WASHINGTON – The government wasted millions of dollars in its award of post-Hurricane Katrina contracts for disaster relief, including at least $3 million for 4,000 beds that were never used, congressional auditors said Thursday.
The Government Accountability Office’s review of 13 major contracts – many of them awarded with limited or no competition after the Aug. 29 hurricane – offers the first overview of their soundness.
Waste and mismanagement were widespread due to poor planning and miscommunication, according to the five-page briefing paper released Thursday. That led to payment for services such as housing or ice that were never used.
“The government’s response to Hurricanes Katrina and Rita depended heavily on contractors to deliver ice, water and food supplies; patch rooftops; and provide housing to displaced residents,” said the report by the GAO, Congress’ auditing arm. “FEMA did not adequately anticipate needs.”
Nicol Andrews, a spokeswoman for the Federal Emergency Management Agency, said the agency was working hard to improve the way it awards billions of dollars in government contracts as it prepares for the next hurricane season.
Out of more than 700 contracts valued at $500,000 or more, more than half were awarded without full competition or with vague or open-ended terms, some to politically connected companies such as Halliburton subsidiary Kellogg, Brown &Root, Bechtel Corp. and AshBritt Inc.
Democrats, in particular, have called for limits on no-bid agreements, which they say have been awarded to politically influential companies at the expense of the Gulf Coast rebuilding effort.
“Previous reports of waste in the aftermath of Katrina have been bad, but this one is worse,” said Rep. Henry Waxman of California, the top Democrat on the House Government Reform Committee.
“The Bush administration has learned nothing from its disastrous contract management in Iraq,” he said. “The administration seems incapable of spending money in a way that actually meets the needs of Gulf Coast residents.”
The leader of the Senate Homeland Security and Governmental Affairs Committee said the report’s findings were troubling.
“After a disaster strikes is too late to start the contracting process for critical goods and services,” said committee chair Sen. Susan Collins, R-Maine. “Known emergency commodities and services must be pre-positioned.”
The GAO report released Thursday does not address the validity of no-bid contracts. But it found significant problems in its general review of the 13 contracts.
For instance, the GAO found that nonexistent communication with local officials led to misjudgments on the need for temporary housing. They included $3 million that FEMA spent for 4,000 base camp beds that were never used and $10 million to renovate and furnish 240 rooms in Alabama that housed only six occupants before being closed.
In Mississippi, inadequate planning led to the award of a contract for classrooms without competition. “Information in the contract files suggests the negotiated prices were inflated,” the report said. A review of the contract with Akima Site Operations LLC was continuing.
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