FEMA still spending on contracts awarded with limited competition

WASHINGTON -- The government is spending $347 million on Hurricane Katrina-related contracts that were awarded with little or no competition, despite a public pledge by FEMA's chief to reopen no-bid agreements.

In its most recent weekly spending report to Congress, the Homeland Security Department detailed 73 contracts awarded on a basis of "other than full and open competition." Most of the contracts on the Oct. 13 list provided travel trailers, communications systems and food from the disaster relief fund run by the Federal Emergency Management Agency.

Last week, FEMA acting director R. David Paulison told senators, "All of those no-bid contracts, we are going to go back and rebid." Later that day, FEMA officials said they would rebid only four contracts of up to $100 million each -- a point spokesman Larry Orluskie repeated Friday.

"A lot of the contracts that were previously awarded without competition are completed or are beyond the point where it would be economically feasible to re-compete," Orluskie said. He did not know how many of the contracts were completed.

"The whole competition process doesn't happen overnight," said Orluskie, defending contracts that were quickly awarded as Katrina loomed. "And when it's about saving lives and protecting property, you need it now."

Sen. Joe Lieberman, D-Conn., said the largess of noncompetitive contracts is a product of poor planning by FEMA before Katrina hit -- one that will result in a "substantial waste of taxpayer funds."

"At least some of these contracts are for ongoing services, and those agreements certainly should be rebid as quickly as possible," Lieberman, the top Democrat on the Senate Homeland Security Committee, said in an e-mail to The Associated Press.

FEMA is an arm of Homeland Security, which is required to report weekly on how it is spending $62 billion Congress approved in disaster relief after Katrina slammed into the Gulf Coast on Aug. 29. The fund includes relief money for victims of Hurricane Rita, which hit two weeks later.

As of Oct. 10, FEMA had awarded $2.3 billion in contracts for Katrina recovery efforts, agency documents show. The new totals show that no-bid and limited competition agreements make up about 15 percent of all hurricane relief contracts.

At an Oct. 6 hearing of the Senate Homeland Security Committee, Paulison defended the initial need for no-bid contracts to get help to hurricane victims as quickly as possible. But he said those agreements should be reopened to competition to prevent any waste or abuse of federal funds and save taxpayer's money.

"I've been a public servant for a long time, and I've never been a fan of no-bid contracts," Paulison said at the hearing. "And I can assure that you we are going to look at all of those contracts very carefully."

Paulison's testimony came as fiscal watchdogs pummeled FEMA for approving noncompetitive, open-ended or otherwise vague spending agreements that audits historically have cited as being highly prone to abuse.

"Our hope had been that he was actually given the authority to make federal contacting more competitive, but it doesn't look like it," said Danielle Brian, executive director of the Project on Government Oversight.

FEMA is rebidding contracts to four firms -- Bechtel Corp., Fluor Corp., the Shaw Group and CH2M Hill -- that were approved before or as Katrina hit. Each of the agreements has a $100 million spending cap, but the four companies had spent only a combined $132 million as of last week, FEMA officials said.

Of the remaining 73 limited-competition contracts, the largest is for $50 million with Clearbrook, LLC, of Mobile, Ala., which provides prefabricated housing. A $37.3 million contract is for hotel rooms by CS&M Associates of New Orleans. Representatives for Clearbrook and CS&M Associates could not be reached for comment Friday.

At least some of the contracts were awarded on a short-term basis to fill an immediate need as the storm hit and could prove difficult to re-bid.

"Once they accept delivery of them, they own them," said Joe Shirey, general manager at CJ's RV Town dealership in Hobe Sound, Fla., which sold 132 travel trailers to FEMA under a $2.3 million contract.

"There is an immediate need to get units for people for housing," Shirey said. "They have to come to the dealers. We're the only ones who can supply what they need."

Another RV dealership that sold 52 trailers to FEMA is waiting to hear whether the agency will need more.

"I can make the calls and purchase more product, but it's difficult not knowing if (FEMA is) going to want them," said Todd Williams, spokesman for Crestview RV Center in Buda, Texas. "That's a little difficult to get across to them. I can get more units, but if they don't want or need them, I won't get them. It's government bureaucracy at its finest."

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Associated Press Writers Curt Anderson in Miami and Kristen Hays in Houston contributed to this report.

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On the Net:

Federal Emergency Management Agency: http://www.fema.gov/

Homeland Security Department: http://www.dhs.gov/dhspublic/

House Appropriations Committee: http://appropriations.house.gov/