Katrina Recovery Contract Oversight Questioned

So far, the Federal Emergency Management Agency has signed contracts worth $1.5 billion to begin the Katrina cleanup. But some lawmakers worry there is not sufficient oversight in place.

STEVE INSKEEP, host:

So after Hurricane Rita, Cameron joins so many towns and cities wrecked by Hurricane Katrina. So far, FEMA, the Federal Emergency Management Agency, has signed contracts worth $1 1/2 billion to begin the Katrina cleanup, but some government officials worry that there are not adequate safeguards in place to prevent money from being wasted. NPR's Kathleen Schalch reports.

KATHLEEN SCHALCH reporting:

Congress acted fast after the hurricane struck, providing more than $60 billion to FEMA and the Army Corps of Engineers. In return, it asked for weekly reports detailing how the money's being spent. David Obey of Wisconsin, the ranking Democrat on the Appropriations Committee, says lawmakers are getting nothing of the sort.

Representative DAVID OBEY (Democrat, Wisconsin): We are simply getting spreadsheets which show total numbers by rough category such as human services or field operations. That tells us virtually nothing about where the money is going. It tells us nothing about their contracts. It tells us nothing about how they're awarded. Well, we are really just getting peppered with non-information.

SCHALCH: And some information that has emerged has lawmakers concerned. Henry Waxman is a top Democrat on the House Government Reform Committee. He cites press reports that more than 80 percent of FEMA's contracts were awarded without bidding or with limited competition.

Representative HENRY WAXMAN (Democrat, California): The majority of these contracts were entered into after no more than a telephone call. To this day, the contracts still haven't been written down. They don't even have what's called a letter contract, which normally sets forth major parts of the agreement. And because of the last-minute rush, a majority of these contracts were not fairly competed.

SCHALCH: Waxman and others say they're concerned about possible cronyism and overcharging. Waxman points to a half-a-billion-dollar contract that went to a company called AshBritt. It will collect debris at a rate of $15 per cubic yard. Some say that's too much, but Army Corps of Engineers spokesman Bob Anderson says officials had to give the work to companies with solid track records.

Mr. BOB ANDERSON (Spokesman, Army Corps of Engineers): Some people bid as low as $8 for a cubic yard, but they just didn't have enough equipment. They didn't have any experience. They didn't have the number of trucks that would have been required for that, the licenses. They didn't have experience in a number of critical aspects.

SCHALCH: Anderson says this and similar contracts were competitively bid, though the competition was limited to 10 days.

Mr. ANDERSON: Normally this would be open for 90 days. There's no way you can leave a bid, you know, open for 90 days.

SCHALCH: Not when you're dealing with a disaster like this, he says. FEMA awarded some contracts without any competitive bidding at first, but spokesmen say the agency was scrambling to cope with the emergency. Now they say that phase is ending. FEMA officials say they'll examine every invoice to make sure they got what they paid for. Still, the Department of Homeland Security's inspector general has expressed concern about where the money's going and about the possibility of fraud and mismanagement. So has Steven Schooner, co-director of the Government Procurement Law Program at George Washington University.

Mr. STEVEN SCHOONER (Co-Director, Government Procurement Law Program, George Washington University): The fear at this point is there does not seem to be a centralized, sophisticated, well-organized planning institution within the government that's going to make good, rational, long-term decisions as to how the reconstruction is done before the government starts throwing money at the problems.

SCHALCH: And that's risky, he says, because there's so much money being thrown.

Kathleen Schalch, NPR News, Washington.

INSKEEP: You're listening to MORNING EDITION from NPR News.

Copyright © 2005 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.