Federal auditors have released a report with more bad news on Katrina relief efforts. The government wasted millions of dollars in its award of post-Katrina contracts for disaster relief, including at least $3 million for 4,000 beds that were never used, according to the report. The review by the Government Accountability Office (GAO) of 13 major contracts — many of them awarded with limited or no competition after the August storm — offers the first preliminary overview of their soundness. Waste and mismanagement were widespread due to poor planning and miscommunication, according to the report. It appears money was paid for work that was never used. The report by the GAO, Congress’ auditing arm, stated:

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. FEMA did not adequately anticipate needs.

Billions of dollars of government contracts have been awarded. Homeland Security Secretary Michael Chertoff appears to be incapable of managing a major government agency. That is troubling to say the least. Of more than 700 contracts valued at $500,000 or greater, more than half were awarded without competition, often to politically connected companies such as Halliburton subsidiary Kellogg, Brown & Root, Bechtel Corp. and AshBritt Inc. While no-bid agreements may have a place in disasters, there have to be some limits. Unfortunately, we have seen contracts awarded to politically connected companies at the expense of a slow Gulf Coast rebuilding effort.

The GAO report speaks broadly and does not actually address the validity of no-bid contracts. Reviews of those contracts are currently under way by inspector generals at Homeland Security and other agencies. But it did find significant problems in its general review of the 13 contracts, most of which were limited bid. According to the report, millions could have been saved if FEMA had adopted previous GAO recommendations to hire more personnel, prearrange contracts and better train staff. Among the GAO findings are:

• Non-existent 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, which housed only six occupants before being closed.

• Poor coordination between FEMA and the Army Corps contributed to waste in an Americold Logistics LLC’s contract for ice. “The local Corps personnel were not always aware of where ice might be delivered and did not have authority … resulting in inefficient distribution,” it said.

• Inadequate planning led to the award of a Mississippi contract for classrooms without competition. “Information in the contract files suggests the negotiated prices were inflated.” A review of that specific contract, with Akima Site Operations LLC, was continuing.

• FEMA had only 17 of the 27 monitors it deemed necessary to oversee the installation of temporary housing in four states, leading to inadequate controls. The 13 Katrina contracts involve the following 12 companies: C. Henderson Consulting; Americold Logistics; Clearbrook LLC; CS&M Associates; Gulf Stream Coach Inc.; Morgan Building & Spas Inc.; Bechtel National; Fluor Enterprises Inc.; CH2M Hill Constructors Inc.; E.T.I. Inc.; Ceres Environmental Services Inc.; and Thompson Engineering Inc.

You won’t be surprised to find out that a number of the firms, including Gulf Stream Coach and Bechtel, have close ties to the Bush Administration or have contributed significantly to the GOP.

Source: Associated Press

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