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GAO Report On Katrina/Rita Maintenance And Deactivation Housing Contracts

1. Why did FEMA choose the Port Bienville, Miss., site for temporary housing for Hurricane Katrina/Rita victims?

Recognizing the critical housing shortage following Katrina, FEMA immediately began working to create group sites for the placement of travel trailers and mobile homes.  Obtaining land for group sites was difficult, as it requires extensive coordination and agreement between land owners, as well as coordination and approval in many cases by local and state officials.   FEMA can only use land if it has been approved by the local jurisdiction. 

The Bienville site is located in the western part of Hancock County, an area devastated by Katrina, and was originally built to support 18 travel trailers.  There was no housing stock available in that area when the site was built and the land was provided to FEMA at no cost.  There is significant reason to doubt GAO analysis, given their fiscal projection that the site would be open through March 09, when in fact the site is already closed.

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2. Why did FEMA set up these trailer maintenance contracts in response to Hurricane Katrina/Rita?

The first priority of FEMA during the initial phase of a major disaster is to save lives and property.  FEMA's goal is to use competitive strategies while also providing local and socioeconomic businesses a competitive advantage whenever possible. In some extreme circumstances there is a need for the use of no-bid, non-competitive contracting procedures in order to meet mission requirements. In the immediate aftermath of Hurricanes Katrina and Rita, FEMA initially contracted with four large contractors by using non-competitive procedures.  All major contracts were rebid in a fully competitive and highly scrutinized process.

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3. What is the breakdown of the temporary housing contracts awarded by FEMA in response to Hurricane Katrina/Rita?

Of the $8.8 billion in contracts awarded by FEMA as result of Katrina and Rita, $1.9 billion was awarded to contractors from the four affected states -  Alabama, Louisiana, Mississippi and Texas, accounting  ' for approximately 22 percent of the Agency's spending for Katrina and Rita requirements.  FEMA has provided over $33 billion to the Gulf Coast states in the last two years to assist in recovery efforts.

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4. Will you define FEMA's contracting process?

FEMA's current contracting practices are designed to engage local small, minority, and small disadvantaged businesses.  Prior to issuing a solicitation, FEMA conducts market research to determine whether or not the capabilities of small local businesses meet program requirements.  If small local businesses are determined to possess the necessary qualifications, then the solicitation is structured either as a local small business set-aside or price evaluation preference.  If no such business is available, the scope of the set-aside is expanded to include all local businesses (rather than only small local businesses).  If no local businesses are available, the geographic scope of the set-aside is expanded to the state level, then to the Gulf Coast Region, and finally open to a national pool of contractors.  Contract files document the determination and findings regarding the availability of capable local firms.

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5. What improvements have been made in FEMA’s contracting process since hurricanes Katrina/Rita?

FEMA has been conducting ongoing quality assessments of the maintenance and deactivation contracts' (MDC) performance within each of the Gulf Coast Ssates.  FEMA developed a new standard operating procedure for implementing the Quality Assurance Plan (QASP), which measures timeliness, quality and customer satisfaction of MDC performance uniformly across the Gulf Coast.  Each month, all maintenance, emergency maintenance and deactivation work orders are sampled for each contractor and then evaluated against specific criteria outlined in the QASP.  The evaluated work orders are assigned a score.  Each monthly score is reviewed with the contractor and guidance is given on how to improve.  At the end of each quarter, the sampled work orders are evaluated and based on the scores an incentive or disincentive of 15% to -15% of the invoiced amount is applied to each contractor.  The new plan focuses on ensuring timely delivery of quality services to FEMA housing applicants throughout a trailer life cycle. 

Additionally, all contracting officers have been trained on the use of the National Institute of Health's Contractor Performance System and in conjunction with the contracting officer are required to input performance records on each of the MDCs.

At the time of hurricanes Katrina and Rita, the Office of Acquisition Management (OAM) workforce included 35 contracting professionals; today OAM has 118.  This staffing level increase has resulted in a dramatic increase in the number of acquisitions being made with full and open competitive procedures.  For FY 07, FEMA ranked second among all DHS components in overall competitive acquisitions.  FEMA awarded approximately 70 percent of all acquisitions in FY 07 using competitive procedures, a large increase over its previous fiscal year (FY 06) metric of 54 percent.

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6. Has FEMA seen demonstrated evidence that contracting improvements are saving taxpayer's dollars?

New business practices have already resulted in significant savings.  Overhauling the contracting process, in one instance, netted a $9 million savings - over 72 percent savings.  Had the agency not changed its approach to assigning work, FEMA would have spent approximately $12 million.

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Last Modified: Wednesday, 11-Aug-2010 13:05:41 EDT