FEMA wasted millions on Katrina no-bid contracts
According to a new report by the Homeland Security Department's office of inspector general, the federal government wasted millions of dollars on four no-bid contracts it handed out for Hurricane Katrina recovery work, the Associated Press reports.
Investigators examined temporary housing contracts that the Federal Emergency Management Administration awarded without competition to Shaw Group Inc., Bechtel Group Inc., CH2M Hill Companies Ltd. and Fluor Corp. in the days immediately before and after Hurricane Katrina, the Associate Press reports.
All four companies have strong government and political ties. According to the AP:
[The report] found that FEMA wasted at least $45.9 million on the four contracts that together were initially worth $400 million. FEMA subsequently raised the total amounts for the four contracts twice, both times without competition, to $2 billion and then $3 billion.
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FEMA did not always properly review the invoices submitted by the four companies, exposing taxpayers to significant waste and fraud, investigators wrote. In many cases, the agency also issued open-ended contract instructions for months without clear guidelines on what work was needed to be done and the appropriate charges.
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FEMA lacked a real-time inventory system to ensure that property attained and maintained by the four contractors, such as trailers, were properly accounted for.
Investigators also found that FEMA paid $20 million for a camp for evacuees that was never inspected and proved to be unusable.
In the past three years, FEMA has steadily come under fire from lawmakers and government investigators for awarding no-bid contracts worth hundreds of millions of taxpayer dollars in the aftermath of hurricanes Katrina and Rita in the fall of 2005. Facing South has previously reported on the problems presented by FEMA's no-bid trailer contracts. This latest report, according to the AP, is just "the latest to detail mismanagement in the multibillion-dollar Katrina hurricane recovery effort, which investigators have said wasted at least $1 billion."
