FEMA ON THE DEFENSIVE
While the report recognizes failures at "all levels of government," the culprit was attributable to "information gaps" - or at least problems with communication, and failures to act decisively.
The report also acknowledged that the Stafford Act, which requires prime contractors to give preference to local companies in subcontracting, might not have been followed.
The good news, according to the Select Committee, is that the (DHS) has "begun establishing a rigorous oversight process for each and every contract related to Katrina."
While the Gulf Coast was still soaking up Katrina and Rita's toxic aftermath, the Office of Management and Budget (OMB) and the DHS started "tracking key vulnerability areas for the federal Inspectors General (IGs), as a means to stem hemorrhaging of funds, stop uncontrolled spending, and establish a strong anti-fraud message for companies that were awarded contracts in the first several weeks." (34)
Testifying before the Senate on April 21, 2006, the DHS's Inspector General Richard L. Skinner said the federal government is "obligated to ensure that immediate steps are taken to shelter and protect the lives of its citizens and it is obligated to take measures to mitigate further damage or harm to homes and dwellings."
A quick performance of such services can and should be provided, however, at reasonable cost, Skinner said.
"The federal government, and in particular FEMA, has received widespread criticism for a slow and ineffective response," he testified. "Unfortunately, much of the criticism is warranted."
Testifying about FEMA's failure, former agency director Michael Brown said that so much emphasis had been placed on terrorism that natural disasters just weren't a priority.
Skinner is in charge of the President's Council on Integrity and Efficiency (PCIE) Homeland Security roundtable, a body of 22 agencies responsible for reviewing the performance of FEMA.
On April 30, 2006, the panel released a report on the thousands of contracts worth millions of dollars awarded thus far.
The report outlines recommended steps for FEMA to prepare for emergencies, such as establishing and publicizing communication techniques, seeking, promoting and sustaining competition during emergency operations, and identifying more prospective sources of supplies and/or services ahead of time.
"Because the above pre-disaster planning process did not take place prior to Hurricane Katrina," the report reveals, "FEMA found itself in an untenable position and hastily entered into contracts with little to no contract competition for disaster commodities."
It breaks down this way: in the aftermath of any disaster, a mad scramble to restore order might result in sole source contracts, but as soon as the dust settles, FEMA must ensure that the government gets a fair price on contracts, including the use of free and open competition. But the widespread destruction of Katrina greatly lengthened this period of pandemonium, and FEMA failed to keep tabs on the contracts it awarded early on.
In November 2005, FEMA tried to deflect some of the criticism over cronyism and profligacy by promising to re-bid four of the largest contracts awarded without competition to politically connected firms Bechtel, Fluor, Shaw, and CH2M Hill. But by March 2006, the contracts had been extended rather than re-bid, even after Congressional investigators discovered they had resulted in million of wasted taxpayer dollars. (35) By August they had ballooned to more than twice their initial worth.
The Congressional Committee on Government Reform reiterated the criticisms in a report on its investigation into Department of Homeland Security contracting. It, too, found widespread abuse and fraud, and blamed the DHS for failing to focus on efficient procurement.
"[M]uch like the Byzantine organizational structure of DHS itself, the department's diverse acquisition needs are supported by a disjointed acquisition management structure that stretches across various offices and lacks a single official responsible for managing, administering, and overseeing all DHS acquisition activities. The department also suffers from a lack of trained and skilled acquisition professionals," the report concluded. (36)
According to the Project on Government Oversight's (POGO) Communications Director, Jennifer Gore, the failure of DHS to track contractors is a "horrible loophole in an already egregious situation."
"No report paints the full picture," Gore told CorpWatch. She explained that sites with information about contracts are patched together piecemeal, which makes the data nearimpossible to interpret meaningfully.
In Iraq, she said, layered contracts prevented auditors from protecting taxpayers from fraud. (37) Few expected the same on American soil.
"The Bush administration has learned nothing from its disastrous contract management in Iraq," said Congressman Henry Waxman following the release of the GAO report detailing waste among Katrina contractors. "The administration seems incapable of spending money in a way that actually meets the needs of Gulf Coast residents." (38)
Charlie Cray, executive director of the Center for Corporate Policy, said, "We've been hit over the head for decades with this mantra that the private sector knows best. We should have learned this lesson from Enron. Even after Katrina, they continued to press their message by manipulating reality." (39)