No-Bid Contracts To Get Close Look
Thursday, September 29, 2005
The officials responsible for monitoring more than $60 billion in federal Hurricane Katrina spending promised yesterday to take a hard look at every no-bid contract awarded since the storm and to investigate the adequacy of contracts the government had in place before disaster struck.
The assurances came at a House Energy and Commerce subcommittee hearing at which lawmakers from both parties questioned a panel of inspectors general about whether Katrina aid money is being well spent. The inspectors general provided few answers because, they said, their work has just begun. But they said repeatedly that they would investigate.
Richard L. Skinner, inspector general for the Homeland Security Department, said he and his colleagues at other departments have divided oversight responsibility and are positioning investigators to make sure that contracts are examined closely early in the process, rather than after the fact. "We're not simply a 'pay and chase' operation," he said. "We're involved upfront."
Skinner said the inspectors general are "uniquely qualified" to monitor Katrina spending because they have a history of overseeing the agencies that are doing the spending.
Those assurances were not enough for some lawmakers, who suggested that a more centralized management and oversight effort is needed. "It does not appear that there is a single inspector general who is in full charge of seeing that these monies are wisely spent," said Rep. Jay Inslee (D-Wash.).
"The abuses and failures we've seen in Iraq -- we don't want to duplicate those here at home," Inslee said, referring to cases of questionable costs by firms with ties to the White House, such as Halliburton Co.
Halliburton has also been doing work in the Gulf Coast, as has the Shaw Group, a company represented by lobbyist Joe M. Allbaugh, a former director of the Federal Emergency Management Agency.
Inslee said he would support naming a chief financial officer with responsibility for watching over all spending related to Katrina. Other recent proposals include a special inspector general's office, a bipartisan anti-fraud commission and expansion of responsibilities of the special inspector general for Iraq reconstruction to include the Gulf Coast.
On Tuesday, Sen. Tom Coburn (R-Okla.) and Sen. Barack Obama (D-Ill.), both advocates of a chief financial officer, raised concerns over a $236 million deal with Carnival Cruise Lines to provide temporary housing on the Mississippi River and off the Gulf Coast. The ships have remained less than half full, and the senators said the cost was exorbitant.
Skinner said of the Carnival deal that it is "something that concerns us as well" and that his office will look into it. He said he has assigned 60 auditors and investigators to review Katrina contracts and that his office will need more money to complete the task.
By early next year, Skinner said, he hopes his office will have completed a broad review of the contracts in place when Katrina struck, and why FEMA was so quickly overwhelmed. FEMA has signed numerous contracts in the weeks since, many without competition, to fill gaps in its response.
Rep. Charles W. Pickering Jr. (R-Miss.) said at the hearing that he wants to know why such a large number of those new contracts are going to companies from outside the region where Katrina struck. "This is a devastated area trying to get people back to work, working with companies from all over the country -- but not their own companies," Pickering said. "As you can imagine, that creates a lot of frustration."
Also yesterday, Skinner's office, in a report on FEMA's information technology systems, said they "are not integrated and do not effectively support information exchange during response and recovery operations."
The review was conducted before Katrina struck, and does not address how FEMA reacted to this year's storms. It focused on FEMA's response to the 2004 hurricanes in Florida, and found that the agency's IT systems "cannot effectively handle increased workloads, are not adaptable to change, and lack needed real-time reporting capabilities. Such problems usually are due to FEMA's focus on short-term IT fixes rather than long-term solutions."