Tony Zelenka was among the first contractors the government hired after Hurricane Katrina ravaged the Gulf Coast.
No government official called to ask for his assistance. But Zelenka, who runs Bertucci Contracting Corp. in New Orleans, had long worked with the Army Corps of Engineers and knew when Katrina hit that the Corps would need help if he could get to Vicksburg, Miss., where the Corps was setting up an emergency response center.
So in the middle of that first night after Katrina hit, Zelenka spent 30 minutes wading through chest-deep water, carrying a bicycle over his head, to reach a highway so he could pedal to a car and make the four-hour drive to Vicksburg. By the first hours of that Wednesday, with just a verbal agreement as a contract, Zelenka's company was at work hauling stone to repair the breached levees that had flooded his city.
That kind of handshake deal, with contract details to be filled in later, has been common in the rush to aid the victims of Katrina. It is also central to a debate that continues in Washington, as the Bush administration and Congress seek the right balance between speeding money to the stricken region and ensuring that the $62 billion already appropriated is not wasted or stolen.
Proposals being floated on Capitol Hill push in both directions.
Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, introduced a bill yesterday that would significantly loosen procurement rules to allow government agencies greater latitude in using no-bid contracts. It would also reduce the amount of information contractors are required to provide the government about their profit.
The legislation is designed to let agencies "quickly acquire the goods and services they need to assist relief and recovery efforts," according to a statement by Davis.
The bill follows a change Congress passed last week upping the amount officials can buy with their government credit cards to $250,000 for Katrina-related expenses from the usual $15,000 allowed in an emergency.
The moves have been opposed by government watchdog groups, which argue that the unparalleled amount of money being spent demands more scrutiny, not less.
"There's definitely a need to get the money on the ground fast. But I don't think any of these proposals would do that. What I see them doing is lessening the transparency," said Keith Ashdown, vice president of Taxpayers for Common Sense. "It's the opposite of the way we should be going. We need to know more so we can know if all this money is being spent in a wise and responsible manner."
Some members of Congress share Ashdown's concern.
Rep. Jim Kolbe (R-Ariz.) late Tuesday introduced a bill that would create a special inspector general's office exclusively to oversee spending related to Katrina.
Kolbe's plan would use as its model the special IG office established to oversee Iraq reconstruction. That office has found numerous instances of potential waste or fraud and has referred several cases to U.S. prosecutors for further investigation.
The amount of money appropriated so far for Katrina dwarfs the $21 billion allocated for Iraq reconstruction.
The Department of Homeland Security's inspector general's office will receive an additional $15 million to monitor Katrina-related work. The department said earlier this week that nine-person auditing and investigative teams are fanning out across the Gulf to oversee spending as contractors begin their work. "The DHS IG is already hard at work monitoring these contracts," said department spokeswoman Valerie Smith.
Davis said through an aide that he thinks that office, and others like it, provide enough oversight.
David M. Walker, head of the Government Accountability Office, said in an interview yesterday that he, too, believes a special IG is unnecessary. "It's one thing to have a special inspector general dealing with a conflict zone halfway around the world," Walker said. "We're not dealing with a conflict zone around the world. We're dealing with a situation in U.S. territory."
Walker said GAO investigators would be active in monitoring Katrina-related spending and would coordinate with existing IG offices.
But Kolbe insists a separate entity is needed.
"The IG's staff at the Department of Homeland Security will be overwhelmed. We've already appropriated nearly twice as much money for [Katrina] as is in the entire annual budget for DHS," Kolbe said. "This needs to be done quickly."
The leaders of the Senate committee that oversees the Homeland Security Department, Susan Collins (R-Maine) and Joseph I. Lieberman (D-Conn.), are working on their own proposal for an IG office to monitor Katrina spending.
One idea being circulated on the Hill that could be used under Kolbe's legislation would be to simply expand the authority of the special inspector general for Iraq to include the Gulf Coast as well.
The spokesman for that IG's office, James Mitchell, would not comment yesterday on such proposals. But he said legislators have expressed strong interest in recent days about lessons learned from oversight of Iraq reconstruction. The main one, he said, is that action needs to be taken fast.
"Oversight should be set up quickly and should be highly visible," Mitchell said, citing the deterrent value of knowing someone is watching. "We learned that lesson from having come late to the Iraq situation and having to catch up."
The White House has not decided whether to get behind the idea of a special inspector general. Office of Management and Budget spokesman Scott Milburn said that all options are on the table and that the White House is in the process of reviewing what resources are already available. "If it's determined that additional safeguards are needed to guard against fraud and abuse, we'll put those in place," he said.
The contracting situation on the ground in the Gulf remains fluid.
In Vicksburg after the storm hit, the Army Corps of Engineers mobilized about a dozen contractors within 24 hours, giving them a verbal notice to proceed, with the first priority being to repair the breaches in the levees, said Jim Barr, the Corps's acting contracting chief in New Orleans. "It wasn't easy, but we did it," he said. The Corps is still negotiating the specifics of those agreements, Barr added.
Like Zelenka, Dan Fordice, head of Fordice Construction Co. of Vicksburg, another longtime Corps contractor, did not wait for a call. He lives only about seven or eight miles from the emergency center and just showed up Tuesday morning, he said.
Fordice took his company plane that afternoon, with Zelenka aboard, to tour the damage to the levees in New Orleans and to check on the location and condition of barges and boats belonging to them and other contractors.
With enough equipment intact, Fordice quickly turned into a Corps supplier, setting up fueling stations in New Orleans and supplying water. "They just kind of grabbed me up and said, 'Make this happen for me,' " he recalled.
The Corps, which during disasters also handles contracting for the Federal Emergency Management Agency for such items as water, ice and debris removal, is using competition when possible, said Lt. Col. Norbert Doyle, the Corps official responsible for contracting. Federal acquisition regulations give the Corps the authority to take emergency measures, he said.
The Corps is holding a brief competition for $1.5 billion in debris removal work in Louisiana and Mississippi.
"We're trying in my office to get a hold of the spending," Doyle said. "We haven't felt a need to keep a list of contracts awarded to date, but because of the interest in this, in the response, we're trying to put a list together of the spending that we have done."
Last week, the Corps awarded Shaw Group Inc., a Baton Rouge contractor, a $100 million contract with one of its first tasks to pump floodwater out of New Orleans. Other companies were contacted to generate a competition for the work, Doyle said, but only Shaw responded.
The Corps will move "toward normal contracting as soon as we can," Doyle said.