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Hundreds of FEMA contractors ordered to halt work as government shutdown drags on

Hundreds of government contractors engaged in disaster preparedness work for the Federal Emergency Management Agency were ordered two weeks ago to stop work on projects, raising concerns about whether the protracted government shutdown is straining the agency’s ability to respond to future disasters.

FEMA emergency funds designated for current disaster response have not been affected by the shutdown, meaning current disaster recovery efforts in Florida, Texas and Puerto Rico should continue despite the partial shutdown, the agency said Thursday.

But on Dec. 26, FEMA ordered hundreds of contractors to halt work on outstanding government contracts, withholding payments for disaster planning work such as flood mapping, government administrative functions like contract management support, and facilities maintenance work.

“Any work done after the receipt of this notice is at your own risk and will not be reimbursed,” FEMA’s head of contracting activity, Bobby McCane, wrote in an advisory to contractors.

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The agency also temporarily stopped processing flood insurance applications over the holidays, though it resumed doing so after criticism from lawmakers and housing industry representatives.

FEMA spokeswoman Elizabeth Litzow said no current disaster response projects are being put on hold because of the partial shutdown. The agency is currently not processing new disaster declaration requests unless it would be likely to “compromise the safety of life or protection or property,” Litzow said, in which case the request would move forward despite the partial shutdown.

“FEMA programs and services currently operating, including emergency work as well as public infrastructure and mitigation projects, will not be impacted if the shutdown continues throughout this week," Litzow wrote in an email. “There are no disaster projects on hold presently and we are not aware of any that will have to be put on hold in the near future.”

The White House did not respond to a request for comment on whether the protracted shutdown could hurt FEMA’s preparedness for a future disaster.

In a Wednesday tweet President Trump threatened to withhold FEMA aid as a way to punish the state of California over what he called a “disgraceful situation” with its recent forest fires.

“Millions of dollars are sent to the State of California for Forest fires that, with proper Forest management, would never happen,” the president tweeted. “Unless they get their act together, which is not likely, I have ordered FEMA to send no more money. It is a disgraceful situation in lives and money!”

FEMA’s now-rescinded decision to halt flood insurance operations drew the ire of lawmakers as well as the housing industry. In a December 26 notice FEMA noted that the agency’s funding for the National Flood Insurance Program expired on December 22, noting that flood insurers are not allowed to collect premiums for issuing or renewing flood insurance policies.

Rep. Maxine Waters, (D-CA), called FEMA’s cancellation of flood insurance a “harmful and incorrect interpretation of its authority,” urging the agency to resume its flood insurance work. Representatives from the housing and banking industries have also pushed back on FEMA’s decision, saying the shutdown could hurt housing markets in coastal communities.

The agency later rescinded its decision on flood insurance, saying it would process flood insurance applications despite the shutdown.

Even before Trump’s admonishment, the shutdown had been taking a sharp toll on the businesses that support FEMA’s operations. Alan Chvotkin, executive vice president and counsel with the government contractors’ trade group Professional Services Council, said the shutdown threatens to damage the industry of disaster preparedness and response professionals that contract with FEMA.

“Companies are naturally going to do what they can to protect their employees, but it’s hard to keep them on idle standby waiting to be recalled,” Chvotkin said. “The longer the shutdown goes the more difficult it is to reassemble these teams.”

The companies affected by the FEMA shutdown include those engaged in Hurricane recovery work across the country, though FEMA says no current emergency work is on hold because of the shutdown.

Among the hundreds of contractors ordered to stop work, many are working to prepare for future disasters.

Researchers at the University of Mississippi and Texas A&M have seen funding lapses for regional flood mapping and disaster preparedness work. A company called Apprio has been ordered to halt work on a $28 million contract to provide training support services.

HME Inc., a Tennessee-based small business that works with FEMA, has been ordered to halt facilities maintenance for government buildings in Anniston, Alabama. The company serves FEMA’s Center for Domestic Preparedness, a government office that coordinates training. An HME representative declined to comment.

FEMA ordered contractors to halt work on a $16 million contract for engineering support services in relation to Hurricane Maria, awarded to a company called NISTAC, a joint venture of the engineering companies Dewberry and AECOM. A Dewberry representative said the shutdown does not affect the company’s work on that contract despite the FEMA stop work order, declining to elaborate further.

And FEMA halted contracts for three mobile home manufacturers: Lexington Homes, American Homestar Corporation and CMH Manufacturing. The companies hold open-ended contracts that FEMA can use to quickly procure mobile homes in the event of a future disaster.

Craig Fugate, a former FEMA administrator, said stopping work on those contracts would not affect people currently living in FEMA-provided mobile homes. But the stop-work orders could chip away at FEMA’s ability to quickly respond to a future disaster, he said.

“This is one of the side-effects of the shutdown is its limiting FEMA’s ability to have contracts in place for future disasters,” Fugate said.

FEMA staff deployed to current disaster areas say the work goes on despite the standoff in Washington.

One of them is Victor Inge, a FEMA public information officer currently deployed in Saipan, a Pacific island in the Northern Mariana Islands, a U.S. commonwealth. The agency is working to provide new housing for survivors of Super Typhoon Yutu, a powerful storm that devastated parts of the Mariana Islands in mid-November.

Inge says his staff will continue its current housing mission despite some recent furloughs.

“Some of our staff are among those being furloughed, but we’re out here still working and we’ll continue to do so until somebody taps us on the shoulder and tells us to stop,” Inge said. “I hope that doesn’t happen because if it does it would leave a lot of people hanging.”

Data reporter Dan Keating contributed to this report.