Barack Obama

Hurricane-Relief Contracts to Be Rebid, FEMA's Head Says

Thursday, October 6, 2005

By DAVID STOUT
New York Times

WASHINGTON - The head of the Federal Emergency Management Agency said today that millions of dollars worth of federal hurricane-relief contracts that were awarded with little or no competition would be rebid to minimize waste and abuse.

"I've never been a fan of no-bid contracts," R. David Paulison, FEMA's acting director, told the Senate Homeland Security and Governmental Affairs Committee, one of a half-dozen Senate and House panels holding hearings today on hurricane-recovery issues.

One underlying theme that emerged from the sessions was a sense of alarm over the overall cost of the recovery, acknowledged to be in the many billions of dollars, and how much of that the federal government must pay. Another is the growing potential for deep disagreement between Louisiana's Congressional delegation and their colleagues from other states on how much Washington can afford to do.

"We can't dilly-dally on Capitol Hill as people in the region face real-world decisions on whether to relocate or not," Senator Charles E. Grassley, Republican of Iowa, said at another session, that of the Senate Finance Committee, which he heads. "American taxpayers are compassionate, but rightly expect their hard-earned tax dollars to be spent wisely."

As for no-bid contracts, Mr. Paulison, according to The Associated Press, told the Homeland Security and Governmental Affairs Committee: "Sometimes you have to do them because of the expediency of getting things done. And I can assure you that we are going to look at all of these contracts very carefully."

"All of those no-bid contracts, we are going to go back and rebid," said Mr. Paulison, who succeeded Michael D. Brown after Mr. Brown stepped down amid heavy criticism of FEMA's response to the destruction wrought by winds and floods along the Gulf Coast.

Federal contracting rules allow agencies to approve deals without standard competitive bidding in "urgent and compelling circumstances." But in the weeks since hurricanes and floods devastated the Gulf Coast and uprooted thousands of people, some government officials and auditors have expressed concerns about the potential for favoritism and waste.

The no-bid contracts specify that once a contractor has received a minimum amount of money, FEMA is entitled to reopen the contracts to allow competitive bidding, according to Nicol Andrews, a FEMA spokeswoman.

Senator Susan M. Collins, the Maine Republican who heads the homeland security committee, noted that thousands of hurricane survivors remained in hotel rooms and emergency shelters despite FEMA's having spent more than $2 billion for 120,000 temporary shelters and mobile homes.

"More than a month after Katrina's landfall, frustration, concerns and questions about FEMA's responsiveness and planning persist as Gulf Coast residents work to put their lives and communities back together," she said.

Senator Joseph I. Lieberman of Connecticut, the ranking Democrat on Senator Collins's panel, said it might have been better if FEMA had had in place "standby contracts," already awarded after bidding.

Mr. Paulison acknowledged the senator's point. "Hopefully, we can put things in place for the future where we won't have to depend on no-bid contracts," he said. In the days immediately after the hurricane and flooding, Congress approved more than $60 billion in emergency spending - a move that Senator Grassley, who is known to be distrustful of deficit spending, implicitly criticized today.

"That well-meaning, but quickly approved open-ended appropriation has produced a lot of tales of wild and wasteful spending," Mr. Grassley said. "That bill wasn't in this committee's jurisdiction."

Mr. Grassley said he did not agree that "the federal Treasury door should be swung wide open for every conceivable tax cut or spending proposal related to the Gulf Coast region."

Treasury Secretary John W. Snow told Mr. Grassley's panel that the administration is committed to "principled, disciplined spending that is commensurate with the needs of the region," and that private enterprise must lead the way.

Cuts in spending, rather than higher taxes, are the better way toward recovery, Mr. Snow said, pledging the administration's help in identifying areas to trim.

Louisiana lawmakers of both parties have been proposing that the federal government spend as much as $250 billion on their state. The money, on top of the roughly $60 billion approved by Congress just after the disaster, would be directed through virtually every federal agency to rebuild schools and roads, provide health care, aid businesses and protect homeowners from foreclosure.

But Mr. Grassley signaled that he envisions something far less than do his Louisiana colleagues.

So did Mr. Snow. "The size and scope of hurricane damage is unprecedented in our history," Mr. Snow testified. "On an individual level, losses came in the form of homes, jobs and loved ones. Economically, lost income and infrastructure damage have national significance.

"That said," Mr. Snow went on, "it is essential that the federal government play an appropriate role, but it should avoid taking steps that are excessive. We must tailor our response appropriately."