FEMA Cautions About Use of Third-Party Contractors 

Release Date: August 11, 2008
Release Number: 1763-149

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DES MOINES, Iowa -- Claims by consultants that their costs will be paid for by the Federal Emergency Management Agency should be viewed with caution, FEMA and Iowa disaster officials said today.

"In some cases, we will not pay for the majority of fees generated by third parties," said Federal Coordinating Officer Bill Vogel, FEMA’s top official in Iowa. "Sometimes such groups have actually slowed down the process of reviewing claims, which can result in cash flow problems for local governments."

Reports have surfaced in the media of claims by third parties that local officials should hire them, and that FEMA will pay for almost all the costs they incur. The claims are usually made in connection with FEMA’s Public Assistance program, which helps pay to repair and rebuild public infrastructure such as roads, bridges, utilities and public buildings. Be wary of such claims, disaster officials urge.

"Our state representatives and FEMA partners already have the mandate to make sure every eligible applicant receives every dollar of assistance available," said State Coordinating Officer Pat Hall, the head of the Iowa Homeland Security and Emergency Management Division (HSEMD). "We work directly with local governments and other agencies. We don’t negotiate with third parties on the rebuilding of infrastructure."

State and federal agents work together with every applicant for Public Assistance. They also provide administrative assistance to local recipients by helping complete project estimates and worksheets.

FEMA gives an additional 3.34% of the total cost of the Public Assistance program to state and tribal governments in order to offset the burden of managing the entire state or tribal nation’s public assistance program. The state or tribal government may give some of these administrative funds to local governments and agencies who handle the projects, but often they do not pass on this money as it is needed to cover their substantial administrative costs.

Local governments and agencies may have a portion of administrative costs covered directly by federal funds, Vogel said. For example, the time and expense of a specially-hired bookkeeper who works directly on project tasks can be incorporated into a project’s estimated cost. FEMA will only pay the federal share of administrative costs that are solely related to a specific project. In some cases, Vogel said, only a small percentage of third party services can be claimed as exclusive and essential to a particular project.

FEMA coordinates the federal government’s role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terror.

Last Modified: Wednesday, 13-Aug-2008 18:03:53