The Federal Emergency Management Agency has failed to honor a pledge made last month to reopen four of its biggest no-bid contracts for Hurricane Katrina work.
The no-bid contracts for temporary housing, worth up to $100 million each, were given to Shaw Group, Bechtel, CH2M Hill, and Fluor right after Katrina struck.
On Oct. 6, acting FEMA chief R. David Paulison declared he was "no fan of no-bid contracts" and pledged to reopen the four deals. But in testimony to Congress on Tuesday, Greg Rothwell, Homeland Security's chief procurement officer, said rebidding will not be done until February.
But the four firms told the Washington Post that they had not been notified of the rebidding other than from news reports following Paulison's announcement. And remarkably, CH2M Hill and Fluor told the Post that their contracts could end in January.
In other words, the "rebidding" is not scheduled to take place until after two of the contracts may be complete.
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How are no-bid contracts examples of wasteful spending? Consider the much criticized case of Akima Management Services. The politically connected Akima received a no-bid $39.6 million contract to provide temporary classrooms across Mississippi. The classrooms cost FEMA nearly $90,000 each. That is double the wholesale price and nearly 60 percent higher than the price offered by a local company that has a long resume selling modular classrooms.
What makes the situation worse is that the classrooms Akima provided were not secured to concrete foundations, violating a state regulation. The classroom contract has already prompted a lawsuit and a government investigation, the New York Times reports.
"The fact that natural disasters are not precisely predictable must not be an excuse for careless contracting practices," David E. Cooper from the non-partisan Government Accountability Office, told Congress last week. Discussing the Akima contract, Cooper said, "We found information in the corps' contract files and from other sources that suggest the negotiated prices were inflated."
Why did Akima get the job over the local player, Adams Hardware and Home Center? Politics.
Akima's majority owner is the NANA Regional Corp. It is represented in Washington by Blank Rome Government Relations, a lobbying firm with close ties to the Bush administration and particularly Tom Ridge, the former head of the Department of Homeland Security, FEMA's parent agency. Akima has 22 federal contracts, mostly with the military. It also has an agreement with the Army to supply modular buildings.
Adams Hardware doesn't have a lobbying firm with a huge retainer and ties to the Bush Administration. It did have a lower bid, though.
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Article comments
1 - Eric Olsen
excellent story David, can't argue with you at all - has the government offered any counter rationale for why Akima, for example, got the no-bid contract as opposed to naked patronage?
2 - david r. mark
An Akima spokesman told the NYT that that neither Akima nor NANA used any ties to elected officials to pursue contracts, "despite assertions in a Mississippi newspaper that the classroom deal may have been the result of political connections."
The GAO's Cooper said the non-partisan agency is investigating.
3 - Natalie Davis
Terrific piece, but it should be no surprise that the Bushites turn to their friends for these sorts of things. That's their MO.
4 - Marcia L. Neil
The people who should have been repairing the
levees or at least delegating authority to do so are over here, wedged into the San Francisco Bay Area, dabbling in the real estate market.