Surprise: FEMA wasted billions on Katrina recovery

August 28, 2006

shockHouse Democrats finally got their act together enough to do a full investigation into the Hurricane Katrina relief and recovery efforts by FEMA. The Bush Administration used private contractors billions to do the work – 70% were awarded without a competitive bid. The report identifies 19 Katrina contracts, totaling $8.75 billion, that have experienced significant overcharges, wasteful spending, or mismanagement.

And of course, under Bush-Cheney theory of “We’re going keep to doing the wrong things, but we’ll just get better at them,” FEMA awarded earlier this month another $1 billion in contracts to several of the same companies implicated in the wasteful Hurricane Katrina response.

Key findings in the report include the following:

  • Full and Open Competition is the Exception, Not the Rule. As of June 30, 2006, over $10.6 billion has been awarded to private contractors for Gulf Coast recovery and reconstruction. Nearly all of this amount ($10.1 billion) was awarded in 1,237 contracts valued at $500,000 or more. Only 30% of these contracts were awarded with full and open competition.
  • Contract Mismanagement Is Widespread. Hurricane Katrina contracts have been accompanied by pervasive mismanagement. Mistakes were made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight. Compounding this problem, there were not enough trained contract officials to oversee contract spending in the Gulf Coast.
  • The Costs to the Taxpayer Are Enormous. This report identifies 19 Katrina contracts collectively worth $8.75 billion that have been plagued by waste, fraud, abuse, or mismanagement. In the case of each of these 19 contracts, reports from the Government Accountability Office, Pentagon auditors, agency inspectors general, or other government investigators have linked the contracts to major problems in administration or performance.

Read the report for yourself (PDF): House Report

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