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Louisiana Officials Say Katrina Recovery Wasteful    [

    Fed Inspectors: Katrina Contracts Wasteful
    By Rukmini Callimachi
    The Associated Press

    Monday 10 April 2006

    New Orleans - Government agencies paid inflated prices for goods and services in the aftermath of Hurricane Katrina in a system riddled with waste, three government inspectors general testified at a congressional hearing Monday.

    It was the first time the three government auditors - inspectors general with the Department of Homeland Security, Department of Defense and Army - publicly disclosed figures on government waste in the Katrina recovery effort.

    The inflated prices were a result of poor planning as well as a lack of proper oversight, the three said.

    In the case of debris-removal contracts, awarded to four firms, the Auditor General of the Army found that the four subcontracted their work to multiple tiers of subcontractors, resulting in markups between 17 percent to 47 percent.

    Similar price hikes were found in other services, including the placing of blue covers on damaged houses and the installation of temporary housing trailers.

    The chief of the Army Corps of Engineers, responding to the reports, said the magnitude of the disaster required the Corps to act outside its normal procedures.

    "If we were to follow these usual rules for full and open competition, we would not have been able to award a contract to get the flood waters out of the city of New Orleans," said Lt. General Carl Strock.

    "You probably saw pictures of helicopters dropping these huge sand bags into the various levee breaches. It was an urgent situation which required expedited procurement," he said.

    Several members of Congress pitched in with examples of waste.

    Louisiana Rep. Bobby Jindal said the Federal Emergency Management Agency paid $175 per square of blue tarp to place on blighted roofs. But multiple contracting levels later, Louisiana contractors reported they were being paid as little as $2 a square. Each square consists of 100 square feet.

    U.S. Sen. Tom Coburn, R-Okla., who chaired the hearing, cited the cost FEMA paid to install each mobile home: "In Oklahoma, we could build a nice little home for $70,000."

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    Louisiana Officials Say Katrina Recovery Wasteful
    By Michael Depp
    Reuters

    Monday 10 April 2006

    New Orleans - Multibillion-dollar hurricane recovery efforts on the U.S. Gulf Coast are plagued by bloated costs and waste with too many contractors getting a piece of the action, lawmakers said at a hearing on Monday.

    Louisiana legislators frustrated by the slow pace of recovery accused the Federal Emergency Management Agency and Army Corps of Engineers of spearheading a flawed rebuilding process with little transparency and contractor oversight.

    U.S. Sen. Tom Coburn, an Oklahoma Republican and chairman of the Senate Subcommittee on Federal Financial Management, held the field hearing as part of efforts to avoid the mistakes made after Hurricane Katrina in future crises.

    "There seems to be a great pillow in the middle," Kevin Davis, president of storm-ravaged St. Tammany Parish, said of a disconnect between FEMA management and on-the-ground personnel. "Creativity and flexibility are discouraged."

    The August 29 storm killed at least 1,300 people along the Gulf Coast. The region is bracing for the formal start to the 2006 hurricane season on June 1 against a backdrop of often-fractious relations with the federal agencies.

    Coburn questioned the Corps' debris removal contracts as an example of mismanagement. He asked why details were not being divulged and questioned FEMA's deferral of key cleanup initiatives to the Corps.

    "We believe that they have the requisite experience that we don't have within FEMA," responded Tina Burnette, deputy director of acquisitions for Katrina under the Department of Homeland Security, which oversees the agency.

    But Sen. David Vitter, a Louisiana Republican, said the Corps contracted out its key cleanup operations to large, private firms, which in turn sub-contracted down a lengthy chain of companies before any work was done.

    Too much of $100 billion-plus earmarked for Louisiana hurricane relief efforts is tied up in wasteful subcontracting practices, lawmakers said often at the hearing.

    Also, local contractors are frequently being shut out of big jobs despite laws guaranteeing their role, Vitter said.

    Derrell Cohoon, chief of the Louisiana Association of General Contractors, which represents 700 firms, said local players were getting subcontracts that were too small and piecemeal to be either profitable or meaningful.

    Several politicians complained about FEMA travel trailers used for temporary housing, which have cost the agency $50,000-$70,000 each to buy and install. The money would be better put in residents' hands to repair their homes or to find other housing, the said.

    The trailers themselves have been troublesome. One local politician testified some of his constituents have had them delivered, only to be locked out because different contractors were in charge of handing out the keys.