FEMA Extreme Trailer Makeover

As reported on Yahoo News

FEMA exposed taxpayers to significant waste — and possibly violated federal law — by awarding $3.6 billion worth of Hurricane Katrina contracts to companies with poor credit histories and bad paperwork, investigators say.

In the immediate aftermath of Katrina, FEMA handed out lucrative no-bid contracts for cleanup work to large, politically connected firms such as Shaw Group Inc., Bechtel Group Inc., CH2M Hill Companies Ltd., and Fluor Corp.


Following heavy criticism, FEMA director David Paulison pledged to rebid those large contracts. He ultimately reopened only a portion, awarding 36 contracts which the agency said would be prioritized for small and local businesses.

Among the winners was joint venture PRI-DJI, which received $400 million worth of contracts. That prompted complaints from small and locally operated firms who said they were unfairly shut out. DJI stands for Del-Jen Inc., a subsidiary of Fluor, one of the original, no-bid winners which has donated more than $930,000 to mostly GOP candidates since 2000.


"It's not what you know, what your expertise is. I don't even believe it's got much to do with price. It's who you know," contended Ken Edmonds, owner of River Parish RV Inc. in Louisiana, a company of 9 people whose application was rejected.


In the audit, investigators said PRI-DJI was eligible to compete because DJI had partnered with PRI, a minority-owned firm based in San Diego, under a federal mentoring program offered by the Small Business Administration.

However, investigators found that PRI-DJI was given special preference even though it was not registered as a small business and "when neither company had its headquarters in Louisiana or Mississippi nor, in any other way, demonstrated that it had a history of working primarily in the impacted states."

Still, the audit noted the bid by PRI-DJI would likely have been selected anyway — without the special preference — because the price was so low.

Prices also varied greatly. Some were so high that investigators deemed them unreasonably excessive and wasteful; others were so unreasonably low that taxpayers faced "an unacceptable risk of poor performance."

For example, FEMA:
_Accepted bids as low as $74 and as high as $4,720 to completely refurbish used travel trailers. FEMA estimated this service should cost $1,380 per trailer.