Katrina contracts wasted money, House report says

70% were awarded without full bidding

August 25, 2006|Associated Press

WASHINGTON -- The government awarded 70 percent of its contracts for Hurricane Katrina work without full competition, wasting hundreds of millions of taxpayer dollars in the process, says a House study released yesterday by Democrats.

The report, a comprehensive overview of government audits on Katrina contracting, found that out of $10.6 billion in contracts awarded after the storm last year, more than $7.4 billion were handed out with limited or no competitive bidding.

In addition, 19 contracts worth $8.75 billion were found to have wasted taxpayer money at least in part, costing hundreds of millions of dollars, according to the report.

It cited numerous instances of double-billing by contractors and cases of trailers meant as emergency housing sitting empty in Arkansas.

Aaron Walker, a national spokesman for the Homeland Security Department's Federal Emergency Management Agency, the primary agency for awarding hurricane contracts, said FEMA was already working to improve its contracting process based on ``previously issued, nonpoliticized, reports."

``This report has no new revelations," he said. ``At the height of hurricane season, it is a disservice to FEMA employees, who are working around the clock to continue retooling this agency."

In their report, Democrats acknowledged that some no-bid contracts were necessary to provide quick aid in the immediate aftermath of the August 29, 2005, storm. But they noted that while 51 percent of Katrina contracts awarded in September were limited or no-bid, that percentage increased to 93 percent in October.

Last December, FEMA was still awarding 57 percent of the total dollar value of contracts without full bidding.