the committee on government reform will come to order the committee meets today to hold a hearing on sifting through katrina's legal debris contracting in the eye of the storm but prior to the hearing the committee will hold a brief business meeting to consider house read seven fifty two as well as several other resolutions and post office designations the committee will first consider house resolution seven fifty two this a resolution of inquiry a privilege house procedure that seeks information from the executive branch the resolution before this committee today was introduced march thirtieth two thousand and six by the government reform committee as ranking member henry waxman seeking all telephone e mail and other records from the executive office of the president regarding variations between s one nine hundred thirty two and deficit reduction act of two thousand five as passed by the house and the bill signed by the president i want to commend the ranking member for introducing the resolution but i think that this resolution of inquiry makes a mountain out of a molehill that i think will be decided by the courts a technical error was made to the bill by a senate clerk before the bill was sent to the president's desk for signature as mr waxman noted in his statement introducing the resolution clerical errors happen when they do live with them or fix  them in this case the issue has been presented to the court to resolve the matter the senate as a matter of fact is not seen as disturbed on this they passed a unanimous consent resolution which i think stated what they had intended as they sent the resolution forward digging around to find out what the white house didn't didn't know about the bill doesn't help resolve the matter the president had in front of him a bill that was signed and certified by the house in the senate and he signed it this resolution similar to the numerous other resolutions inquiry that have been introduced in this congress by democrats most have been in the vale political gimmicks resolutions have been introducing various information documents in the president's possession when he gave a speech back in two thousand and two in cincinnati ohio documents in the president did and did not know when he signed a bill that was certified by the house and the senate that was before him into law i intend to recommend the committee i report this resolution unfavorably to the house but i look forward to hearing the comments of my friend in the resolution sponsor mr wax and i like to recognize you for an opening statement thank you mr chairman i i do have a statement on this and i hope my statement might change your mind and convince the members to join me in supporting it this resolution  concerns a constitutional principle fundamental to our nation's systems of checks and balances a bill does not become law until the president signs of version identical to the version passed by both the house and senate this subject should matter to members of congress across party lines and it is a subject crying out for congressional oversight the resolution concerns the president's roland s one nine hundred thirty two the deficit reduction act of two thousand and five constitutional requirements were not followed when the bill was presented to and signed by the president and the resolution seeks to find out why the deficit reduction act was highly controversial legislation the senate passed the measure on december twenty one two thousand and five on a fifty one to fifty vote with vice president cheney casting the tie breaking vote the house passed the measure on feb one two thousand six by an equally narrow vote of two sixteen to two fourteen but the version of the act congressional leaders presented to the president had not been passed by both the house and senate the house passed a version of the legislation required the medicare program to lease durable medical equipment such as wheelchairs for seniors and other beneficiaries for thirty six months the senate passed version limited the duration of these leases to thirteen months although this may seem like a small difference its fiscal implications are exceptionally large as a congressional budget it office reported the effect of the change was to cut medicare outlays by two billion dollars over the next five years there is mounting evidence that the president was aware of the constitutional flaw in the deficit reduction act before the president signed the measure it appears that on the morning february eighth the day the legislation was signed by the president the white house office of management and budget notified republican congressional leaders or staff rather that the version of the legislation presented to the president was not the same as the house passed version this information was promptly communicated to the office of house speaker hastert the speaker's chief of staff then called senior staff at the white house to advise the white house of this mistake and to request a delay in signing the legislation the wall street journal in an excellent investigative report confirmed the key facts according to the journal the speaker's chief of staff staff scott palmer conceded that quote the illinois republican had asked the administration to delay proceeding until the problem could be addressed by the house and senate and quote indeed the wall street journal reported quote when the speaker and senate majority leader went to the white house for the february eighth ceremony they expected only a mock ceremony not a real signing of the parchment that had been presented in error and quote despite these communications from the house speaker the president signed the bill on february eighth this action by the president has serious constitutional implications when the president took out of office he swore to preserve protect and defend the constitution of the united states if the president signed s one hundred thirty two knowing it's constitutional infirmity he would in effect be placing himself above the constitution the president's decision to authorize the national security agency to conduct warrantless wiretaps despite federal laws forbidding the practice has raised questions in the minds of many americans about whether the president considers himself bound by the laws passed by the congress the president's assertion that he can ignore the newly enacted law prohibiting torture has or a similar questions the evidence that the president signed the deficit reduction act knowing that it differed from legislation passed by the house presented even more fundamental issue does the president consider himself bound by the provisions of our nation's constitution to learn more about this matter i wrote the president's chief of staff on march fifteenth seeking information on the president's knowledge of the bill's constitutional infirmity after the wall street journal reported the speaker hastert hastert office had informed the white house of the problem with the legislation i joined democratic leader nancy pelosi and two letter on this issue to the president but the white house has refused to respond given the constitutional it's a shoe at stake it's imperative that the congress exercise its oversight powers to examine what the president and his staff knew about the defects and asked one hundred thirty two and how they considered and acted on such information this was not simply a clerical error this was a two billion dollar difference in the house and the senate bill the logical thing is that our chairman here today said would the one way to resolve it would be to take it back to the congress and have the congress resolve the differences but with a very narrow vote in both the house and the senate which was on partisan lines only the the leaders of both the house when the senate were refused fearful both houses again because of the strong bipartisan opposition well i urge my colleagues to support this resolution of inquiry whether or not we share the party affiliation of the president we all have an interest in ensuring that no president can ignore basic constitutional requirements we in the american public deserve a thorough explanation of how the president came to sign the deficit reduction act of two thousand and five so i would urge support for our motion  r a inquiry from our committee to to the the president just one mr oxman just one just to get the facts straight my understanding is the senate passed thirteen months is what the senate language had but the enrolling it and sending it to the house put thirty six months in the house passed thirty six months when it was sent back to the senate instead of the senate going back and correct thirty the clerk then changed it back again  o these mistakes and i think it's very clear from the wall street journal argument and there's no issue on i think the facts this was done in the senate by a senate clerk the senate then passed a unanimous consent bipartisan resolution basically saying this is what we mean behind it the president was offered it was had before him a certified act of congress which he signed i think ultimately it's up to the courts to decide this and i think the facts are pretty clear there's no question the courts will likely have to resolve the issue but the but we ought to still exercise our oversight responsibility and we ought to know what the white house understood the situation to be because that wall street journal article indicates that the president president's chief of staff and maybe the president himself knew about the fact that both versions the very passed by the house and the senate did have a difference no matter how the difference might have come about whether it was an error unintended yeah it doesn't make any difference if if they're not the same as i understand the error was discovered by the white house so i am certain they knew that what was in front of them and w certified that there had been some controversy and i guess the legal issue was the assigned what the clerk certifies and says they passed or not and i just think it's better off to the courts but i appreciate your bringing it up and i understand that there is a genuine issue here that i think will move through the court system are there any other members who wish to address this issue given the time i would ask that members submit their written statements for the record with no further member seeking recognition i would following bills in the house by unanimous consent h r forty seven sixty eight introduced by congressman i'm melissa hart of pennsylvania would designate the u s postal facility located in beaver pennsylvania is the robert lee memorial post office building robert lane was the longest serving mayor in the united states serving fifty eight years as the town's mayor h r fifty eight introduced by congressman ray la hood of illinois will designate the u s postal facility located in rock island illinois elaine evans post office building this bill would honor congressman lane evans who has long serve the people of the seventeenth district of illinois first elected one thousand nine hundred two mr evans has recently announced his retirement after twenty four years of distinguished service h r fifty one of four introduced by congressman jim davis of florida would designate the u s postal facility located in st petersburg florida as the morris w milton post office throughout his impressive legal career mr morris fought for the hiring of more minority teachers and promotion of more african americans to probably administrative jobs in the panellist county school board mr morris also found time to establish the democratic by caucus of florida and to be president of the st petersburg branch of the n a c for ten years h r fifty two forty five introduced by the distinguished gentleman from vermont mr sanders will designate the united states postal facility located in fairhaven vermont is the matthew lyon post office building in addition to being the founding father of the town of fairhaven matthew line dedicated much of his life to raw politics serving as a member of the state house of representative for more than ten years a thread three twenty seven introduced by congressman barr believe california with support the goals and ideals of national passport month according to the u s state department only twenty percent of americans hold passports this bill would encourage world travel as a means of cultural enrichment a threat six twenty six introduced by congress and russ carnahan of missouri which congratulate albert pujols on being named the most valuable player for the national league for the two thousand and five major league baseball season the fifteenth cardinal to win the prestigious award since its one hundred thirty one inception two holes received eighteen of thirty two first place votes to capture the m v p title also h red six twenty seven introduced by congress and russ carnahan of missouri we congratulate chris carpenter and being named the site young award winner for the national league for the two thousand and five major league baseball season he posted a twenty one five record while also achieving career highs in strikeouts innings pitched completed games and shut out so i would just add here that we're moving ahead with these markups despite the fact that they're having the groundbreaking for the new stadium in washington as we are of florida will support national tourism week as one of our nation's largest employers the travel and tourism industry supports more than seven million jobs national tourism week recognizes the significance of this important industry to our economy h r s seven fifty three introduced by congressman sherman boehlert of new york would command the american craft brewers american craft brewers are a vibrant affirmation an expression of american entrepreneurial traditions operating as community based small businesses and providing employment to more than thirty three thousand workers  sixty three resolution i introduced which would support the goals and ideals of the national children families day our children our country's most vital resource and we should strive to do everything possible to prepare them to lead healthy productive lives as they mature into adulthood there's nothing more important any of us whether we be adults or child than have a sense of family and tradition but most important to have a feeling of belonging seven seventy three introduced by congressman pete sessions of texas we commend the american jewish committee for its century of leadership since  american jewish committee has been a pioneer in human relations dedicated to combating all forms of bigotry and championing a sense of shared civic responsibility h r s seven eighty eight introduced by congressman joel hefley of colorado would support the goals and ideals of peace officers memorial day this resolution would honor the dedication and perseverance of our country's brave law enforcement personnel and we've added conrad three ninety nine injuries by congressman thompson of california this recognizes the thirty eighth anniversary of the victory of united states wine makers at the one nine hundred seventy six paris wine tasting and would recognize the historical significance of this event to the united states wine industry mr waxman you can make a statement on any of these bills mr chairman very meritorious and they'll give us some opportunities on the house floor to do some business in a session that has been noted for the very few very few bills that have really been considered on the house floor in the short period of time in which members of been required to actually in session so i want to join you in urging all of our colleagues to support these worthwhile resolutions well thank you very much let me just say as a lifelong teetotaller for me to be able to support the recognition of the wine tasting and the craft breweries and as a gnat's than recognizing that i think i've risen above the usual partisanship here to try to make and accommodate the needs of members mr chairman mr bur committee favorably report the following bills of the house h r forty seven sixty eight h r fifty eighty six h r fifty one zero four h r fifty two forty five h ross three twenty seven h red six to six  red seven to nine eight red seven fifty three h red seven seventy three h red seven eighty eight and h conrad's three ninety nine i hope i got all those numbers right that nothing was reversed i don't want any problems as we move forward without objection so ordered and the committee will stand adjourned and will reconvene in a couple minutes for the hearing on sifting through katrina's legal debris contract in the eye of the storm can challenging circumstances acquisition personnel acted to meet pressing humanitarian needs contacting firms or never to provide an immediate relief to survivors into practical life and property many firms were called into action  sole source basis under acquisition flexibilities that allow the government to acquire urgently needed goods and services in emergency situations notwithstanding the extraordinary scope of the disaster a significant portion of the immediate response were provided to existing contracts that had previously been awarded through full and open competition as we learn from our work on the house select it could mean a committee the circumstances an urgent needs created by the storm provided an unprecedented opportunity for fraud and mismanagement nevertheless despite the speed and scope of the effort the system though stressed appeared to work well today we want to learn whether the proper procedures vehicles and mechanisms are in place to minimize systematic vulnerabilities and meet the challenges posed by catastrophic events the committee's interested in pre disaster acquisition planning by federal agencies the initial acquisition response the need for immediate relief and average to respond to more long term recovery needs the adequa of the existing acquisition workforce to provide contract management support is going to be examined as well finally we'll review lessons learned and suggestions for improvements in our response to future disasters our view will include the use of set aside including local contractor participation under the stafford act in addition we want to understand the specific roles and responsibilities of private companies as contractors to the federal government our witnesses can bring their perspectives regarding forward contracting reverse auctions the use of online acquisition tech now ology and the challenges that occurred in implementing the stafford act and preferences for local contractors will ask questions these firms provided agencies the extent of previous support for agency missions during natural disasters and their participation in preexisting disaster relief plans finally i'm interested in the company's perspectives regarding the most effective contracting vehicles methods and policies millions of dollars have gone to private firms to help prepare for and respond to katrina part of our job is to ask what contracts should have been in place before the storm arrived and the rationale and process for awarding disaster relief and recovery contracts in the immediate aftermath will ask about the ways in which the management and oversight of disaster related contracting can be strengthened concerns have been raised with respect to how the federal government awards contracts in the immediate aftermath of a disaster i hope that we can take the time to understand how the procurement system works before we rush to change and i'm sure we'll learn that there have been mistakes when decisions were made quickly there will be disagreements with contractors over pricing and payment schedules which happens with complex contracts under difficult situations we also need to look in review the local participation under the stafford act agencies and prime contractors are to give preference to local subcontractors that many small local businesses continue to complain they are hired or are hired on unfair terms questions have been raised about the corps of engineers use of limited competition to award contracts for degree debris removal and cleanup for example at the same time larger firms argue that the projects are too big or complicated for small firms to handle agencies cite the need to hire firms with a track record financial strength and expertise to meet the requirements they also note the challenges posed by managing hundreds of smaller contractors raises a related but important issue clearly we want contractors to have the expertise to get the job done but before we can address that issue we need a sufficiently trained acquisition workforce our acquisition laws have been crafted to provide anough flexibility for the government to quickly get what it wants in emergency situations i hope we'll learn what tools if any we need to be better prepared the next time the officials on panel one will provide an overview of the acquisition process and a description of the acquisitions made before katrina the witnesses will undertake a review of the agency's performances in response to katrina and their plans for the future the d h s s i g and the g a o witnesses will provide an overview of their katrina related investigations and oversight efforts panel to consist of representative companies whose work can highlight particular contracting issues surrounding response and recovery requirements ashbridge as a national firm providing debris remov a review of their contacts with the federal government and the unique challenges they face carrying out their missions i look forward to hearing from them i would now recognize our distinguished ranking member mr waxman for his opening statement and before i do that let me just ask unanimous consent for m from the agencies this is a hearing that we should be doing the picture the documents point are not very pretty it's hard not to get angry after hurricane katrina devastated the gulf states americans did what they always do they open their wallets to get the recovery going as a nation we committed billions of dollars to make things better and americans asked us to make sure the job was done right today we examine how that money has been spent and what we will find is massive fraud waste and abuse pervasive mismanagement of the first and most basic challenges of the gulf faced was removing countless tons of debris the u s army corps of engineers lead this effort and awarded for contracts totaling two billion dollars to clean up the mess the debris contractors grabbed the money and then committed every abuse imaginable some sought double payments for the same load others massage their travel records to qualify for bonuses for long distance transport and one contractor even picked up debris from a public dump and drove it to the federal site just to game the system the tape types of fraud and waste in the debris contracts goes on and on and it's all summarized in depressing detail in this memo things weren't any better in the effort to patch damage roofs the federal government spent millions on contracts with companies to install temporary blue plastic sheeting to protect damaged homes but internal the government documents show that blue roofs that were installed for building purposes were never installed on  actual roofs overcharges were routine and exaggerating the amount of work actually done seems to have been been standard siege or the katrina contracts are a lose lose proposition private contractors have exploited the system to make a bundle taxpayers were gouged and the folks devastated by katrina in louisiana and mississippi didn't get the help they deserved who let this happen well the short answer is the corps of engineers the prime contractors the bush administration and congress the corps had the dual responsibility of getting the work done and looking out for taxpayers but the corps of engineers regularly failed to inspect trucks as they left dump sites and repeatedly over estimated the size of the loads they delivered by the contractors in a series of damning reports government auditors described the corps assessment as unusually high overly generous very liberal and consistently on the high side the exact same types of problems plagued the blue roof contracts government auditors found that core fishelson enter to entered into an informal agreement with the private contractors not to question billings as long as the bills did not exceed the estimates by more than fifty percent according to the auditors this agreement was quote excessive and unreasonable and does not adequately protect the government from waste or abuse one of the most powerful findings that emerges from the documents is how fundamentally flawed the bush administration's entire contracting approach has been the cornerstone of the administration's approach has been to award large umbrella contracts to major prime contractors these contractors don't collect the debris themselves and they don't patch the rubes themselves instead they hire subcounty actors to do the work then the sub contractors hire other some contractors the theory behind this approach is that the prime contractors should have the resources and the expertise to oversee these layers of contractors effectively was the gut documents reveal it at this entire approach bankrupt the government auditors report repeated repeatedly report that prime contractors were exercising virtually no oversight over the sub contractors they don't know where the sub contractors are and what they're doing or whether they've even completed their work well this approach builds overhead on top of overhead and dramatically inflates costs for taxpayers each contractors sub contractor and sub sub contractor wants a cut even if it's doing not doing any real work and it's in the ideal environment for fraud when g a o testifies this morning we will also learn that there was inadequate planning that the agencies failed to communicate with each other about who was in charge and that there was in effect of contractor oversight because there weren't enough people on the ground g a o will also tell us about other examples in which millions of dollars were simply thrown away because of incompetence at lax oversight what's clear is that contractor looting in katrina isn't an isolated incident contract mismanagement deficient oversight and exorbitant over charges have occurred again and again since two thousand and one the bush administration has gone on three spending binge is in the last five years the first was the frenzy toward a huge homeland security contract after the september eleventh attacks the second was the twenty billion dollars spent on iraq reconstruction and the third is responding to kurt to katrina all three are marked by unimpressive did contractor abuse we aren't talking about hundreds of thousands of dollars lost to fraud in wasteful spending we aren't talking about millions we're talking about billions of dollars billions squandered or looted scattered through iraq right now  over one hundred partially build public health hospitals paid for by us taxpayers which were are likely never to be completed they cost over one hundred eighty million dollars the contractor parsons got paid but it didn't finish its work last month the new york times reported on a seventy million dollar ditch halliburton build in iraq it appears company officials knew their plan for repairing an oil pipeline couldn't possibly work it didn't but they still got seventy million dollars and american taxpayers bought a ditch yet despite the litany of extraordinary abuses no one in this administration seems to care and no senior officials are ever held accountable congress is no better given all the billions of taxpayers dollars that have been wasted americans might think that congress would dig into this problem but in almost every case with the exception of hearings in this committee congress has looked the other way i'm particularly frustrated by the katrina looting because we knew it was going to happen that's why i joined with minority leader pelosi last september in introducing the hurricane katrina accountability and clean contracting act this legislation what would have enacted fundamental reforms in time to prevent the katrina abuses but the bill never received a hearing administration officials claim we are exaggerating the problem and the day after leader pelosi and i introduced our katrina legislation the president said reforms were necessary and he prom we'll make sure your money is being spent wisely and we're going to make sure that the job is being dead that the money is being spent on a slate and quote well i said at the outset we should all be ashamed and i mean that but at the same time i do want to thank chairman davis for holding this hearing he is one of the lone figures on the republican side who will ask questions and request documents it doesn't always go as far as i think he should but he does much more than many of his colleagues in particular i want to thank him for requesting with us the documents from the army corps of engineers the department of homeland security the detail the abuses and can train a related contracts these three thousand pages of documents and the really are the reasons we're here today and i look forward to working with the chairman and all the committee members and getting to the bottom of this and finally holding someone accountable for the unconscionable looting and inco owe that to the american taxpayers and we owe it to all those who lost so much katrina thank you mr waxman members will have seven days to submit opening statements and for the record we're going to recognize our first panel we have major general don reilly the director of s department homeland security no stranger to this committee thank you for being here and family murphy the chief acquisition office u s general services administration thank you and we have mr william woods a director of acquisition and sourcing manager of the u s government accountability office and  stranger to this panel and mr matt jackie who is the special inspector general gulf coast hurricane recovery u s department of homeland security is our policy we swear all witnesses in before he testify so please rise and raise your right hand sound is where the testimony about to be the truth the whole truth and nothing but the truth thank you what we try to do is you may be seated the your entire statement is in the record questions will be based on that what we ask is you take five minutes to sum up the important parts of that the light in front of you will be green when you start after four minutes it will turn yellow it'll turn red after five if you could move to summarize at that point we have a large family day and we want to get to like we look forward to i think the riggers oversight hearings generally will start with you and thank you for being with us yes mr chairman thank you and as director of the civil works i'm also commander emergency operations for the corps and thank you for the opportunity to testified today under the national response plan the corps is assigned as the coordinator for emergency support function number three which is public works and engineering under this function the corps is an advance contract initiative program in which we competitively award contracts for future use in the provision of water ice temporary power temporary roofing and debris removal having these contracts in place allows accord to rap and they respond to emergency situations the president widespread devastation in last season's storms the corps awarded for additional debris removal contracts in mississippi and louisiana that were open to any company we received twenty two proposals in the contracts were awarded on the basis of the best value to the we previously awarded several advance contracts for temporary routes in the gulf region and given the magnitude of the damage during the two thousand and five hurricane season for additional contracts were awarded on earth n c procedures utilizing the ranked proposals from the original competition additionally the corps makes extensive use of standard authorities granted to us under the various small business set aside programs especially for small business administration registered a firm's we have instituted high goals for small business sub contracting and they include a reporting requirement that keeps focus on achieving results in these areas furthermore we have been following an acquisition strategy for our continued mission from fema which includes opportunities at the prime level for local disadvantaged companies and a geographic set aside for the unrestricted portion of the strategy we work to strike a balance between expeditiously providing relief to those in need while doing so in the most efficient and effective manner we immediately deploy corps internal auditors team with the defense contract audit agency and the united states army criminal investigation command to oversee all emergency response efforts to note actual or potential errors to help mission managers comply with their fiscal stewardship responsibilities and protect instances of fraud waste and abuse we implement corrective actions immediately finally for each emergency event we prepare after action reports which include lessons identified from all sources during our response efforts and our intent is to me the correct strengthen and where necessary adjust supporting procedures again thank you for the opportunity appear before this committee and i'd be happy to answer any questions  mr chairman congressman waxman and members of the committee thank you for the opportunity to discuss the department of homeland secure city acquisition program and our role in providing support to thema in its response to hurricane katrina join the new senior leadership team in april she brings a wealth of acquisition experience that will greatly contribute to fema success in improving its disaster response and recovery operations she can answer any questions that the committee may have concerning themis plans and moving forward as a cheaper chairman officer for the department of homeland security i provide oversight and support to the eight mccarran offices within the department in addition to the federal emergency management agency the seven other part karen officers are the u s customs and border protection transportation security administration immigrations and customs enforcement the federal law enforcement training center united states  united states secret service and the office of preparing operation collectively these eight procurement offices obligated over seventeen billion dollars for supplies and services in support of the da da s mission in fiscal year two thousand and five because eight of the seven contracting offices report to the heads of their components i strive to achieve functional excellence among the offices primarily through collaboration i use the d h s s chief acquisition officers coun comprised of the head of each contracting office to integrate the contracting function while maintaining the components ability to meet their customer's unique needs my top three goals for the d h s s acquisition program are first to establish an acquisition system whereby each requirement has a well defined mission and a management team that includes professionals with the skills to achieve see the crack mission results my second goal is to build the data acquisition workforce one initiative under this goal is improving and improving and broadening the d h us fellows program under the fellows program we recruit recent college graduates to ensure a d h s has a qualified cadre of acquisition professionals to support it mission now and in the future my third goal is to assure more effective buying across eight contracting offices through the use of strategic sourcing and supplier management and a federal level as a member of the federal chief acquisition officers council i will continue co leading with ms emily murphy my colleague at general services administration the federal wide effort of developing a contingency contracting program so the park kimock community has the tools to provide an integrated federal response to an incident of national significance our response to hurricane katrina revealed the need for improvements and how we respond to such devastating events for the acquisition community we recognize the need for increased staffing and we are hiring additional personnel we also recognize a need for additional longer term contracts to improve famous ability to respond to emergencies i will continue to work closely with the most senior leadership to ensure and successfully obtain the resources authorized to build their acquisition core and to fulfill the commitment to re compete contracts as appropriate we are addressing that area with the award of many disaster related contracts including the competitive award of the planned individual assistance technical assistance contract we have developed an overall contingency contracting strategy that provides immediate response to disasters while taking full advantage of good morning chairman davis ranking member waxman and other distinguished members of the committee thank you for inviting me here this morning to testify and g s a factions in the aftermath of hurricane katrina and on how we serve the taxpayers interest in the procurement process in times of urgent need these are timely topics as we're roughly one month away from the beginning of the next hurricane season and the past eight months the men and women of g s a have worked diligently to help respond to the call for assistance and even now we're working to be more proactive we must apply the lessons from katrina to every disaster that strikes in the future immediately after katrina g s a activated our contingency contracting plan supplementing our contracting office supplementing with contracting officers from all  regions and g s a headquarters seven days a week twenty four hours a day every member of my staff that we could warrant we warned you immediately to provide additional assistance to those in the field and our office of commercial acquisition alone g associates work nearly ninety five hundred collective hours on on over eleven hundred requisitions for items such as diapers bottled water portable restroom facilities computers pumps generators in ten additionally we transfer nearly two million dollars worth of property from excess inventory to state and local governments including three hundred thirty two thousand dollars in for federal property donated to the furniture for schools program in the affected area of the total two hundred three g s a mannish office space locations within the fema declared disaster area fourteen buildings were closed due to sustained damage that includes one hundred eighty nine lease locations and fourteen g s a own locations comprising in excess of three point four million dollars and thirty three point four million rentable square feet the space and one point eight million square feet of own space on october tenth two thousand and five just forty days after  landfall in the gulf coast the entire federal workforce affected by katrina with return to full operational status via a placement in temporary space in response to fleet operational requirements g s a assigned over seven hundred vehicles including vans pickup trucks and buses for immediate need short term basis to federal agencies in support of their aid and relief work in the affected storm area as of april eighteenth of two thousand and six g s a had procured over six  hundred thirty million dollars in products and services in support of hurricane katrina we made every effort to comply with the stafford act and four hundred eighty three million dollars or seventy seven percent of procurements were awarded to small businesses with fifty three percent to local small businesses this work occurred amid pressure to execute contracts quickly challenging working conditions and widespread logistical and communications disruption one example on september first g s a was asked to quickly establish a five hundred operator call center in chicago at the time fema was unable to meet the demand of the approximately fifty thousand calls a day as you will call this unprecedented urgent need receive national media attention and a prompt president promised to do whatever was necessary to ensure that people got answers by september second at g s a leasing specialises and signed a letter for sixty thousand square feet allowing for  five thousand dollars of electrical work and two hundred eighty thousand dollars of cabling work to begin within one week we had the center up and operational and ready for four contractors to go in and begin work so what do we need nothing to suggest that everything went perfectly in katrina and we're working right now to make sure that we're better prepared in the future that includes directing training so that we give our acquisition professionals the tools that they need to be respect to be successful as they responded disasters a partnership with federal acquisition and student defense acquisition university to make sure that additional courses are available and a real time basis and making sure that go kits including things like satellite phones and just basic gone reviewed all of our significant acquisitions that we did in in response to hurricane katrina to make sure that we did not just the appropriate contracted time in the initial acquisition but that that continue to be the appropriate response going forward in some we take seriously the trust placed in us fire federal customers and by the taxpayers we've learned lessons from katrina and will continue to apply those in the future and we look very very very much look forward to working with this committee o m b and the other agencies to continue to support their mission thank you thank you mr woods thank you mr chairman ranking member waxman other members of the committee i appreciate the opportunity to be here today to talk about the work of the government accountability office and looking at the  a related contracts let me first mention the approach that we that we took to make a couple of points there we coordinated very closely as we began to look at katrina related contracts with the rest of the oversight community particularly the inspectors general mr skinner at the department of homeland security mr jackie and the rest of their colleagues to make sure that we could avoid duplication of effort whenever possible those consultations resulted in a  couple of understanding some on our respective organizations for us it was very clear that the inspector general community was devoting a significant amount of resources looking at the award of these contracts the competition the pricing issues that sort of thing and where we felt that we could make the greatest contribution at the government accountability office is looking at the execution of those contracts so we decided to devote a significant effort looking at the monitoring  of contractor efforts the other accommodation that we were able to reach is that we satisfied ourselves that certain contracts were had quite adequate oversight by the inspector general community particularly the debris removal contracts so we were able to we decided that we did not need to devote any additional resources looking at the debris removal contracts and i want to summarize very briefly our findings and looking at these  contracts but before i do i want to recognize the hard work and extraordinary effort of all of the responders at the federal state and local level and the contractors who have devoted a significant amount of  effort in responding we can all have our differences about the outcomes and we'll have our debates about the challenges that they face but there can be no disagreement it seems to me about the effort that was put in many of these people were volunteers from agencies that are represented at the table and a number of other agencies and wanted to recognize that effort let me summarize very briefly our findings we found shortcomings in three primary areas  first was planning secondly communications and third was workforce and in each of these areas i will summarize very briefly the challenges that the agencies say but then also talk about some of the  experiences that we learned about from other organizations private sector organizations other companies state and local governments that also responded to challenges and maybe there's some lessons learned from the from the for the federal government in these areas first in the area of planning we found in sufficient numbers of pre awarded contracts some agencies had preordered contracts the scene the federal emergency management agency had some but clearly not enough they did not adequately anticipate  need for temporary housing for example or the need for public buildings by contrast the corps of engineers you heard earlier about their advanced contracting and it should have that enabled them to have the contracts the pre award contracts in place in order to be able to respond similarly we found that at this in the state of florida they have a very comprehensive database of the amount of supplies and and services that are going to be needed corps of engineers was responsible for the contracts for ice thema placed the requirements for the ice but fema did not understand how the corps of engineers went about contracting for ice and as a result ordered twice as much as was needed this resulted in a very difficult situation when the ice arrived to the region and there were insufficient distribution and storage facilities in order to be able to handle the quantities that arrived by contrast when we looked at other organizations for example us e s x transportation one of the approaches that they take is they conduct joint training exercises with all open ization that are going to be responsible for responding including the contractors and that enables them to anticipate some of the difficulties that might arise after the event occurs and then thirdly in the area of workforce we found that there were insufficient numbers of contract monitors specifically in the blue roof program and also in the temporary housing area for the trailers the lack of on site contract monitors delayed both of those programs but again by contrast when we look at some other organization landstar transportation and wal mart for example they place a premium on being able to redeploy employees and in a very very fast turnaround response time to be able to to respond to the needs of their of their customers with that summary i'll be happy to take questions whatever questions the committee may have thank you would said regarding some of the cooperation coordination findings so i will try to be brief in the aftermath of a major disaster such as hurricane katrina and the federal government's oblige obligated to ensure the number of reported safety and security measures for its citizens the government responsible for among other things take immediate steps to mitigate damage or harm to its citizens ensure the roads are clear the debris to allow emergency workers access to affected areas provide temporary shelter to disaster victims and provide minimal repairs to buildings to enable victims to return home to prevent further damage as we review the federal government's response to hurricane katrina we asked the question to the federal government meet its obligations unfortunately as my test of he indicates and our findings that some of the reviews there many weaknesses in the federal government's response recovery efforts we are still in the process of fully valid valuating overall contracting efforts in pre disaster planning related to katrina again we are working closely with the general account of the government accountability office and what the other federal inspector general's office today my office published over forty reports many dealing with contracting issues many of these reports pertain to famous procurement activity including contracts for technical assistance crew ships mobile homes base camps guard services name a few we also undertaking several major reviews of thema contracts and we plan to vigorously review contracts led by theme and other d h as components regarding sas related activities themas core mission is to respond to emergenc for example ice food water travel trailers mobile homes base camps on a recurring basis therefore planning for these parents would represent sound business practice because of the unpredictable nature of emergency operations such planning cannot always be used to select specific sources in advance however for each type of procurement such as ice water food pre disaster planning can identify prospective sources of supplies and services delineate how competition will be sought promoted and sustained during emergency operation describe requirements for preferences of firms affected by the disasters will be met layouts or selection procedures for each type of mature meant and establish communication systems and processes and publicize them in order that prospective sources know how to contact them a prepare my person because this is after plan it did not take place in any of the components of the federal government found itself hastily enter into contracts with little competition for disaster commodities understandably in the aftermath of a disaster government agencies award contracts under expedit contracting methods as authorized by the federal acquisition regulation in order to quickly respond to victims needs d h s s alone awarded thirty four hundred contracts worth about five three billion dollars in the immediate aftermath of hurricane katrina we understand that the immediate response is needed to provide victims essential aid however we suggest that many of these response requirements are the same for every disaster a degree of pre disaster planning can and should take place pre disaster planning should include establishing standby or call contracts with vendors to provide essential goods and services required to facilitate immediate response operations or to meet the needs of disaster victims for example call contracts ice water food tarps transportation travel trailers and other items c pure shortly after the disaster strikes should be in place and ready eschewed in short notice a call contract allows for cost specification terms and conditions to be negotiated in advance negating the need for intensive contract negotiations during a crisis this is a common business practice in the private sector and in other federal agencies i submit to you we why we're here today to learn the lessons learned in the past in this case the federal government's response and devastation devastation caused by hurricane katrina in order to not to repeat the same mistakes because of the nature of disaster operations we understand the pre disaster planning has to be flexible however pre disaster planning should balance the federal government's capabilities with those of the private industry including distributors wholesalers retailers manufacturers and service providers we suggest the use of color standby contracts with printing pre negotiated prices quantities terms  conditions and specifications to facilitate determine operations in the immediate aftermath of a disaster we understand if being was aggressively pursuing and recruiting contracting officers and and c o t r's to augment its contract staff in addition establish a separate contract office to hand of acumen activity for the gulf region these are important first steps devide additional oversight controls and support for recovery operations throughout the gulf coast region more importantly a position speed to better meet the here meant demands of the future our hope is that the very much let me start to question mr woods let me start with you we've heard mr waxman success but i didn't ask him for a grade but i don't think it's a passing grade in terms of how this worked out we know the administration said basically mistakes were made but the men very defensive about what happened what's your overall assessment of the perfect performance of the acquisition agencies in the contractors and how would you grade the performance of our acquisition system in response and i'm going to ask you the same thing as you jockey bellamy at you you've been through this before you've seen it an emergency you've got you know you discount a little bit for that but how would you grade i think you can't underestimate the  fail to get a full authority ation to the circumstances and clearly the agencies did the best that they could under the circumstances but those circumstances just greatly overwhelmed the planning that was in place the workforce that was not only predicted it was predictable i mean everyone knew sooner or later you could get a storm of this magnitude and you started off with three deficiencies in europe were in the first one was planning now everybody here trying to do the best they could we're not i don't think and myself are going to question anybody there on the ground but at the end of the day how would you rate the planning for this the planning was not where it needed to be for the level of the storm that hit clearly they are anywhere close i don't play so they  translated into adequate planning for rocketry not so on the planning side is it fair to say that we get an f on that i mean it was it was not were anywhere near need to be i'm not sure i'd want to give them a grade but it was clearly not what it needs to be so i can't give you an incomplete i or maybe not up i did have the opportunity when i was working for feynman to attend the hurricane pam exercise and quite frankly i was kind of shocked that some of the scenarios that were that were being predicted a year before the disaster and actually watched the events unfold on t v you know it fema for a number of years had discussed the notion of a catastrophic housing program what to do when a number of people that were displaced in their homes or had to be moved normal disasters if there is a normal disaster people have evacuated fifty miles inland the disaster was over and able to actually go back in this case to people evacuating to almost every single state in some where he's staying hotels staying in travel trailers in apartments and those types of things that type of planning would really help go a long way to the planning here was just nowhere near where needed to be i believe now and that exact everything else flows off of that because once you don't have the planning in place and the assets preposition and it's in your face you do the best you can at that point but more and more mistakes are likely to ensue under that circumstance and if you had this thing i agree i think we're just overwhelmed you know the fact of the hundreds of thousands of citizens that had to leave their homes for extended periods and you know what to do in that case it didn't click for karen but also i'm sure you know well let me just give the panel and ask on the other side now we have a new hurricane season coming up what's different this year than last year how are we assured that if this happens i mean you still drive through there are still debris on the ground months months afterwards in fact the thing that caught me the most is my third visit down there is how much debris was still on the ground although i recognize that there was a lot of debris to start with and you have to put it somewhere and you will get to that in this panel in the next panel what's different this year on the planning that makes this should make everybody feel safer i'll start with you general sir if i in that in particular in the planning for advanced contracts initiative once again will have in place advance contracts for procurement of ice and water is also is construction of temporary roofs and remov wal mart then these groups could have gotten assets there a lot quicker if you just give it to them that some of these other companies they have a supply train and a way to get things moved around they have in some cases they're closer to the points where these things hit than some of these the government sites that are pre positioned there i had president home depot saying they wanted to give away stuff that cost we didn't have a mechanism to accept that we didn't have a mechanism to accept this on this side this year as far as a delivery of commodities in particular mentioned i was just water the logistics it does at the corporate curers we have those contractors in place and they're ready they have many of them already course  great deal stored for this year and we had some stored from last year as well that we used in the initial days so those kinds of things i think is a is an initial a good preparation for this season for the procurement of commodities for for debris removal and in case of our advance contract last year we saw this storm was was coming into louisiana so we and mississippi so i spoke to the contractor the day prior on sunday saturday excuse me two days prior to landfall he had his equipment and personnel staged in florida and in texas ready to move into the storm from both sides of those kinds of things we have in days prayed for before and then the long term preparation we've got many actions going on to prepare ourselves better season but again i mean the last time for example shelters we were very inadequate on the shelters for katrina thank goodness that the convention center didn't get flooded that it was on happen to be on higher ground that was almost i mean we were lucky in that case that wasn't something that was picked there because it was predicted it was set for a thousand people and thirty thousand people showed up and then the next day another thirty thousand people showed up and they were they move up the convention center instead of the  certainly in the in the hurricane pam exercise you noted the planning did go through that type of thought process what was actually in place was for similar to hurricanes that happen the previous season in florida so that type of magnitude is clearly the magnitude of this contracts that you have in advance you always need a plan b just in case it becomes something else and in this case it wasn't a plan b it was kind of you know we kind of invented it as we went along and the result of that was not just additional working into general areas and planning one is the people side and one is the contract side when last hurricane season hit fema had in place less than a dozen contingency contracts to to be prepared for the hurricane season this year with fema there's over seventy contract actions that we're working to have in place and prepared for the hurricane season these include some renewal some additional new actions so we're expanding the number of contingency contracts we have in place so we're not reacting after a disaster hits on the people side that is an area that i'm from the department working with fema extensively on also one of the things we did is hire mislead as you mentioned mr chairman for chairman does not have the total responsibility for delivering the mission activities it's a tool by which we deliver one of the things mislead brings is the acquisition and think that's going to help a lot in the planning in terms of we also have a director of learning a new senior executive miss tina burnett who is a new senior contracting person and sima that contracts ready to go and meet those requirements we're looking at as you mention the learning lab and one of the other things we're looking at is real time ability to order as needed and we are actually looking at piloting up the possibility of scrambling to try to deal with the problems that the result of the inadequate planning i think that's a fair statement and so as i understand it they needed four contract contracts to provide temporary housing they had only one in place so they had to move quickly i want to focus on the debris the debris area because after that after the hurricane struck there was a lot of debris that had to be removed and there were no contingency contracts in place for debris removal there that the government then rushed into for five hundred million dollars contracts for debris removal and the government's own evaluation of these contracts disclosed a host of problems seems everywhere that the auditors looked they found that the taxpayers were losing out here's how the debris removal was supposed to work trucks were supposed to pick up the debris and take it to dumps when the trucks arrived officials from the corps of engineers were supposed to make sure that they were full since contractors are paid by the q b cubic yard the more debris they collect the more they're paid then when trucks leave the dump the core is supposed to make sure they're empty so the government doesn't end up paying twice for the same debris that's supposed to be how it's supposed to work but i want to examine how it actually worked i have an audit dated september twenty fifth from mississippi it states and i quote that auditors observed a self loading truck exit ing the peddle dump site without completely unloading the debris from its truck bed as a result the audit found the contractor was i quote fraudulent lee being paid twice for the same load other words drove up with the truck didn't unload it all came back and then said well i've got more debris and so they in effect they're being twice they're being paid twice this was an isolated occurrence a month later auditors observed four trucks leaving the dump site in laurel with a considerable amount of debris remaining in the trucks general right riley are you aware of these are the findings yes sir i am and i thank you for bringing that up that's a act auditors i would i arrived at the louisiana state emergency operations center the day prior to landfall my experience from the previous year storm was those emergency operations are very vulnerable to fraud and abuse and so on the day following landfall you shoot in order to deploy all of our operators and also called for the army's criminal investigation division and then within three days they are arriving and though they go through some of these audits with you because you're familiar with the from the documents you know if the corps is not really making sure that what's being done is done right and we're paying for what work was actually done  contractors can see it opportunity for abuse and there are documents numbered one thirty seven one fifty six one sixty two two thirteen and sixteen and they still say that across the gulf region the cor failed to inspect the trucks as they left the dump site let me read to you what one of these audit said about the corps failure to inspect the trucks quote this provides the opportunity for truck drivers to leave debris in the bed of the truck while receiving full credit for each load resulting in government over payments to the contractors and minimizing the amount of debris being cleared generally how would you how would you react to this lack of oversight well what i would react is that exactly what i told our auditors to go out and find when they arrived i told them to find out what's going wrong don't tell me what's go on right although they did and did that very well now but what i want to know is i knew that this type of situation with and we did have an advance contract in place and they worked and they they moved in immediately the day following the storm began to work we found that we then needed to compete larger contracts which we did for louisiana and mississippi because of the normandy of the storm so those inspection reports that you're referring to sir where exactly when i was looking for those and were coordinated with the contracting all through the safety officer and then sent to the commanders on the ground and and and to verify that corrective action is meant taken my intent for those auditors was to go out immediately and find it documented and correct it where they could immediately and then get the commanders to do their work as lister woods g a o examined contract oversight in the gulf coast what did you find in the corps have sufficient contract personnel on the ground to prevent abuses we found that they did not have enough personnel in order to be able to adequately monitor contractor performance unfortunately leaving the dumb sides with loaded trucks was by no means the only abuse the documents describe a host of other schemes to enrich the contractors  god's taxpayers for example they describe one subcontractor halliburton that repeatedly picked up debris from wooded lots on private property instead of public rights away as required by the contract and other contractors overstated their mileage to earn an extra two dollars per cubic yard because i gather if they travel further they got paid more but they didn't really travel further still others mix different types of debris to inflate their billings and another report i want to read from you read to you is the mississippi report dated october eleventh and according to the auditors and i quote they watched the driver climb the citizens dump pile and enter the excavator he proceeded to load his trailer himself when the load was complete the driver exit at the dump site he then pulled around the entrance tower and then loaded his trailer with the debris he obtained from the citizen dump site in other words this contractor n again i think that was why we had three thousand audit reports those were our auditors going out and finding that stuff and then what we did then is we withhold payment from a contractor until we verify that it's been properly routinely credited contractors with hauling more debris than they actually carried the auditors said that the assessment by the corps were quote overly generous unusually high and consistently on the high side and so over and over kor just right down that the trucks were one hundred percent full even if they worked mister jackie you're the lead i g for the gulf coast recovery effort do these corps practices meet your standards no they fact that you know we have seen in past reviews we've done of sites with no monitors you know blank tickets you know things like that we tweak we try to keep a close eye on that in the case of the corps of engineers we're relying on the d o d inspector general keep an eye on which things however thena also provides debris move on to the public assistance pro when to where we rely on the locals jurisdictions to provide those types of things and provide the assurances and oversight that makes a problematic two because you're not dealing with one or two entities you're dealing with a number of them so we are aware of things have gotten a pass and we really emphasize some of the staffers in those controls because they are needed in that program as i understand from general riley he had auditors sent his auditor's out there to try to flag these problems they did flag the problems according to what i understand he just told us and that they were addressed immediately but when the audits like these keep appearing over and over for months after month after month across different states different sites in different contracts it seems like one could conclude that the officials who are in charge of the contracts aren't doing their jobs did you find them taking adequate action in the case of the fee material which we're looking at we actually found some cases where there were no monitors and we took they took immediate action to get monitors in the place and the problem that we're seeing in this disaster is that it's spread out over there sixty three million cubic yards of debris out there over the land size of that that of great britain so having oversight in every single site of every single truck is a very problematic i'm not saying it should be done but just given a magnitude of disaster it's very difficult especially the resources then and mr woods did you have any review of the work that the corps did we did not look at the debris removal contracts at all i just want to give mr general riley opportunity it sounds like you're saying everything was done properly and all these problems were caught and addressed and and and the the public was protected from their taxpayer dollars being wasted are you comfortable with a statement like that and i don't know sir i'm not going to because it wasn't all done properly and that's why i called it an army of auditors and training of quality assurance personnel down because i knew there would be challenges like that when it with such an enormous storm spread out over and over much territory but we do have procedures in place and to go back and attempt to recoup the money from the contractors and we're doing that to this day or so if a if the army corps took the contractors word give them credit for a full load of debris when they didn't have a full load of debris there is no way to check that afterwards it just got paid and they're going to continue to hold it and we will verify the load tickets and go back and all that now that all the reports you're referring to sir of course are our internal audit reports and that's that's exactly what i wanted them to find and what we did then is take as a new quality assurance personnel continued an updated the training of those personnel ethics training every single day training of our quality assurance people personnel and then commanders on the ground working to correct these problems because over such a long period of time we had over thirty two hundred from the core temperature set of the corps of engineers was deployed on this hurricane half of those quality assurance personnel their training going to be the red lights of my time is up but i just i'm pleased you're trying to go back and check these things what i'm afraid of is from your own audit reports the direct debris removal contracts have been a great deal for the contractors but not a good deal for the taxpayers and and the victims who are still suffering the gulf coast and we're trying to catch up with money that has just fallen right through the cracks and we're not talking about a small amount of money but talking about a huge amount of money so were their participation i mean we learned that this is a storm of abaco proportion and one of the points that in my criticisms and i have tremendous criticisms i mean the committee had tremendous criticism we said basically the white house was in a fog we said homeland security was missing in action we said fema was frankly derelict but we said the governor and and and the mayor of new orleans simply were a part of the problem having said that people point out to me that we we the loss of life given the biblical proportion the storm was relatively small i mean in mr taylor's district ten miles in the water was twenty twenty feet high and i asked gene taylor to describe to me why that was so and he said in mississippi they have a culture of dealing with storms and that the last great time i think it was taylor told me was when he was younger but his parents kept teaching him and he passed it on to his kids and so on so i want to acknowledge that that we must've learned something but i think it was more the folks living down there than than the federal government mr riley a chimney general what i'm to gather from the dialogue you've had continually with mr waxman is a lot of the the criticisms the abuses were abuses that you your own people discovered correct i'm not sure that's correct and so this isn't a big surprise you were discovering and trying to deal with it what i i gather from this is when you're dealing with a storm of such huge proportions you were trying to just get out there and deal with it and oversight was important and very important but it simply was second to just helping people as quickly as you could that is is is acceptable to me in the initial stages are some of these criticisms so and findings have been now did they happen then but no longer happening now sir my my belief is that we've got sufficient procedures in place all the towers at still have these were through the through the fall october november primary september october november of what year last year during the during katrina you're still doing the cleanup correct yes sir and still uncovering the same kind of corruption sir we uncover it in cases where we have a new volunteer to point to the storm that are quality assurance personnel we train them as they come in training prayed appointment but not have been to the sandbags are much much less frequency of course and then we go back and verify it in the commanders on the ground assure a correction i know you are new to fema but what blows me away about fema where the continuous stories of how they kept saying no to voluntary help no to this effort no to that effort it was constant no no no we had people you know were willing to offer help and so on but i have two major industries in my district folks said that basically international suppliers of water and they said that when they wanted to provide water in the region they had to negotiate with an individual basically worked out of his kitchen and that seem a gives out contracts for water for housing and so on a very small individual sole source is that accurate is that or can you describe the part that i'm missing that makes me a little more understanding of this mr shays i was not at fema last year so i can't tell you exactly how that was done i will tell you that currently we are pre positioning we kind of have a three stage thing we're actually pushing things out and pre positioning in the states and it's in coordination with not really answer m so you have a major international water company that's willing to provide water at below cost for free and they were having to negotiate with someone who basically worked out of their kitchen sir i'll have to get the details for you because i'm not familiar with that particular act but this was simple matic i mean i then had the largest r v company trailers and so on they had to work with someone who basically was working out of a small office who knows where they had no professional background they just had the contract and so i guess your new and can answer can you respond to this question but i just started as sir i could only respond to in particular the ice contract fema ask us to pick your the ice for them and then deliver it to staging areas where they would distribute it from there but our you know we used our advanced contract for that that was  does one person in this country have the ice contract or is it done district by district by day no sir it goes up to the headquarters and they'll ask the corps then to prepare the ice and we'll do it through our single  suspicion my suspicion is that some people get these contracts they have they have the ability to say no they can tell the big companies don't even come in you've got to work through me and i think it's a huge problem  five minutes hi i want to thank all of you for being here and i particularly my colleagues from the gulf state that have suffered so much and it's very disturbing to see so much money that was wasted of thousands and thousands of trailers that never even left arkansas because you didn't need them but you paid hundreds of millions of dollars for and it's really upsetting particularly when you know how how how up so many people are are suffering my colleague mr taylor his entire home was destroyed as well as many people in the gulf region and i can understand that right after katrina you had to scramble quickly to do some contracts you ha out these massive five hundred million dollars each to temporary housing missions and these were not given a full and open competition theme a push to put them through and after the immediate crisis has pas s and fema seem to recognize that these huge contracts have been awarded in haste and should be open to competition on october sixth acting fema director paulson testified before the senate promising that all four contracts would be r around the same time greg rockwell then the d h s s chief preacherman office officer assured our staff of the contracts would be reopened to competition and so i'd like to ask mr woods according to the federal there are exceptions to the normal rules of competitions in cases of emergencies is that correct that's right that's correct mr maloney but after the emergency passes would you agree that it makes sense to open things up to competition to make sure the taxpayer gets the best value for the dollar yes certainly after a certain period of time whatever exit jency might have existed at the time passes and there's time for a full and open competition procedures so when director paulson the rothwell committed to doing just that to opening up the future blanket contracts for bid is for competition that commitment was with the federal acquisition rules is that  that you referred to earlier well i i know that some were awarded i have if i remember correctly reading the briefing materials roughly thirty out of seventy were but but massive amounts even after the tragedy  were no bid sole source contracts and after these two gentleman committed to opening up to competitive bidding that never happened instead fema and v h s slowly backed away from their pledges to rebid these contracts and then in november fema official said the contracts would not be rebid until february but then in march them announced that the contract would not be rebid at all and would in fact be extended now isn't that in contradiction to federal law you can have an exception for an emergent see but when the emergency is over and the merging emergency was over you can no longer hide behind a no bid contract where your promise is absolutely correct that certainly at the time of the event federal law or and the federal acquisition regulation permit contract to be awarded in less than full and open competition procedures and as time goes on that reason dissipates and at one end at some point we would expect that agencies would comply with all of the full and open competition requirements the exact schedule and timing of the of these contracts  they build a ditch for whatever and it doesn't employ the people there and then you had these huge contracts blue roof contracts two thousand four hundred eighty dollars per roof to nail blue lou lou covers on them the local workers told us it would only cost three hundred i'm sure that mr taylor and others from the gulf region would of like the local workers in the local businesses down in the gulf region to have the opportunity to bid on on a housing on the roofing on the removal of the debris and on all the other things that happened down there so they're double hit that number one new year from mr waxman that just a whole litany of the contracts not fulfilling their rockwell as the chief or curious officer for v h s and did you make the decision not to rebid these contracts now man who made that decision we are rebooting the contracts would you like me to review the strategy but  used to complete the installation of trailers and louisiana we have awarded some local small business and small disadvantaged business contracts that are going to continue to do the maintenance and then deactivation of the trailers that were installed in response to katrina additionally we're competing and that is out for bid now the national individual assistance technical assistance contracts that will be awarded a national level and we are working with g s a to award towards some contingency regional contracts and how you're taking all these no bid contracts and rebuilding them as a competitive contracts now yes all of them are now going to be competitively bid yes well i think that mr taylor and others that live in the gulf region would like to know about your plants and how they can advertise to local workers and local businesses how they can bid on these contracts believe me many people are capable of getting  job done besides halliburton and i'm very pleased that you're going to let the american people compete for the work and the dollars of the american government thank you thank you thank you i don't think it's when american companies  find the facts and fix the problem in a lot of rhetoric and i've been on the sled committee traina the senate committee we have had our investigate and and i'm more concerned now not about assigning blame but making sure that as we go into the next hurricane system season that we have the right assumptions that will lead us to the right outcomes and the right model and so to achieve that i want to very quickly go through and establish some quick facts  mr riley and mississippi you have been tasked mission assigned to did debris cleanup and as i understand it you have been in charge of roughly twenty one million cubic yards of cleanup and debris is that correct yes sir that's correct and what is the cost to the core of that cleanup of the debris cleanup servitors are of course different cost depending on what types of debris that we pick up the bottom line anywhere not in line what do you see that mississippi what have we spent and what will you spend by the time you complete your mission sometime at the end of matter the the major contract in mississippi was for five hundred million dollars and what has gone over that cleanup that there's an average of twenty six dollars per cubic yard that is from taking the debris from the very beginning to its final destination about twenty six dollars a cubic yard is that correct yes sir and it depends on if they need to take that to an area reduction site on average twenty six twenty six of the twenty after the twenty six year overhead management is roughly five dollars a cubic yard is that correct sir no our  overhead management is about it's about sixteen percent of the cost if you multiply out twenty six plus about sixteen percent that's about five dollars your total cost is thirty one dollars a cubic yard is that correct correct sir now out at the same time we've had local companies local entities that have done cleanup and debris removal and based on our investigation on average you are at thirty one dollars a cubic yard and local communities local contracts i do around fifteen dollars a cubic yard do you agree or disagree with that figure so there's no way i can compare it because you really don't know what type to debris they're doing are they are they taking you to a temporary reduction site does it hazardous material is a vegetative is it construction and demolition so i really can't make a comparison nor do i have the knowledge of what was your idea and local contractor said correct is that how do you put in i pronouncing it correctly jackie have you looked at costco or cos local we look at the local routinely when we do our reviews of when the local society to do it themselves on republican systems program again the price ranges depending on the type of debris how far it has to be whole but on average it's but on average and i'm glad i've seen it anywhere from about thirteen to about twenty twenty mid twenty's for per cubic yard on average about fifteen sixteen all of our research all of our committees house committee senate committee local investigations on average fourteen to fifty that's that's in the range we see so this is let's do the math at twenty one million cubic yards of mississippi times fifteen on average that's three hundred fifteen million dollars at twenty one million cubic yards and the court costs thirty one dollars that's six hundred fifty one dollars a differential of over three hundred million dollars local is half court is twice as much is that is that pretty close that's pretty accurate isn't so let's go back to my first principle best for tax payer local national corps based on those figures what would you say local best cheaper faster better for the local community would anybody disagree with that on the panel all right let's let's go to some of the other things and again just trying to establish the facts and the florida model is what i just talked about they preposition pre contract and it's all local state is that correct the floor and model well yes sir when we look at they they don't necessarily always pre contract but they do know they have a very good idea of the supplies and services that they need and they have a very good idea of the vendors that are capable of supplying those do they use national contracts or federal government contracting agencies to do that they contract on their own and what is the result to the taxpayer and to the local communities what respect what costs more what helps local communities recover i don't better i don't have an answer to to that and there i don't have a basis for comparison on that as i g your job  is to be the advocate for the taxpayers that correct that's correct but would you say is flawed a model our national model is best for the taxpayer again i don't really have a basis of pretty clear isn't right i mean the evidence is not close to the facts aren't even close here what is the intent of the congress in the stafford act it is to promote the recovery of local economies and to give preference to local contractors is that correct let me there is if there was a local conway that debris removal that was incapacitated they would not have been able to perform in mississippi at half the cost and twice as fast there is a false assumption that leads to a bad outcome and that is local companies and local economies are incapacitated therefore we have to come in from the federal agencies and national contracts and displace them and replace them it hurts the local community and it hurts the taxpayer that is a false assumption and if we're going to fix this problem for the next storm we have to remove that assumption from our model and from our maryland thank you very much congressman thank you very much chairman and thank you for holding this hearing thank you for your leadership let me just say that i'm just looking at an article from back on december thir thousand and five in assist katrina victims living in barns just doesn't say some folks from overseas or somebody talking not not refugees but united states citizens living in bonds and i want to just look at this whole issue of travel trailers and modular homes fema board more than twenty six thousand manufacture and matt modular homes for nearly a begun dollars but only one hundred of these will use not one has been sent to the most ravaged parts of louisiana mississippi because the famous own regulation ban banned their use in flood plains female also spent one point seven billion dollars to buy one hundred fourteen thousand travel trailers more than one billion dollars of these funds were spent without full and open competition but now over twenty three rules were followed but how in the world do we justify this to people sitting at home shaking their heads about the absolute incompetence of their own government and  jackie tell us other than michael brown what higher ups have been fired because i can tell you that that there's not a person in this room if we had the incompetence that we have here and the failures  human communicating all the things that we've heard that would have been a whole lot of heads roll and they would not be sitting doing the job i did and michael brown he lists the higher ups who have been fired so the american people can get some satisfaction i'm not aware of anybody who was fired for this or i'm sorry i said i'm not aware of anybody that's been fired nobody's been fired other than michael brown no i'm not aware of it huh now let's go to  this happened back we're on in august is that right katrina am i right correct all right we've got september october november december january february march april and now we're in may are we still having trailers sit on laps somebody please answer me as do we are continuing to install trailers in louisiana yes what does that mean how many trailers are we installing we have about eighteen thousand more additional trailers to install in the next sixty day and so what does that mean in total in total we have about one hundred fifty thousand trailers and manufactured homes that would be installed for the victims they've already been install you know that includes the ones to be installed over the next sixty days and this is what i'm asking you would nine months after  the nine months i'm asking you people sitting right now that basically don't have a home they're trying to figure out what is going on with our government one of the most powerful governments in the world and they're trying to figure out why it is that we can't get it straight after eight or nine months when i'm asking you is that what is the demand and how far have we gone towards that demand for homes for americans not refugees americans we have installed about one hundred thirty thousand of the hundred fifty thousand known households that need trailers we have been working closely all the remaining trailers are in the new orleans area we have been working closely with the local government and have clearance now of those of all the remaining group sites and  of the things that we are trying to do is have accountability we as elected officials we have to be accountable to our constituents government employees need to be accountable to the american citizens how do we i mean you've done your report you've looked at all of this what the complaint is i and as i hear from various people one person blames another one person says you send them over here and they say you send them over there but in the meantime a lot is not being getting done and i'm to how do we bring accountability to all of this so that it works for the american people i'm i'm concerned about the next storm but i'm concerned about the aftermath of this one yes mr hood there's no question that accountability is extremely important here i think this hearing is one good example of bringing light to bear on on these issues and ensuring accountability i think focusing on the future is of course important where do we go from here how do we fix what's wrong not only identifying with the wrong assigning accountability but what are the solutions and how do we move forward have you made recommendations for accountability yes we prosecuting a sheriff billy mcgee who bravely seized a pair of eighteen wheeler full of ice from a military post and distributed it to people in need he provided a vital and rip off u s taxpayer do you have any count on yet there's been there's literally been hundreds of prosecutions and items i have i can test this to say and share with you after the after the hearing but we're working closely with the department of justice who in this case or they're prosecuting fraud at the two thousand dollars level in some cases a lot of individual systems fraud going on right now and are shifting gears right now and a lot of contract fraud issues and how they're investigating right now but i know there's been about fourteen thousand complaints that have been received by a katrina hotline that we set up collectively for the federal government and i know there's been a number of indictments arrests prosecutions thus far and the number keeps growing thank you very responsive miss lee what repercussions did they might have for stay out that approved contract which overcharged taxpayers and charged twice what local farmers be it have you had to fire in employees and made these are able d misplay i have been it for four we're four weeks and we're continuing to look at the contracts that are in place to make sure there are proper and to make sure that we're forward looking and make sure that our people are trained and ready to go for the next season   by fema to acquire portable classrooms they went about that very quickly and they awarded a contract under an existing agreement with an alaska native firm that firm came in with an initial  recommendations taking all those things and we have an action plan and are working through the numerous recommendations and of course the audit as the general said we work through in each contract we go back and work with the contractors background i just heard it said that there were one hundred thirty thousand mobile homes that had been institute our report from our staff who does the research and this report is mark the third of m says that team up purchased twenty six thousand seven hundred and twenty two manufactured and modular homes at the cost of nine hundred fifteen million but only one hundred one hundred not one hundred thirty thousand of these homes have been used to house evacuees are the relief workers if that is not true i'd like you to submit it to me in writing please and i would hope mr chairman that next time we have people here who are on site not new people who have to carry the load for ridiculous mistakes that were made by sema doing a time of crisis one of the cornerstones of sound contracting practices is the use of full and open competition and i heard that halliburton and we have nine billion dollars missing as a relates to iraqi services they get the contract firsthand but anyway in the case of hurricane katrina full and open competition has been the exception rather than the rule so as you plan forward take that into your consideration mr gibb i'd like to walk you through some numbers from the similar ano report to congress released by the president's counsel and integrity efficiency on april thirtieth according to this report the federal government has awarded nine point seven billion dollars in private contracts where the recovery is that right that's correct ok according to this report a huge majority of the contract with amount nine point three million was awarded in one thousand two hundred three contracts worth then more than five hundred thousand troops that's correct ok the go standard for federal contracting is full and open competition ok mister your deck of the one thousand two hundred three contract worth more than five hundred thousand what percentage were issued with full and open competition i believe about seven hundred were awarded with limited competition so i leave about a quarter of those open with full open competition about twenty five percent possibly and have the numbers in front of me been roughly that much ok at the department of homeland security fifty four point six percent of these large contracts were awarded on a sole source bases without any competition at all why is the administration to adverse to competition and why does it hand out over two thirds of the contract on a noncompetitive basis i can't answer the question on the ministration i know that during the during the crisis immediately after a disaster a lot of contracts for immediate needs a necessity is rewarded on verbals or with limited competition and again as mr woods pointed out that after the crisis here is over the agencies need to go back and take a look and see whether their servers are or goods are still needed and whether those contracts need to be renegotiated or terminated if necessary september of two thousand and five september beem awarded three point one billion dollars in contracts which is fifty seven percent of which was noncompetitive october two thousand and five fema awarded five hundred and ninety five million in contracts seventy five percent which were not full and open competition november two thousand and five female awarded two hundred and fifty six million or eighty percent without full and open competition and as a february thirteenth of this year female awarded approximately four point eight billion dollars of contracts for reconstruction sixty two percent of these were awarded without competition  and we mentioned the rebuilding of four large contracts and march this is may as of march two thousand and six fema announce that these contracts would not be bit but we would be extended i really don't understand why we are not protecting the taxpayers dollars i've been down there to the lower ninth in louisiana it is a shame to see the debris still in place and the look at the kind of something is wrong and somebody has to be held accountable for it and miss duke and mislead and mr murphy you've got that on your shoulders now to see that we do a better job for american citizens thank you thank you mr various know what we have these folks are because they're the decision major highway projects in which in my district we have bechtel was involved but basically what we try to do with two things one is ascertain the cost of the work being done and second try to determine whether or contract which caught my eye i must admit i've never been on a cruise but the numbers here are stunning i think i actually live in a pretty high cost housing state and i want to make total picture it cost two hundred thirty six million dollars two hundred thirty six million dollars it ran for six months and based on the occupancy figures that we've got now when when i'm as watson and actually the chairman let us down to a co del right after the right after the hurricane and i know there was some problems with getting people into the into the the cruise ships and i don't know why but but there was but based on the occupancy figures from yes it cost over fifty three have fifty three thousand dollars to the house each individual on board the ship that out to about three hundred dollars a night for an individual and obviously six hundred dollars a night for for two people now the way that g s a looks at this is we try to do comps and it's shot hand fall comparable properties are comparable accommodations and so what i did was i asked we all asked minority staff to come up with some comps on on what what six hundred dollars a night for a couple might get us and what three hundred dollars a night might get us for an individual so we know whether or not those are reasonable now this is a fairly boilerplate process but i have to admit even though i come from i represent the one congressional district in massachusetts which includes boston which is fairly high in terms of housing cars i i have to admit i was extremely surprised when we got the results now mr chairman i don't know if we have the ability i know i have some photographs of the of the properties we came up with casino in las vegas which is you know which is pretty nice i've never been there either but it looks looks nice and you know it's it's rather stunning that when we think we're trying to do temporary housing for these folks and this is what where we're paying for and and you could stay at this hotel in a suite not just a room you could get a a full suite for the money we paid to house these folks  actually a little bit like the challenge house down to virginia but it's actually a castle and it's a twelfth century gothic castle you could actually rent this for less money than we we paid to put up these folks on the condo cruise ships and you know if it wasn't the taxpayers paying for this this would be humorous and if it wasn't for the fact that the folks we were trying to help went without our help that's the other side of this is not just the shortfall on the taxpayer side but the fact that the goodwill of the american people was was put forward it just never reached the people we were trying to help and they desperately needed our help  this this this castle actually has a premed golf course as well as an equestrian center for those who play polo but it's just a good indicator of what we what we could have  jeter live this this would of been cheaper it would have been cheaper to put our folks up at trump towers than it was to have fema house howrah cain survivors on these kind of a cruise ships now the exasperating part of this is that that kind of a cruise line follow the rules that's what bothers them they follow the rules they didn't they didn't commit fraud they actually stayed within the guidelines and were able to get away with this within within the rules within the law within the guidelines and that's a disgrace that's a disgrace i want to ask ms lee what controls are in place to prevent the administration from awarding contracts like these what you frankly absurd and shocking to  to the average sensibilities out there not only of the members of congress but also of the american taxpayer mr lynch has been has been talked about here by the other members is we strive to have competitive activities and to plan ahead as you well mentioned and discussed in the in times of emergency things are done much more expeditiously and sometimes in hindsight we say well we could have done things differently so what we're trying to do this year is planning ahead making sure we're better prepared and have contractors ready and activity ready to respond to the emergencies that we face in the future but you know i'm going to let this go there's a i've used up my time we had advance notice of this this is not you know you think people in the water you automatically think boat cruise ship probably a good idea it was the administration on the contract and what we pa these folks that we decided afterward where we fell down and i'm going to leave it at that but i am going to ask an open question for anybody on this panel can anybody justify this contract and what the american taxpayer paid for what we got crew ships had to cancel passengers and everything to go there and they basically said if we can break even i don't think they're the culprits here the culprit is a government was reduced to that was their best option given the given the the planning of what i had think is a gentlemen's point  best thing they could do because they had done the planning if you compare what they would have gotten were at what they were already booked in a gun in six hundred bucks a room you know but that cruise ships also you have beverages and everything else to go with the rooms as they work through that that is mr chairman and you also they would have had experiences with these other passengers because they'd be travelling and moving from port to port on a cruise here they were in one place so they got compensated for what they would have had and then some well that's the government's fault for negotiators on line my point is at the end of the day we had few options and we had proper planning been in place and we would have had other options for handling this and bring cruise ships and they advertised out and only a couple of cruise ships responded everybody was booked mr van hollen i thank you mr chairman with thank you and mr waxman for your leadership on this issue and thank you all the witnesses who were here to testify and i must say the american people in listening to the testimony today in the stories to come out regarding waste fraud and abuse have to be disappointed that a number of unscrupulous contractors decided to take advantage of the situation and that their work mechanisms in place to better prevent that because as has been said people throughout this country responded after hurricane katrina people opened up their homes their hearts and their wallets and what we've learned more recently is there are a lot of people well most americans were open up there was there a few people heading down there to fill up their own wallets at the expense of the victims of  a natural disaster and i think it's incumbent upon all of us to learn the lessons and put in place better mechanisms to prevent that from happening in the future i just want to focus in on one of the particular  cases and general riley if i could ask you about the whole issue of the blue roofs obviously it's a good idea after a hurricane to try and cover up the roofs of houses that have been blown if you have a roof that's been disappeared or blown off you want to prevent further damage and then put a tarp or something over it but you also want to make sure it's done in a way that you don't doubt the taxpayer and so i want to ask you a couple  questions about the blue roof contract is i believe a lot of the work that's been done by the army corps of engineers reveals the gross waste fraud abuse in this area and i understand that in this is based on documents have been provided  the committee that contracts can locate their crews in the field and that they've been ensure that the workers were being paid that they failed to follow up that the work was actually done before submitting the bills to the federal government so let me let me just ask you about what value you believe the prime contractors added to this process and my understanding is what the corps found is they hired subcontractors who in turn hired some contractors who in turn hired some contract there at least three tiers of sub contractors and the work was not done and thousands of dollars on average were paid per group in the end so if you could explain what value anything the american taxpayer got out of paying those prime contractors if i might that the beauty of the blue roof program vice the debris program as we can go back and verify every single roof and the sizes that are quality assurance personnel were all issued cameras and so when they went around they inspected the roofs and then at the end before we close out the contract we make them go back and verify how much plastic was actually installed on the roof so we can  much in a simpler fashion verify what the contractor has done or not done in those cases ns in some cases we found that the contractor quality control that they they had in place we were responsible for the quality assurance to make sure that they have a quality control program in place and that's where our auditors and our surance people find out more where it may be lacking and we need to strengthen the contractual controls that in the end that we win when it comes to blue roofs because we go back and check every single one of them and have you made sure that the contractors didn't get paid for the work that was done and yes sir and abroad before we close out the contracts we inspect every one of those routes now and we'll look at the course there's differences the different routes that we can verify it completed i mean that was part of their job on your behalf was to go out and find out whether the work you've been completed they said there it had been completed but when your folks went out they found that there was no blue roofing installed despite the contractors claims of of completion of the auditor's concluded that the prime contractor i'm quoting is failing to adequately monitor inspect the roofing efforts of its subcontractors and crews as required they went on to make another other findings were you aware of these particular reviews with respect to that prime kind of out of those particular but i i certainly believe the autor report when they tell us the contractor isn't doing his job as quality control because we're we're highly answers we pay  are more familiar with the territory and cut out the four or five layers of middlemen involved in this but this morning there was a report on national public radio with respect to some of the new contracts that have been let in this effort to get more local contractors in as it turned out despite i guess efforts to do so a lot of the contractors on that turned out to be from out of state fact one of the biggest w j which were two joint venture california firms and it turned out that one of the partners in that joint venture was in fact a subsidiary of one of the large firms that received the initial competition was in fact that we would compete with a preference to locals and that preference happened to be a thirty percent price differential so after so any local would be priced at what they proposed and any non locals would be have a thirty percent price differential applied and because of the importance of getting it right for the taxpayer there is a balance there and so in some cases if a local's price was was not within those parameters a non local could have won it but it was a small business or a company so under this particular case it would have been a situation where the bid from the out of state that much yes or if there was a if those are the contracts we're talking about yes thank you and that preference under the stafford act is the way famous traditionally recently the stafford act was amended to last set aside for only local businesses and we will be using that new authority given to us by immediate aftermath of the storm things were so chaotic with the lack of fuel lack of electricity no flush toilets i mean go down the list no food that you almost had to bring in help from outside but within about thirty days things were starting to get halfway back to normal within thirty days there were banks open within thirty days there was some fuel available locally and occasional grocery store and what troubles me is that these contracts were let for a value of money in later they've never answered that now if you're proud of the job you do and i would think you'd want to get back to me in a hurry and say no it's nowhere near seventy thousand dollars less than ninety days and so the only number in the minds of the people of south mississippi is with mis read it read a dead published in the sun herald the seventy thousand so what i'm saying is i hope the staff report is wrong because if you're telling me the answer to contracts that are too big and too long is to make them bigger and longer that's insane the only people have a longer contract and that are us senators now you know serious public school teachers get a one year contract congressman get a two year contract it keeps both of us on our toes the shorter contact contract in my mind is a better contract you can always put options in there for someone who's doing a good job to continue it on the flip side if you give someone a five year non compete contract you can almost bet featherbedding you can almost bet they have every brother in law in the contract you can almost bet they're going to be paid for their mistakes i mean in the case of bechtel contract at at their site and  day i went they had thirty trailers that they gamble last so let's say it's only fifteen thousand dollars a trailer pulling out the air conditioning unit on that fifteen thousand dollars trailer and leave it open to the rain you've now got two hundred dollars with a scrap aluminum what was a fifteen thousand dollar trail next to it were approximately two hundred trailers that had been removed for quality reasons ninety percent of them came from one manufacturer same name song i'm not going to say publicly because i don't feel like paying for a libel suit but you know the name and i said ninety percent of the trailer rejects are coming from one manufacturer you buying from five manufacturers why do you keep buying from these guys and you're into us we've got a contract we've got a long term contract so long contracts create the kind of inflexibility that leads to the public being angry at least to me being angry and leads to the feeling of the public that you're thawing away money as you're not meeting their needs and a i'm sorry if you two ladies here today i wish your boss was either take your place but you're the only folks from fema here today so i guess i just it boggles my mind and i'll use the converse ok the general over there took a beating from mr waxman but apparently the information mr waxman used was an internal study conducted by the journal to see if his operation was being done right and they found would they would check the gas no one bothered to see if the microwave worked no one hooked it up to a water hose to see if you had plumbing leaks no one even ran it through something as simple as a pressure washer to see if it leaked from the outside so at that point it's no longer the manufacturer's problem it's the taxpayers problem so you have a second contract that paid a fortune to send people out individual locations all over south mississippi to fix the things they should have been fixed when we as a nation accepted delivery why are you paying one driver to take it from the factory to hope arkansas or another to purchase mississippi when we know we're buying thirty five thousand of these why do you put a whole bunch of on a train i mean simple business decisions that anybody would have said we need to get better you never in the entire process of that contract got better in fact your best now never got better because your contractor had no incentive to get better because he had a non compete no bid contract and so he got paid for every mistake he made if a trailer was brought to a site reading it came back the driver got paid and got paid the next day to bring it back to the same site don't tell me that's a good idea to mescal for the taxpayers because i can tell you lots of citizens who are living on a mother in laws couch or in an astro van waiting for that trailer were enraged to see it being pulled up on the be taken away it's a travel trailer every weekend moms and dads across america go to go to travel parks look it up to a water hose hook it up to a sewer tap plug it into the electricity it's not complicated why did it take six inspectors to go look at the site i mean in these are things that average mississippians were seeing every day as their blood was boiling as they were boy the gulf of mexico is ten degrees warmer today than a year ago today the navy oceanographic lab tense tells us we're in for ten years of this missing greenpeace united states military so what's the plan for the thirty nine thousand travel trailers that are now in south mississippi are you going to move are you going to stage him in the event of the storm are you going to tell people to take him with them because let me tell you as is and i'm so much luckier than most but when  person when folks lost everything suddenly that's all they have left in the world and they waited two three four five six months to get this you know what the tennessee is going to be i'm not waiting six months for the next one i'm taking this with me so they're going to hitch it behind a toiler pickup truck or dodge dart and if we thought we had evacuation problems before when an undersized vehicle is trying to pull that travel trailer out in our win to bring over people if you want to specific briefing on on the housing plan or the evacuation plan because there are plans and so i would be happy to have the expert program managers come over and give you and your staff or any other members those briefings if you would like contracts that are already too long as to make them if that's what you plan on doing administratively i think this committee needs to know because we need the opportunity to try to prevent that legislative because that's not the solution so that's the first question are you really contract we are looking at contracts with longer terms with options as you mentioned and so we will continue to monitor the performance we also put in place contracts that have an ordering period so you can order against them for a certain period but if performance is not contract they're going to get the first thirty thousand trailers there's absolutely nothing we can do about it and believe me that's not a good thing for them and it was a horrible decision on our nation so how are we going to keep that from happening again where we contracts with two options so there are a maximum of three years because we are constantly looking at a housing strategy we didn't think a long term contract was in place the second thing is we share your concern with single chain of custody so there is a provision to have the have less changes of ownership if you will our custody during the installation the trailer prize process so it's easier to hold either us or the contractor whoever's pro grade accountable if there are damages or any instances during the process ok again i would welcome the opportunity to visit with you at line since i do have some i think very valid concerns yes good been very committed you have tried to go out and to give contracts to local companies you started in december and so a lot of issues that are raised in the last hearing you have tried to address and i commend you for doing so unfortunately contracting process now allows an incumbent contractor to protest in such a way that that you're not able to fulfill congressional intent and what's best for the local community because of the ability of of incumbent contractors to protest and delay so i do want to commend you that goes back to that to the question mr taylor was raising on trailers once you go down one path of contracting you can't get  it takes you a year year and a half to take a contract away from a unencumbered contractor if there's a protest process each step of the way and so i hope that mr mr chairman that we can look at greater contract transparency and also ways to give you greater tools so that we can fix the problem so you can achieve your objectives in a more flexible way and that's all i wanted to be yes i think you're making an excellent point and one of the frustrations that i'm feeling is that we have all auditors after the fact and the auditors can pick up some of the problems sometimes they can't but the problem that i've seen over and over again katrina and iraq some of the  homeland security contractors that the government goes to a big contractor gives them the contract they end up with a monopoly over that contract and the work to be done and then they hire subs and the government ought to be negotiating with the people who can do the job directly it would certainly make make it easier make it easier to get the job done it will help the local people and it would be at a fraction of the  the price and so i think we're making this mistake over and over again and i hope one of the lessons we can learn is that we need to rethink how we're doing these big major contracts so that we can be more effective here thank you let me just add in also i mean particularly in some of these debris removal and things like that that it's not a high skill level where you have local workers that can get into this is one of the fastest way to bring the local economies back and from my observations being on the coast three times  areas where you had the locals letting these contracts at it happen fast there and i think at a lower cost but it certainly it got to work faster than having to go through the top and i think on those kind of basic services it's probably  taxpayers interest in everybody's interest to go local yes mr stern for twenty seconds mr murphy shame on me if i don't mention the good work of the g s a within three or four days of the storm realizing that my local offices had been washed away i think two three three trailers were delivered by the g s a so you actually had a trailer they are from our local offices before phone service before electricity so again not everything o policies in place pretty katrina and that everyone at this table at the implementers of those policies and the implementers of false assumptions and so my message is really to the policy and decision like your secretary chertoff and president bush is that we hope to see the policy changes on contracting in any reforms necessary legislatively and administratively because mr chairman we we are planning to move major disaster reform legislation before the memorial day recess before the hurricane season and i'll be a submitting questions on a number of different issues as well as asking the department of homeland security and fema to make to change assumptions and to change policies and to sometimes in the next not too long so i want to move quickly if i can to get the testimony and we have mr randall perkins the president of ash britt ank mr george bernard the c e o of america hold logistics mr neil fox a member of the board of testify so when you get up here if you just remain standing and raise your right hand will swear you're going to begin t everybody soundly swear the testimony about to get to the truth the whole truth and nothing but the truth i do thank you thank you for your patience and i will just move ahead mr perkins will start with you you get five minutes to handle this any way with expertise in a range of disciplines and fall into one or more of the four divisions disaster recovery services solid waste services engineering services and special environmental services committees a letter to me dated april twentieth as i addressed three matters the first of which was that i provide an overview of ashburton the goods and services that it provides the second of which concerns advert role as a contractor to the federal government and third of which request my own personal views regarding certain contracting vehicles methods and policies and response to the first suppression support regarding the committee's second arab interest and as for trolls and responsibilities that a contract with the federal government is first necessary to explain a hurricane hurricane katrina size and scope elevated the federal response from from the usual circumstances  female oversight of the local and state governmental contracts for first storm damage recovery to one which seem a task u s army corps of engineers with a usually locally initiated contract responsibilities ordinarily asked for it deals with a city county or local agency  assisting it's efforts to recover from a natural disaster while achieving compliance with the rules and regulations problem aided by fema for reimbursement to the local government entity however asked for and in the year two thousand to have been  competitive selection process through which the united states army corps of engineers preposition contractors for separate geographic regions of america as a resource in the event a major cause that a catastrophe such as this that subsequently caused by hurricane katrina a sites debris reduction and quality assurance and include supervision to ensure compliance with governmental requirements and regulations asher's experience and expertise a result from years of the only with dozens of local government entities with around the united states finally a committee expressed a third of our interest asking my personal views of contracting vehicles methods and policies generally concluding with my views of the set aside and local contractor provisions under the stafford act i do not feel qualified to suggest federal policies for contracting i do feel qualified to come on to comment about want to spec that u s army corps of engineers preposition contract contractors process and that is that it is the geographic selection the corps of engineers specifically chose to select experienced contractors with ability to respond an emergency situation but did not want the contractor to potentially be incapacitated incapacitated by the same emergency i concur with this assessment consequently i have no complaint that coordinators did not select my form firm or or another firm in florida selected for the state of alabama but is working as a contractor for response anita resulting from the damage caused by hurricane rita in texas this kind of geographic prepositioning is good planning for an event of the magnitude of hurricane katrina regarding any other federal matters federal contracting policy i do not have the expertise in federal contracting policy make the legislative regulatory suggestions but i can and can and proud to outline what ashford has done and the further into its own federal contractual task and in compliance with existing laws and regulations appear today i appreciate your interest in this issue and i hope my comments today are helpful responsive i have submitted a copy of my statement for inclusion in the record merkle logistics is a leading national third party provider of integrated temperature controlled supply chain solutions we are headquartered in atlanta georgia and have one hundred facilities and over sixty five hundred employees across north america we have five hundred forty five million cubic feet of temperature control warehouse capacity and ship sixty billion pounds of freight annually for over fifteen hundred active customers the two thousand and five hurricane season was our first assignment with the federal government during a natural disaster prior to this occasion the only work our company had done for the federal government was under contract with the department of agriculture for storage of food commodities that are carthage missouri and bettendorf iowa where houses are companies first experience with disaster assistance came in the aftermath of hurricane dennis in july of two thousand and five requested that three hundred ten truckloads of ice be stored in a miracle of facilities in thomasville georgia montgomery alabama and fort worth texas weeks later in days prior to hurricane katrina making landfall we are requested by c much manage the loading staging and subsequent to the livery of these three hundred ten truckloads of ice to affected regions america was successful in accomplishing this task with little notice and it at an extremely condensed timeline our ability to redeploy personnel and resources due to the existing size and scale of organization our warehousing and transportation technology and our established contractual relationships with an extensive network of common carriers were key components of the success our success in our initial activities led fema to request additional warehousing and services for america are covered his experiences with disaster preparedness response  to develop the following suggestions that are respectively submit for your consideration we believe each of these items will lead to more efficient response at a lower cost to the federal government number one the federal government must prepare and maintain a supply chain network plan that identifies private industry providers and locations necessary for storage and distribution of relief to bodies a supply chain network plan is an analysis that identifies the optimal operational locations the objective is to locate both manufacturing and distribution facilities within the nearest proximity of the end market in commerce a successful plan places inventory in locations that minimize storage and transportation costs also supporting quantity and schedule requirements of the next receiver in a disaster response an area the objective is to reduce travel unaddressed consumes time the scarcest resource to the federal government  the federal government must procure and maintain an inventory of essential commodities essential for initial relief americal recommends contracting in a manner that provides pre disaster funding to efficiently build in lower purchase price provide as for rotation of commodities to bodies to avoid waste and maintains adequate reserve stock multi year contracts would allow contractors to form alliances of complimentary skills and make investments in assets and people necessary to efficiently and cost effectively perform this would include relationships with local contractors which we effectively used in two thousand and five for the federal government should consider entering into a tri party agreement with manufacturers and retailers for water and ice allowing fema to procure and rotate products through normal reading normal retail retail distribution channels fevers evolving concept  pre stage commodities to support all hazards response is a good first step in this direction three the federal government should utilize a single integrated system to monitor and control the storage and movement of all  times it is essential to establish and maintain total asset visibility at all times a single warehouse and torrie management system would identify the location manufacture date of manufacture and on hand inventory at a minimum this information is essential for inventory deployment as well as stop rotation and reverse logistics americal for example uses a web based system that delivers real time information on customer orders inventory and transportation status we maintain total asset visibility and accountability where their inventory is located in one of our warehouses a third party warehouse or in a trailer an integrated system of this type is essential to support multiple occasion and rotation for the federal government should develop a virtual fleet of transportation carriers minute managed by one party rather than a single asset base carrier that faces constraints on peak demand americal demonstrated the ability in two thousand and five to obtain carry carrier capacity utilizing its prieto interacted network of over four hundred common carriers when supply was scarce others americal coordinates routes dispatches and monitors fleet activities for over two hundred twenty thousand temperature controlled truckload the year and integrated transportation and warehouse management system as previously described is essential to making this recommendation successful miracle has processing systems in place that can quickly incorporate local carriers into its fleet ensure they are paid for their services on a timely basis i would be happy to go into further details about my testimony and suggestions during the question and answer period thank you thank you very much mr fox chairman davis ranking member waxman members of the committee i'm neil fox  consultant and member of the board advisors of fed is honored testify regarding fed's efforts to help the federal government improve disaster related for chairman said it is a small business that offers online procurement services including reverse auctions and other competition methods through its website said bid dot com this internet based marketplace enables public sector buyers to purchase commercial items in a dynamic competition environment that it operates m a reverse e bay providing an online forum where many sellers bid on government requirements and prices drop as sellers seek to underbid each other it is a user friendly regulatory compliant means to help agencies for sure commodity products and services by automating the prepare and process fits and significantly reduces the amount of time required to complete a project from a transaction which is especially important during a crisis where time is of the essence but com and sets the duration of the competition thousands of potential sellers are notified automatically of the requirement and could submit multiple bid until a preset time period expires when bidding ends the government buyer reviews the bids and decides whether to accept one of them based on best value and makes the award using government purchase card through fed that each payment capability or a purchase order detailed transaction information provides enhanced reporting and clear accountability that it has successfully demonstrated that federal government agencies can quickly and efficiently procure commodities at the lowest available market prices using their process today federal federal buyers for more than sixty s federal contracting offices within eighteen federal agencies use fed bids innovative tools overall federal easy customers have used said bid to make over four hundred million dollars worth of purchases resulting in net average savings eleven percent better than government price estimates that it also increases small business utilization since it brings far more companies into the competition than most other methods nearly seventy percent of all dollars awarded through fed did go to small businesses and eighty percent of those dollars are non set aside awards with said bid both government and small businesses when prices for chairman said they can provide the government with an extremely effective first line of  defense against no bid and sole source contracts that put the government at increased risk that it enables fast yet competitive procurements for example in one competition lasting just two and a half hours over one thousand sellers were notified seven sellers bid and the government saved over twenty two percent and the award was a small owned with said bid good for chairman does not need to suffer due to urgency buyers can access over four hundred thousand federal government contractors and additional vendors can be added the feds database easily usually in about ten minutes this allows state or local authorities to maximize the use of local vendors in fact there are over eleven hundred sellers from the gulf coast states registered on fed did today federal agencies under the authority of the stafford act or local community recovery act can also use said bid to reach local vendors although fema did not utilize fitbit in the immediate aftermath of hurricane katrina the agency recently began a fitted pilot program that it has only been in use by fema at one office for two months yet significant improvements in pricing discount state availability reporting capability and other benefits have already been achieved in the short time thema has used eleven reverse auctions for items totaling approximately four hundred thousand dollars and average nearly thirteen bidders bidding a total forty six times total savings approach seventy five thousand dollars nearly nineteen percent below independent government estimates we have floods themas action to look for improved ways to improve their parent processes that led them to use fed did starting in march two thousand and six famous currently looking into expanding the use of fed to other parent offices and we anticipate the opportunity to replicate our initial successes throughout sima and to be ready to provide immediate support when the next disaster requires urgent for chairman action we also appreciate the committee's efforts on this important matter and i would be pleased to entertain any questions from the committee thank you very much mr shot off this chairman ladies and gentlemen of the comm case vice president of the case brothers i would first like this they not only are we speaking out from the case brothers but also for all other local mississippi contractors that have been slighted by the government's current practice of hiring out of state contractors to perform work that is critical to the rebuilding of not only the physical but the motional infrastructure of our community we have all felt the injustice from truck drivers to chainsaw operators with had t and claw to be afforded an opportunity to rebuild the very place we call home in these next five minutes i hope i can convey to you to frustration with his experience as a result of the hurricane katrina disaster service p nikkei's brothers construction is a miss if a corporation based out of gulfport mississippi when poor thirty six local citizens and work with local subcontractors who employ hundreds of local residents nikkei's brothers history of disaster relief services dates back many years before hurricane katrina james's father harmony case president in the case brothers construction began his roots in the field of debris removal back in one thousand nine hundred fifty nine with hurricane camille a resident of hancock county mississippi hermann uses own don't try to haul debris from the devastated by st louis mississippi area on august twenty ninth two thousand and five katrina challenged the case brothers like no other storm had in the past my family harmon james as well as many of our employees all lost their homes that are ravages of katrina despite the hardening blow nikkei's brothers retained every single employee it had prior to the storm we are proud to say that despite our personal losses our company was a far responder for numerous municipalities and local governments across the mississippi coast in the immediate hours following katrina nikkei's brothers crew crews cleared vital roads of debris for emergency personnel such as search and rescue far police and power crews to aid those in need emergency operations were successfully completed the case brothers concentrated its efforts on debris removal production and demolition for our local governments the city of long beach mississippi contracted with the case brothers to remove all debris from public right of ways as well as demolish and remove debris for over six hundred right of injuries citywide and maintained sites for debris disposal nikos brothers is proud to say that the city of long beach recovery effort is one of the elite on the coast over one million cubic yards of debris have been removed in the supposed from the city along the beach and our contract is within ten percent of the engineers estimate on april seventh two thousand and six in the case brothers was awarded a contract under a solicitation with the united states corps of engineers vicksburg mississippi consolidated contracting office for the demolition of private commercial and public structures or buildings damaged by hurricane katrina and removal of related to bree ash britt of florida contractor prevented any case brothers performing up to one hundred fifty million dollars in cleanup work awarded to the cold war by filing a protest with the g a o this is not the first administrative challenge that aspart made and sent to block the award of contracts to local mississippi firms prior to the ward of the case brothers asked for it protested the project claiming that the stafford act did not allow the corps of engineers to include a set aside for local contractors the g a o validated the corps approach and rejected ashbridge challenge aspirins procedural challenge delayed in the case brothers performance of its contract  before months all the while asked for it was performing a work intended for any case brothers in addition to the g a o congress with broad bipartisan support as recently encouraged the corps attempts to implement the stafford act as it applies  hurricane katrina cleena contracts and h r four nine seven on the local community recovery act of two thousand and six the bill provides explicit directions to federal agencies that geographic preference for the award of contracts are pacifically encouraged the following congressional record her record clearly reflected congress intent to remove further interference by aspirin and a pure mint process i would like to read comments made by congressman oberst last week the g a o issued its ruling is decision in the matter of aspirin with reference to the file number dated march twentieth and in the most part said we think aspirin misses the point when argues that some form of preference short of a set aside also implements stafford act preference for using local business to clean up disaster related to bree the question here is not whether some lesser form of preference might have satisfied the axe intent but whether the preference chosen was an abuse of agency discretion since the language in the statute does not specifically restrict the application of the preference and since the use of set aside is consistent with statutory goal of assisting firms in affected area we do not view the court's decision to implement the stafford act preference with a set aside as an abuse of the agency's discretion to implement the statutory scheme that settles it the court has authority that authority has been affirmed by the government accountability office and it contracting should proceed the g a o decision so clear so precise so one equivocal in my judgment and in previous experience with the corps and with the g a o should ward off any lawsuit or other appeal by aspirin i think they will be very wise to accept the judgment of the g a o and a lot of procedure to go forward congressman oberstar goes on to say i think it is a good legislative outcome it is a good direction to the core it will be good for the people of mississippi it will be good a good lesson for workers in smaller contractors and other hurricane affected gulf states it will set a good precedent for the future on april tenth two thousand and six aspirant filed yet another protest despite the prior ruling by the g a o and a clear congressional mandate the army corps of engineers refused to lift the automatic stay which would have allowed any case brothers to begin its work if asked for its second g a o protest was allowed all remaining work intended to continue with the debris removal process not only was this a slap in the face new case brothers and local contractors it prolongs unnecessary burden to taxpayers if fast recovery efforts were examined they would show that competitively bidding projects to local companies under the stafford act reduces the cost of debris removal by twenty five to one hundred percent this puts money back into the devastated local commies and boost morale of local citizens allowed to take charge of their own recovery process for us meanwhile back on the mississippi gulf coast often office continues to be inundated with calls from low workers and contractors pleading for an opportunity to clean up and rebuild their community unfortunately at this time all we can do is redirect their calls was particularly disturbing about this experience is that the corps had the tools to allow any case brothers to perform the seek a stay which could have been overridden but the court chose not to do so thank you that's right thank you very much i gather you're not looking for a sub contract right now with all the  pouty right after the storm is that correct mr picker we started doing cleanup the day after the storm my company and other local companies moved in to clear the not i lost my house but i was there next day to work and that your story is repeated across the disaster area mississippi where local communities even against advice of the corps of engineers contracted with their own the first two weeks ash britt the corps of engineers is on it was the local citizens cleaning up their own mess open in the streets for david mention the ambulance the recovery efforts and no time did i see the co giving their presentation to the city officials and why they should use the coal or i was the stirred durness presentation one of the sent another thing was if they went with the corps instead of locals they would not have to worry about me and audited by fema and that that to me is a scare tactic used to the  governments the local officials to bring the corn here i have a bit for the city of pass christian and for debris removal you stated earlier fourteen dollars your twelve ninety your million yards in a thirty five that's actually cost us one small town twenty million dollars the taxpayers had to pay that money could been used for something else ok this process works by the local governments of the state of mississippi requesting the governor of their state once they've assessed the situation which they did during the first five to seven days after katrina made landfall demanding of their governor that this was be on their ability from a local level to hindle the magnitude of response and the cleanup that was needed there for triggering fimo to pass a corps of engineers and bringing in ashford under our competitor leap richard a contract that we had for almost ten years and i maintain that it made zero sense to answer your question to do what the coordinators was trying to do when they want to rebid our contract absolutely i still maintain that today but that was three when they rebuilt the contract that was december the twenty s at that time three months after the storm so even if let's just say there was some limited incapacitation or that we needed supplemental help capacity now why does it make sense at that point in december for you for financial reasons for congressional intent reasons of the stafford act and the recovery of the local economy why does it make financial sense to pay twice as much to have out of state contractors at a point when all of our local contractors are on the ground and can do the work at that point so why did you continue to protest and delay and game out the system nobody was gaming the system server gardasil you like to characterize it but speaking specifically to this bit abstract that that mr nikkei's has if you examine the requirements put forth in same thing what is your comparison of nikkei's disposing of one million cubic yards of debris at what twelve fourteen there's twelve bitters on this one particular project my company was started we were third lowest at the twelve nine of the contractors were between twelve and fourteen dollars your they were all local and the job description the job was removing debris maintaining the dump sites the debris reduction and that calls come out to twelve  dollars or something to your there is no difference doing what we're doing twelve not what they're getting thirty six thousand i mean i compare apples to apples and apples of freight trains garbage garbage dollar contract that we have that the pricing structure of that contract was negotiated with the contracting department contracting specialist of the army corps of engineers in that process we are negotiating a profit margin which you said you have a twenty five percent profit on that contract of the five hundred million dollars contract was your profit one hundred million dollars you back often twenty five percent is that about ballpark yeah it's a little overstated but you know we're so far away from and they just for the record make sure that i understand you made a twenty five percent profit this is not about what i said this is a lot of the air this is not about what is common sense in the best financial interest for the taxpayer for the country offer the local communities this is about your your protest your case i mean why are they not apples to apples what are you doing differently well first of all i know what that that that proposal or the bit that they put out required second of all you know we're working for the army corps of engineers the administration the safety the project manager the oversight required working for the agency is significantly significantly greater than working for cities or counties directly i just i mean mike well i'm not after afy i'm just trying to understand what services were you providing different than what mr nick cave's provided part of our contract quality assurance disposal costs specialized work items hazardous materials as best as monitoring meeting pools and  subsurface voice imminent dangers trees limbs that excedrin that they're not even close in the requirements that were under some of these local bids that were put out an initially after the storm and were required to perform on our contract they just they don't even come close and the documents from the army corps show that for both to pre debris removal and the blue roof contracts there are as many as four layers of contractors between the government and the worker each taking a financial cut  mr perkins for your debris removal contract how many layers of subcontractors does ashbridge employ and how many layers stand between the government of the workers zero so you did actually the actual work out what you waxman you're referring to and i concur i completely agree with the problems that you see with that those are related to the contracts in louisiana our contracts in mississippi every sub contractor working on the job gets a check directly from ashbery there are very few instances where some of the local mississippi companies such as some of the truckers that are independent that was of that i was asking how many sub contractors do you hire under your prime contract by one point we had several thousand but they all work directly for us there was no tear during on our project where you paid you you had the contract with the army corps of engineers and then you hired sub contractors to the do the work that's correct ok and did they have subcontractors as i was just getting ready answer in very few cases we allowed a sub contractor and they were mississippi subcontractors to hire people underneath them and this was mainly at the request of some of the smaller guys who only had one truck or two trucks or work for these guys on a regular basis and felt comfortable in that situation but it is our typical policy as a company we do not allow multiple tearing at any level one document we have shows a prime contractor and then three tiers of sub contractors and press articles have reported the same do you dispute the accuracy of these reports maybe not for your company but for the work that's generally being done by private contractors i mean i can dispute a for my company because i know it's factually incorrect but i have personal knowledge that that is the case on some of the other core contracts in louisiana it's a common practice which we do not employ i think at the laser the delays the cleanup it increases the cost and it just creates confusion and takes longer to get the job done how much is ash britt paid for every cubic yard of debris we are paid a combined price of twenty three dollars a cubic yard not twenty six as was mentioned earlier in the first panel the washington post reported that local officials and business people knowledgeable about the contract say the companies are paid twenty eight to thirty dollars a cubic yard is that inaccurate figure i can tell you that from my contract with army corps of engineers is inaccurate i do know in louisiana they're paying upwards of thirty forty fifty percent more than what we're being paid in mississippi now when you get down to the the people who are have the trucks and actually do the hauling how much do they get paid per cubic yard we as as i said earlier we sat down with acting this was not natural just throwing a number at the wa and hoping they accepted the first when we threw out the process we did not have our contract defended ties for the first thirty days we negotiated with a coordinator contract specialist we gathered cost within the first action was about twenty one days  we paid on average there's multiple parts of this contract this is not just picking it up it's picking up is transporting it is running the temporary debris site that's a hazardous waste there's multiple multiple functions that that are captured in this and this a rate that we get paid but for simply picking it up and hauling it from point a to the temporary disposal site the average price was in the ten dollars a yard range which i might add as you know sixty three percent of the dollars we spent to date have gone to mississippi contractors so you know if we paid on average more than a lot of the the big ones for and some of the other is the status of the contract what do you do to earn the extra upwards of eight hundred thousand dollars a year to maintain a contract that potentially has zero dollars zero revenue against it we plan we train we manage we drive project oversight we assume all the risk involved we carried a job of over one hundred million dollars before we received our first penny from the federal government we've got one hundred million dollars payment performance baan on this project let me ask you this maybe you're not the one of the best position to answer because you have an interest in your company but what what bothers me is that and conditions were difficult after hurricane katrina hit but the approach that the army corps uses for these contract seems to me flawed instead of the government hiring and managing contractors we outsource that work to companies like ash britt and then they go out and other companies like yours go out and sub contract seems to be highly inefficient leading to higher overhead many cases worse results let me ask you about the cure and notice you've got a cure notice and it was interesting to me that you got a cure notice where other companies did not get a cure notice even though the audit were some several deficiencies we had on the project we addressed them we corrected him and we moved on in six months later we're still working well as i understand you were then cited again did they ever they didn't terminate your contracted they ever take action after the subsequent violation of the curia notice you know in a contract of this size and with thousands and contractors working and a magnitude of work that was taking place it's routine to get letters or maybe weekly on certain just a minute it's see you seem to be saying that you get twenty three dollars in the subs are getting ten dollars that would mean that your cut is more than half that's not correct it's not correct tell you what the exactly what the correct figures lie and i mean i'm  separating i asked the chairman if he would get from you all the figures because i think we ought to have the accurate figures if it hasn't yet been determined we ought to find out where that is and what the determination will be of what your provide that information to the committee what information you're looking for so ultimately all of your contracting information of going into the specific pricing i think if you request that information first and foremost from the corps of engineers they have all information they've got all the backup they've got all the supporting documents of how we came to our price who's being paid what and what the the g n a s and profit overhead numbers should be and that's and that by the way those numbers are set by the federal government they're not set i mean that  information is proprietary and they were not the question is can they release that information you have you have sounded very well would you object what i object to divulging proprietary information that that i've worked hard for fifteen years to build a n i think that we mr chairman i would suggest that if it's at all possible to get this information we should get this information and i would have urged that we do that let me just ask you a couple questions for you this was a competitive bidding process right yes or was it this contract proposition contract dates back almost ten years and you were you were the low bidder we were the we were we were selected based on our capabilities or expertise and best value to the federal government that's correct and  not the only bitter going back on the prepositions there was at one point forty nine companies nationwide vote on the latest five hundred million dollars contract there were twenty two contractors of which two were very large businesses from mississippi but you were not the only  stafford act and the stafford act to try to renegotiate the contract and that's when you went to court is that correct the corps put out a solicitation back in december but did you did you go to court we didn't know so we didn't go to court we stay as a law allows in the bill and so the contract went forward even though they tried to use the stafford act changes that's correct and so do you still have the contract right now that yes sir we do i don't have any other questions and i would like to see those  figures mr chairman if that's all possible thank you very much we have five minutes left in the voting we have a series of votes so i'm going to suggest we take a recess and come back here in an hour and that will give us time for the votes i'll give you all time to get lunch a well you got nothing to be sorry for i tell you that leaves we don't have all our members here is mr perkins here ok that's fine we'll wait so i didn't hit the gavel don't even start to record it was just practice i'm  take to call this hearing to order i welcome all our witnesses again i'm sorry for the delay a bit appreciate your participation and at this time we're going to go back ten minutes  remember and we'll just keep coming back until we sort this all out i want to say to our participants you'll have a chance to make sure your story is clear if you have a longer answer i'll give a member a little more time we just want to know the truth whatever the truth is and we'll get things i'd like to clear up for the record some of the communities in south mississippi chose to use a corps of engineers some did not and that was made on a community by community basis because and to clear the air some communities were indeed incapacitated the city of waveland city hall no longer exist there was nothing there every vehicle that belonged to base a loose waveland and most of the vehicles i belong to hancock county were destroyed or went  underwater so their options to this day the city abasing was continues to operate out of a temporary trailer hancock county operates out of a temporary trailer city wavin operate out of a temporary trailer so for i hope no one in any way would cast aspersions upon those cities that chose to use the corps because they lacked the local resources when that decision was made as far as the cleanup and i think the communities that could do it themselves  themselves and by and large did that very very well so again for clarification what i'd like to ask the members of this panel is i think i'm seeing a lot of duplications of effort i think i'm seeing the core being paid to do something and to a certain extent your company is being paid to do something that the corps probably could be doing themselves if the corps had gone out and for example given safety specifications you must pass a safety test if the corps had gone out and say you must be covered by insurance should there be an accident in picking up the debris or delivering the debris so that the people united states are not held liable what i'd like to ask of you all as could the corps have done a better job of specking these jobs out so that it would not take a large mega corporation in order to bid on it to where if a guy really did have a truck he could bid on it or forgot had dan trucks he could bid on it but but what i've what i think us saw was a system that really did cater to the bigger contractors and you know if we're trying to help devastated people the last thing i want to do is excluded a guy who had a truck was looking for a job so it's all opened up to the fa because i can tell you from being stopped at gas stations the convenience stores there to hardware store i had a lot of guys who had a truck or a front end loader who would just felt like they didn't get not a didn't get a fair shake in this process and again in fairness if we're going to be trying to get misty contractors in their daughter start with individuals and work up to companies and their congressman or respond to that i don't think it realistic to expect a small small company to be able to serve and meet the requirements and a prime contractor role with the magnitude of devastation that katrina  created i do think it's fair for this committee state and local government to expect that their local contractors are treated fairly and equitably and given every chance they can to participate and i think that we've accomplished and i think that we tenfold as far as the stafford act stafford act requires could there been a sum in some of the smaller communities some smaller contracts let and some of the more rural counties to the local small small business where they could have had a chance to serve as a prime contract and succeeded and hindsight the answer that would be the answer that would be yes but you know follow up on that yes or you know what opus up to all the panel i presume there were times when you told your company or your companies told someone we can't use you if there had to be a prevailing theme in that what was it that would have prevented someone from doing work and if there's something that needs to be addressed which we now in the next hurricane season what are those things that need to be addressed so again so that that individual who does own his own front end loader does own his own dump truck lost his house trying to make a little money to start building his next douse that would have a better shot at it next time you know i think when you go back to the original five hundred million dollars per chairman when you look at the number of mississippi companies that responded to it i believe it was two when you go to the subs are computer meant which was in a day a hub zone and unrestricted for chairman there was also only several mississippi companies that that that that submitted responses to that proposal what that shows me is is that that in a fair open competitive situations the ones who felt that they were capable to serve in that role submitted a proposal the ones that didn't obviously didn't i still maintain the fact that that we've spent upwards of  hundred eighty million dollars to date with mississippi companies of which seventy percent of those are from the impacted impact area i don't think that there was a public outcry from mississippi companies that they weren't being treated fairly unfortunately there were a handful of companies that felt that they should have had our role as the prime contractor and i think that's where a lot of these problems originated from but in the corrected on a go forward basis as a core engine ears are contracts expire december thirty first of this year they're going to report your those contracts i guess look look at some way that after the mag and after the event happens and it was the worst natural disaster ever hit the country the breaches with a levee in new orleans took a lot of focus away on what the corps of engineers would have normally done in president was set and you know my opinion i've talked to the board years about this is is to to look forward and find a way to change that again as the question i'm asking is was there a prevailing reason or prevailing theme was there one or two things that those people who were local who didn't get work could have done work who could have done so that they got work and if there's anything that they need to change between last hurricane season next hurricane season yes or let out of state contractor one out of state contractors prime after this job was was be a leave this job was bid on a thursday i believe friday city hash and sided to go with  e i contacted mr perkins myself see if i contract from him since i've already been on a job i want to cheap as contractors for this particular job and i was declined he had enough people  to do the job and most his contractors from what i've seen in past jan or either from state of florida or michigan and the problem i see is the small contractors are excluded when a large contractor from another state is awarded these contracts now a lot i have no problem with a large contractor been awarded this contract if he is from that state he is going to take care of his own which is mississippi contractors but i was declined to contract to answer your question about is a is a small company capable of meeting the co guidelines and as far as performing these contracts we were awarded the contract so i think the obvious answer that question is yes we we are capable it's a management operation it's putting the people on the ground to pick the trash up and it's a management operation we were awarded the contract by the coal or on a best value basis so the answer to your question congressman taylor is yes it does small gas can do it  just for my information was all of your work done by any case brothers quit or did you turn around and hire an individual with a front end loader and i don't care how did it work for your company we had perform any work because of the protest filed by ash bread both pre select cetacean pre award and post award protests that caused the delays such that nikkei never got to perform the work can  you perform any work in any of the other cities gulf or below i didn't and we used i use my people that were for me my own crews and also hired so contractors from south mississippi what did  nvidia come to me and all he had was a truck up with him on one of my personal cruise if a company come to me with their own equipment i give their give them their own area to work they were  but if there was people just had a backhoe or or a front end loader or excavator or truck not a crew i would take them and put them with one of my crews and pay them i made sure the individual got a chance to work not just the sub contractors that had companies that were capable of doing it but if individual had some something they wanted to put the work in didn't have enough forces to take on a sub contractor rowe put them under my wing and kept them with and work with me ok just for the record since you did some of this work on the last a whole panel same question what if you choose answer what was your profit margin on something like under me as one of my crews i had to pay x dollars per yard for whatever they brought in other contractors that had the whole package the trucks the quitman to load i got eggs now dollars so until we break it all out i'd say our profit question because i want to clarify something that might have been misinterpreted earlier when i we were talking around the twenty five percent number that number does not encompass my company's profit the numbers that we negotiated we are nish really went to the corps of engineers with a number right at that for profit and overhead not just profit the number was turned down by the core negotiations we subsequently settled on a lesser amount so so than the profit margin or the  if i if i may congressman still if i could add something there i think what you're trying to get to is to try to figure out a way to get the local vendors into the mix to the maximum extent possible and that's where fed bid is an on line for chairman tool comes to play i spent twenty six years of government the chairman official in department of sands and general services administration now i'm a private consultant but the problem in the federal government is there are not enough people to go out and  find these folks like mr new case and others to actually award the contracts that's where you need tools is it's like the difference between trying to trying to dig out a foundation with shovels or using a front end loader you need the right tools and you need a for small apply are like a force like a back and front end loader to get the job done correctly said that provides that type of a tool that can bring people like mr new cases company into the bidding  whereas in the past the federal government has defaulted to very large contracts that run by single companies to to take care of the issue and the profit that's where you have the tearing of sub contracts if you use a tool like  bit you can get to the right people at the right levels of the right time i'm sorry you asked a question earlier and i didn't i didn't answer we did not exclude any mississippi companies from working on our project although i would say seventy percent of the companies in mississippi local most of the companies could not meet the insurance requirements your workman's comp laws and mississippi exempt them if they have less than five employees those type of things in the first thirty days we provided fuel we supplemented their insurance to our master umbrella policies we rented equipment for them under our national accounts w all our caterpillar dealers and things like that so we did go above and beyond what we normally would have done and put on a lot more risk than we would have normally took on to try and make sure that all the local mississippi companies that approach us see really what in mississippi was a ten mile wide tornado and ninety miles long that's what it looks like and i'm struck by the fact that in mississippi had less to tear down because it was just totally destroyed chairman yes or i'd like to remind you t i saw it as a tornado it where the death damage was just like that and i am in awe that we didn't lose more lives and i appreciate the culture down there that that just is in tune to what you do obviously folks  n the smell and sun in new orleans they were used to being protected in and so lives out was something as horrific but a different kind of of tragedy i mean the same result of what i what i'm interested in is that i do believe that theme is broken i believe it's broken in a big way i think it's contracting process defies imagination when mr perkins you respond to questions i'm i'm looking at you and thinking you know this is a man who has probably a very successful business and you're probably quite efficient at your business and you know if you get your profit margin is a certain level more power to you but having said that we're trying to understand is this system working right if i was and member in anywhere near this area and i wasn't seeing local people getting employed and i getting employed thirdhand getting employed up front i'd be pretty unhappy now if you mr perkins can make sure that you can hire a lot of folks locally and they get paid on time and so on and they're happy you know that there's logic to that i understand a lot of people who have done work down there are still haven't gotten paid and i have a feeling that some of the operations what i'm suspicious about with theme is and it was just now it's kind of related in your area and not in any way disrespect to you but you can help me understand this you have a approach them but we didn't go through a big rigorous program we had had a different vendor you know you weren't a broker where all eyes had to come to before it went out you know we were just a place to put it they inspected our facilities we have to silage throughout the south we have five facilities in alabama we have one a west point mississippi you know we stored i'll have to work through a broker now so who do you work through we were directly a female and he would direct the ice to us they would just send their so they were looking for a place to deposit they had no place to store and they were trying to they want to create in the eyes they were they were buying it from other suppliers looking for a place they wanted to inventory the felt they were going to have a bad year again they wanted to inventory i guess we had gone to them actually on a different idea which was to have them work with a retailer to buy ice and rotate it through so that they would always be nice but they would have to own it you could always go right out to retail and i was saying to me that we are actually you death i mean like i believe it is i mean from what it what i what's represented to me for people who are trying to store a product live day to day i mean they're not buying it to get drinks cold it's like take everything out of the refrigerator powers down how do you keep your own food good shape and i' to believe that a lot of people themselves live off the land so to speak and it's very important for them to keep that product cold so ice is more of a life essential than i think some people think it is water is a life essential because water systems are down and we also stored ice and water we delivered ice challenge of people having to go through brokers in order to be able to do business with seem that's that is a difficult problem of the way prepare him and normally works in the federal government especially when you you have a very large  for german operation with a lot of moving parts the federal government is not kept pest pace with technology unfortunately when it comes to paramount operations and contracting that's where companies the fed did being a private company need and stepped and put their own resources at risk to create a company that can solve a problem the government had i'm not liking about how you're solving a problem that i'm as i'm going to just be looking to exploit you sure i don't want you to explain  for housing one person for water one person that people basically had a contract and had a huge territory to which they had a monopoly i can't speak in detail about seem as precise operation  contracting operations but but there were not clear lines of authority of who was responsible for what areas that much i am sure of the corps was responsible for some things teams response for other things jointly they they were supposed to hand things off that as handoffs go in a crisis that's difficult i think the key gets back to the pre planning and having the capability to have these things sorted out the authority lines of authority have to be clearly stated before you ever enter into this situation so if people are responsible for certain for chairman areas they need to know that ahead of a crisis so if you're going to divvy up t responsibilities that's part of the but one of the challenges is it appears that in many instances the people who had the contract were really brokers without any resources of any kind and they were basically asking a cut of large companies that were willing to pretty much do things for free or well below cost and they had to go through these brokers and they finally said forget it forget it so i understand and i'll give you a chance a little later to to desensitise how you think you break through that system where i wrestle as i listen to this dialogue is mr perkins when you get a contract do you have a monopoly for a whole area and how large is that area there's there's two ways with a company like myself tell me what happened in real life what your partner serves as it's very rare and for me if you in between that the corps of engineers is to ras task direct federal assistance to come in after after a major disaster i just want to answer i mean were you given a certain territory that was so we competitively bid and won the states of louisiana and mississippi and the alaska region pacific ouldn't we have said to four or five i mean why would we just give one company such a large bid whether you want to know i'm not living i think it makes perfect sense i mean might be self serving statement because we won the contract but but then you're the monopoly you're the you're the emperor you're the only person that they can go through why not allow for a huge amount of competition and participation you're asking the femur the corps of engineers after the worst natural disaster to ever but you cannot select companies that don't plan don't train don't have the resources don't have the final financial capability to take on this task of and then this volume of work is not lost i'd say in reverse given all the buy  it's crazy from my standpoint to have just one company be in charge i don't know why we didn't test literally hundreds and if and this no disrespect to you you know  i don't take it personally i don't think it's reasonable to expect the army corps of engineers to manage one hundred different contractors and the environment that that we were working in an area that katrina i don't understand why they just didn't give you half of the state or something at the least and give somebody else another part and somebody else another price just don't understand that like i said earlier i think the course going to evaluate that the future you're not going to see a single five hundred million dollar contract i think they realize that that that things are to be done different in the in the clarification the core made the pitch to every municipality and every county on debris removal right and i was there for one of them so i think it's fair to say that let it be known that their resources their people in sense it was their internal already a government agency it was kind of implied that we take all the heat if there mistake no one's going to looking over you the local elected officials showed he was also kind of implied for those counties and cities that chose not to use the corps that since we're not going to be handling this we will be looking over your shoulder so again based on the capacity of the city in case a waiver no city hall case hancock county courthouse went underwater basing those went underwater pass christian and half the city is gone they all decided this is too big for us to do right now we're going to court to cities like gulfport biloxi that had fairly large organizations that remained intact that after the storm they said we'll do it and so that's why you're go and i believe hurricane season frederick the corps did separate jobs after hurricane frederick the corps took over several parts of alabama and they beat out each town separately there was not a contractor and place to take over the whole region if the corps took over an area that area out after they acquired the job from this they didn't have contract where did shaw is a d c c and c h to him he'll fit into that picture because they are in louisiana doing work at art we were the only time to preposition contractor for the on of the a those type of things as well as debris removal but our national natural ses operation we provided support services fuel housing meals everything else for government personnel as well as subcontractors subsequently after the five hundred million dollar chairman the corps came in and wanted to well the two parishes that opted to not use a corps contractor and i don't know if there's any collusion in there or not but i can tell you that my local elected officials in at least one of those two parishes got browbeaten and inferred that they were going to have to pay a car share they did not take the course designated contractor and this is the core and theme of the meetings and i thought not mistaken i might even had a louisiana person that handles the deal he did what is it all e c operations for louisiana  that was in those meetings they occurred on several occasions and the parish officials have had some grave concerns about what took place but continued they did it properly they accepted the bid which was a combination of about three companies that came together it's in one parish it's going to probably be hundreds of millions of dollars not counting you all in south black  or jefferson any place else there's enough dollars to go around for another twenty years yet all last all of companies trying to squeeze other companies out and people using  accomplish that and i will have to confer with congressman baker but i believe he was quoted as saying about a week three weeks ago that out of the eighty seven billion dollars that the congress appropriated before christmas twenty five percent was taken off the top b nine billion ended up on the ground in louisiana out of that eighty seven billion and seventy five percent of the damage was in louisiana and i criticize in other states just the fact where the numbers  when all was said and done we're still probably months in years away finishing the entire clean up the entire day bri removal the entire process of course we've got to got to go through demolishing houses and such the other problem i've got is those contractors not all of them but some of those local contractors that did manage to get hired three trucks louisiana contractor went to one of the big contractors and got hired and apparently somebody supervised over those but i've got some that were subject to the sub who are still waiting for their money and in the case of st bernard parish i have tried to put the entire group of people parish officials governor's office state auditor them corps the state o e c d and everybody in one room and thema refuses to attend i have yet to find out who the person is that makes the decisions in louisiana on whether someone gets paid or i should say allocated money because all i've gotten when i've asked for that information is two or three bureaucrats they bring me a stack of papers that a computer print outs of the deed obvious and said here go through it  of the parishes that chose to have its own contractor and allow allocated the core contractor for the portions have had problems also and became territorial when the parishes contractor crossed a street to demolish two homes or pick up trash from two homes because the people asked him that they do it and the contractor in the core people came down there and told him they can't do that these contractors that have been hired by the prime parishes directly didn't take the corps people believe that their people are doing the work cheaper and visibly are doing the work faster than are the core contractors while at the same time these contractors i haven't spend day and day out seven days a week trying to protect the contract they've got because people are trying to avoid it tell him that they're going to lose that the parish going to have to pay ten percent and god knows none of the parishes have any of that money to do  anything we in this country in a committee asked the corps of engineers in the theme of people said right at that table what the cost of de brito removal what the cost of cleanup that they were paying for the contract we were told by a member of the corps when i have to go back and see who it was that they would give us that information we have voted up the katrina committee and we have still not gotten any information one of my parish presidents asked for that information from the corps and thema and was never received and this goes back to last october he then wrote a letter on the freedom of information asking for that information and never received it and i convinced him about two months ago to file a federal suit that will be heard in june and you all and as to what the actual cost of cleanup is these par wanted to do a good job get their people back up get their communities back up resurrected or whatever term you want to call it and it's been a hindrance all along because of the not all of maybe but the major contractors and this you've got to task the corps contractor or you're going to have problems one parish that went back and hard their own people wanted to know what number did they have to look for so that they will know whether they will get a good price and that's when the game started of we can give you that and that's where we are now waiting for june to get here so we can get it into a hearing in court that same parish had its own landfills and its contractor was hauled into its landfills coincidentally their landfill got shut down last month by e p a but the landfill that's thirty miles away still continues just to receive the day bree from this parish and the contracted that was doing the work that was using the parishes pitch have basically been stopped from ok yeah yeah got some trailers i have a contractor that was putting trailers down in one parish he was getting paid by the unit completion the major contractor was getting paid cost plus and his experience was that they were very nitpicking and they spent a lot of time going back if they said stake the drainpipes at four feet and it went four feet one quarter inch they made a ripple back up and start him over again i don't know if they ever got straighten out and then when the guy said something they threaten to cancel his contract you know i can go on but i think that we would need to get a core in here colonel viz a and because of the unwilling us and c n n and for that matter i'm willing to bring the louisiana people in here because we need to know you know is there is there something actually going on out there let me say to the gentleman if the chairman once myself committed to do it or he wants the full committee to do it i think there are a number of follow up hearings we can have that will get specifically to these points and we'll make sure that the folks come in who are able to answer questions chairman that asking them to come here and pledge that they're going to tell the truth the whole truth and nothing but the truth i think that the scare of subpoenas and come in here and then having to swear carries a whole lot more water and we might get chairman and i just want to comment on some of the discussion from mr taylor what we're looking at is several different models mission a case to mention the model where the corps contracted on a local basis and hugo and that was one one model usually and and natural disasters it is done by local entities if you look at the florida model which is has been held up as probably the most efficient they have a statewide emergency plan in place which includes pretty storm contracts for debris removal and so if a city like waveland is wiped out and does not have the capacity you ha the contract already in place that you also have the state compliance assistance to help comply with anything in a requirement to meet all famous standards is a achieve that there's a public policy objective here now that mr perkins would advocate that there should be and i don't say this in the pejorative there should be a storm chasing industry and that is that you pay a premium to have somebody  capacity that can be mobilized to meet any storm at any time that premium is built in this price and to his profit in a second i'll give you a chance mr perkins if you disagree with that but one of the reasons that you have a higher price of the corps and through a national coming like asheville is that they would argue that they have to have the real resources they have to supply store them and there are a lot of downtime where they are not in use unlike  new case who is now well not only there for debris removal but he's doing local projects construction work all the time it is clear from the first panel that general riley did not disagree sed of the national corps modeline in katrina now we're all entitled to our pinions but we're not all entitled to our facts and so what i'd like to do mr chairman is ask that we have a f transparency of what the facts are and i believe the only way that we can do that is to ask the court mr perkins and other major contracts to go ahead and lay on the table for us their books to give us what the cost was katrina so that we'll know which model is most cost effective the florida model which is a state local model or the national court model and i think that what we will find is just like no one in mississippi this is going to be a very equivalent comparison of what is the most cost effective was a for us to do this for the taxpayer now from a macro question do we want to storm chasing industry and pay that premium or is our objective to recover local economies and what congress has said not only in the stafford act but what it just said unanimously in the house in the legislation that was passed and what it said unanimously in the senate is that local recovery is our highest policy priority now the court tried to carry that out and mr perkins i do not fault you for playing by the rules in winning the contract in two thousand and one building a company successfully over a number of different hurricanes in disasters but what i do have a problem with is that when the co engineers tried to meet their stafford act requirements and to help the local economy by having a geographic set aside for mississippi companies that was protested now the g a o rejected and they didn't say that that was the preferred outcome they said that they only waited to finish the job in the fact that they expect to finish by the end of may and the protest would last one hundred days that they had no other choice but to withdraw the contract from the case that they had once met all the criteria they had been in the area they've been performing at the highest standard the best value of those contracts now on a going forward basis mr chairman hope that the model and as i say some in the audience from the corps of engineers we can go to the florida model which is a complete state local where we can go to a core model where you continue what you did in mississippi in doing geographic set asides for priest storm local state contracts on a competitive basis and i have always advocated even if it's a geographic preference that it should be done competitively and i think that they the evidence is very clear that the mississippi companies in the competitive even when it was limited were low or lower cost mr lee case as mine is standing that you are at a you had  low in your bid to do the work that you had a lower cost of what you were offering to do the work for in your contract is that correct that's correct so again that the lowest cost and local is precluded in denied because of protest from out of state company now the other question mr perkins you had two options you could have protested the geographic set aside and you could have protested the award of the contract or you could have partnered with the corps and with mississippi companies in a transition is that correct and understand your disruption to the work schedule and the cleanup is that correct had the corps been able to award the contract in the case and we would assisted with the transition but that but you were the that you sponsored part of that language tried to take the judicial appeal rights away from from from ashburton any other contractor in the comp in the country and luckily there were some congressional members that realized how damaging that would litigate and you also refused to come to this committee did you not voluntarily subpoena me that's correct and is a reason that you would not come after winning five hundred million dollars and making tens of millions of dollars of profit from taxpayer i don't have problem with the question as was fema is the the broken the famous cracked it's not broke it can be fixed this problem these problems that we're talking about here today go back it's not a party issue it's been going on for the last ten years they happen these committees get together and when he talks about it are there any changes in the last ten years it hasn't been any changes the the problem here is i've been criticized for not hiring mississippi companies it's wrong it's false we spent hundreds of millions of dollars hiring mississippi companies we've created over five hundred very high paying jobs  ministrative clerical project management the problem here congressman pickering is i didn't hire the right mississippi companies i didn't hire the four or five mississippi companies who employ their lobbyist to badger me on a day to day basis who employed your office to call me along with some other delegation members from your state to call me and demand that i do things that are some are going to do it's my contract all the ministry of power i felt was best for my company in a recovery mission the state of mississippi so this isn't about mississippi companies this is about a select handful of companies who wanted my contract and didn't get it that's what this is about mr perkins if you would like i can have the court engineers release all information any communication any contact the mouth has ever had with them make a very long statement that which you you know you're pointing a real strong finger and i'd like him to be able to make his comment ok i'm sorry that's right i mean i realize you're kind a little bit under the gun i think you've done a fine job i think all of you have will get to the bottom of this local geographic priority given it is with a broad mission an objective of recovering local economies again one hundred percent of the house in one hundred percent of the senate agree with that position and that we have clarified the staff act so that the corps of engineers could slide off protest that you filed so that geographic set aside could go into effect as we go into the next season we will need to do additional reform to make sure that they congressional intent the stafford act objectives give preference to the recovery of local economies and that we move away from the most costly and inefficient models of recovery and that is that is whom i subcontract there were three protests filed on this this latest protest of award ourselves the n j and hemphill tall joint venture out of mississippi we talked about the protest procedures they asked me because my experience in the federal contracting process how it works what they need to do exciter i gave them some advice did you encourage them to do so there are a business absolutely not to answer your question i think  of you to just have a minute or two to just summarize any point you want to make ok and this further this isn't your first time here correct i think you've been here before now it's my first time ok ok i'll come voluntarily next time  i know you well there are people i know say you're a fine gentleman and i think all of you have conducted yourself well and i think everybody here has a point to make that that is valid and it comes at a little bit in conflict frankly  mr taylor you have a seat in the back of the room is colonel help us a process properly say of the vicksburg corps of engineers who's actually handled this contract on a day to day basis in south mississippi and it has been a tough task and they have moved millions of cubic yards of material and at this point things to look at a heck of a lot better than they were started they deserve credit for that i think everyone is concerned that we spent too much money that that's universal and we want to do better next time i think there are a heck of a lot of south mississippi who wish they had had who of limited means who wish they had had a better shot at participating on these contracts that's also fair to say so with that in mind carnal we're going to ask you to appear before this committee i'm not a member of the committee the chairman has agreed to do so we're going to ask you to appear before the committee and give us your recommendations of how do we reach those goals because and i sure as heck don't wish a hurricane on anyone but the navy saying that we're in for ten years of this and i'm going to take their word for it so when the next storm hits how do we do a better job of giving the local average joe a shot at how do we do a better job of through this competition getting the cost per cubic yard down for the taxpayer and i would really you know you're a smart guy i would ask you to give us your personal thoughts as someone who has witnessed what has happened and big because i value your opinion and ask and i think all of us want to see us do a better job as a nation next time and so we're giving you some notice from time comment that you wish that we had that you had had an opportunity make a point of over is there any point that you wish to make that needs to be made before i joined this hear work as as we stated earlier we we performed all the debris cleanup for city long beach and i think it was in february we made the last pass to debris there  as many other cities gulfport biloxi there's numerous others that are done the corps the last last one there the last one there's around it's the slowest is the most expensive it's just numerous problems with it so that biggest thing and i think what will be what it will be taking a look at that mr fox and i  don't mean to just say we're going to take a look at we're going to take a look at it because we get it mr fox listen to a lot of good points were made during this hearing on keeping competition in the mix at all times about ensuring local vendors are brought into the into this percheron process and kept in the preparing process as early as possible as well to avoid the leak the need for large preposition contracts that is all what's said that can offer youngblood you saw here from sema the people who unfortunately had to take the heat there the next generation and they're looking out for they're looking for new processes and they see said that as one of those new pro i have basically two comments that we were here for number one we didn't have a contract we basically treated this like it was walk in off the street business we would do it within of our warehouses our point that we were trying to make was that what made us unique was the fact that we could give the government total asset visibility so one of our warehouses or someone else's warehouse we actually used a couple other warehouses that were not ours to store the material but that's something you've got to have you have to have some way of knowing i've got a  go here that was our point you know we're just general business guys we also did the same thing with transportation we used two hundred different transportation carriers anybody who qualified with a secure insurance etc we were we're  basically putting a request for transportation out on a bit board we do that at a very low margin business you know load a has to go from this is silly to that facility and those were another thing that we brought to the committee was  do these things with things that go on in the daily commerce every day we do twenty two hundred twenty thousand dispatches a year we don't have a flea we use all different types of carriers we know where all the we can address an example stores with us in forty eight different locations always knows where the materials are so that was what we had brought the committee was a concept you know you don't need long term contract you don't need major funding for super systems those systems and supply chain management exist today and that's our specialty thank you thank you very much mr perkins thank you a couple of things dollars and picturing it noted the floor model and i and he's right on that i mean we hold more preposition contracts in the state of florida any other company in the state of florida it works it works although it also works because the state of florida local governments have much more money for planning and training those are some things that need to be looked at states like mississippi they don't have the tax base the tourism base if you don't given the hours thirty seconds the mississippi department of transportation put out beds that went one hundred percent to mississippi d o t contractors those prices in a competitive bid situation or two and a half to three times higher than the rate the corps of engineers paid us for almost identical services also eighty five percent of the work performed by those six big m dot contractors went to companies from out of state  fact you give me concern that you may get people wanting to jump in and i do have to get a play ok i don't know but i would like evidence our general comments your point about florida any other comment that you'd like to make before we i just want to set the record straight on one thing direct arms because i have to the question was asked me did i influence or try to strong arm any other contractors into protesting the contractors referring to a central utah they were a partner of ours they continue to be a partner or is on the job we sat down as partners because we're working together to talk about strategy and why we should continue to work and what we could do about it alternately they had a debriefing with the u s army corps of engineers and felt that they should have been awarded the contract and their decision to protest was soley based on on that debriefing and my final word is i would understand if you want to contract law you would want to keep it and i could understand if i was a member of congress why i would want the people i know the best and the most to have it  so both sides are very explainable to me but i appreciate all of you being here the pledge that we're making at this hearing is either the full committee will do it or my subcommittee or a combination of both but we're going to get into more the details we'll have some panelists who will be very keen on those particular issues we thank all of you for being here we know a lot at stake and appreciate your patience thank you very mischievous chairman yes mr i just want thank the committee for letting me to stay and and i want to thank all the members who have worked with us from the select committee and i hope that we can find the reforms i never said strongarm enforce i said you encouraged and your testimony was absolutely not is that still your testimony ok so i think i think i corrected it w