OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Audit Report 

New Housing Contract for 

Hurricane Katrina Command Post 

Reduced Costs but Limited Competition 

Report No. 2007-P-00015 

 March 29, 2007 
Report Contributors: Michael Petscavage 

 Andres Calderon 

 Jean Bloom 

Abbreviations 

EPA U.S. Environmental Protection Agency 

OIG Office of Inspector General 

SOW Statement of Work 

Cover photo: EPA’s incident command post in Metairie, Louisiana, for dealing with the 

aftermath of Hurricane Katrina. Trailers are in the foreground. (EPA photo) 
U.S. Environmental Protection Agency 2007-P-00015

Office of Inspector General March 29, 2007

At a Glance 

Catalyst for Improving the Environment 

Why We Did This Review 

The objective of our audit was 

to determine whether the 

requirements for Contract 

EP-R6-06-03, for providing 

office space and housing at the 

Hurricane Katrina incident 

command post, were wellsupported and justifiable, and 

whether the contract was 

awarded fairly using full and 

open competition. 

Background 

On August 29, 2005, 

Hurricane Katrina caused 

catastrophic damage in the 

Gulf Coast area. In October 

2005, the U.S. Environmental 

Protection Agency (EPA) 

Region 6 established a 

command post in Metairie, 

Louisiana, for emergency 

response operations. Through 

several contracts, EPA 

obtained office space and 

trailers for housing staff. 

After the contracts expired, 

EPA competitively awarded a 

new contract in March 2006 

at an estimated value of 

$980,765. 

For further information, 

contact our Office of 

Congressional and Public 

Liaison at (202) 566-2391. 

To view the full report, 

click on the following link: 

www.epa.gov/oig/reports/2007/ 

20070329-2007-P-00015.pdf 

New Housing Contract for Hurricane Katrina Command 

Post Reduced Costs but Limited Competition 

What We Found 

Contract EP-R6-06-03 contained several improvements over the previous housing 

contracts for the Metairie incident command post. The new contract terms were 

more flexible, allowing for various options regarding the numbers of trailers to be 

leased. It also resulted in a price reduction for each trailer (including some 

services) to $95 per day per trailer compared to over $300 under the prior 

contracts. We found that both EPA Office of Administration and Resources 

Management personnel and Region 6 procurement staff worked together diligently 

to attempt to refine the statement of work and make sure that the requirements did 

not limit competition. These personnel performed admirably and deserve much of 

the credit for reducing costs. 

However, the contract’s statement of work could have been improved to ensure 

that it did not contain unnecessary and ambiguous requirements that limited 

competition. Full and open competition is required by Federal Acquisition 

Regulations and EPA’s Contracts Management Manual. Specifically, EPA: 

• Overstated the need for land 

• Sought unneeded kitchen space, refrigerators, and microwaves 

• Did not consider multi-story office space 

• Unnecessarily required a 6-foot fence 

• Did not clearly indicate whether private rooms per person were needed 

The contract requirements made it difficult for hotels and apartment complexes to 

compete for EPA’s business. EPA largely based its requirements on what it 

already had as opposed to future requirements, making it difficult for anyone but 

the incumbents to win the contract. Also, contract requirements were often 

undocumented and unverifiable. As a result, EPA had limited assurance that it 

received the best value for its money because similar or better facilities may have 

been available at a lower price. 

Because EPA plans to award two national blanket purchasing agreements to 

provide emergency technical support and logistical services as a result of one of 

our prior reports, no recommendations are being made. We are providing this 

report to ensure similar occurrences are avoided in the future. Region 6 did not 

agree that its contract requirements limited competition and asked that the report 

reflect that contract requirements may have limited competition. 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

INSPECTOR GENERAL

March 29, 2007 

MEMORANDUM 

SUBJECT: New Housing Contract for Hurricane Katrina Command Post 

Reduced Costs but Limited Competition 

Report No. 2007-P-00015 

TO: Richard Greene 

Regional Administrator, EPA Region 6 

This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the 

U.S. Environmental Protection Agency (EPA). This report contains findings that describe the 

problems the OIG has identified and corrective actions the OIG recommends. This report 

represents the opinion of the OIG and does not necessarily represent the final EPA position. 

Final determinations on matters in this report will be made by EPA managers in accordance with 

established resolution procedures. 

The estimated cost of this report – calculated by multiplying the project’s staff days by the 

applicable daily full cost billing rates in effect at the time – is $108,420. 

Action Required 

Because this report contains no recommendations, you are not required to respond to this report. 

We have thus closed this report in our audit tracking system. We have no objections to the 

further release of this report to the public. This report will be available at 

http://www.epa.gov/oig. 

If you or your staff have any questions regarding this report, please contact Melissa Heist, the 

Assistant Inspector General for Audit, at (202) 566-0899 or heist.melissa@epa.gov; or Carl 

Jannetti, Director of Contract Audits, at (215) 814-5800 or jannetti.carl@epa.gov. 

 Bill A. Roderick 

 Acting Inspector General 
New Housing Contract for Hurricane Katrina Command Post 

Reduced Costs but Limited Competition 

Table of Contents 

Purpose ................................................................................................................................ 1 

Background ....................................................................................................................... 1

Noteworthy Achievements.................................................................................................. 2 

Scope and Methodology ..................................................................................................... 2 

New Housing Contract Reduced Costs but Limited Competition .................................. 2 

Need for 6 Acres of Level Land Overstated ............................................................ 3 

Unneeded Kitchen Space Sought ........................................................................... 3 

Unnecessary Small Refrigerator and Microwave Required..................................... 3 

Multi-Story Office Space under One Roof Not Considered..................................... 4 

Alternatives to 6-Foot Metal Fence Not Considered ............................................... 4 

Need for Private Rooms Not Clear.......................................................................... 4 

Conclusion .......................................................................................................................... 5 

EPA Region 6 Comments.................................................................................................... 5 

OIG Evaluation of Comments ............................................................................................. 6 

Status of Recommendations and Potential Monetary Benefits ...................................... 8 

Appendices 

A Agency Response to Draft Report ................................................................... 9 

B Distribution ........................................................................................................ 15 
Purpose 

The objective of our audit was to determine whether the requirements for Contract EP-R6-06-03, 

for providing office space and housing at the Hurricane Katrina incident command post, were 

well-supported and justifiable, and whether the contract was awarded fairly using full and open 

competition. 

Background 

On August 29, 2005, Hurricane Katrina made landfall in southeast Louisiana, causing 

catastrophic damage along the coastlines of Louisiana, Mississippi, and Alabama. The U.S. 

Environmental Protection Agency (EPA) quickly deployed emergency response personnel. 

These personnel, along with the Federal Emergency Management Agency and others, assessed 

the damage and initiated cleanup operations. 

Initially, EPA Region 6 established an incident command post in Baton Rouge, Louisiana. In 

October 2005, EPA relocated the incident command post to Metairie, Louisiana. The Metairie 

post was established on the grounds of the Louisiana Technical College and used part of one 

building and some of the surrounding grounds. The command post included 78 trailers for 

housing up to 130 EPA personnel. 

EPA procured the 78 trailers via two sole source purchase orders. EPA leased 66 trailers from 

one vendor at $325 per trailer per day ($125 per trailer per day, plus $200 per trailer per day for 

related services). Another vendor provided the other 12 trailers at a cost to EPA of $350 per 

trailer per day ($150 per trailer per day, plus $200 per trailer per day for related services). EPA 

leased the office space, parking area, and the land that the trailers sat on from the Louisiana 

Technical College under a separate sole source purchase order. 

Both EPA’s acquisition staff and the Office of Inspector General (OIG) had concerns with the 

initial contracts awarded for office space and trailers (plus related services). These contracts, 

awarded under catastrophic conditions in the aftermath of Hurricane Katrina, were allowed to 

expire on April 11, 2006 (office space) and March 31, 2006 (trailers). In January 2006, the 

Region 6 Superfund program office told us they intended to extend these contracts or award a 

sole source follow-on contract. At that time, we convinced EPA officials to competitively award 

new contracts. On March 17, 2006, EPA awarded Contract EP-R6-06-03 to obtain 35,000 

square feet of office space in the same building at the Louisiana Technical College and 

77 trailers for housing from the contractor that had provided the original 66 trailers. In the new 

contract, the incumbent who had provided the original office space and the other incumbent who 

had provided the majority of the trailers under the prior contract joined together in bidding on the 

new contract. The initial estimated value of the contract was listed as $980,765. 

Federal Acquisition Regulation, Part 6, describes Government policy on competition. It states 

contracting officers shall promote and provide for full and open competition in soliciting offers 

and awarding Government contracts. The EPA Contracts Management Manual, Chapter 11, 

states that any statement of work (SOW) “must contain only those requirements necessary to 

meet the Agency’s needs and not be unduly restrictive of competition.” 

1
Noteworthy Achievements 

Contract EP-R6-06-03 contained several improvements over the previous housing contracts for 

the Metairie incident command post. The new contract terms were more flexible, allowing for 

various options regarding the numbers of trailers to be leased. It also resulted in a price 

reduction for each trailer (including some services) to $95 per trailer per day compared to over 

$300 under the prior contracts. We found that both EPA Office of Administration and Resources 

Management personnel and Region 6 procurement staff worked together diligently to attempt to 

refine the SOW and make sure that the requirements did not limit competition. These personnel 

performed admirably and deserve much of the credit for reducing costs. 

Scope and Methodology 

We performed this audit from March 2006 to October 2006 in accordance with Government 

Auditing Standards, issued by the Comptroller General of the United States. We visited EPA 

Headquarters in Washington, DC, and the EPA Region 6 office in Dallas, Texas. We reviewed 

our working papers related to Hurricane Katrina procurements, since these working papers 

contained data related to the EPA Region 6 command post in Metairie, Louisiana, including 

correspondence and procurement data. We had previously reviewed EPA procurements in 

Metairie and noted concerns regarding the original procurement of trailers, as discussed in prior 

Report No. 2006-P-00038, Existing Contracts Enabled EPA to Quickly Respond to Hurricane 

Katrina, Future Improvement Opportunities Exist, issued September 27, 2006. 

We interviewed EPA officials in the Office of Solid Waste and Emergency Response and Office 

of Administration and Resources Management, as well as Region 6 contracting office and 

facilities personnel involved in awarding Contract EP-R6-06-03. We also reviewed the contract 

file and other correspondence related to award of the contract. 

In planning and performing our audit, we reviewed management controls related to our 

objectives. We examined the Agency’s stewardship plan issued on September 26, 2005. This 

plan outlined EPA’s controls and monitoring procedures that would be used to review costs 

incurred related to Hurricane Katrina. Additionally, we interviewed employees involved in 

weekly meetings between EPA Headquarters and Region 6. These meetings discussed 

procurement and program related issues, one of which was awarding Contract EP-R6-06-03. 

New Housing Contract Reduced Costs but Limited Competition 

Contract EP-R6-06-03 substantially reduced costs over the previous housing contracts to $95 per 

trailer per day compared to over $300 under the prior contracts. However, the contract’s SOW 

could have been improved to ensure that it did not contain unnecessary and ambiguous 

requirements that limited competition. Full and open competition is required by Federal 

Acquisition Regulations and EPA Contracts Management Manual. The SOW requirements 

made it difficult for hotels and apartment complexes to compete for EPA’s business. EPA 

largely based its requirements on what it already had as opposed to future requirements, making 

it difficult for anyone but the incumbents to win the contract. Also, contract requirements were 

often undocumented and unverifiable. As a result, EPA had limited assurance that it received the 

2
best value for its money because similar or better facilities may have been available at a lower 

price. Details on the various concerns that limited competition follow. 

Need for 6 Acres of Level Land Overstated 

The SOW required a contractor to provide 6 acres of level land surrounded by a security 

fence with a single point of entry. In a written response to the OIG dated May 18, 2006, 

Region 6 explained that it needed 6 acres of land, even if a hotel/apartment had been 

selected, to store equipment and park vehicles. Region 6 also indicated the land for the 

trailers was not included in this acreage. The executed contract and EPA’s contract files 

did not contain any drawings, blueprints, measurements, or descriptions of the 6 acres of 

land that EPA was to use. 

When we requested additional information to identify the 6 acres, Region 6 personnel 

could not initially provide it. Several weeks later, Region 6 provided us drawings 

obtained from the Louisiana Technical College that identified the land provided under the 

contract. Using these drawings, we calculated the acreage provided, excluding the land 

on which the trailers sat, to be approximately 4.1 acres. During subsequent discussions, 

Region 6 identified land that increased the acreage being used to over 6 acres. However, 

one added section of land, the west side parking lot, was shared with the college and was 

not for the exclusive use of the Federal government. Moreover, that parking lot had to be 

accessed through a second entrance. As a result, the additional land provided by the 

contractor did not meet the contract requirement for 6 acres, although this requirement 

was used to disqualify other bidders that could not provide 6 acres. 

Unneeded Kitchen Space Sought 

In early January 2006, the kitchen at the Metairie facility discontinued meal service, and 

EPA indicated it had no future plans to provide food service. EPA personnel said that 

after they discontinued meals the kitchen area was only used to provide ice. However, 

they wanted the new contract to provide kitchen space to keep their options open. The 

SOW did not specify the size of the space and the number of people the space needed to 

accommodate. Also, ice could be obtained from other sources. While food service was 

initially needed at Metairie immediately after Hurricane Katrina struck because 

restaurants and other eateries were closed, local conditions had improved substantially by 

the time the new contract was awarded, and EPA personnel were receiving per diem to 

eat at restaurants. 

Unnecessary Small Refrigerator and Microwave Required 

The SOW required each housing unit to include a small refrigerator and microwave. 

While some hotels do provide such amenities, many do not. Requiring a small 

refrigerator and microwave in each unit eliminated many hotels that could not provide 

this amenity. Travel regulations do not require accommodations to provide a refrigerator 

and microwave during Federal Government travel. As noted, the travelers were on per 

diem. 

3
Multi-Story Office Space under One Roof Not Considered 

The SOW required all 35,000 square feet of office space to be on one floor and under one 

roof. EPA personnel told us they needed this because of the information technology 

equipment being used. However, the contract file did not contain any data regarding the 

different options, what additional technology equipment was needed, or cost. While 

multiple story office space may have required additional technology expense, EPA 

eliminated that option without knowing whether additional technology expense would 

have been offset by a less expensive multiple story office space. Further, additional costs 

and/or other layouts could have been considered as part of the best value determination. 

Alternatives to 6-Foot Metal Fence Not Considered 

The SOW required a 6-foot-high metal fence with a single point of access around the 

office space, housing facility, and parking lot. EPA personnel said the fence was needed 

for security purposes. However, other forms of security, such as more security guards, 

were not provided as an option to bidders. In a written response, Region 6 personnel 

contended that a no-fence option was rejected as being more costly and inefficient, 

although they did not provide data to support their contention. The inflexibility of this 

requirement likely eliminated or discouraged most hotels and apartment complexes from 

bidding. A fence would have been costly for a hotel or apartment complex to erect, and 

also would have likely interfered with the facility’s normal operations and obligations. 

Need for Private Rooms Not Clear 

The SOW required “housing to accommodate a maximum of 132 personnel with one 

person per private bedroom area.” The term “private bedroom area” was not further 

defined. Hotels that bid on the solicitation apparently interpreted this to mean that they 

needed to provide 132 separate rooms, since that is what they bid. However, the 

incumbent (and ultimate winner of the contract) only bid and provided 77 trailers. People 

would have to share trailers to accommodate 132 people, with some people sleeping in a 

bunk (see photo). We are not sure how non-incumbents would know that it was 

permissible for people to share trailers, but the trailer contractor was allowed to interpret 

the private bedroom requirement as allowing people to share trailers. OIG personnel 

stayed in the trailers during November 2005, and the trailers’ bedrooms provided two or 

three beds in different parts of the trailer and one bath. Hotel rooms give each person a 

private room and bath. Regional personnel held hotels to higher standards. The cost 

analysis included in the contract file reflected a ratio of between 1.5 and 2 people per 

trailer, while hotel rooms were calculated based on 1 person per room. 

4
At left, several trailers used at Metairie; at right, a trailer bunk area. (EPA OIG photos) 

Conclusion 

Many of the conditions noted occurred because the Region 6 Superfund program office and 

Region 6 facilities group developed requirements based on the incumbent’s facilities in Metairie 

instead of what the future needs would be. They did not adequately document the requirements 

with verifiable data. Despite the restrictive requirements, EPA’s cost per trailer was reduced 

from over $300 to $95 per trailer per day (for trailer costs and various services). We believe that 

this reduction was due largely to the contract being competed. However, because of the 

restrictive nature of the SOW requirements, EPA cannot be certain it achieved the lowest 

possible price or received the best value. Other facilities could not compete for the contract 

because they could not meet all the restrictive requirements. It appears that Region 6 personnel 

created requirements based largely on the incident command facility that EPA already occupied. 

Because of other concerns discussed in our prior report on Katrina procurements 

(2006-P-00038), EPA planned to award two national blanket purchasing agreements to provide 

emergency response technical support and logistical services (food, housing and facilities, etc.) 

for responding to future disasters. This arrangement should prevent the reoccurrence of the 

issues discussed in this report. Therefore, no recommendations are being made at this time. We 

believe this report will assist the EPA contracting community in promoting competition in future 

contract actions. 

EPA Region 6 Comments 

Region 6 maintains that the OIG reached a somewhat ambiguous conclusion that, “EPA cannot 

be certain it achieved the lowest possible price or received the best value.” The region 

maintained its efforts yielded substantial savings in lodging costs. Region 6 noted that its efforts, 

such as advertising in a Sources Sought Notice and issuing a request for quotes, resulted in 

Region 6 receiving proposals from several hotels. Considering that one hotel offered lodging at 

slightly over $2 million, the awardee’s (trailers) price of $660,000 represents a savings of almost 

$1.4 million. Moreover, this savings was only for the initial 3-month period. The savings over 

the potential life of the contract would be more than $2.5 million. Region 6 also concluded that 

the hotels’ proposals were non-responsive because they did not address all requirements of the 

SOW, such as the need for 6 acres of land. Region 6 stated that at no time, under any 

circumstance, did a comparison between the trailers and hotels support a decision to structure the 

5
housing contract differently. Lastly, market research on Hotels.com by the Region’s Contracting 

Officer found no comparable pricing to that proposed by the awardee. Region 6 also stated that: 

• EPA had unlimited use of all of the property provided by the Louisiana Technical 

College and used the entire 6 plus acres; 

• Kitchen facilities were needed for coffee breaks, lunch breaks, informal gatherings, and 

ad hoc meetings to ensure the morale of employees; 

• Refrigerators and microwaves were essential for the comfort and convenience of its staff; 

• A multi-story building may have required installing a second Information Technology/ 

Communication system at increased cost; 

• Security fencing was required to provide for the security of personnel and equipment and 

would be less costly than paying for security guards; and 

• Offerors could have proposed alternatives to the fencing requirement, but no offeror 

raised fencing as a problem or offered alternatives. 

As a result, Region 6 believes that the OIG should not conclude that the Region’s actions limited 

competition, only that competition may have been limited. Accordingly, Region 6 believes the 

OIG should revise the report’s title and references to limiting competition in the body of the 

report. 

The complete Region 6 response is included in Appendix A. However, contractor names have 

been redacted by the OIG. 

OIG Evaluation of Comments 

Region 6 maintains it could not find housing at prices comparable to the awardee. While six 

different hotels submitted bids (several hotels were combined into one bid), Region 6 eliminated 

all six hotels before fully evaluating their proposals because they did not meet contract 

requirements. Our evaluation found comparable pricing was available. For example, one hotel 

proposed providing free office space if EPA maintained a certain level of occupancy and paid for 

parking. When we compared this bid to the awardee’s bid for a 6-month period, the cost of the 

hotel was $20,000 less. Our comparison was based on using 77 trailers and 77 hotels rooms 

because the average occupancy for the trailers during February 2006 was 74 people. Occupancy 

in March 2006 was similar. We also note that the Region’s $1.4 million estimate of savings for 

lodging is based on the highest bid received. 

We do agree that the recompeted contract saved substantial amounts over the previous contract. 

The cost of trailers went from more than $300 per trailer/day to $95 per trailer/day. However, 

we continue to believe that the contract terms limited competition because only one bidder, the 

incumbent, was considered. Region 6 based its requirements largely on what it already had 

instead of considering other options that may have saved additional funds and still met mission 

needs. Region 6 recognizes in its response that the contract requirements could have been 

improved. The Region suggested we revise our report to read, “the contract . . . could have been 

improved to ensure that it did not contain unnecessary and ambiguous requirement that may 

have limited competition.” We cannot agree that competition may have been limited when 

only one bidder (the incumbent) qualified for the contract and other bids were disqualified. 

6
More competition would have increased EPA assurance that it received the best value and 

realized all of the savings possible. 

7
Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Planned 

Rec. Page Completion Claimed Agreed To 

No. No. Subject Status1 Action Official Date Amount Amount 

No recommendations 

1 O = recommendation is open with agreed-to corrective actions pending; 

C = recommendation is closed with all agreed-to actions completed; 

U = recommendation is undecided with resolution efforts in progress 

8
Appendix A 

Agency Response to Draft Report 

March 9, 2007 

MEMORANDUM 

SUBJECT: EPA Region 6 Comments on the Draft OIG Report for Assignment No. 2005- 

001721 

FROM: Lynda R. Carroll 

Assistant Regional Administrator for Management 

 EPA Region 6 

TO: Carl Jannetti 

Director of Contract Audits 

 EPA Region 3 

Attached hereto are EPA Region 6 Comments on the Draft OIG Report for Assignment 

No. 2005-001721. 

If you have any questions about this case, you may call me at (214) 665-2100 or 

David Gillespie at (213) 665-7467. 

Attachment 

9
March 8, 2007 

EPA Region 6 Comments on the Draft OIG Report for Assignment No. 2005-001721 

General Comment 

Having undertaken a deep and comprehensive review of the Region 6 contract for office space 

and housing, reviewed numerous documents and conducted many interviews, the report 

ultimately reaches a somewhat ambiguous conclusion: “EPA cannot be certain it achieved the 

lowest possible price or received the best value” (page 5, emphasis added). 

Indeed, as we detail at length below, the efforts of our contracting officer yielded a very 

substantial savings in lodging costs. With one hotel offering us lodging at $2,032,311 (and 

another hotel also bidding high), the awardee (ppppp, Inc.) priced its lodging at $658,350 -- a 

savings of $1,373,961 over NNnnnnn. Moreover, this $1.3 million difference was just for the 

initial three month period. The potential savings over the potential life of the contract -- 

considering just the lodging in trailers over the hotel's proposed price -- was $2,527,436. Lastly, 

our contracting officer undertook market research on Hotels.com, and found no comparable 

pricing to that proposed by ppppp, Inc. 

Region 6 thus, asks that the Title of the report, and the “At a Glance” section, merely reflect the 

uncertainty that the report itself explicitly concedes. We believe that the following language 

does so, and suggest that it be used: 

Title 

The title of the report should be revised to say: New Housing Contract Reduced Costs and Did 

Attract Competition. If, however, this language is not acceptable to the OIG, Region 6 would 

accept the alternative title: New Contract for Hurricane Katrina Reduced Costs, but Less 

Restrictive Requirements May Have Potentially Increased Competition. 

“At a Glance” (and page 2) 

Region 6 suggests that the “At a Glance” section, and page two, first sentence of the last 

paragraph read: “However, the contract’s statement of work could have been improved to ensure 

that it did not contain unnecessary and ambiguous requirements that may have limited 

competition” (emphasis added). 

Competition (page 2) 

The report should reflect the following information: A Sources Sought Notice was issued for the 

Hurricane Katrina Command Post and Lodging requirement. The Statement of Work advertised 

in the Sources Sought Notice was similar to that advertised in Fedbizopps. Four responses were 

received from the Sources Sought Notice with questions received from other sources. No source 

submitted concerns that the requirements were too limiting. With the responses and questions 

10
received from the Sources Sought Notice, it was firmly believed there would be competition for 

the requirements. 

The Request for Quote subsequently advertised in Fedbizopps was also sent to the New Orleans 

Chamber of Commerce and the New Orleans Metropolitan Association of Realtors in an attempt 

to try and reach as many sources as possible. No information was received during the 

advertisement period stating the requirements were too limiting. Additionally, two hotels did 

submit quotes, however, the hotel quotes did not address all requirements of the Statement of 

Work and were therefore deemed non-responsive by the Contracting Officer. For informational 

purposes, the hotel costs were used to support the fair and reasonable price determination of the 

ultimate awardee as those proposed by the hotels were significantly higher than the per person 

rate of the awardee. 

Under the first housing contract, pricing for the 66 trailers was $3,915,600 or $21,450 per day, 

which equated to $325.00 per trailer. This cost included ancillary services. This rate was 

$224.17 less than the FEMA allowable per diem of $332.50. It should be noted the FEMA 

allowable per diem represented 250% of the typical $133.00 per day allowance for lodging. 

This FEMA allowable increase was directly attributed to the costs being charged for hotels, 

motels and apartments during this time. Using 2 persons per trailer, the lodging rate equated to 

$162.50 per person per day. Even using this rate, it was still $170.00 less than the FEMA 

allowable per diem of $332.50. The point we wish to illustrate with this comparison is, although 

EPA was limited in its ability to build flexibility into the initial emergency housing contract, it 

did not deter EPA from ensuring the price paid per person represented the best value to the 

Government. 

As market conditions changed and flexibility could be built into the solicitation, the contracts 

were re-competed. At the time of the competitive bidding for the second combined command 

post and housing contract, FEMA per diem rate was still at the high rate of $299.25. Although 

more availability of hotels, motels and apartments existed at this time, there was absolutely no 

justification for moving personnel from housing trailers when the re-negotiated price per trailer 

was reduced to $95.00 including ancillary services. With only 1 person assigned to a trailer at 

this point in the response, this rate still equated to $204.25 less than the FEMA allowable per 

diem of $299.25. It should be noted the FEMA allowable per diem represented 225% of the 

typical $133.00 per day allowance for lodging. This FEMA allowable increase was directly 

attributed to the costs being charged for hotels, motels and apartments during this time. 

At no time, under any circumstance, would a comparison between trailers and hotels/motels 

illustrate and/or support a decision other than the one that was made to structure the housing 

contract as it was. 

Offers were received from ppppp, Inc. (the awardee) and two other local area hotels -- tttttttM 

and nnnnnn. The Katrina Contracting Officer reviewed the three proposals and excluded the 

mmiiiiii and llllllll hotels from award consideration because their proposals failed to meet the 

salient requirements cited in Part II, Section 1, Paragraph E, of the SOW (“Statement of Work 

for Louisiana Unified Hurricane Response Incident Facility"). The requirement is: “The 

contractor must provide, at a minimum, six acres of level land that must support a facility, with a 

11
minimum of 35,000 square feet of office space.” The Contracting Officer sent a letter to each of 

the offerors excluded from further award consideration notifying each offeror of its exclusion. 

The Contracting Officer performed an evaluation of pppppp, Inc.’s proposal in accordance with 

the solicitation provision FAR 52.212-2, “Commercial Items”, and found that the price proposed 

by kkkkkk, Inc. was fair and reasonable. For example, the pricing provided by Wooooo 

reflected a three-month price for lodging -- totalling $2,032,311.60. The pricing proposed by 

hpppp, Inc. totalled $658,350.00 for housing. Thus, the Government realized a housing costsavings of $1,373,961.60 by awarding the contract to wwwww, Inc. 

Moreover, this $1.3 million difference was just for the initial 3-month period. The potential 

savings over the potential life of the contract -- considering just the lodging in trailers over the 

hotel’s proposed price -- was $2,527,436.10. kkkkkk proposed price for housing was also higher 

than the price proposed by hhhhh, Inc. 

Lastly, the Katrina Contracting Officer also performed a market research on Hotels.com for other 

hotel prices and did not find any pricing comparable to the housing price proposed by lllllll, Inc. 

Need for 6 Acres of Land (page 3) 

In order to be more accurate, the heading for this issue should be revised to the following: Need 

for 6 Acres of Level Land Demonstrated 

The OIG report uses the heading: Need for 6 Acres of Level Land Overstated 

Further, the report should reflect the following information: EPA had unlimited use of all of the 

property provided by the Louisiana Technical College and made use of the entire 6 plus acres. 

Need for Kitchen Space (page 3) 

In order to be more accurate, the heading for this issue should be revised to the following: 

Kitchen Space Was Desirable to Support Staff and Morale 

The OIG report uses the heading: Unneeded Kitchen Space Sought 

Further, the report should reflect the following information: EPA staff assigned to the IMT had 

developed a base of knowledge of operational efficiencies and needs to meet the Agency’s 

mission. These needs included providing for the welfare and morale of the staff. The Incident 

Command requested that kitchen facilities be maintained for coffee breaks, lunch breaks, 

informal gatherings as well as for ad hoc meetings. 

12
Need for Refrigerator (page 3) 

In order to be more accurate, the heading for this issue should be revised to the following: Small 

Refrigerator and Microwave Were Necessary Support Given Long Hours 

The OIG report uses the heading: Unnecessary Small Refrigerator and Microwave Required 

Further, the report should reflect the following information: EPA’s Incident Commanders, in 

consideration of the welfare and morale of the staff, requested that the housing accommodations 

include facilities for storing food and for warming food. Restaurant facilities were limited and 

staff worked long hours, most of the time arriving back at the facility long after restaurants 

closed. These accommodations were needed and essential for the comfort and convenience of 

the field staff. 

Office Space (page 4) 

In order to be more accurate, the heading for this issue should be revised to the following: MultiStory Office Space Not Considered to Save IT/Communication System Costs and to Avoid 

an Unacceptable Delay to the Mission 

The OIG report uses the heading: Multi-Story Office Space under One Roof Not Considered 

Further, the report should reflect the following information: FEMA had already purchased one 

IT/Communication System for the Incident Command Post and there was no indication that they 

would reimburse the cost of installing a second system. Further, substantial IT/Communication 

downtime would have occurred had it been necessary to install another system. Assuming that 

the necessary vendors, equipment and supplies were readily available; a downtime of seven to 21 

days was very probable. ICP operations could not have tolerated even a seven day period of 

compromised or non existent IT/Communications resources. 

Need for Fence (page 4) 

In order to be more accurate, the heading for this issue should be revised to the following: Metal 

Fence Sought by Region 6 as Important to Security 

The OIG report uses the heading: Alternatives to 6-Foot Metal Fence Not Considered 

Further, the report should reflect the following information: Security of staff and equipment was 

of significant importance. Therefore, fencing was required in the Statement of Work to provide 

for the security of personnel and equipment as it was believed to be the most cost effective 

guarantee of security. The temporary fencing market rate was approximately $22.00 per foot and 

was a one-time cost. Security Guard support services ranged from an hourly rate of 

approximately $20.00 to $31.00. The number of security guards would have been dependent on 

the size of the area to be secured. The number of guards required would have to be enough to 

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visually inspect entrances, perimeters, and areas of lodging and the command post. The market 

hourly rate of $20 per hour for 24 hours per day equated to $480 per day per security guard. A 

minimum of two security guards was required, but more would be needed if there were no 

fencing to secure vehicles and government property. The period of performance for the 

Statement of Work was approximately a minimum of three months with options for an additional 

three months. Therefore the costs of $480.00 per day for each security guard (with multiple 

security guards needed) far exceeded the one-time cost of a fence. Additionally, it was possible 

some offerors may already have had fencing and these additional costs may not have been 

needed. Finally, the requirements listed in the Statement of Work could be addressed by an 

offeror if the offeror chose to propose an alternative to the fencing requirement. Discussions 

could have been held with offerors proposing an alternative, however, no offeror raised fencing 

as a problem and no one offered alternatives. 

Privacy (page 4) 

In order to be more accurate, the heading for this issue should be revised to the following: 

Region 6 Sought One Person Per “Private Bedroom Area” in Order to Ensure Privacy. 

The OIG report uses the heading: Need for Private Rooms Not Clear 

Further, the report should reflect the following information: If private rooms were needed, the 

Statement of Work would have used the word “rooms.” Instead, the statement of work used the 

term “area” so that alternatives to one room per person were possible. Of the 77 trailers, 70 of 

them had separate, private sleeping areas with a shared common area. The smaller trailers (7) 

that did not have separate, private sleeping areas had only one person staying in them at a time. 

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Appendix B 

Distribution 

Office of the Administrator 

Regional Administrator, Region 6 

Assistant Regional Administrator for Management, Region 6 

Assistant Administrator for Administration and Resources Management 

Acting Director, Office of Acquisition Management 

Audit Followup Coordinator, Region 6 

Audit Followup Coordinator, Office of Administration and Resources Management 

Agency Followup Official (the CFO) 

Agency Followup Coordinator 

Office of General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Acting Inspector General 

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