GAO-06-461R Management of Katrina Contractors 

United States Government Accountability Office

Washington, DC 20548 

March 16, 2006 

Congressional Committees 

Subject: Agency Management of Contractors Responding to Hurricanes Katrina 

and Rita 

In February 2006, we briefed the staffs of your committees on the results of our 

review of various contracting issues related to the Gulf Coast hurricanes. We 

conducted this work under the Comptroller General’s statutory authority in order to 

assess how three agencies—the Federal Emergency Management Agency (FEMA), 

the U.S. Army Corps of Engineers (USACE), and the General Services Administration 

(GSA)—planned for and conducted oversight of several key contracts in support of 

Katrina and Rita response and recovery efforts. The briefing document is attached. 

After we completed our work and briefed your staffs, the House Select Bipartisan 

Committee to Investigate the Preparation for and Response to Hurricane Katrina and 

later the White House issued reports based on their reviews of the various hurricane 

response issues. These reports contain findings and recommendations intended to 

address a number of the issues identified in our briefing. Additionally, the Senate 

Committee on Homeland Security and Governmental Affairs has been reviewing 

these issues, and various inspectors general are proceeding with their reviews as 

well. In general, while the inspectors general are reviewing a broad range of 

contracting issues, such as competition and pricing, we focused our efforts on 

contract planning and oversight. During the course of our work, the agencies 

informed us that they are taking a number of steps to address the issues that we 

identified, and we reflected those actions in the briefing where appropriate. Given 

these developments, we are not making any recommendations at this time; however, 

we continue to monitor agency actions in this area. 

We provided this briefing document to the Department of Homeland Security (DHS), 

the Department of Defense (DOD), and GSA for review and comment. While DOD did 

not have any comments, the Corps of Engineers provided some technical 

clarifications, which we incorporated in the briefing where appropriate. Officials at 

DHS said they had no further comments beyond those provided at the agency exit 

conference, which were incorporated where appropriate. GSA provided technical 

comments, which have also been incorporated in the briefing. 
We are sending copies of this briefing to interested congressional committees, the 

Administrator of General Services, and the Secretaries of Defense and Homeland 

Security. We will make copies available to others upon request. This briefing also will 

be available on the GAO Web site at http://www.gao.gov. Should you or your staff 

have any questions, please contact me at (202) 512-4841. Key contributors may be 

found on the last page of the briefing. 

William T. Woods 

Director, Acquisition and Sourcing Management 

Enclosure 

Page 2 GAO-06-461R Management of Katrina Contractors 
List of Committees

The Honorable Susan M. Collins 

Chairman 

The Honorable Joseph I. Lieberman 

Ranking Minority Member 

Committee on Homeland Security and 

 Governmental Affairs 

United States Senate 

The Honorable Tom Davis 

Chairman 

Select Bipartisan Committee to Investigate the 

 Preparation for and Response to Hurricane Katrina 

Chairman 

Committee on Government Reform

House of Representatives 

The Honorable Henry A. Waxman 

Ranking Minority Member 

Committee on Government Reform

House of Representatives 

The Honorable Peter T. King 

Chairman 

The Honorable Bennie G. Thompson 

Ranking Minority Member 

Committee on Homeland Security 

House of Representatives 

(120495) 

Page 3 GAO-06-461R Management of Katrina Contractors 
Briefing for Congressional Staff March 2006

Background 

Congress has appropriated over $62 billion as an initial commitment of federal 

support to the Gulf Coast states impacted by the recent hurricanes. The 

government’s response to Hurricanes Katrina and Rita depended heavily on

contractors to deliver ice, water, and food supplies; patch rooftops; and provide 

housing to displaced residents and temporary facilities to local government 

agencies. 

In any acquisition, agencies need to have in place sound acquisition plans, 

processes to make and communicate good business decisions, and a capable 

acquisition workforce to monitor contractor performance so that the 

government receives good value for the money spent. These components are 

critical to successfully managing contracts in any environment—even in a 

contingency situation such as that presented by Hurricanes Katrina and Rita. 

In reviewing contracts awarded for Iraq—another contingency situation—GAO 

found that without effective acquisition planning, management processes, and 

sufficient numbers of capable people, poor acquisition outcomes resulted. GAO 

made recommendations regarding the need for: ensuring that requirements for 

placing orders are within the scope of contracts; timely definition of contract

terms and conditions; and sufficient numbers of trained staff who have clear 

responsibilities and guidance for overseeing contractor performance. Having

these capabilities requires preparation, such as having pre-arranged contracts in 

place in advance of the disaster or other contingency.

Summary of Findings 

Given the environment in which they were operating, agency acquisition and 

contractor personnel have been recognized for their hard work in providing the 

goods and services required to be responsive. The response efforts nonetheless 

suffered from: 

• Inadequate planning and preparation to anticipate requirements for needed 

goods and services. 

• Lack of clearly communicated responsibilities across agencies and 

jurisdictions. 

• Insufficient numbers and inadequate deployment of personnel to provide for

effective contractor oversight. 

Risk Areas

Inadequate planning and preparation page 2 

Lack of clearly communicated responsibilities page 3

Insufficient numbers and deployment of page 4

oversight personnel 

Appendix 

Scope, methodology, and contributors page 5 

cially

The private sector is an important 

partner with the government in

responding to and recovering from

natural disasters such as Hurricanes 

Katrina and Rita. As we recently

noted,

1

 such partnerships 

increasingly underlie critical 

government operations. 

With hundreds of billions of tax 

dollars spent each year on goods and

services, it is essential that all federal 

agency acquisitions be handled in an 

efficient, effective, and accountable 

manner. The fact that disasters, such 

as hurricanes, are not entirely

predictable must not be an excuse

for poor contracting practices.

Nevertheless, the circumstances

created by the hurricanes created a 

difficult environment in which 

agencies had to balance the need to

deliver goods and services quickly 

with the need for appropriate 

controls. 

Under the Comptroller General’s 

statutory authority, GAO conducted

work to assess how three agencies 

planned for and conducted oversight 

of several key contracts in support of 

Katrina and Rita response and 

recovery efforts: the General

Services Administration (GSA), the 

Federal Emergency Management 

Agency (FEMA), and the U.S. Army 

Corps of Engineers (USACE). A 

number of efforts are underway by 

these agencies to address the issues 

we and others have identified. This

briefing does not contain any 

recommendations. 

All three agencies reviewed this 

briefing and either had no comments

or provided technical clarifications, 

which we incorporated where

appropriate. 

1 GAO, 21st Century Challenges: Reexamining 

the Base of the Federal Government, GAO-05-

325SP (Washington, D.C.: February 2005). 

Why GAO Did This Study 

Briefing Agency Management of Contractors 

Responding to Hurricanes Katrina 

and Rita

Overview

Briefing Structure
Briefing for Congressional Staff Page 2

Risk Areas 

Related GAO Reports 

• Continuity of Operations: 

Agency Plans Have 

Improved, but Better 

Oversight Could Assist 

Agencies in Preparing for 

Emergencies, GAO-05-619T

(Washington, D.C.: Apr. 28, 

2005). 

• Results-Oriented 

Government: Improvements 

to DHS's Planning Process 

Would Enhance Usefulness

and Accountability, GAO-05-

300 (Washington, D.C.: Mar.

31, 2005). 

• Homeland Security: Effective 

Regional Coordination Can 

Enhance Emergency 

Preparedness, GAO-04-1009

(Washington, D.C.: Sept. 15, 

2004). 

• Continuity of Operations: 

Improved Planning Needed to 

Ensure Delivery of Essential 

Government Services, GAO04-160 (Washington, D.C.:

Feb. 27, 2004).

Inadequate Planning and Preparation 

Some key agencies involved in responding to the disaster did not have adequate 

acquisition plans for contingency situations. For example:

• While contracts for some items were in place prior to the storm, the Federal 

Emergency Management Agency (FEMA) did not adequately anticipate 

needs for such services as providing temporary housing and public 

buildings. 

• The practice of the U.S. Army Corps of Engineers (USACE) is to establish 

Planning and Response Teams for various missions assigned to it by FEMA 

prior to an event, with specific responsibilities assigned to team members. 

However, the Corps indicated it did not know prior to the hurricane that it 

would be tasked by FEMA with some of the mission assignments it received. 

In one case, FEMA tasked the Corps with acquiring temporary classrooms 

for Mississippi within a very short time frame. To meet the requirement, 

USACE placed a non-competitive order on a pre-existing agreement for 

portable buildings. Information in the contract files suggests the negotiated 

prices were inflated and indicates USACE did not have sufficient time or 

information to ensure a good acquisition outcome.2

 

• Similarly, better management of requirements development could have

avoided costs to house workers and victims. Based on information provided

by local officials, FEMA spent $3 million for 4,000 base camp beds that were

never used. 

• Preparation was also lacking in implementation of the Stafford Act

preference for contractors residing or doing business in the affected area.

3

USACE staff expressed uncertainty regarding how to apply preferences or 

determine if a company was in an affected area. Several General Services

Administration (GSA) and FEMA officials indicated they were aware of the 

Stafford Act but stated it is difficult to immediately factor in local businesses 

in such a catastrophic event. GSA officials stated they plan to review the

Federal Acquisition Regulation (FAR) to see if additional Stafford Act

guidance is necessary.

 4

In discussing our findings and observations with FEMA officials, they indicated 

they were taking steps to improve in areas such as staffing and pre-mobilization 

capabilities in order to better respond to future disasters. However, they also 

stated that such pre-planning and preparedness has a cost. The USACE 

commented that contracting staff need to have defined requirements in order to 

get the right type of contracts put in place and, unfortunately, the contracting 

staff did not always get defined requirements in a timely manner. Additionally, a 

USACE official commented that until funding for a particular mission is secured, 

preparation for the mission cannot go forward and this also delayed contracting 

efforts. Finally, both GSA and the USACE noted that they tried to reach out to

local and small businesses through forums and other means to make them aware

of opportunities to contract with the federal government.

2 GAO, Hurricanes Katrina and Rita: Contracting for Response and Recovery Efforts, GAO-06-235T

(Washington, D.C.: Nov. 2, 2005). 3 42 U.S.C. § 5150. 4 See the FAR, Subpart 26.2-Disaster or Emergency Assistance Activities. 
Briefing for Congressional Staff Page 3

Risk Areas 

cont’d 

• Hurricanes Katrina and 

Rita: Contracting for 

Response and Recovery 

Efforts, GAO-06-

235T (Washington, D.C.: Nov. 

2, 2005). 

• Interagency Contracting: 

Problems with DOD’s and 

Interior’s Orders to Support 

Military Operations, GAO-05-

201 (Washington, D.C.: Apr.

29, 2005). 

• Homeland Security: 

Successes and Challenges in 

DHS's Efforts to Create an 

Effective Acquisition 

Organization, GAO-05-179

(Washington, D.C.: Mar. 29,

2005). 

• Homeland Security: Effective 

Intergovernmental 

Coordination Is Key to 

Success, GAO-02-1013T, 

(Washington, D.C.: Aug. 23, 

2002). 

Related GAO Reports Lack of Clearly Communicated Responsibilities

We also found that processes for executing contracts were hindered by poor

communication. As envisioned under the National Response Plan (NRP), federal 

agencies responding to a disaster carry out their acquisition functions through a 

network of federal, state, and local agencies. In some instances, the local or state 

officials determine the requirements and communicate them to FEMA; FEMA may 

write and award the contract or communicate the requirements to another agency

that writes and awards the contract; and then FEMA or another agency oversees

contract performance. This approach puts a premium on aligning roles and 

responsibilities clearly and maintaining good communications to ensure effective

execution of the contract. 

Our fieldwork identified examples where unclear responsibilities and poor 

communications resulted in poor acquisition outcomes. For example:

• FEMA officials stated that a contractor spent approximately $10 million to 

renovate 160 rooms and furnish another 80 rooms in military barracks in 

Alabama that a FEMA survey team identified for use as temporary housing. To

renovate the facility, FEMA headquarters awarded a contract without consulting 

local FEMA officials in Alabama. According to FEMA officials in Alabama, 

however, the facility was not needed and they tried to stop the renovation. 

These same FEMA officials stated that few evacuees agreed to live at the facility,

and when officials decided to close the facility, it had only six occupants. 

• The process for ordering and delivering ice heavily depends on effective 

communications between FEMA and USACE. However, according to Corps 

officials, FEMA did not fully understand the contracting approach used by the

Corps and ordered at least double the amount of ice required, resulting in an 

oversupply of ice and a lack of distribution sites available to handle the volume

ordered. Additionally, the local Corps personnel were not always aware of 

where ice might be delivered and did not have the authority to redirect ice as

shipments arrived, resulting in inefficient distribution and receipt at the state

level. 

• FEMA tasked GSA to write three contracts in Louisiana for base camps, hotel 

rooms, and ambulances, with a total value of over $120 million. GSA contracting 

officers awarded the contracts, but could not tell us which FEMA officials would 

be responsible for overseeing contractor performance. The FEMA official 

identified as the main point of contact by GSA did not have any knowledge of

these contracts or who was responsible for oversight. Only after contacting 

multiple FEMA officials over a 3-week period were we able to determine the

agency officials responsible for contract oversight.

In commenting on this briefing, GSA officials stated that their role is to provide 

resource support in the response phase of a disaster, meaning they are responsible 

for executing contracts under the NRP, and FEMA is responsible for monitoring the 

contracts. FEMA officials commented that there needs to be more clarity regarding 

procurement roles and indicated one of their goals is to work with GSA to clarify 

procurement responsibilities for the future. GSA officials indicated that the current 

memorandum of understanding between GSA and FEMA is being updated to reflect 

the standards of the new NRP as well. 
Briefing for Congressional Staff Page 4

Risk Areas 

cont’d 

• Contract Management: 

Opportunities to Improve

Surveillance on 

Department of Defense 

Service Contracts, GAO-05-

274 (Washington, D.C.: Mar.

17, 2005). 

• Rebuilding Iraq: Fiscal Year 

2003 Contract Award 

Procedures and Management 

Challenges, GAO-04-605 

(Washington, D.C.: June 1, 

2004). 

• Human Capital: 

Opportunities to Improve

Federal Continuity Planning 

Guidance, GAO-04-384 

(Washington, D.C.: Apr. 20, 

2004). 

• Contract Management: Coast 

Guard's Deepwater Program 

Needs Increased Attention to 

Management and Contractor 

Oversight, GAO-04-380 

(Washington, D.C.: Mar. 9, 

2004). 

Related GAO Reports Insufficient Numbers and Deployment of Oversight Personnel

Ensuring that contracted goods and services are delivered in accordance with 

the agreed upon schedule, cost, quality, and quantity provisions as stated in the

contract is the purpose of agencies’ monitoring processes. Without sufficient

numbers of trained people properly deployed, however, effective monitoring is 

hampered and agencies are at risk of being unable to identify and correct poor 

contractor performance in a timely manner. Furthermore, agencies can be at

risk of paying contractors more than the value of the services performed. 

Our work indicated that while monitoring was occurring on the contracts we

reviewed, the number of monitoring staff available was not always sufficient or 

effectively deployed to provide effective oversight. For example: 

• FEMA’s contracts for installing temporary housing in four states had only 

17 of the 27 technical monitors that had been determined necessary to 

oversee contractor performance.5

 

• USACE officials told us that the “blue roof” program was slowed down due 

to the lack of sufficient monitors.6

 

Deployment practices did not always provide for appropriate notification of 

responsibilities or overlap of rotating contracting officers and oversight 

personnel, thus making knowledge transfer and continuity of contract 

management operations difficult. For example: 

• For four of the contracts we reviewed, officials were either unaware or not 

notified by FEMA of their oversight responsibilities. 

• The lack of overlap between oversight personnel for a large temporary

housing contract left the most recent contract administrator with no

knowledge or documentation of who had authorized the contractor to

perform certain activities or why the activities were being performed. 

While discussing our findings and observations with FEMA officials, they 

emphasized that they lacked adequate staffing, but said they have made efforts 

to fill staffing gaps. Additionally, FEMA officials stated they recognize the need 

for continuity in contract oversight and indicated they are implementing a

process to ensure workload and knowledge sharing among rotating personnel. 

However, they also believe that fewer transition difficulties exist now as a result

of hiring more people and having more oversight officials staying in the affected

areas. GSA officials indicated there may also be other alternatives for ensuring

adequate contract oversight, such as designating GSA employees to conduct

oversight on some contracts. USACE officials stated their policy is to rotate

certain personnel every 29 days to keep personnel costs to a minimum due to

regulations under the Fair Labor Standards Act.7

5

Data provided by FEMA official was dated November 18, 2005. 6

The USACE manages the Operation Blue Roof mission for FEMA. Operation Blue Roof provides

assistance to storm victims in disaster areas through the installation of rolled plastic sheeting on

damaged roofs, helping to protect property and allowing residents to remain in their homes. 7 5 CFR § 551.208.
If you have any questions 

concerning this briefing, please 

call Bill Woods, Director, 

Acquisition and Sourcing

Management, at (202) 512-4841, or

John K. Needham, Assistant 

Director, Acquisition and Sourcing 

Management, at (202) 512-5274.

Other key contributors to this 

report were Penny Augustine, 

Elaine Boudreau, Myra Watts 

Butler, Dave Cooper, Lisa Henson, 

James Kim, Victoria Klepacz, 

Sandy Reigle, Ralph Roffo, Jeff 

Rose, Moshe Schwartz, and 

Shannon Simpson. 

Contributors 

Appendix

Briefing for Congressional Staff Page 5

Answer Scope and Methodology

Due to the level of congressional interest in the federal response to Hurricanes 

Katrina and Rita, we initiated this review under the Comptroller General’s 

statutory authority. We conducted our work from October 2005 through 

February 2006 in accordance with generally accepted government auditing

standards. 

In order to determine which agencies to include in our review, we analyzed data

collected from the Federal Procurement Data System-Next Generation (FPDSNG) and agency websites on contract awards and dollar amounts for Hurricanes 

Katrina and Rita response and recovery work. This led us to review three 

agencies: GSA, USACE, and FEMA. We discussed acquisition management 

issues with, and obtained documentation from, officials in these agencies, as 

well as with employees from other agencies that served in oversight positions on 

behalf of these agencies. We also traveled to sites in Louisiana and Mississippi to

meet with agency officials at field locations and observe oversight practices at

contractor locations. 

We selected 13 contracts from 12 contractors performing work for the agencies 

in our review to analyze in further detail how monitoring policies and processes 

were put into practice (see table below). Our criteria for selection included: 

• Minimum contract value of $5 million. 

• Variety of missions (type of activity to be conducted under the contracts). 

• Coordination with the Inspectors General and other audit offices to avoid

duplication to the extent possible.

• Contract award and administration locations (to facilitate data collection 

and interviews). 

Contractor Name Contracted Product or Service 

C. Henderson Consulting, Inc. Ambulance services 

Americold Logistics, LLC Transportation, storage, and delivery 

of commodities 

Clearbrook, LLC Base camp construction and 

operation 

CS&M Associates Hotel rooms for displaced persons 

Gulf Stream Coach, Inc. Gulf Stream travel trailers 

Morgan Building & Spas, Inc. Travel trailers and shipping

Bechtel National, Inc. Installing trailers/ mobile homes for 

temporary housing 

Fluor Enterprises, Inc. Installing trailers/ mobile homes for 

temporary housing 

CH2M Hill Constructors, Inc. (2 

contracts) 

Installing trailers/ mobile homes for 

temporary housing (FEMA); site 

preparation/installation of portable 

public buildings (USACE) 

E.T.I., Inc. Quality assurance inspectors for 

temporary housing 

Ceres Environmental Services, Inc. Temporary roofing repairs (“blue 

roof” program) 

Thompson Engineering, Inc. Quality assurance inspectors 

Source: GAO.