U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

28–237 PDF 2007

S. Hrg. 109–743

KATRINA AND CONTRACTING: BLUE ROOF,

DEBRIS REMOVAL, TRAVEL TRAILER

CASE STUDIES

HEARING

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, AND INTERNATIONAL 

SECURITY SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

FIELD HEARING IN NEW ORLEANS, LA

APRIL 10, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

TOM COBURN, Oklahoma, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

THOMAS CARPER, Delaware 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

KATY FRENCH, Staff Director 

SHEILA MURPHY, Minority Staff Director 

JOHN KILVINGTON, Minority Deputy Staff Director 

LIZ SCRANTON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Coburn ................................................................................................. 1

Senator Carper ................................................................................................. 4

WITNESSES 

MONDAY, APRIL 10, 2006

Tina Burnette, Deputy Director Acquisitions for Katrina, Department of 

Homeland Security ............................................................................................... 5

Lieutenant General Carl A. Strock, Chief of Engineers, U.S. Army Corps 

of Engineers .......................................................................................................... 7

Matthew Jadacki, Inspector General of Hurricane Katrina Oversight, Department of Homeland Security ................................................................................. 9

Patrick J. Fitzgerald, Auditor General, U.S. Army Audit Agency ....................... 11

Thomas F. Gimble, Principal Deputy Inspector General, Department of Defense ...................................................................................................................... 12

Hon. David Vitter, a U.S. Senator from the State of Louisiana .......................... 17

Hon. Mary L. Landrieu, a U.S. Senator from the State of Louisiana ................. 19

Hon. Bobby Jindal, a Representative in Congress from the State of Louisiana 20

Hon. Steve Scalise, Representative, Louisiana State Legislature ....................... 30

Bill Woods, Director of Acquisition and Sourcing Management Team, U.S. 

Government Accountability Office ...................................................................... 32

Derrell Cohoon, Chief Executive Officer, Louisiana Associated General Contractors .................................................................................................................. 34

Kevin Davis, President, St. Tammany Parish ....................................................... 35

ALPHABETICAL LIST OF WITNESSES

Burnette, Tina: 

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 51

Cohoon, Derrell: 

Testimony .......................................................................................................... 54

Prepared statement .......................................................................................... 113

Davis, Kevin: 

Testimony .......................................................................................................... 35

Fitzgerald, Patrick J.: 

Testimony .......................................................................................................... 11

Prepared statement .......................................................................................... 69

Gimble, Thomas F.: 

Testimony .......................................................................................................... 12

Prepared statement with an attachment ....................................................... 73

Jadacki, Matthew: 

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 59

Jindal, Hon. Bobby: 

Testimony .......................................................................................................... 20

Prepared statement with attachments ........................................................... 97

Landrieu, Hon. Mary L.: 

Testimony .......................................................................................................... 19

Scalise, Hon. Steve: 

Testimony .......................................................................................................... 30

Strock, Lieutenant General Carl A.: 

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 55

Page

IV

Vitter, Hon. David: 

Testimony .......................................................................................................... 17

Prepared statement with attachments ........................................................... 80

Woods, Bill: 

Testimony .......................................................................................................... 32

Prepared statement .......................................................................................... 103

APPENDIX 

Charts and pictures submitted by Senator Coburn for the Record: 

‘‘Hurricane-Related Spending,’’ Source: Senate Budget Committee ............. 47

‘‘Costs of Legislative Response to Domestic Emergencies,’’ Source: Senate 

Budget Committee ........................................................................................ 48

Picture of trash being loaded submitted by Senator Coburn ........................ 49

Picture of Wrangler trailer submitted by Senator Coburn ........................... 50

Questions and responses for the Record from: 

Ms. Burnette ..................................................................................................... 120

Lt. Gen. Strock .................................................................................................. 132

Mr. Jadacki ....................................................................................................... 140

Letter from CRS, dated March 29, 2006, submitted by Senator Coburn ............ 143

(1)

KATRINA AND CONTRACTING: BLUE ROOF, 

DEBRIS REMOVAL, TRAVEL TRAILER CASE 

STUDIES 

MONDAY, APRIL 10, 2006

U.S. SENATE, 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, AND INTERNATIONAL SECURITY, 

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 11:30 a.m., at the 

Louisiana Supreme Court Building, 400 Royal Street, New Orleans, 

Louisiana, Hon. Tom Coburn, Chairman of the Subcommittee, presiding. 

Present: Senators Coburn, and Carper. 

Also Present: Senators Vitter, Landrieu, and Representative 

Jindal. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. The Subcommittee on Federal Financial Management, Government Information, and International Security will 

come to order. We will dispense with opening statements other 

than that I will summarize, and I think Senator Carper will, and 

I ask unanimous consent that my opening statement be made a 

part of the record, as well as other members of the panel. We’re 

here not to put blame on any individual. We recognize the hard 

work of most of the people involved in the Hurricane Katrina and 

Rita disasters and we praise your effort and your dedication. What 

we are here to find out is what went wrong, why it cost more than 

it should, what can we change so we know what to do in the future 

so that we’re more responsive or more efficient with our responsiveness and accountability that can be tracked at every level. 

We have in front of us today, in our first panel, Tina Burnette, 

Deputy Director of Acquisitions for Hurricanes Katrina and Rita at 

the Federal Emergency Management Association (FEMA). Previously Ms. Burnette served as the Deputy Assistant Commissioner 

of Commercial Acquisitions at the General Services Administration’s Federal Supply Services. 

Lieutenant General Carl Strock is Commander in Chief of Engineers at the U.S. Army Corps of Engineers. Previously, Lieutenant 

General Strock served as Director of Civil Works at the U.S. Army 

Corps headquarters. 

2

Matthew Jadacki is the Special Inspector General for the Gulf 

Coast Recovery of the Department of Homeland Security. He has 

previously served as the Chief Financial Officer for the National 

Weather Service and before that, he was acting CFO with FEMA. 

Patrick Fitzgerald is Auditor General of the U.S. Army Audit 

Agency. Mr. Fitzgerald joined the Army Audit in 1980 and has held 

a variety of key positions in the agency field offices and operations. 

Thomas Gimble is the principal Inspector General of the Department of Defense. He began his Federal civilian career with the Air 

Force Audit Agency when it was created in 1976. Since then, he 

has worked in several key positions within the Department of Defense. 

I might note that Senator Carper and myself, along with Senator 

Obama, asked the President or Chief Financial Officer when this 

occurred. We were not successful in that. My hindsight is 20/20 and 

now says we should have had that because the effect of not receiving it means that the tracing of the accountability and responsibility is going to be more difficult. We are now looking at things 

after the fact instead of before we signed the check or signed the 

contract. 

[The prepared statement of Senator Coburn follows:]

PREPARED STATEMENT OF SENATOR COBURN 

Last August, Hurricane Katrina wreaked havoc upon the Gulf Coast. A few short 

months later, Hurricane Rita pounded the Gulf Coast, exacerbating the challenges 

of reconstruction. As you can see from the chart Congress has already appropriated 

$100.9 billion for the recovery efforts. Between recent approval of $3 billion by the 

Senate and a request by the President of $20 billion, we are looking at $123 billion 

dollars to date. As you can see from the graph, the money spent on this recovery 

effort is the most expensive rebuilding effort of all-time. To put this into perspective, 

Hurricane Katrina recovery funding will be over eight times the amount of Federal 

hurricane recovery aid for the entire 2004 hurricane season. Now, perhaps, Katrina 

was eight times worse than the previous year’s season. There’s a valid argument 

to be made. But with this level of disaster, it is all the more important that the 

money Americans have provided for their neighbors in the Gulf Coast not be wasted. 

The Congress has held extensive hearings on Hurricane Katrina back in Washington. We’re not here to assign blame and reconstructed a minute-by-minute account of failure. Rather, we’re dealing here with a few case studies of financial management that I believe are symptomatic of government’s inherent limitations. A 

Federal bureaucracy based in Washington is always going to come up short when 

it is trying to watch billions of dollars far from Washington. But the nature of this 

disaster is that the Federal Government will be spending money here for years to 

come. 

So let’s take a look at a few specific cases and see if we can learn something that 

we might apply not only across the rest of the recovery effort, but across other disasters in the future. Today, we will explore Federal contracting and management of 

three programs: The ‘‘Blue Roof’’ Program, debris removal, and the travel trailer 

program. While the audits of these programs have only just begun, initial reports 

from the media, the Government Accountability Office, and local officials paint a 

disappointing picture. We’ve heard about unreasonably inflated prices, excessive layers of subcontracting, and inadequate oversight for these three programs. 

Last year, Senator Carper and I introduced with Senator Obama, a bill that 

would have created an independent chief financial officer. This CFO would be in 

charge of every penny that goes out the door. With the huge opportunity costs associated with wasted tax dollars, I know the American public and the people of the 

Gulf Coast deserve no less. The CFO would have been responsible for the efficient 

and effective use of Federal funds in all activities relating to the recovery from Hurricane Katrina. Unlike an inspector general which audits money after it has been 

spent, the CFO would have been responsible for preventing problems. Unlike the 

so-called ‘‘IG Council’’ that was put in charge of financial management for recovery, 

a CFO would have been a single accountable point of reference. In other words, the 

CFO’s motto would be ‘‘the buck stops here.’’

3

We were promised that a CFO wasn’t necessary. We were promised that every 

dollar would be tracked. When the Senate was presented with the first supplemental appropriations request for tens of billions of dollars, we were assured that 

the expenditure of this money would be accountable and responsible and the American people would not be embarrassed. After months of hearings and investigation, 

it seems that we had the oh-so-predictable waste and fraud that always accompanies huge money rolling out fast and unwatched by Washington. 

As reported in recent news articles, there are cases where the price for putting 

a blue tarp on a roof costs close to the price of hiring a roofing company to install 

a new roof. We also hear reports of travel trailers that retail around $16,000 to 

$20,000 costing FEMA up to $60,000 for purchasing, hauling, installing, and removing. Two thirds overhead seems awfully high to me. There are reports of FEMA 

spending up to $400,000 to prepare lots for these travel trailers only to find out 

after the fact that local authorities either did not give authorization to build at 

those locations or communities weren’t properly consulted. With debris removal, 

there are cases where top contractors are reportedly charging up to $30 per cubic 

yard while five sub-contractors deep, the workers actually doing the work receives 

sometimes as little as $6 per cubic yard. 

Some may argue that inflated prices and multi-layering of contracts is to be expected due to the downsizing of Federal procurement staff. They say that it takes 

five layers of middle-men, each taking his cut, in order to get money from Washington to Biloxi. I’m not buying it. And Americans shouldn’t stand for it. 

The Government Accountability Office—that’s Congress’ investigation operation—

has recently issued a report highlighting the systematic failures that are creating 

these types of problems: Inadequate planning and preparation, lack of clearly communicated responsibilities, and insufficient numbers and inadequate deployment of 

personnel. FEMA is only at 73 percent of its authorized staffing levels. In addition, 

FEMA still does not have a permanent director, four of the ten division chiefs and 

four of the ten regional directors are serving in an acting capacity. In another example, GAO reports that a contract worth $120 million was tasked to the General 

Services Administration by FEMA, and it took FEMA three weeks to pinpoint the 

person responsible for oversight on the contract. 

There have been all kinds of new task forces, councils, and coordination models 

that have been born as reports of problems keep surfacing, but the problem with 

each is the same. You can’t fix it after the fact. As former Secretary of State Colin 

Powell famously noted with respect to recovery of devastated regions: ‘‘You break 

it, you buy it.’’ He wasn’t talking about domestic disaster recovery, but the principle 

is the same. When we have funneled money through a broken system, Americans 

are on the hook to pay for the consequences of that system throughout the life of 

the reconstruction. But it’s not just today’s taxpayers who are on that hook. We 

have mortgaged this recovery on the backs of our children and grandchildren. Their 

future quality of life is in further jeopardy every time we fritter away another dollar. 

Today we’ll be looking at the following questions:

• How extensive is the problem of mismanagement and waste that is reported 

both by GAO and the media?

• What steps are FEMA and the U.S. Army Corps of Engineering taking for 

current and future contracts to ensure reasonable prices before a contract is 

signed?

• Is it possible to cut out some of the layers of sub-contracting that, in some 

cases, is over six levels deep?

• Is the Federal Government getting the oversight and management out of the 

prime contractors that we are paying for?

• What are we to expect from the Inspector General community regarding ongoing audits of the blue roof, debris removal, and the travel trailer program?

• Is the Inspector General community receiving adequate funding to handle the 

burden of the additional Katrina audits as well as audits for normal agency 

programs?

I want to thank all the witnesses for being with us here today, some of them taking time away from tireless and thankless work to answer our questions. I know 

that good people with good hearts are running these operations and we are not here 

to question anyone’s motives. Thank you very much for your service to the region’s 

recovery and to our country.

Senator COBURN. Senator Carper. 

4

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Thanks Mr. Chairman. Let me just say to our 

witnesses welcome, it’s nice to see some of you again and to see 

others for the first time. We want to express our thanks to the staff 

here at this facility for the warm welcome that’s been extended to 

us. It’s great to be with our colleagues Senator Landrieu and Senator Vitter, and we thank you and your staff for your hospitality. 

I have a statement I’d like to ask to be entered into the record. 

Let me just say very briefly when Senator Coburn and I hold hearings in Washington or actually around the country, and we do a 

fair amount of that, what we’re looking for is not so much to pin 

blame or to assign blame, we’re looking to find out how to learn 

from whatever mistakes we’re making and to make sure that we 

won’t make the same mistakes over and over and over again. 

We all know that Katrina was well telegraphed and is not the 

last hurricane we’re going to see in our country and certainly this 

part of the country and we need to be prepared whether, it’s in 

New Orleans or some other place, Pensacola, or Corpus Christi. We 

need to be prepared for it to make sure that when we turn to the 

taxpayer and ask them to pay large sums of money to help those 

communities get back on their feet that they know their dollars are 

being well spent. So we look forward to learning a lot here and the 

other thing we look forward to doing is learning some lessons so 

that when this happens again, hopefully not here but some other 

place, we won’t make the same mistakes. Thank you. 

[The prepared statement of Senator Carper follows:]

PREPARED STATEMENT OF SENATOR CARPER 

Thank you, Mr. Chairman, for taking the time to focus on these issues. 

More importantly, thank you for holding this hearing in New Orleans so that we 

can see first hand the progress that has been made and the work still to be done 

in bringing this city back. 

I’ll start off by saying that I truly believe that FEMA and the agencies and contractors on the ground here and in Mississippi and Alabama following Hurricane 

Katrina worked as hard as they possibly could to provide goods and services to those 

in need following the storm. Anyone who turned on their television set the week of 

the storm, however, could see that the Federal Government’s overall response to 

Katrina was confused and ineffective. 

Poor planning at FEMA and elsewhere before the storm contributed, in all likelihood, to a tragic loss of life and property. While there are still audits and investigations underway, it’s clear from the evidence before us today that poor planning contributed to a tragic waste of taxpayer dollars as well. 

The people of New Orleans and the other communities affected by Katrina deserve every penny we’ve provided them as they’ve worked to pick up the pieces. At 

the same time, however, they also deserve to know that the money coming down 

here is spent appropriately and effectively. 

I believe it’s been a little over 7 months now since Katrina made landfall. The 

2006 hurricane season is now right around the corner. we’re going to learn a lot 

more today about what went wrong post-Katrina but, as a Senator from a State 

that’s seen its fair share of hurricanes in the past, I’m also interested in learning 

what FEMA and the other agencies involved have done to set things right. 

I believe this is the third time in the past year or so that we’ve heard testimony 

about FEMA waste. The full Committee held hearings following a 2004 hurricane 

in Florida and again during its Katrina investigation showing that the agency 

lacked the basic internal controls necessary to ensure that its post-disaster assistance funding goes only to those who are eligible to receive it. 

Now we hear that, while residents of New Orleans and other communities are 

still struggling to find the resources to get their lives and their business back together, FEMA and the Corps have been wasting money on needless bureaucracy and 

to compensate for the fact that they just didn’t plan ahead. 

5

1The prepared statement of Ms. Burnette appears in the Appendix on page 51. 

I look forward to hearing from our witnesses and from our colleagues from Louisiana about how we can do things better next time.

Senator COBURN. Before we get started, Ms. Burnette I noted 

that we didn’t get your testimony until 5 p.m. Friday. I have a routine habit of hoping that we can expect compliance out of agencies. 

That undermines our effectiveness because I didn’t get to read your 

testimony until this morning and I hope that would be communicated again to OMB because I know those testimonies have to go 

through them and if you would send that signal, I’d very much appreciate it. Each of you will be given 5 minutes. Your complete 

statement will be made a part of the record and then we’ll have 

questions from both ourselves, Senator Vitter, and Senator Landrieu. Ms. Burnette. 

TESTIMONY OF TINA BURNETTE,1 DEPUTY DIRECTOR ACQUISITIONS FOR KATRINA, DEPARTMENT OF HOMELAND SECURITY 

Ms. BURNETTE. I apologize for that. Mr. Chairman and Members 

of the Subcommittee, My name is Tina Burnette and I’ve been the 

Deputy Director of Acquisitions for Gulf Coast Recovery of FEMA 

since January of this year. Thank you for the opportunity to appear 

here today to discuss the successes of the Agency as well as the 

challenges and response to Hurricane Katrina. Prior to being 

named to my current position, I spent 90 days in Louisiana as the 

On Site Acquisition Support to the Katrina Recovery Office headed 

by Vice Admiral Thad Allen. I’m a career Federal executive and 

spent 16 years of Federal service in the procurement profession. As 

the Deputy Director, I supply oversight and support for those acquisitions issued in support of the Gulf Coast Recovery. In the days 

immediately following the disaster, the primary goal was meeting 

urgent and humanitarian needs. Clearly, an equally important responsibility in our office then and now is to stewardship of taxpayer dollars and insure integrity of the contracting process. 

To insure integrity and transparency, the Department of Homeland Security established an Oversight Board which is chaired by 

the Under Secretary for Management and oversees hurricane funding that the Department receives. The Board recently established 

an Oversight group responsible for reviewing high risk Katrina 

contract actions which includes verifying what was purchased, the 

reasonableness of the price, and the extent of competition. Special 

attention is being paid to the individual assistants technical assistance contracts that were sole sourced to four companies: Fluor, 

Shaw, CH2MHill, and Bechtel. FEMA is preparing for the next 

hurricane season and has established a priority list of acquisitions 

that will enable a more responsive ordering process for the goods 

and services while ensuring a fair and reasonable price. FEMA is 

also working with the Defense Logistics Agency on assisting with 

commodity contracts and with the General Services Administration 

on the better utilization of their Agency’s services. I know that 

there has been much stated about the recompeted of the IA–TAC. 

Let me be clear. It is being recompeted. 

6

First, maintenance and deactivation of the temporary housing 

units will be assumed by approximately 36 small and small disadvantaged businesses, some of which have already been awarded. 

Other efforts are also being recompeted such as group site maintenance and infrastructure support. The new IA–TAC for the upcoming hurricane season will be awarded competitively on a national 

basis. We have already sent out for this requirement and a request 

for proposal will be issued very soon. FEMA is also in the process 

of increasing its Acquisition Corps to handle post-Katrina work by 

adding 60 positions that will include procurement and program 

management personnel. As of last week, we have hired 45. 

I know that you’re particularly interested in debris removal, the 

Blue Roof Program, and temporary housing. FEMA supports debris 

removal through the mission assignment issued to the U.S. Army 

Corps of Engineers, and also reimburses State and local government that contract with local debris contractors through the public 

assistance grants program. The Blue Roof Program is also supported through the U.S. Army Corps. FEMA’s primary support of 

the program last year was through the purchase of blue tarps 

awards that were made to multiple vendors that could meet our required delivery date and the prices were consistent with past purchases. To provide timing housing assistance and meet one of 

FEMA’s top mission goals of moving applicants out of shelters and 

into houses, we purchased temporary housing units from manufacturers and from dealer inventories. We purchased over 140,000 

temporary housing units and expended approximately $2.7 million 

dollars. These costs included delivery to the logistical staging area 

but they do not include installation. We anticipate that 151,000 

temporary housing units will be installed by the time this effort is 

complete. Currently, we have over 110,000 that are either occupied 

or are ready to be occupied. We’ve established a Program Management Office to ensure that funds are being expended appropriately 

and we use the Defense Contract Audit Agency to review proposals 

and make recommendations prior to final negotiations. Sub-contractual relationships are an integral part of this effort and are 

good for local businesses and for small businesses. As a result of 

these sub-contracts, FEMA now has a much larger pool of highly 

qualified small businesses that can compete directly for future disaster response efforts. 

Mr. Chairman, in the days immediately following Hurricane 

Katrina, the primary focus of FEMA’s procurement office and of the 

entire procurement community was to act as quickly as possible 

within the parameters of acquisition law and regulation and to obtain the materials and support desperately needed in the devastated areas. FEMA procurement professionals also recognize 

their responsibility and worked within the system to ensure that 

contracts were awarded correctly. Currently, DHS is reviewing 

transactions to ensure that proper procedures were followed and 

that appropriate decisions were made. We are using the reviews, 

the results of those reviews, to help us understand how to do better 

next time. 

Thank you Mr. Chairman and I look forward to the Subcommittee’s questions. 

7

1The prepared statement of General Strock appears in the Appendix on page 55. 

TESTIMONY OF LIEUTENANT GENERAL CARL A. STROCK,1

CHIEF OF ENGINEERS, U.S. ARMY CORPS OF ENGINEERS 

General STROCK. Mr. Chairman and Members of the Subcommittee, I’m Lieutenant General Carl A. Strock. I’m the Chief of 

Engineers. I thank you for the opportunity to testify before you 

today concerning the Corps’ disaster relief contact procedures. With 

your permission, I’ll summarize my statement here and provide my 

full statement for the record. 

Senator COBURN. Without objection. 

General STROCK. Under the National Response Plan, the Corps 

is assigned as the coordinator for Emergency Support Function or 

ESF–3, Public Works and Engineering. During disasters, the Corps 

is the primary agency for response activities such as ice, water, and 

temporary power. FEMA is the primary agency for ESF–3 recovery 

activities and assigns the Corps to assist in the execution of debris 

missions. The Corps is also a support agency to other ESFs such 

as ESF–6, which is mass care and housing by executing missions 

to provide temporary roofs. The Corps has started a program called 

the Advance Contracting Initiative or ACI under which we competitively award contracts for future use in the areas of water, ice, 

power, temporary roofing, and debris removal. Having these contracts in place allows the Corps to rapidly respond to emergency 

situations. We did, in fact, use our ACI contracts to support the 

Hurricane Katrina recovery and also in those areas impacted by 

Hurricanes Rita and Wilma. The Federal procurement system is 

based on the principle of full and open competition. Congress also 

realized that emergency situations sometimes require emergency 

actions. The Federal Acquisition Regulation known as the FAR is 

the implementing regulation for government-wide procurement. In 

most cases, the FAR mandates a 15-day advertising period and a 

30-day proposal period. If you follow these usual rules for full and 

open competition, we would not have been able to award the contract to get the flood waters out of New Orleans until the end of 

October. The FAR allowed us to considerably shorten the time period for the award under the urgency exception and a contract was 

awarded on September 2, 2005. 

The scope of the damage of Hurricanes Katrina, Rita, and Wilma 

was unprecedented with 90 thousand square miles of land significantly impacted. That’s greater than the area of Great Britain. 

There is over 100 million cubic yards of debris that is eligible for 

Federal assistance. Tremendous progress has been made in removing debris over the last 7 months. The Corps is responsible for the 

removal and disposal of debris in 54 counties and parishes in four 

States totaling about 60 million cubic yards. In the first 7 months, 

45 million cubic yards of this debris were removed. Due to the unprecedented and widespread devastation, the Corps needed to 

award additional debris removal contracts. We awarded four additional contracts for debris removal in Mississippi and Louisiana. 

Each contract valued at $500 million has a $500 million dollar option. This was open to any company and the Corps received 22 proposals. The contracts were awarded on the basis of the best value 

8

to the government. The Army Audit Agency is currently reviewing 

the award and the administration of these four contracts. 

The hurricanes of 2005 also had an enormous impact on homes 

to include damages to thousands of roofs. FEMA tasked the Corps 

to provide temporary roofs for over 194,000 homes in Florida, Louisiana, Mississippi, and Texas. This tremendous undertaking was 

completed over a few months and allowed thousands of disaster 

victims to return to their homes. The temporary roofs should not 

be confused with self-help tarps that are provided to homeowners. 

The temporary roofs installed by the Corps use sturdy plastic 

sheets, professionally installed and securely fastened, to provide an 

important degree of protection from the elements. Before plastic 

can be installed, roofs usually require some repair to roof the structure. There may also be a requirement to furnish and install joists 

and rafters. The Corps awarded several ACI contracts for temporary roofs in the Gulf region. Given the magnitude of the damage 

during the 2005 hurricane season, four additional contracts were 

awarded under urgency procedures utilizing the ranked proposals 

of the original competition. The Corps makes extensive use of 

standard authorities granted to us under the various small business set aside programs, especially in the area of the Small Business Administration registered 8(a) firms. We have instituted high 

goals for small business sub-contracting and include a reporting requirement that keeps focus on achieving results in these areas. We 

have been following an acquisition strategy for the continued mission from FEMA that includes opportunities at the prime level for 

local disadvantaged companies and a geographic set aside for the 

unrestricted portion of the strategy. Competition was limited to 

Mississippi companies for the Mississippi aspect of the mission and 

will be limited to Louisiana for the Louisiana mission. 

The Corps of Engineers takes great pride in being a learning organization and every event is different. Mistakes can and do occur. 

There is also opportunity for unscrupulous individuals to take advantage of the system and we work hard to strike a balance between expeditiously providing relief to those in need while doing so 

in the most efficient and effective manner. One solution is to immediately deploy Corps internal auditors, teamed with the Defense 

Contract Audit Agency and the U.S. Army Criminal Investigation 

Command, to oversee all emergency response efforts to note actual 

or potential mistakes, help mission managers comply with their fiscal stewardship responsibilities, and to detect instances of fraud, 

waste, and abuse. Corrective actions are implemented immediately. 

I welcome the reviews conducted by the external audit and investigative activities as they are also a valuable tool for us to identify 

potential vulnerabilities and weaknesses in the processes and procedures. Several years ago, the Corps instituted a formal procedure, our Remedial Action Program, to capture lessons learned and 

to adjust our processes for future events. 

To close, I’d like to thank you again Mr. Chairman for allowing 

the Corps of Engineers the opportunity to appear before this Subcommittee to discuss contracting procedures during times of emergencies. Many Corps personnel have served our Nation by helping 

in the response to natural disasters in Texas, Louisiana, Mississippi, Alabama, and Florida, or elsewhere in the Nation and the 

9

1The prepared statement of Mr. Jadacki appears in the Appendix on page 59. 

world. We are proud to do so and I’d be happy to answer any questions the Members of the Subcommittee may have. Thank you. 

Senator COBURN. Thank you, General. 

TESTIMONY OF MATTHEW JADACKI,1 INSPECTOR GENERAL 

OF HURRICANE KATRINA OVERSIGHT, DEPARTMENT OF 

HOMELAND SECURITY 

Mr. JADACKI. Good morning Mr. Chairman, Members of the Subcommittee, and guests. Thank you for the opportunity to be here 

today to discuss our overseeing of Federal pre-disaster planning 

and contract management issues in response and recovery efforts 

after Hurricane Katrina. In the aftermath of a major disaster such 

as Hurricane Katrina, the Federal Government is obligated to ensure that immediate steps are taken to protect the lives and property of its citizens and to mitigate any further damage or harm, to 

make sure that roads are clear of debris to allow emergency workers access to affected areas, to provide temporary shelter or housing to disaster victims who lose their homes, and to provide interim 

repair to buildings to enable victims to remain or return to their 

homes and prevent further damage. 

As my testimony indicates, there are many weaknesses in the 

Federal Government’s pre-disaster planning and contract management oversight efforts. We are still in the process of fully evaluating the overall contracting efforts related to Hurricane Katrina, 

however, our work thus far has disclosed that FEMA either purchased supplies, commodities, equipment, or other resources to support emergency and disasters response efforts in insufficient quantities or over purchased commodities because of requirement planning prior to Katrina was inadequate. The government, in many instances, did not pay reasonable prices for goods and services because competition was limited or non-existent and costs and prices 

were not always controlled because of the government’s contract 

oversight and monitoring was inadequate. FEMA’s core mission is 

to respond to emergencies and procure emergency supplies and 

equipment on a recurring basis. Therefore, planning for these procurements 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 of disasters. However, for each major type of procurement pre-disaster 

planning can address the following: Identify prospective sources of 

supplies and services, delineate how competition will be sought, 

promoted, and sustained during emergency operations, describe 

how Stafford Act requirements for preferences of firms affected by 

the disaster will be made, lay out source selection procedures for 

each type of procurement, and establish communications systems 

and processes and publicize them in order to have prospective 

sources know how to contact FEMA procurement personnel. The 

above pre-disaster planning did not take place, therefore FEMA 

found itself in an untenable position and hastily entered in contracts with little to no contract competition for disaster commodities. 

10

We are currently reviewing the entire process for accountability 

for the travel trailers from additional orders received by FEMA to 

final delivery to an evacuee. We have reviewed various reports all 

with the different sets of numbers as to what has been ordered, received, and occupied. These discrepancies suggest that FEMA and 

its contractors did not have sufficient controls or systems in place 

for the trailers and their ultimate disposition. Under the Stafford 

Act, States have the option of either using the Corps of Engineers 

to provide debris removal or enter into direct contracts and get reimbursed through the Public Assistance Program under the Stafford Act. We are in the process of auditing debris removal contracts 

awarded to the States. In the past, we have waited until all or 

most of the work has been completed before starting our reviews. 

The amount of destruction and resulting debris from Hurricanes 

Katrina, Rita, and Wilma created unprecedented debris removal 

operations estimated at several billion dollars. As a result of this 

massive effort, we initiated audits of a number of debris removal 

grants with the goal of identifying and preventing problems before 

they occur. Specifically, we’re looking at the reasonableness of debris removal contracts, types of awards, and terms and conditions. 

In the past, we’ve found cases of price gouging, non-arms length 

transactions, bribery, and false or padded billings. Some of our 

work resulted in arrests and convictions, other work identified significant, ineligible, or questionable costs that required reimbursement to the government. 

The Blue Roof Program provides roof tarps to homes that sustained some but not major roof damage. Additionally, FEMA asked 

the Corps of Engineers to install the roofs in mission assignments 

under a Presidential Disaster Declaration. FEMA purchases and 

stockpiles the tarps using its specifications for grade and quality. 

The Corps of Engineers is responsible for hire crews for tarp installation. I would like to note some of the activities of the Inspectors 

General. As a community, the Inspectors General throughout the 

Federal Government have committed to providing effective contract 

oversight and established a Hurricane Katrina contract audit task 

force to coordinate those efforts under my office. This group includes auditors from DHS, GAO, and the Department of Defense, 

including the service-oriented agencies from the Army and Navy, 

HUD, HHS, the Department of Energy, GSA, and the Environmental Protection Agency. One of the objectives of the contract 

audit task force is to provide consistent contract oversight across 

all government agencies involved Katrina. 

In closing, through our oversight efforts, we have learned the following: FEMA scrambled to purchase supplies, commodities, and 

equipment and other resources to support emergency and disaster 

response efforts from numerous vendors because requirement planning prior to Katrina was inadequate. In many instances, the government did not pay a reasonable price for its purchases because 

competition was limited and the government’s contract oversight 

and monitoring was inadequate resulting in cost and price variations. Because of the nature of disaster operations, we understand 

that acquisition planning has to be sufficiently flexible to address 

the impact of the disaster and the production capabilities and 

available onsite inventory. However, pre-disaster acquisition planVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00014 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
11

1The prepared statement of Mr. Fitzgerald appears in the Appendix on page 69. 

ning can balance the capabilities of distributors, wholesalers, retailers, and manufacturers, and call or standby contracts with prenegotiated prices, quantities, terms and conditions, and specifications could have greatly facilitated procurement operations. 

As I pointed out, there are many weaknesses in the Federal Government’s pre-disaster planning and contract management efforts. 

We hope that the lessons learned from our findings will help address weaknesses and be better prepared for future disasters. Mr. 

Chairman, this concludes my prepared remarks. I’ll be happy to 

answer any questions. 

Senator COBURN. Thank you General. We look forward to your 

report. 

TESTIMONY OF PATRICK J. FITZGERALD,1 AUDITOR GENERAL, 

U.S. ARMY AUDIT AGENCY 

Mr. FITZGERALD. Mr. Chairman and distinguished Members, 

thank you for the opportunity to be here today to discuss with you 

our oversight work related to the Hurricane. As the Army’s Auditor 

General, I’m responsible for the worldwide operations of the U.S. 

Army Audit Agency. Army Audit is the internal audit organization 

and we provide objective, independent audit services to the Army 

and to the Corps of Engineers in its disaster relief role. 

After Hurricane Katrina, we met with the DOD and the GAO to 

design a plan to provide oversight for DOD funds for relief and recovery efforts. As part of the plan, we assumed the responsibility 

for the Corps’ mission assignments for debris removal, demolition, 

and repair of hurricane protection systems. Today I’m going to 

focus my statement on debris removal and our audit results to 

date. 

We began field work last October and are nearing completion of 

our initial audits. The scope coverage is debris contracts and the 

pending solicitations for the demolition contracts. In response to 

Hurricane Katrina, FEMA provided the Corps with the mission assignment of debris removal. The Corps has contracts in Mississippi 

and Louisiana. The first contract was awarded in November 2002 

as an ACI contract. However, immediately after the hurricane, the 

Corps officially recognized that this contract did not have the capacity to handle the widespread destruction and cleanup. Within 

days, the Corps, prepared solicitations to award four indefinite delivery and indefinite quantity contracts, each with a $500 million 

limit and an option for an additional $500 million. The Corps 

awarded four contracts on September 15, 2005 and as of March 28, 

2006, the Corps has obligated about $1.6 billion. The Corps’ decision to award four large contracts of $500 million each led to multiple tiers of subcontractors. The private contractors did very little 

debris hauling. As a result, they sub-contracted a large majority of 

their work with most sub-contracts going to small and disadvantaged businesses located in the hurricane affected areas. We reviewed the costs proposals submitted by the private contractors 

that showed markups for management, overhead, and profit ranging from about 17 to 47 percent of the subcontractor’s costs. During 

the audit, we recommended that the Corps award future contracts 

12

1The prepared statement of Mr. Gimble appears in the Appendix on page 73. 

in smaller amounts. The Corps has agreed and has scaled back the 

scope of the new contracts for the demolition work to $150 million 

or less. Another area we reviewed was contract pricing. Although 

fixed price contracts were awarded, the Corps contracting officials 

negotiated higher prices for most of the tasks orders issued under 

three of the four contracts. Our analysis of the individual task orders showed that the negotiated prices were higher than both the 

initial bids and the government’s independent estimate. We recommended, and the Corps has agreed, that the Defense Contracting Audit Agency review these negotiated task orders to determine the reasonableness of the prices. If defective pricing is found, 

the government would have an opportunity to recoup any overstated costs. We also looked at the Corps process for monitoring 

contractor performance. Although we found it adequate, we did 

identify some quality control practices that could be done more efficiently. We recommended that the Corps standardize its quality 

control requirements that it made with the contractors and that 

the Corps’ quality assurance plans be fully developed and synchronized for both existing contracts and implemented for all future debris and demolition contracts. In conclusion, we have been 

working closely with the Corps to develop solutions to these issues. 

The Corps’ management has addressed our concerns promptly and 

has been very responsive to our recommendations. 

I appreciate the opportunity to testify before you today and will 

be glad to respond to any of your questions. Thank you. 

Senator COBURN. Thank you Mr. Fitzgerald. Mr. Gimble. 

TESTIMONY OF THOMAS F. GIMBLE,1 PRINCIPAL DEPUTY 

INSPECTOR GENERAL, DEPARTMENT OF DEFENSE 

Mr. GIMBLE. Mr. Chairman and distinguished Members, thanks 

for the opportunity to appear before the Subcommittee today to address our ongoing oversight work regarding Operation Blue Roof. 

My testimony today also describes the oversight activities within 

the Department of Defense regarding hurricane relief and recovery 

efforts. I should also note that I’m working in close coordination 

with other Federal inspectors general to ensure effective use of 

DOD resources in the relief and recovery efforts. 

In total, my office, the service audit agencies, the Defense Contract Audit Agency and the defense criminal investigative organizations have employed a cadre of about 150 investigators, auditors, 

and inspectors to provide oversight of the contracts and operations. 

The DOD office of Inspector General also provided the facilities and 

personnel to stand up the hurricane fraud hotline. My office has 

currently 11 ongoing audits related to Hurricane Katrina. The service audit agencies have 14 additional ongoing audits projects. The 

audit projects are listed in the appendix of my prepared statement 

and cover the following areas: Contracting, contract data reporting, 

purchase card transactions, effects on information technology in the 

areas affected, accounting and oversight of obligations and expenditures, and use of DOD’s resources supporting recovery and relief efforts. In addition, my investigators from the Defense Criminal Investigative Service (DCIS) received 21 criminal allegations related 

13

to Hurricane Katrina. At this time, the DCIS has opened six cases 

involving bribery, kickbacks, and possible product substitution. 

Three of those relate to debris removal and one relates to blue 

roofs. 

The Defense Contract Audit Agency (DCAA) is supporting both 

FEMA and the Corps of Engineers in their Hurricane Katrina recovery efforts. The DCAA has assisted the Corps with the blue roof 

and debris missions by verifying contractor compliance with terms 

and conditions of the contract. Regarding the blue roof mission. 

DCAA findings included a lack of initial estimates on Right of 

Entry forms, claimed quantities in excess of the actual physical 

roof area, incomplete certified payroll records, and safety violations. 

Regarding the debris mission, the DCAA findings included the need 

for improved observation tower locations at the dump sites, a lack 

of standard procedures for determining the amount of debris 

hauled to the dump sites, a lack of controls over the billing process 

and safety violations. The Corps of Engineers has taken or is in the 

process of taking corrective actions with responsible contractors. 

Operation Blue Roof is a priority mission managed by the Corps 

of Engineers for FEMA. The program provides free temporary roofing for residential structures, schools, daycare centers, and all publicly owned facilities. On November 9, 2005, we announced an audit 

of the Army Corps of Engineers Operation Blue Roof Project. This 

audit is in response to a request we received from the House Committee on Homeland Security and also the Senate Committee on 

Homeland Security and Governmental Affairs. The objective of the 

audit is to determine whether the Corps properly awarded and administered the contracts for Operation Blue Roof. We’re currently 

reviewing all seven contracts with 29 delivery orders for a total obligated dollar value of $277.5 million for temporary roofing work 

done in Louisiana and Mississippi. We plan to issue a draft audit 

report in June 2006. 

Also, in preparation for the 2006 hurricane season, the Corps is 

planning to award new Operation Blue Roof contracts. On November 30, the Corps Mobile District posted a solicitation for Indefinite 

Delivery/Indefinite Quality (IDIQ) contracts for temporary roof repairs in 10 Gulf and East Coast States. The responses are currently in and are going through the source selection process. It is 

our understanding that the Corps plans to make multiple contract 

awards, both unrestricted and set-aside. 

This June, in response to concerns related to subcontracting and 

contract pricing for Hurricane Katrina relief and recovery efforts, 

we plan to initiate an audit of the Corp’s Blue Roof Mission to examine the costs contractors used to establish pricing, the percent 

of contract cost for overhead, and how many layers of subcontractors were used. 

This concludes my statement and I’ll be happy to answer any 

questions. 

Senator COBURN. Mr. Gimble, thank you very much. We’ll start 

out with a round of questions of 5 minutes apiece. 

Ms. Burnette, what limits on overhead will be on the new recompeted contracts and can you document for this Subcommittee a reason ability analysis you perform before signing those new contracts? 

14

1Letter from CRS, dated March 29, 2006, submitted by Senator Coburn appears in the Appendix on page 143. 

Ms. BURNETTE. I’m sorry Mr. Chairman, are you referring to the 

recent maintenance and deactivation contracts? 

Senator COBURN. Yes. 

Ms. BURNETTE. The maintenance and deactivation contracts were 

a competitive acquisition and the majority of the work that was 

competed under them were from fixed price. And so in those situations you don’t typically negotiate overhead or you do an elements 

of cost-type breakdown. It’s just based on a scenario. 

Senator COBURN. And how about the contracts that had no bids 

that are to be rebid? 

Ms. BURNETTE. Mr. Chairman, we are in process of working with 

DCAA to ensure that the overhead costs are consistent with their 

best business practices that they charge to other customers. We 

have put a provision in each of the task orders that states that no 

final negotiated contracts, no final negotiated prices will be allowable until after DCAA has confirmed that both their overhead rates 

and their general administrative fees are confirmed to be reasonable. 

Senator COBURN. General Strock, I know you’re here on one of 

your days off. I appreciate your being here. Thank you. It is my understanding that the Army Corps offers local parishes two choices 

in Louisiana: One, allow the Army Corps to do the debris removal 

or, two, allow the parishes to do the work but pay 10 percent of 

the cost while the Army Corps pays 90 percent of the cost. Tell me 

why it’s set up that way. What are the laws? Do we need to change 

something under the Stafford Act? What is it that we should be 

doing so that we can have more of the work done? My understanding is that we have a large number of community contractors 

in place that were not available for some of this contracting. 

General STROCK. Sir, it was previously the policy that we would 

charge 90 percent Federal and ten percent local if locals went their 

own way on that. That has now been changed and FEMA no longer 

follows that process. They do go to a 90/10 percent cost share at 

some point following a disaster but when that kicks in, it will apply 

to both the work done by the Corps as well as by the locals. 

Senator COBURN. So there wasn’t necessarily an inhibitant 10 

percent fee that we weren’t working under that or we were but we 

changed our mind? 

General STROCK. Sir, it was that way for a time. That was the 

understanding but given the magnitude of this disaster, that policy 

was changed so everything that is judged to be 100 percent Federal 

will be applied whether you do it locally or with the Corps of Engineers responsible. 

Senator COBURN. I’d like to ask consent from the Subcommittee 

to introduce into the record a letter we received from the Congressional Research Service 1 on the Corp’s contracting with the major 

contractors on debris removal and the fact that many of them were 

told not to give interviews, not to divulge their pricing. Is there any 

contract that the people of this country should not know what we’re 

paying for and where the money went? Other than defense intelligence and national security issues, is there a reason why someVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00018 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
15

body should not have their contract exposed to sunshine as to what 

they’re getting paid, what the details of the contract are? 

General STROCK. Sir, I think there are some situations in which 

there are proprietary processes involved and the cost of which give 

that contract a competitive advantage and they’re reluctant to divulge those. 

Senator COBURN. In debris removal? 

General STROCK. Sir, I don’t know to answer to that, whether the 

specific cost breakdown in the contract is something we can share. 

I don’t believe we can. I think that’s proprietary information but 

we can certainly share the overall——

Senator COBURN. That’s something I assure you we’re going to 

change. The people of this country have the right to know what 

we’re paying and what we’re getting. The fact that we would in the 

Federal Government contract then say we can’t tell the American 

people what we’re paying, or have an assessment of how we value 

it, has got to change. We cannot get what your actual contract’s 

were when we talk to local contractors, and we can’t find out 

whether or not they could have competitively bid it. We have anywhere from $27 to $32 per cubic yard and if you have 100 million 

cubic yards, you’re talking $3.2 billion dollars. That ought to be in 

the sunshine. People ought to know. They ought to be able to see 

what we’re paying and what we’re getting and I would hope, I 

would think the Members of this panel would agree with that and 

that if we need to change some type of legislation, then that’s what 

we will do here. That’s one of the things that creates a competitive 

equality out there. Is there a law somewhere or a regulation that 

says you can’t do that or is that part of your contract agreement 

that you won’t? 

General STROCK. No, it’s certainly contained in the Federal Acquisition Regulation and I’m not sure whether that’s statutory or 

policy. Perhaps I could get a head nod. It is the policy, sir. 

Senator COBURN. It’s the policy and not statutory? All right, 

thank you. 

General STROCK. Sir, if I may comment also on the statement 

that some of our people were told not to talk and not to be interviewed. If that did occur, that’s absolutely contrary to our policy. 

We believe in talking to anybody and explaining anything that they 

want to talk about. 

Senator COBURN. It was not your people. The Corps of Engineers 

asked ECC not to give interviews. This is a direct quote from the 

CRS bulletin, page 4 issued to us March 29, 2006. 

General STROCK. Then I’ll need to look into that, sir, because 

that’s certainly something we wouldn’t do, normally. 

Senator COBURN. Thank you. Senator Carper. 

Senator CARPER. When I was a kid growing up, my father used 

to say to my sister and me, we have a job to do and we wouldn’t 

do it very well. He was always saying if a job is worth doing, it’s 

worth doing well. He was an old Chief Petty Officer in the Navy. 

We must have screwed up a lot because he said it a lot. My father 

would also say to my sister and me if we did some bone-headed 

stunt, he’d say just use some common sense. Just use some common sense. Everything I do, I know I can do better. I suspect the 

16

same is true with you in the jobs that you lead and the people you 

work with. 

I want to ask you to be thinking. I think what is a real value 

to me is a hearing like this. We have a lot of smart people here 

who thought and worked hard on a problem and see where you 

agree some things we ought to be doing differently. That’s what I’m 

going to be asking. Where is some consensus on this panel to 

things we should be doing differently through legislation, through 

regulation, or just through policy that’s within your own job. 

While you’re thinking about that, let me go back to the issue the 

Chairman touched upon and that’s debris removal stuff. I understand the States have the option of working with the local contractors themselves and then getting reimbursed by the Federal Government. It seems that States have the incentive to go with the 

Army Corps contractors because the Federal Government picks up 

100 percent of the cost. As a recovering governor, if I could get 

somebody else to pick up 100 percent as opposed to 80 or 70 percent, I’d look for 100 percent. 

It seems there’s an incentive that we have for States to go with 

the Army contracts because of this 100 percent policy and there’s 

no State to match when the work is done in that way. In instances 

where the State is doing their own debris removal, do we see fewer 

of these multi tiered contracts? And, second, is the work done more 

cost effectively? 

General STROCK. Sir, I can’t comment directly on layers of tiering 

and local contracts. I don’t know the answer to that but I can probably find out for the record, if you let me do that. In terms of the 

costs, I think intuitively there is a higher cost when you bring in 

our oversight. It’s for many reasons. We have, well I hate to characterize us as more rigorous or stringent than locals in terms of 

things like safety or quantity. In audits, we bring in a full sweep 

of auditors and checkers when we come to the table. So I don’t 

know that I can categorically state that our costs are higher but 

intuitively they may be a bit higher. We also had to bring in people 

from outside. We had over 3,000 people in the Corps of Engineers 

that had to come in from around the country and other agencies 

that responded so the rates we pay to our people are probably a 

bit higher than local people overseeing local work. But what we do 

bring is the ability to take that burden off the local population as 

they are trying to recover, that we can get the job done for them. 

They don’t need to be subjected to audits and they don’t need to 

worry about the safety of the operations. They can focus on other 

things and hand it off to us and certainly there was an incentive 

in the past when if locals did it, after a point they would pick up 

10 percent of the cost so there are many incentives to using us. I 

think you have to look at all of that to make a full determination 

about the efficiency and effectiveness of the rates that the Corps 

charges. 

Senator CARPER. Let me go back to my other question and that 

is where do you think you might agree as a panel on some things 

that we ought to do differently in terms of legislation, in terms of 

regulation, and just in terms of policies that you are aware of, and 

I’ll just start here with Mr. Gimble because I like your first hand. 

17

1The prepared statement of Senator Vitter with attachments appears in the Appendix on page 

80. 

Mr. GIMBLE. Thank you, Senator. I think what we have going, 

the body work we have going to do the ideas—we’re in the process—I think we’re in the position if you take this and look at, if 

you’re talking about overall contracting procedures, we probably 

have some ideas on that but when you look at a disaster of this 

degree and you look at all the things that we’ve done, I think when 

we get to look at the lessons learned, what I think we are going 

to be doing is that we will come up with some recommendations to 

increase competition, to improve oversight, probably will be some 

pre-planning that everybody said can be improved. So I guess I’m 

not really ready to comment on legislation——

Senator CARPER. When might you be? 

Mr. GIMBLE. Probably at the end of the summer. 

Senator CARPER. End of when? 

Mr. GIMBLE. August time frame. As I said earlier, we have 11 

audits ongoing dealing with contract issues and among other 

things, we’ve actually survived the audit’s contract issues. We 

think it’s going to give us a good basis to overall contracting and 

then some specific like ice water and the blue roof issue. We have 

some specific contracts on this. We ought to have a good array of 

what we think went wrong in terms of just overall contracting, contract negotiation, and pre-planning. At this point, based on just 

what happened with Hurricanes Katrina and Rita, we were not 

really firmed up on what the issues will end up being at this point. 

Senator CARPER. And you won’t be in a position to do that until 

the end of the summer? 

Mr. GIMBLE. Well, we’ll be, in the August time-frame. 

Senator CARPER. My time is expired. Will we come back for a second round? 

Senator COBURN. We’ll try and do that. Senator Vitter. 

OPENING STATEMENT OF HON. DAVID VITTER,1 A U.S. 

SENATOR FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you Mr. Chairman. I want to thank you 

and the Ranking Member, Senator Carper, for bringing this field 

hearing to Louisiana. It’s very important. We share your frustration with costs that are much higher than they have to be, waste 

of U.S. taxpayer dollars. In addition, we have two Louisiana frustrations. One, in the midst of this process, far fewer Louisiana 

firms are being used that could otherwise be used and that would 

help to do it differently and would help with our recovery, and two, 

it’s really frustrating that all of this money, including this waste, 

is still being counted against us even though we’re not seeing results or that waste here on the ground, so thank you for this hearing. 

Ms. Burnette, I’m convinced from looking at this for months that 

the fundamental problem is the overall model which is used which 

is basically very large contracts under which grow layer upon layer 

upon layer of subcontractors. Blue roof contracts are the perfect example the prime getting between $150 to $175 per square foot and 

then six, seven, eight layers of subs underneath them and the perVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00021 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
18

son putting on the blue roof getting 10 cents or less per square foot. 

As you re-bid these contracts and move forward, what is going to 

change with regard to that basic model? 

Ms. BURNETTE. Thank you, Senator Vitter. The IA–TAC which is 

in the process of being re-computed that will be used during the 

upcoming hurricane season. We’re implementing a different type of 

strategy that I think will alleviate some of your concerns. The initial strategy is to go out on a full and open competition and allow 

all companies to bid on it because we recognize that under an urgent situation, you may need a contractor that has a lot of experience in those areas. The idea is that once the contractors come in 

and they kind of get the situation under control, we’re also setting 

up regional BPAs and we’re doing this through our partnership 

with GSA and they will be mostly made up of small businesses in 

different regions. So each region, depending on where the disaster 

happens, will be offered an opportunity to participate through a 

blanket purchase agreement. And last, the last phase of the strategy is once we can isolate the problem, which is what we’ve done 

recently where we went out and re-computed the maintenance and 

the deactivation and we had local firms and I mean to date we’ve 

had 36 awards that we’re in the process of awarding and 28 of 

them are from the affected States. It will be a similar situation. 

Senator VITTER. But you’re still talking about very large prime 

contracts, correct? 

Ms. BURNETTE. Initially we’re talking about very large prime 

contracts. Senator Vitter, we had 487 subcontractors, which equated to over 10,000 people. 

Senator VITTER. Let me throw this idea out in terms of further 

reform. Rather than a big traditional prime contract, why shouldn’t 

we replace that with a project management contract so that the 

prime contractor gets a far smaller price to manage a lot of smaller 

subcontractors, including local contractors underneath them and 

has an incentive built in to save the government money? Right 

now, that prime has an enormous incentive to cut costs below him 

because he keeps all of that money. Under the new model, the government could keep most of that money. 

Ms. BURNETTE. I think that’s an interesting concept and I’d like 

to explore that further with my colleagues back in Washington. 

Senator VITTER. General, I want to go back to this idea of the 

price of prime debris removal contracts because local government 

in this area has been trying to understand what you all are paying 

the primes for months and has done everything under the sun, including FOIA requests to get that information and still hasn’t gotten it. Why can’t the Corps release the basic contract prices? What 

could possibly be confidential about the basic contract price that 

you are paying to the prime? 

General STROCK. You’re speaking the price per cubic yard, sir? 

Senator VITTER. Correct. 

General STROCK. Sir, I don’t know that. I know that we have 

published on occasion what those prices are. I’m not sure which the 

Congress before you request, but typically here in Louisiana and 

local parishes we’re paying $25 to $26 per cubic yard. I’m not sure 

why we wouldn’t divulge that. 

Senator COBURN. Senator Landrieu. 

19

OPENING STATEMENT OF HON. MARY L. LANDRIEU, A U.S. 

SENATOR FROM THE STATE OF LOUISIANA 

Senator LANDRIEU. Thank you Mr. Chairman. Let me join my 

colleagues in thanking both of you all, you and Senator Carper, for 

conducting this hearing because it has been such a tremendous 

source of frustration as we try to do our best in really a unprecedented disaster in terms of our delegation and local officials to understand the Federal rules and regulations regarding the recovery 

and trying to manage through all of the different layers of challenges that you can imagine, not just with debris clean-up and blue 

roofs but re-building, building levees, re-building lives, building 

dreams, churches, business, homes, etc. It’s been extremely frustrating, as Senator Vitter pointed out, to not only have that work 

well but also to have it charged against us when it doesn’t and it 

truly is really the shortcomings of the Federal policies and Federal 

rules that are causing a lot of this money to be spent with very little to show for it, so I want to thank you for focusing on this, Senator, because I think there will be a great deal of good that comes 

out of this hearing and changes. 

Let me just follow up with the debris removal in this. I am very 

pleased to see that policy has been changed. It just has been a tremendous source of aggravation to our 19 coastal parishes and others throughout the State that had the challenge of this debris removal so I’m pleased that policy, General Strock, has been 

changed. I think it would be great to carry that policy on in the 

future so that 100 percent of the clean-up can be done by the local 

parish officials and their contractors that routinely are involved in 

clean-up, even without these large storms. We have all sorts of 

other smaller storms and problems that occur and they have local 

contractors that they are very used to working with that do good 

work and can do it for less so I want to encourage that. 

Second, I want to support Senator Vitter’s suggestion for this 

project manager. He and I have talked a great deal about this, he’s 

done a lot of good work on it and as we see the incentives as he’s 

outlined, that adds to our frustration. So a project manager approach for some of this would be terrific. 

We’ve talked a lot about blue roofs and debris removal but maybe 

Ms. Burnette or Mr. Jadacki of Homeland Security, we had a policy 

on trailers, could you describe what it is and how we are evolving 

to a better policy on trailers relative to not just ordering but where 

they are going to be used, how we work with our local officials to 

provide adequate housing? Just be as short in your answer as you 

can. What have we learned and what are we changing right now 

about that? 

Mr. JADACKI. Well as far as the purchases are concerned, when 

we did our work we found that a lot of purchases—because there 

was no pre-disaster planning for temporary housing, there was 

really no idea how many travel trailers were really needed. We understand that people were told to buy until you’re told to stop buying. I understand they bought about 120,000 travel trailers and 

they’re still being used extensively. However, there are some manufacturers that providing the travel trailers that were purchased, 

but there were shortages. There was, I think, over 300 vendors contacted at some point. What do you have on your lot, what can you 

20

1The prepared statement of Mr. Jindal with attachments appears in the Appendix on page 

97. 

provide us, can you meet these specs? As a result the prices varied 

considerably between the price from the manufacturer versus the 

ones on the lots. 

Senator LANDRIEU. Can I ask you one thing? 

Mr. JADACKI. Sure. 

Senator LANDRIEU. Are you aware that there was a project, Operation PAM, conducted just 6 months before the storm where it was 

estimated that ‘‘X’’ number of people would be without homes? 

When that information got to Washington, did anybody read it? 

Senator LANDRIEU. I actually attended the Hurricane PAM exercise as my role as the FEMA CFO and I know specifically some of 

the scary scenarios that were described there such as 60,000 people 

possibly dying, hundreds of thousands of people, that would be 

homeless or displaced. I know that message did get back to Washington. I know for years FEMA had discussed the notion of catastrophic planning initiatives over the years and for whatever reason they just never followed it through to fruition. FEMA’s been in 

and out of the travel trailer business and mobile home business for 

a number of years and it’s just something that seems to reappear 

after every major disaster. 

Senator LANDRIEU. Well, Mr. Chairman, my time is short and it’s 

expired. Just for the record, that operation predicted tens of thousands of people losing their lives and hundreds of thousands of people homeless 6 months before the hurricane and to think that when 

the hurricane hit there was no plan for shelter either in hotels, 

temporary housing, or trailers is something that I hope your Subcommittee will focus on. Thank you. 

Senator COBURN. I want to welcome Congressman Bobby Jindal 

to be here with us and we’re going to afford you your time to do 

this. We’re happy you’re here and you have 5 minutes. 

OPENING STATEMENT OF HON. BOBBY JINDAL,1 A U.S. 

REPRESENTATIVE FROM THE STATE OF LOUISIANA 

Mr. JINDAL. Thank you very much, Mr. Chairman. Senator Carper I want to thank you and Senators Vitter and Landrieu for not 

only coming but allowing me the privilege of sitting on this panel 

with you. If there are no objections, I have written a statement 

that I’d like to read. 

Senator COBURN. Without objection it may be made part of the 

record. 

Mr. JINDAL. Thank you Mr. Chairman. Several of my colleagues 

have made several of the points I wanted to make. I know my time 

is going to run out before I get to ask all of my questions. I will 

tell the panelist that many of my questions are contained in two 

letters that I sent to the Department of Homeland Security. The 

first, on October 11 of last year, talked about Section 307 in preferences of contracting with local businesses. The second, March 27 

of this year, with some suggestions on how we might save taxpayer 

money and help those dollars go further on the ground. I have not 

received a reply to either letter. 

21

As Senator Vitter said, we have two very strong reasons for 

being very concerned about the stories we’ve heard today and 

heard before today about not getting the best bang for the tax dollars being spent. First, not only as taxpayer but also as representatives many of our colleagues feel like almost $100 billion has been 

approved, they don’t realize that there hasn’t been $100 billion of 

relief on the ground and I think for every dollar that’s not being 

spent effectively is another dollar that could have gone to help a 

family here in Louisiana or on the Gulf Coast. 

The second reason for concern is that June 1 is right around the 

corner. The next hurricane season is about to be upon us. We want 

to make sure that whatever lessons need to be learned are learned 

before the next hurricane season. Now, I’ve got several questions 

and I want to focus on one area that hasn’t been touched upon. If 

we have a second round of questions, I will certainly come back to 

debris removal. I want to focus on the trailers for just a second. My 

understanding is that FEMA may have spent as much as $3 million on 4,000 base camp beds that were never used, $10 million dollars to renovate and furnish 240 rooms in Alabama that housed 

only six evacuees before that was closed. My understanding is that 

we’re spending, as taxpayers, between $60,000, and maybe as much 

as $77,000, for each mobile home, for each travel trailer, to provide 

about 18 months of temporary housing. I also understand that 

there are at least 10,000 trailers in Arkansas and maybe as many 

20,000 that have currently been purchased and haven’t actually 

reached the residents who they’re intended to help. 

If you look at the cost and look at the money that we’ve spent, 

it seems pretty self-evident that if you would have taken that 

money and been more flexible. For example, the local media reported that money could have easily paid for more than 18 months 

of rent, could have easily help owners repair their homes, and 

could easily paid for what are being called Katrina cottages and are 

more durable forms of housing. My question is two-fold. I guess I’ll 

address it to Ms. Burnette to begin with. First, would you agree 

that if Congress were to change the regulations in the Stafford Act 

specifically to allow more flexibility to help residents use some of 

the money spent on their behalf to repair their homes instead of 

limiting those dollars to trailers, would you agree that the money 

would actually go further and maybe help more people? Second, 

would you explore the flexibilities you think you currently have to 

help break down the costs of those trailers so we’re not spending 

that much money? What flexibilities do you think you currently 

have to help people either with more permanent housing or repairs 

to their housing? 

Ms. BURNETTE. Congressman Jindal, I actually, because of my 

experience and because of my background is in procurement, that 

is a policy question that does need to be debated and I understand 

that it is being debated amongst the senior leadership. Right now 

the way the legislation does read is that FEMA is to provide temporary housing for applicants or evacuees when a catastrophic disaster hits. 

Mr. JINDAL. Within temporary housing, do you think you have 

the ability to work with HUD, for example, instead of doing trailers 

if there were no other forms of temporary housing available? It’s 

22

not that it has to be trailers. I mean, if there were more cost effective alternatives. 

Ms. BURNETTE. I think the idea that we’ve recently explored with 

just the apartments, where we’ve started to put people into apartments, I think that has been very favorable. I know in Houston 

that we’re working to move 35,000 households out of the hotels and 

into those apartments and it is, in my mind, probably a better alternative. I certainly would prefer to be in an apartment rather 

than a trailer and it’s certainly more of a long term solution. 

Mr. JINDAL. And I would certainly encourage my colleagues for 

us to change the law. I would encourage FEMA to take as an expansive a view of the word temporary as possible? Again, I’ve got 

to reiterate for our constituents I strongly believe if they have access to those dollars they can make it go much further. If we gave 

them even a fraction of the $80,000 that is now being spent for 18 

months—I believe and I’m certainly encouraged that if we bought 

these trailers that they would be used. 

Gentleman, I know my time has run out. I’ll just make one comment on debris removal. I won’t ask you a question, it wouldn’t be 

fair to do that as my time runs out. I know that we’ve got a Parish 

President and other local officials here. I certainly appreciate that 

we would not have been able to move as much debris as we removed without the Corps’ tremendous help. The point I do want to 

make is that not only the cost is a strain but the paperwork requirements is quite onerous for local officials, when they’re told 

that if you use a local contractor you may be audited, you may not 

be reimbursed in addition to the cost versus if you let us handle 

it you don’t have to worry about the paperwork, you don’t have to 

worry about the audit. Many of them said simply out of fear that 

they chose the later approach and some believe if they have control, as I said to FEMA, if individuals felt like they had control 

over the dollars spent for housing that those dollars would go farther, many local officials feel like if they have greater control over 

the money spent on debris removal in their parishes and their communities, they could have certainly made those dollars go farther. 

I’m not asking a question because my time has run out but I’ll simply say it’s not just the cost, but the paperwork requirements are 

also very daunting for local officials. Thank you. 

Senator COBURN. Ms. Burnette, why do you all contract with the 

Corps? Why do you go through the Corps? Why have that extra 

layer? You all can’t issue four contracts, five contracts, global contracts for debris removal and what are we paying for the Corps to 

do that? 

Ms. BURNETTE. The Corps, we believe that the Corps just as we 

partner with other Federal agencies, to support catastrophic events 

such as this. We believe that they have the requisite experience 

that we don’t have internally at FEMA. FEMA is much smaller in 

size than other government agencies so we rely on our partnerships 

to support those efforts. 

Senator COBURN. FEMA is a big agency as far as I’m concerned. 

I still don’t understand why you have to have the Corps to contract 

for debris removal, tarps, and everything else, and also I’m interested in something General Strock said is because the local governments are inadequately prepared for safety and oversight. I’m not 

23

sure that’s the case. As a matter of fact, I think we’re ill-prepared 

for oversight. As a matter of fact, this hearing actually, and the 

testimony of the Inspectors General that we’ve had, says that we’re 

ill-prepared for oversight. So I’m going to come back again. What 

is the rationale for FEMA contracting with the Corps, creating a 

layer of bureaucracy, rather than contracting directly with these 

major national contractors which we contract almost everything? 

The Corps contracts almost everything through these people all the 

time, whether it’s through FEMA or through the EPA for cleanups 

or whatever. Why is it we have to have the Corps do that and why 

should we pay for an additional layer of bureaucracy to get it done? 

Ms. BURNETTE. Mr. Chairman, we believe that there are advantages because of the expertise level that they bring to the table 

that we don’t have. But we have recently started to explore what 

kinds of things would be better established with other agencies. 

Certainly housing, and the retooling issues that Secretary Chertoff 

has provided. He’s looking at HUD as a possible alternative for providing housing which goes back to Congressman Jindal’s question 

about apartments and partnering with them. So we are looking at 

those other alternatives. 

Senator COBURN. Let me go back again to Senator Vitter talking 

to you about project manager. Isn’t that what the Corps is for you? 

That’s why you’re contracting—they’re not actually doing direct 

cleanup work. Aren’t they a project manager? So if that’s the case, 

why do we need those huge super large contracts that end up four, 

five, six, seven, eight tiers down and what do we get for that? 

Again, if the Corps is the contract manager for the project, then 

why do we need the massive, large national companies to do that 

and why don’t we go direct to the regional contractors, regional 

subcontractors, or local contractors? Why add the two layers? If 

you’re going to use the Corps, then why does the Corps have to use 

the national contractors? 

Ms. BURNETTE. I, again, would go back to that we believe that 

the Corps has the requisite experience to do that. I think that the 

program management office is an interesting idea and is certainly 

something that we could explore. 

Senator COBURN. You have a program manager. That’s the 

Corps. 

Ms. BURNETTE. Yes we do. 

Senator COBURN. You have a program manager. So, again, my 

question is why is it necessary, if the Corps is the program manager, for them to then contract with a significant higher overhead 

to the larger national companies rather than regional companies? 

Ms. BURNETTE. I think it’s the staff that is involved in administering these contracts appropriately that is integral to ensure 

that it is done properly and meets all regulatory requirements and 

we believe that the Army Corps has the staff and the knowledge 

that they bring to the table to support this effort that we don’t 

have internal to FEMA. 

Senator COBURN. What you will find if you talk to the local contractors around here is the national companies came in and got the 

big piles, got paid the big bucks. They left when all the profit was 

taken out. Now they’re going to give it to the small companies here 

in Louisiana and give them the hard work and not give them an 

24

opportunity to make any money at it so the vast majority of the 

money got swept out of town, not into the local economy, and the 

details of the small debris removal is now left to the people to not 

make any money on it and to me, you can rationalize it. I don’t 

think there’s a rationalization. Either the Corps is the project manager and if they are, you don’t need to pay a large corporation to 

do that. If they’re not the project manager, then you don’t need 

them. 

Senator CARPER. I’m going to go back to my earlier question as 

far as Mr. Gimble who basically said that he thought he would be 

able to answer the question at the end of the summer. What I’m 

looking for from each of your guys and I would like to go to Mr. 

Fitzgerald next. When you look at the statues we have in place and 

when you look at some of the regulations that are in place at the 

relevant agencies and when you look at the policies that they are 

following, just in terms of common sense, saving money, what are 

a couple of major changes that you would bring to our attention for 

us as legislatures for the agencies themselves? 

Mr. FITZGERALD. Senator, I don’t know if I have statutory 

changes to recommend but one of the lessons learned, I think we 

saw was when we awarded these contracts——

Senator CARPER. I don’t know that we can legislate common 

sense? 

Mr. FITZGERALD. The Corps awarded these debris contracts as 

firm fixed price competitively awarded contracts. The Corps then 

negotiated task orders after the initial bids were in. That is an 

area we took issue with from our standpoint in the sense that we 

got bids that were competitive bids but then subsequent to that, we 

had to negotiate higher prices for those task orders because of some 

unknowns. Documentation wasn’t available to show how exactly we 

got from the initial bid or the independent government estimate to 

the higher bid. Without that support in the contract files, there’s 

really no way to determine whether those prices that we paid were 

justified. There are some explanations we got during our audit 

about why those things happened but we really think it’s important 

that it is supported and documented exactly why we went from a 

competitively bid price to a negotiated bid price and why the increase was justified or needed. That’s why we made a recommendation for the Defense Contract and Audit Agency to come in and look 

at the pricing to make sure that the increase pricing was totally 

justified. So the lesson learned, I think, is to make sure that we 

have the support and justification for negotiating higher prices 

than what was initially bid or cited in the independent government 

estimate. That’s the lesson learned. 

Senator CARPER. Mr. Jadacki, same question. 

Mr. JADACKI. There was over 4,000 contracts that were let for 

over $5 billion dollars after the disaster occurred so the fact that 

there were a lot of negotiations going on and getting bids going in 

and out and lack of documentation makes it more difficult to contain costs. We’re going to recommend that call or stand-by contracts. I agree with Ms. Burnette that the need for regional and 

possible local level are in place before these disasters occur. I know 

there’s a lot of concern about June 1 is coming up and we’re tracking, we’re working closely with the DHS procurement folks about 

25

how they are coming along on some of these contracts. We’re 

pleased to see that some of the local awards were made on some 

of the travel trailer maintenance and deactivation were made, but 

a lot more needs to be done before hurricane season which is quickly coming towards us. 

I also agree with Congressman Jindal about the cost of a travel 

trailer, the life cycle. We actually did some work in that and it does 

cost $50,000 to $70,000 to provide temporary housing for 18 

months. Unfortunately, FEMA’s hands are tied by the Stafford Act 

because they’re not allowed to go out and build structures and 

things like that which could be cheaper. So, I think exploring some 

of those types of changes that would allow more flexibility would 

be something we should consider. 

Senator CARPER. General Strock. 

General STROCK. Certainly pre-planning needs to be improved. If 

I could just comment a bit on these negotiated prices. Certainly we 

do need to do a better job of documenting our decisions so we can 

follow that trail but this is a tough one when you have an advance 

contracting initiative. For example, it’s based on—if it’s for a region. You take the lowest labor price, in that demanded labor 

prices, in that region and you base your price on that. Then you 

get into a crisis situation and in a different part of the country you 

have to use different labor rates and that automatically drives the 

price up. We have things like hauling conditions. The contractor 

will bid on a general sense of what he’s going to have to face and 

then you get into a situation where New Orleans is under water, 

and you’re in tight streets where the work is much more difficult, 

than we should grant them the ability to come in and negotiate 

prices. In the early days, in response to New Orleans, every worker 

had to wear a tie-back suit because we weren’t certain about the 

nature of the contaminants and so forth and that drives the prices 

up. So we have a mechanism that we can negotiate these prices 

and given the catastrophic nature of this disaster, the prices generally went up when we did that negotiation. But we did not document it as well as we could have and certainly we’re working on 

that. Thank you. 

Senator COBURN. Senator Vitter. 

Senator VITTER. Thank you Mr. Chairman. Ms. Burnette, I want 

to go back to your answer about what’s going to be different this 

next round because I’m not sure I understood it. I think one of the 

things you said is you’re identifying local subcontractors ahead of 

time and having pools of those available or something like that. 

Are they still going to be employed under a mega—prime and if 

not, what will be the different arrangement? 

Ms. BURNETTE. Actually no, they’re not going to be underneath 

a mega—prime. They are going to be their own prime contractor. 

What we will do is with GSA, we will identify companies in different areas because we don’t know where the next catastrophic 

event will happen and we’ll have contractors come in and tell us 

their expertise. They’ll basically compete on a technical and price 

situation response plan and then they will have agreements with 

us so that when a catastrophic disaster happens in that particular 

region, we will have a pool of qualified contractors that can respond 

to it. 

26

Senator VITTER. And a negotiated price already? 

Ms. BURNETTE. That is correct, under negotiated prices. Now the 

disaster could vary but so the pricing that’s established will be 

based on what we know today not by some of what will happen in 

the future. 

Senator VITTER. I also want to go back to Senator Coburn’s question about the role of the Corps. What money does the Corps get 

to play the role that you’re referring to in terms of these contracts 

which are ultimately FEMA’s responsibility? 

Ms. BURNETTE. They have, they are participants in accordance 

with the National Response Plan. They participate with us and 

they are our partners in the disaster and they receive an overhead 

for the amount of contracts that they put in place for those different supplies and services that we ask them to accomplish in accordance with the National Response Plan. 

Senator VITTER. And how much is that? 

Ms. BURNETTE. I am not a technical person and since this is not 

a procurement issue, we’re not procuring with another contractor, 

we’ll have to get back to you Senator. 

Senator VITTER. And so it’s a percentage of everything they put 

out? 

Ms. BURNETTE. It’s my understanding that it’s a percentage of 

the dollars that they award and we are looking at that Senator. 

Senator VITTER. OK. I think we would all like to know what the 

Corps makes by playing this role in the process, particularly when, 

from my vantage point, in the great majority of time they don’t do 

significant work in that role, they push it on to mega—national 

contractors who essentially do that. So I think we would all like to 

know what the Corps makes in terms of dollars. 

Chairman, I also want to go back to the debris removal issue. I 

am very glad also that this disparity between the 90 percent reimbursement and 100 percent if locals use your contracts has been 

done away with but I think it’s still not an even playing field and 

the reason it’s not is that, as you know, it’s fine to say you’re going 

to be reimbursed 100 percent but when that happens after reams 

of paperwork, or doing it three or four times, or a year after the 

fact, that’s a major cost and a major risk to local government so 

I still think we’ve got further to go to have a true even playing 

field. Let me also back up and say that I disagree with any suggestion that the Corps brings higher standards to the table. I think 

the ultimate, and I know you didn’t mean to denigrate local government, but I think the ultimate test there is the fact that locals actually live in those communities day in and day out. They have 

every incentive in the world to make sure it’s done right, quickly, 

and safely. I think that is far more powerful than the reams of Federal regulations. What would be wrong in telling local government 

you can do it either way? You could use us, you could use your own 

locals. If you do it yourself, you’re not only reimbursed 100 percent, 

but every dollar you save compared to our price, you get to keep 

20 percent. 

General STROCK. Sir, that’s certainly a policy call. It would be 

out of my lane to comment on that but that could be done. Sir, may 

I comment a bit on what the Corps brings to this thing. We have 

what are called Planning and Response Teams. These are preVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00030 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
27

trained and ready teams that are ready to flow in. And as I mentioned on this thing of quality and safety and so forth, I said I’m 

reluctant to make any statements along those lines. We can flow, 

in fact, trained professionals into an area. We’ve flown over 3,000 

people into this area when this disaster happened. They simply 

don’t have the capacity at the local level. Where they do, then it 

should certainly be used. The State of Florida does not use the 

Corps for debris removal because they have a standing capacity. 

The way FEMA’s or the National Response Plan works, locals use 

their capacity to the degree possible and then, and only then, turn 

to the Federal Government for assistance. So, really, it’s in our best 

interests as an agency to help work with the locals to build their 

capacities so we’re not required. But I think that the big challenge 

here was the catastrophic nature of this disaster and the need for 

a massive response. But we have professionals trained and ready 

to move it——

Senator VITTER. Let me say that I certainly agree that in this 

case all of the work could not have been done by purely local contractors but I still think its incumbent on us to go further to even 

the playing field. 

General STROCK. Yes, sir, I agree with you that it should be local 

first and only as a last resort that the Feds are called in. 

Senator COBURN. If that’s the case, why do you need Bechtel and 

CM2HILL? Why do you need them? 

General STROCK. Sir, you need them, I think, because they expand the capacity. In the Federal Government, we’re prohibited 

from competing or having the capability that can be provided by 

the private sector and our job, as professionals, is to leverage the 

capabilities of the private sector. So we go to them for our work. 

Senator COBURN. But they’re going out and doing sub-contracting 

for 95 percent of this stuff so why can’t you do it? If you have the 

professionals to do it, why do we need Bechtel? 

General STROCK. We can do it when the situation allows that, 

sir, and we do that. In this case, we recognized the need for a massive mobilization of resources. There is no one contractor that can 

bring all of the capabilities to bear in a rapid way so we go to the 

larger ones that have industry connections that could quickly build 

alliances and relationships that certainly sometimes run many 

tiers but they actually pull together teams to get the work done. 

And it’s done with competitive pricing, best value in mind. 

Senator COBURN. I think we’re going to find that when we’re 

through the cost of debris removal was too high, the cost of blue 

roofing was too high, and the cost of trailers and their installation 

was too high compared to what common sense would dictate. I 

think that’s what we’re going to find. I’m not sure we’re there yet, 

but I think that’s where we’re going. I’ve read all of the Inspector 

General’s reports and that’s where it looks like we’re going to. So, 

if that’s the case, then we didn’t get good value. We may have got 

their services, we didn’t get good value. Senator Landrieu. 

Senator LANDRIEU. Mr. Chairman, you have been so gracious. 

I’m going to submit my questions for the record because I’m anxious to hear the next panel and I thank you. 

Senator COBURN. Congressman Jindal. 

28

Mr. JINDAL. Thank you Mr. Chairman. I want to just review because I haven’t heard anyone dispute these facts. I want to review 

them and make some recommendations and see if the panel agrees 

with them. The numbers I want to submit for the record is that it 

is true that, and again, I’d love to be corrected. Is it true that 

FEMA spent $3 million dollars on 4,000 base camp beds that were 

never used? Is it true that FEMA spent $10 million dollars to renovate 240 rooms in Alabama that housed only six evacuees? I’ve heard confirmation we are spending $50,000 to $75,000 per 

trailer. I’ve heard confirmation that there may be as many as 

20,000 trailers not currently being used. I’ve heard that we spent 

$175 per foot to put the blue plastic on roofs and yet in some cases, 

after five layers of subcontractors, only $2 is actually given to the 

front-line contractors, in some cases, $10, and some cases as little 

as $2. One of the numbers that troubles me is that I’m hearing 

that within FEMA, and this is not something maybe Ms. Burnette 

can actually answer, but within FEMA there are only 55 acquisitions staff members and of those only 36 are being filled whereas 

some think we need as many as 172 to oversee the contract work. 

One estimate says that there were over 1,000 contracts valued in 

excess of half a million dollars but only half were awarded under 

full and open competition, which may be part of the explanation for 

some of the numbers that I read before. One of the most disturbing 

numbers is $175 per square foot for the blue plastic and we have 

local workers saying they could have put up permanent roofs with 

the money that has been spending. It goes back to my previous 

point that with the $50,000 to $75,000, we could have made permanent repairs to people’s homes and let them come back permanently. 

And the reason I emphasize that is housing is so critical to get 

people back into the greater New Orleans and Gulf Coast area and 

all of Louisiana. It’s so critical to get our economy, our health care, 

and our education systems back and so I have focused quite a bit 

on housing. Those are some of the things that concern me greatly. 

As the Chairman said, I don’t think that when the record is written 

on this that we will have gotten great value. I think if you survey 

local residents, local officials, they’ll tell you over and over they 

could have done so much more with the money that’s being spent 

down here. 

My suggestion is that as we go forward to June 1 and as we continue to recover from Hurricanes Katrina and Rita, is that we absolutely have greater financial transparency. Along with the Chairman, I don’t understand why we wouldn’t want taxpayers to know 

what they’re paying. It took quite a lot for the local contractors to 

figure out what was being paid to put the blue plastic on roofs. It 

took a lot of effort to get those numbers out there. 

Second, let’s explicitly limit the number of layers of subcontractors to reduce the overhead costs and let’s publicly report how 

much is being spent at each layer of sub-contracting. 

Third, I understand the need right after a storm to spend more 

than market rates to respond in the middle of a disaster but certainly after the initial emergency period expires, there’s no reason 

for us to be spending, at the most, 25 percent above the market 

value or it could even be better than that, and yet we have many 

29

1The letters referred to appears in the Appendix on page 98. 

reports where we’re paying much above market rates long after the 

storm had passed and long after the emergency period had passed. 

Fourth, the point I made earlier, I certainly hope that we have 

greater flexibility as we spend these dollars. Given whether it’s 

FEMA or the local homeowners greater flexibility on how the 

money is spent on their behalf. 

And, fifth, one thing we’ve not talked about as much and, again, 

it’s not something that I expect Ms. Burnette to respond to, it’s 

something I’d like FEMA to respond to, we’d like to have less turnover in the personnel on the ground. One of the things that is very 

frustrating to local officials and others is that as soon as a certain 

policy guidance is established, often times somebody new will come 

in and the person will rotate out and have to start all over again. 

And as Senator Vitter references when it came to debris removal, 

many local officials feel like after they’ve worked out the procedures for reimburse for using local contractors, as soon as a new 

local official shows up, they have to start back from square one. 

And then finally something that’s been hinted at, certainly I 

think we need to do a better job before June 1 in terms of pre-positioning and partnering with the private sector. Knowing that this 

is going to be a busier than normal hurricane season. I don’t think 

there was an excuse last year and I don’t think there will be any 

excuse at all after Hurricanes Katrina and Rita for us to be unprepared next year. 

I know my time is short. I leave those suggestions with the 

panel. I’ve documented those in two letters.1 The first letter, which 

I think is still very important is the use of Louisiana contractors. 

I know the Stafford Act 307 requires that. I don’t know the record 

has gotten better as time has gotten further away from the storm. 

I still don’t think we’re doing as well as we could. I’d like us to do 

more to keep those dollars in the economy to keep people working 

here. It’s not fair to ask how we respond to so many suggestions 

in such a short period of time. I would ask you to take a look at 

those letters. If there are things that you can do administratively, 

I’d encourage you to do them. There’s certainly no reason to have 

20,000 trailers out there when people need housing but there are 

things that we need to do to statutorily to amend the Stafford Act. 

I hope you’ll support those changes and report back to us and we 

can pursue those changes in a bipartisan manner. Thank you Mr. 

Chairman. 

Senator COBURN. Well, Congressman, you just demonstrated you 

know how to be a senator because you took 5 minutes and didn’t 

ask a question. I want to thank our panelists. You will receive multiple questions from us. From the time that you receive those, we 

would like those back in 2 weeks if you can. And I would emphasize again what is it that we didn’t do right, what have we learned 

from it, when all these reports are coming out in the summer what 

do we change. You have an obligation to communicate with us 

what will make you more effective, more efficient, and also more 

transparent to the American people. So I want to thank you for 

your time that you have given today and General Strock I know 

you took time out from your own vacation to be here. I appreciate 

30

that. It certainly shows a level of dedication that is admirable and 

we will dismiss this panel and look forward to your replies from 

our written questions. 

The second panel can take seats, please. Our second panel consist of Steve Scalise. He’s a third term Louisiana State Representative from the 82nd District of Louisiana. He was born and raised 

in the New Orleans area and serves on several committees including the Appropriations and Budget Committees. Welcome Representative Scalise. 

William Woods is Director with the Acquisition and Sourcing 

Management at the U.S. Government Accountability Office. Prior 

to assuming his current position, Mr. Woods served as Assistant 

General Counsel in GAO’s Office of General Counsel. 

Derrell Cohoon is the CEO of Louisiana Associated General Contractors, welcome. And next is Kevin Davis who is the President of 

St. Tammany Parish. Hurricane Katrina’s destruction to his parish 

includes 8 million cubic yards of debris, 3,000 miles of clogged 

drainage and 48,792 destroyed homes. 

Each of your statements will be made a part of the record. You’re 

recognized for 5 minutes. We would appreciate it if you could stay 

within that time. 

TESTIMONY OF THE HON. STEVE SCALISE, REPRESENTATIVE, 

LOUISIANA STATE LEGISLATURE 

Mr. SCALISE. Thank you, Mr. Chairman and Members, Senator 

Vitter, Congressman Jindal, and Senator Landrieu. I appreciate 

the opportunity as well as appreciate you coming down to New Orleans to hear this. For each of these three programs I would like 

to propose alternatives that could result in significant savings to 

the taxpayers while also providing better relief to the people that 

are most in need. Some of the things you’ve heard about already. 

On the Operation Blue Roof, the biggest problem that we’ve experienced is the multiple level of subcontractors and some of the 

numbers that they’ve thrown out are right where the top contractor 

would get $175 per square. Ultimately it works its way down to the 

person that’s actually putting on the piece of blue tarp making 

about $2. By streamlining that process you can significantly reduce 

the savings while providing that same service. It’s been pointed out 

as well that you can put a brand new roof on somebody’s house for 

the price that has been spent by the taxpayer by putting a piece 

of blue vinyl on a house. 

For the public releasing of this information is also important because as we talk about the travel trailer program that’s especially 

important to the State and local government because we are being 

asked to pay a percentage, a 10 percent match of the travel trailer 

program and it does have a lot of embedded cost. As we get into 

the overall cost. It’s averaging about $75,000 of what we’ve been 

told a trailer to purchase, install and service. That housing alternative while the trailer itself costs about $20,000. The Federal Government is spending between $3,300 and $4,100 per month to keep 

a family in a trailer in front of their house or in a park. And obviously we feel that the taxpayer is not getting the best deal or the 

people that need temporary housing are not getting the best deal 

either for this expense. 

31

The coordination of subcontractors is also a big problem because 

too many times we hear complaints from people who have a trailer 

sitting in front of their house for months while they’re waiting to 

either get electricity hooked up to get their key for the trailer. I’ve 

had calls to my office from people who have a trailer in front of 

their house for 2 months but couldn’t get into it because they didn’t 

have the key because it was a different subcontractor. So clearly 

that coordination needs to be worked a lot better too because that 

ends up becoming a bigger frustration than the devastation that 

the person has from the hurricane when they’re trying to find relief 

and it’s sitting there in front of them and they can’t use it. Some 

alternatives may be to provide travel vouchers or credits to people 

who purchase their own. I’ve had a number of people who could not 

wait any longer for a FEMA trailer and they went out and bought 

their own and spent about $18,000, $20,000 hooked it up themselves instead of the $75,000 the Federal Government’s spending 

yet they can’t get any reimbursement. So they’re out $20,000 

whereas if they would have waited the Federal Government would 

have spent $75,000 for the same alternative. It just doesn’t seem 

to make sense as well as the businesses could be allowed credits, 

too. A lot of businesses right after the storm stepped up to get their 

businesses back up and running but their big problem was they 

didn’t have personnel. So many of them took it upon themselves to 

find ways to get their people back and if they were allowed to have 

some credits so that they could buy the trailers as long as it costs 

less than what the government was spending, I think you would 

have seen a much expedited manner of getting people back into 

their communities while also getting our economy back up and running by having businesses and that would help people get a sense 

of normalcy. Many people expressed that getting back and working 

was a big method of relief from all the devastation and yet some 

people still haven’t come back because there is no housing. So if 

businesses would be involved in that process I think it would help 

us some, too. 

Regarding housing alternatives, modular housing, was brought 

up by Congressman Jindal. The Katrina cottages, I think you have 

a picture of one of those in your handouts that I gave you cost at 

most as much as FEMA is spending on trailers yet these are hurricane proof which the trailers are not and in many cases they can 

be made into permanent houses where you can actually turn them 

into a permanent house which provides a much better solution. 

There are some other alternatives that can be reviewed as well 

that would save money in this program, but also provide more relief because we’re spending a lot of money on trailers and on hotels 

when there are other opportunities that are available. 

Finally, with debris removal the multiple layers of subcontracts 

are again a big problem. I am very encouraged to hear what General Strock mentioned about allowing the reimbursement because 

many local governments mayors have said they had a lower priced 

contractor to remove the debris yet because of the way that it was 

structured they had to go through the Corps of Engineers because 

of the 100 percent reimbursement because they simply could not afford to pay that 10 percent cost when they were cash strapped. And 

many communities were in that problem. 

32

1The prepared statement of Mr. Woods appears in the Appendix on page 103. 

What I would suggest that if that is in fact the policy that those 

local governments that did go on their own at a lower cost to the 

government have that 10 percent fee waived because many are still 

being told that they have to make that 10 percent payment and so 

hopefully we can get some of these improvements in place. I think 

your Subcommittee has started to point out and see some of the 

problems that we’ve been dealing with on the ground. I think there 

is a better way to do it. So I appreciate the opportunity to speak 

and would be happy to take any questions. 

Senator COBURN. I noticed that the Corps is still here. Is someone still here from FEMA? 

(No response.) 

Senator COBURN. Nobody’s still here from FEMA to listen? No, 

General, you’re not from FEMA, you’re from the Corps. 

That’s the problem. That is a big problem. 

Mr. Woods, you may proceed. 

TESTIMONY OF BILL WOODS,1 DIRECTOR OF ACQUISITION 

AND SOURCING MANAGEMENT TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. WOODS. Good afternoon, Mr. Chairman, Members of the Subcommittee. Thank you for inviting me here this afternoon to represent the Government Accountability Office and its work in this 

area. Before I get to my specific findings I would like to just touch 

on three overall points. First, to describe the breath of the work 

that the Government Accountability Office has underway. Some of 

it completed, most still to be completed. A number of reports to be 

issued this year across a number of areas involving, for example 

flood insurance, the voucher program, we worked on the levees, 

healthcare, many issues that we’ve been involved in. General Walker recently testified before the full Committee of Homeland Security and Governmental Affairs and outlined some of our preliminary observations in that area. 

The second general point is the extent of coordination that the 

Government Accountability Office has done with the rest of the 

oversight community. You heard reference to that in the first panel 

but particularly in the area of contracting we made an early and 

earnest effort to touch base with our colleagues in the oversight 

community to make sure that there was no duplication. To make 

sure we were doing the right work and that all of the work was 

being covered. 

In the area of contracting the division of labor, if you will, that 

we decided on early on was that the other components of the oversight community would be looking at in the area of contracting at 

the award process and at the pricing of government contracts. We 

on the other hand, would be looking at contract execution. Sort of 

the back end of Federal contracting and asking ourselves the question, is the government, are the taxpayers getting a good value for 

the money saved? We are looking at contract monitoring, contract 

oversight, those sort of issues and those are the issues that I’d like 

to discuss with you today. 

33

And the third sort of overall comment that I wanted to make is 

to recognize the extraordinary hard work and dedication of the responders at all levels. We sent several teams down to this area. 

This is my second trip and I’ve been impressed with the enormous 

dedication of responders at all levels, the local, the State and the 

Federal and that’s by Federal employees as well as by Federal contractors. There were heroic efforts and I think we all need to recognize that. We certainly do. 

In terms of our specific findings, they fall into three categories. 

No. 1 is planning and preparation. That can’t be understated. It is 

enormously important. The Corps of Engineers has a program that 

you heard about earlier called ‘‘Their Advanced Contracting Initiative.’’ That enabled them to get, they were up and running and off 

the ground very quickly and they had contracts in place. The Federal Emergency Management Agency has some contracts in place, 

but not nearly enough and that’s an area where they need to improve. Let me give you just a concrete example of where the advance contracting lead or the lack of advanced contracting lead to 

some unfortunate results. As you know, the Federal Emergency 

Management Agency task other agencies with contracting on their 

behalf. One particular case that we looked at, FEMA turned to the 

Corps of Engineers and asked them to contract for portable classrooms in Mississippi. They did that, but unfortunately that was a 

tasking that occurred after the event and the Corps did not have 

the opportunity to call on their advanced contract initiative to call 

on contracts already in place. They had to enter a market where 

it had very little experience, was facing a very tight time frame 

and as a result paid more than it probably should have and could 

have under normal circumstances. So that’s a case where advanced 

planning could have helped save the taxpayer money. 

Another area where advanced planning can be helpful—we’ve 

heard reference to the Stafford Act and the preference for local contractors. When we did our work and asked agencies how they were 

implementing that, all of the agencies that we talked to were 

aware of that requirement. Very few knew how to operationalize 

that. There’s very little guidance in the Federal acquisition regulation about how to make that happen. We recently issued a protest 

decision where we had the State of Mississippi issuing a set aside 

under the Stafford Act. Contractors came in and said that’s not 

permitted, we protest. Well, GAO took a look at that and decided 

yes, that’s within the discretion of the Corps of Engineers in this 

case to have a set aside and to reserve contracts or just for firms 

that are either located or does their principle amount of business 

in Mississippi. That’s the kind of guidance that was not in the Federal acquisition regulations. It took a protest and actually delayed 

proceedings. 

Senator COBURN. Mr. Woods, can you summarize? 

Mr. WOODS. The third area that we found could be improved is 

in the number of oversight personnel. We found in a number of incidents looking at blue roofs for example where they didn’t have all 

of the monitors that they needed. In looking at the travel trailers, 

another example where agencies, FEMA in this case did not have 

all of the contract monitors that they needed to have in place. So 

in summary, it’s planning, it’s communications and it’s having an 

34

1The prepared statement of Mr. Cohoon appears in the Appendix on page 113. 

adequate work force. Those are the three key ingredients to successful contracting. 

Senator COBURN. Mr. Cohoon. 

TESTIMONY OF DERRELL COHOON,1 CHIEF EXECUTIVE 

OFFICER, LOUISIANA ASSOCIATED GENERAL CONTRACTORS 

Mr. COHOON. Thank you very much, Mr. Chairman, for the opportunity to come and address you. Thank you Senator Carper, and 

certainly Senators Landrieu, Vitter, and Congressman Jindal, for 

your continued help with this, if you will. For the record, I’m 

Derrell Cohoon. I’m CEO of Louisiana Association of General Contractors. We appreciate you doing a look back with respect to this 

issue, too, because we see a lot of things that we think need to be 

changed. In fact, we feel like we’ve been living the writing of the 

textbook for the last 7 months. We call it the new normal. For your 

information, the Louisiana Association of General Contractors represents 700 firms in the State of Louisiana. We’ve been in operation here since 1949. We represent contractors in the commercial, 

heavy, highway, and municipal utility areas as well as subcontractors and material suppliers. 

Needless to say, the devastation that has been brought is large 

and obviously we need help within the construction industry from 

outside. We admit to that. However, when there are opportunities 

for some Louisiana firms to participate as subcontractors other 

firms have not had that opportunity or they’ve been offered prices 

so low that they can’t afford to take that kind of work, something’s 

wrong with the system. I think a lot of it relates to the nature, 

these very large primary contracts. We’re relegated as Louisiana 

contractors to participate in these subcontracts through the 

websites of these primary contractors. It’s very disheartening to go 

onto that website and find out we’re number 3,422 of 9,722 and we 

never hear a response either. It’s very disheartening. The appearance to us has to be that the storm chasers, those who follow these 

primary contractors, have an in. Obviously, they ended up as the 

first tier, second tier, third tier, and then on, and the Louisiana experience has been from the sixth tier on down. That’s unfortunate. 

Obviously the difference between a hauling contract at $27 a yard 

and the $6 a yard we experience as a sixth-tier subcontractor is 

great, is very large. We saw other instances where subcontractors 

really only acted as brokers under this system with this multitude 

of vertical tiers for subcontracts. The press has collectively termed 

this vertical nature of these subcontracts the fifth-tier subcontractors and that’s us. That’s essentially what we are. The process allows the cost to be driven up. Ineffective management by the 

prime, decreased productivity, possibility of some subs only acting 

as brokers for other subs and the slow payment of bills as they 

pass down through subcontractors. 

Compounding the problem is our perception of the Federal Miller 

Act. As you go down the tiers of subcontractors if you’re not being 

paid by the prime in a timely manner. The Miller Act doesn’t allow 

us to collect on a performance bond, which is of much concern to 

us. There are people who aren’t being paid. The absolute irony is 

35

these very businesses, most of which are small businesses that we 

represent that are familiar with the area in the needs of local government and are supposed to be assisted through the Stafford Act 

are, in fact placed in areas that are not meaningful and certainly 

are not profitable. 

We have some recommendations for you in an effort to resolve 

some of the issues. First, is that FEMA, the Corps of Engineers, 

the State and local government, whomever, give strong consideration to use of the project delivery method, construction management at risk, but with variations. Under this method, the owner, 

the Corps, FEMA, or whomever will maintain a contract with the 

CM-at risk primary contractor as a professional service. CM-at risk 

is to provide essential pre-construction services, over trade contract, take responsibility for the work and guarantee the construction cost and schedule. At the same time, strong consideration 

should be given to breaking these large contracts into smaller segments to afford more competition and they should be publicly bid. 

The Louisiana construction industry is accustomed to open competition and publicly bidding public contracts. We’re comfortable 

with it. We should also consider requiring CM-at risk to break the 

subcontracts into horizontal tiers rather than vertical tiers. Again, 

vertical tiers make for people not being paid and inefficiency. 

Senator COBURN. I’m going to get you to summarize for me. 

Mr. COHOON. Yes sir. Most importantly, the CM should be tasked 

in subcontracting debris removal, demolition, etc. on a horizontal 

basis rather than current vertical basis. That will afford open competition and thereby the use of Louisiana firms for disaster cleanup for that matter other firms. 

The system we’re recommending certainly can be no worse than 

what we’re experiencing today. In fact, we think it will assist you 

in better supporting taxpayers commitment to the reconstruction of 

Louisiana and certainly it would be more fair to the people who are 

trying to survive to participate in the rebuilding of the Louisiana 

that they built in the first place. I will be most pleased to answer 

any questions. 

Senator COBURN. Thank you, Mr. Davis. 

TESTIMONY OF KEVIN DAVIS, PRESIDENT, ST. TAMMANY 

PARISH 

Mr. DAVIS. Good afternoon. Thank you, Mr. Chairman and Members of the Subcommittee, I appreciate the opportunity to be here 

this afternoon. 

I want to just kind of go through a little bit of my statement for 

you so we can get to the questions and answers. Certainly I have 

to continue my dealings with the Corps and FEMA so they are 

going to be somewhat short in my discussion. But let me say from 

the outset that there are many fine people working for FEMA and 

I have had the opportunity to work with the JFO and others who 

I think are sincere and are really competent in trying to deal with 

the issues that we’re dealing with. But there seems to be what I 

would call a great pillow in the middle from the top to those on the 

ground here with us. 

The FEMA employees and the FEMA contractors contract and in 

general they make our lives miserable, disrupt our attempts at reVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00039 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
36

covery and ultimately require us to go to the FEMA managers that 

I just mentioned to get us moving again. Creativity and flexibility 

certainly are discouraged. And let me give you an example from the 

beginning. They commandeered fuel supplies that I had ordered 

from out-of-state; they commandeered generators donated by 

churches and faith-based organizations that I was able to get into 

my parish. Naturally FEMA was already frustrated in our efforts 

and our emotions before anyone from FEMA actually appeared on 

the scene to work with us. 

Debris: St. Tammany Parish is a large parish. It’s 900 square 

miles; 216,000 pre-storm population; 300,000 approximately now. 

As of today we picked up over 6 million cubic yards of debris from 

roadways in the parish at a cost of $148 million. Our draining debris clean-up will be another $60 million. Draining debris pick up 

is a major problem. First FEMA said we don’t want to pick it up; 

then it was multi-agency jurisdiction on the same natural drainage 

ways. 

Marsh grass issues: Marsh grass for those who aren’t familiar it’s 

out in our marshes. It actually was brought in about four miles inland and now because 7 months later it somehow attached itself to 

the ground it’s not qualifying as debris pick up. So how do I help 

those citizens get that picked up. 

Now we’ll go past the June 100 percent funding deadline if I continue on this course. My probably only saving grace at this time 

with the debris and drainage ways is our drought because I’d probably have a larger population of flooding than Hurricanes Katrina 

or Rita. 

Roadway debris already contracted prior to the storm, I heard 

the gentleman earlier. We do that every year. We’re very accustomed to it in St. Tammany Parish. I give out a contract on a public bid process. We do it every February on our clean up. We had 

to do some minor amendments and at first FEMA was fine so we 

moved forward. But then they questioned the contractor while at 

the same time bring in the Corps of Engineers into my office and 

suggesting that I cancel that contract and use the Corps. Well, I 

believe that I made the right decision and I kept those contractors 

busy and I also believe that we saved the Federal Government 

close to about $42 million by using that contractor. Because our 

contractor’s rates were $7 at the low end for C&D and $14 a yard 

on the high end for other debris. That’s including hazardous materials. So it’s $7 and $14. 

Finally let me say one of the most frustrating thing about dealing with FEMA is the constantly changing personnel. We all deal 

with that every day. They make a decision and then they change 

their mind. And I don’t know whoever thought up the idea of requiring exact latitude and longitude of every tree stump in my parish and every leaner and hanger. While we went through that process I had five of my citizens die in St. Tammany from trees falling 

on them. This is 4 months after the storm. While we’re going 

through this process of longitude and latitude on every leaner and 

hanger and every stump in my parish. I want to read to you today, 

I got a memo from one of my engineers, ‘‘Stumps should remain in 

the ground. If they are removed then they are considered ineligible, 

37

detached stumps.’’ That’s what FEMA tells us now. So now I can’t 

pick them up if they got moved. 

Travel trailers: We’ve had over 70 percent of the housing stock 

damaged by Katrina and over 20,000 houses had enough damage 

to require residents to ask for housing assistance. I have about 

8,000 trailers on the ground right now. The same can be said about 

debris for travel trailers. 

We actually tried some pilot program and maybe you’ll ask me 

that question when we get to that point, but we believe, again, that 

the local national contractors the way it was done. And then also 

if you asked me the questions about changing rules for locals 

versus national firms, I’d be happy to answer those because I have 

specific details that I can express to you. 

It has been a pleasure to be here with you this afternoon. Thank 

you. 

Senator COBURN. Thank you, Mr. Davis. I wanted to do a little 

housekeeping just because I failed to mention earlier. I want to 

thank the Louisiana Supreme Court for all of their assistance and 

their staff today and also Senators Landrieu and Vitter for their 

aides and their help force. They’ve been very gracious and we’re 

very appreciative. 

Representative Scalise, I’ve heard all the testimony of everybody 

that’s come to the table for this hearing and I’m certain when everything’s said and done and has been looked at by all the inspectors general and the Government Accountability Office. The Government Accountability Office said there was terrible pre-planning. 

There are no lines of responsibility and accountability and transparency. There’s a lack of clearly communicated responsibility and 

insufficient people put on the ground to provide for effective contractor oversight. 

I’m certain that we paid too much for debris removal; we used 

some of the wrong people. I’m certain that we paid way too much 

for the blue roofing and I’m certain that the travel trailers cost us 

about twice as what they should have. When you talk to people 

here and mention the number that you did a minute ago, I can’t 

remember what it was, but the average is somewhere between 

$60,000 and $70,000. The average true cost for the same on average home, travel home is less than $20,000. So we’re spending anywhere from $40,000 to $50,000 contracting to get something set up 

and I know part of that is bringing power and sewer and everything else, to it. In Oklahoma we can build a nice, little home for 

$70,000 that’s permanent and hurricane or tornado proof is what 

we call it. We don’t have much trouble with hurricanes. Give me 

a summary of those three areas of what you’re hearing again and 

what you would think we should do with them. 

Mr. SCALISE. And unfortunately to many people in this region 

FEMA is viewed more as the problem than a solution and when 

you look at the amount of money that’s been appropriated, $100 

billion. To a lot of people in the country they think that the Federal 

Government, the taxpayers, have sent $100 billion down here to 

help us. When in fact, the vast majority of that money has not 

made its way to the ground to actually help the people that are 

most in need. So the frustration with people is they’re seeing all 

this money being spent. They’re also seeing the results of it to 

38

them and their neighborhoods and their communities where they 

need relief and they’re not getting that relief. 

So it ends up creating more problems than it solves because to 

a lot of people the transparency is a big issue. We cannot get numbers. Our State Legislative auditor has tried to get numbers. We 

got a $156 million bill from FEMA. It was the size of a water bill. 

And it says you owe this money as your percentage match for the 

amount of relief that’s been sent already. We asked for a break 

down of that and when I get a credit card bill they list everything 

that’s on that item before I submit my check. We cannot get that 

detail breakdown and so the transparency, and you talked about 

the sunshine, it’s been a big problem because we really can’t get 

a grasp of what we’re being asked to pay or what the taxpayers 

have paid for because much of that information is being disclosed. 

Senator COBURN. Mr. Davis, I’d like for you to spend just a 

minute and talk to us about if you have been able to do what you 

would want to do outside of the bound of restrictions that have 

been placed on you. I’m looking at your numbers versus $27 to $32, 

which I can’t find out for sure. As head of this Subcommittee, I 

can’t find out what we contracted debris removal for, but I promise 

you I will find out. It sounds to me like you saved us about $10 

a cubic yard, and if you can do it—and that goes back to Senator 

Vitter’s point. We’re not getting the value. We’re getting charged 

for it but we’re not getting the benefit of the dollars that are spent. 

What would you have us do? 

Mr. DAVIS. I think that’s a great question. Your aides and I were 

discussing some of those issues about the brainstorming of storm 

and just FEMA and all these agencies. I know what we do. It’s just 

like now what am I going to do with 10,000 trailers in a flood 

plane. I’ve asked FEMA that question and I also asked if I would 

help you find a solution and we don’t seem to get an answer. So 

we’re going to have to deal with it on the local level and we do that 

through our brainstorming sessions and then find all the negatives 

and how we’re going to fix them. 

All I can do is submit to you that we publicly bid it. We had numerous bidders from around the country and also local contractors. 

It happened to be a local contractor who was the low bidder, and 

it’s $7 to $14 depending on the type of debris. And I’ll have it all 

picked up because it’s my goal—I think a senator or congressman 

stated we—I want to get done by June because I’ve got hurricane 

season. I don’t want this to drag on. I don’t want any more Federal 

funds or the Nation to have to send us more. I want to get it over 

with. There just seems to be a lot of lack of brainstorming on finding solutions to all these answers. As I was hearing this morning 

from your earlier panelists not being able to even answer some of 

your direct questions. Maybe I didn’t answer your question, sir, I’m 

sorry. 

Senator COBURN. Senator Carper. 

Senator CARPER. To each of you thank you. Thanks for joining 

us today and for your testimony. A question if I could for you Mr. 

Woods. And I might ask some of the other witnesses to comment 

too, but let me just direct these to you first. In your review were 

there any contracting practices that you or your folks might have 

39

observed at other agencies that could be used to improve contracting operations during disasters like Hurricane Katrina? 

Mr. WOODS. We’ve done a little bit of work looking at that, Senator Carper, and what comes to mind first is the forest service. 

They deal with similar situations in that we know every year 

there’s going to be forest fires. We don’t know exactly where or 

what intensity, but we know that they’re going to occur and in 

roughly what geographic area. They do a much better job it seems 

to me in preparing for those and having advanced contracts in 

place and in getting base camps up and running in a very short 

period of time. 

Senator CARPER. Why do you suppose they do a better job? 

Mr. WOODS. I think it’s the advanced planning aspect. They do 

advanced contracting and they have capabilities. Usually in the 

western part of the country most predominately but they know that 

they’re going to need certain capabilities and they plan for that? 

Senator CARPER. Why would they do the advanced planning and 

contracting in those areas but we wouldn’t do it in areas that we 

know we’re going to have hurricanes? 

Mr. WOODS. Some agencies do a better job of that than others. 

For example, when we look at the Corps of Engineers they seem 

to do a better job of advanced planning and advanced contracting 

than some of the other agencies that we’ve looked at. 

Senator CARPER. What advice would you have for us as legislators to urge more of the kind of approach they’re using in the forest 

area? 

Mr. WOODS. To be honest, I’m not sure that it’s a legislative 

issue quite frankly. Most of the issues that we identified come 

down to fundamental management issues and as you eluded to earlier you can’t legislate common sense. But the deficiencies and 

weaknesses that we identified in the areas of advanced planning 

and better communication and a more capable and larger work 

force to monitor contracts. Those are not issues, in my judgment 

that are capable of being addressed legislatively, but are issues for 

the agencies to address greater management attention. 

Senator CARPER. OK. I want to stick with you, if I could, Mr. 

Woods. Are there any contracting examples from other disasters 

where there were not as many levels of contractors, we’ve been 

talking about the nesting and the tiering. But, do you know of any 

other examples where there were not as many levels of contractors 

and subcontractors? They appear to have been with the Army 

Corps contracts I guess for the tarps and the debris removal and, 

if so, any idea if the work was done at a better price as a result? 

Mr. WOODS. Well, just sticking with the area of Hurricane 

Katrina, the one contract that we looked at in some depth where 

we looked at the layering issue was the contract for the portable 

classrooms in Mississippi that I referenced earlier. And there too, 

we found the same sort of layering. Let me just give you a sketch 

of that. There was a prime contractor who was an Alaska native 

firm. That prime contractor had two subcontracts and just working 

down the tier of one of those subcontracts that was a Maryland 

based firm. That Maryland based firm subcontracted yet again 

with a Georgia firm for the classrooms and that Georgia firm then 

went to a Georgia manufacturer before actually getting the classVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00043 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
40

rooms. So there’s an example in Katrina where we have four layers. Now if you’re looking at other disaster or contingency contracting situations, it struck us in doing our work that there were 

a lot of similarities to what happened with our contracting situation in Iraq where again there was a need for acting quickly and 

there we found that in a number of instances they did go to the 

larger contractors in order to get the work done. 

Senator CARPER. I understand that GAO during the response to 

Hurricane Katrina that there was not always a clear understanding amongst the different agencies involved who is actually 

responsible for what. What kinds of problems did this lead to on 

the ground and I assume there is at least some discussion of agency responsibilities during a disaster and a National Response Plan. 

Does that document need to be changed in your view in some way 

so we have more clarity in this area? 

Mr. WOODS. Well, I think across a broad range of issues we’re 

going to have to look at the national response plan and to see 

whether it’s adequate to address the many issues that we’ve identified. But if you’re asking me for a specific instance and I would 

elude to one of the examples highlighted in my written statement 

that I haven’t touched on yet and that is, the renovation of the barracks in Alabama where there was a total lack of communication 

between the FEMA officials in Washington who said let’s renovate 

those barracks and the local FEMA officials who said, ‘‘Hold off, we 

don’t need it. That’s going to be a waste of money.’’ And it ended 

up that there were very few people who agreed to live in those renovated barracks and at the time they made the decision to close 

them there were only six people there. 

Senator CARPER. Alright, thank you. 

Senator COBURN. Senator Vitter. 

Senator VITTER. Thank you, Mr. Chairman. Thank all of you for 

being here. Representative Scalise, thanks very much for your presentation. Just caught by one specific thing in your presentation I 

would like for you to quickly expound upon and that is the fact 

that in the present debris removal situation there really is no incentive to recycle recyclable material and actually save money in 

the process. Why don’t you hit on that for a second. 

Mr. SCALISE. Thank you. It’s a good point because right now 

we’re dealing with of course, we’ve had tons and tons, millions of 

tons of debris that have been deposited into local landfills. Because 

of Hurricane Katrina they’ve reopened some and it’s a big NIVE 

issue. We have a limited space to place the debris and yet a lot of 

the recyclers, a lot of the debris haulers are carrying recyclable materials, steel, metal, even wood. I heard a story of a contractor that 

had a cypress stump that could have gotten a few thousand dollars 

on the market yet the way the policy works if they don’t just go 

and haul it to the main site and they actually take the time and 

separate that material and take a separate trip to go somewhere 

where it’s recyclable material, they have to turn over 100 percent 

of that money back over to FEMA. 

So it cost them money to separate the materials. It would reduce 

the load that they’re actually dumping in the landfills so it would 

reduce the cost that you are paying as the Federal Government and 

yet because of the structure there is not only a disincentive for 

41

them to do it, but it would save money because if this was competitively bid they could factor that in, the fact that they could recycle. 

If that would not be remitted back to FEMA, they could build that 

savings into their price, charge a lower costs, they’ll be putting less 

amount of debris in the landfills and then you get to recycle a lot 

of this material that’s right now sitting in landfills being dumped. 

So it’s a big issue and a big problem and as we run out of landfill 

space it only adds to that problem. 

Senator VITTER. Thank you. Mr. Cohoon, I wonder if you could 

outline a little bit more of your alternative model for the way we 

approach this work in general in terms of the structure of the contracting method? 

Mr. COHOON. Certainly, I’d love to. Basically it’s the same thing 

the Subcommittee has been talking about earlier today, a program 

manager. I don’t care if it’s the Corps of Engineers or one of these 

multi-national companies that are in here doing this stuff right 

now. The way it’s working right now is an absolute travesty. When 

you have $500 million ceiling and they’re trying to bump against 

it and folks down below are being driven down. What we would recommend is that this guy be a CM, a manager if you will, to oversee 

subcontracts but rather than a vertical structured subcontract 

method which ends up hurting the very people we’re trying to help 

make all of them horizontal, publicly bid them which has the affect 

of driving down the costs to the taxpayers but also opening up competition for Louisiana companies and for that matter others. We 

can compete. 

Senator VITTER. Thank you. And President Davis, I really think 

the case of your parish with regard to debris removal gets to the 

core of this issue. Did you all take care of all of your needs within 

the parish with your pre-existing local contract? 

Mr. DAVIS. No, the problem was the debris in canals and drainage ways was not in the original bid package so then we had to 

go back to FEMA and we’re in that process now of bidding those. 

Senator VITTER. Apart from canals and drainage ways was the 

capacity that your pre-existing local contract offered enough to get 

the job done in the parish? 

Mr. DAVIS. Yes sir. And we didn’t pay every year. 

Senator VITTER. Right. And so in the case of your parish, and 

there was huge amounts of debris in your parish, you met your capacity need basically locally? 

Mr. DAVIS. Yes, sir. I didn’t understand that when they were 

making recommendations I guess—I don’t know why FEMA and 

others don’t deal directly with parishes or counties chief executive 

officers. As you had stated elegantly earlier, we know the lay of the 

land, we publicly bid everything and I told that to the President 

of the United States in private meetings. I’ll personally be responsible, send your auditing team with us, don’t send all the other 

stuff that we have to deal with. I’ve requested $1 billion for my 

parish and I thought I could get everything done. 

Senator VITTER. In the case of your debris removal are you going 

to be stuck with the 10 percent bill for that period of time before 

they changed the policy? 

Mr. DAVIS. If I don’t get it done by June. Again, the local guy, 

the pressure is on him to complete the project. 

42

Senator VITTER. But what about on the front end? In other 

words, they took a while until they changed that 10 percent match 

policy. Are you being forgiven that initial 10 percent? 

Mr. DAVIS. Yes, because I personally—And parish government 

didn’t use the Corps of Engineers. So I didn’t have that requirement. But I have about seven municipalities and five or six of them 

came to me and wanted me to help them get out of that contract. 

Senator VITTER. And the final question real quickly, am I to understand that there was a meeting at some point where the Federal 

agencies really pushed hard for you to abandon your pre-existing 

contract which ended up saving a lot of money and go with the 

Federal Government capability which by the way makes the Corps 

of Engineers money? 

Mr. DAVIS. Yes sir. And that was a very uncomfortable situation. 

I almost think that if that was to happen to any elected official you 

would want your legal department with you. I put them in two different rooms. We had publicly bid our contract. That’s the numbers 

I have given you which I will submit as back up documents. Then 

FEMA came in with the Corps and they said we’re not supposed 

to do this, but the Corps’ with us and we’ll let the Corps explain 

to you the process and they happened to have, if I may, the name 

was Cirus I believe, was the national contractor. They were in the 

other room and I said we already have our contract. And they said, 

‘‘Yes, but we can hire your local guys if you’ll just give the contract 

to the Corps and I said I think we’re getting into an area that’s 

very gray and I don’t want to be there.’’

Senator VITTER. Thank you very much. 

Senator COBURN. Senator Landrieu. 

Senator LANDRIEU. Thank you. President Davis, I just want to 

thank you for your steady leadership and your responsible management from the earliest days. We worked very closely with you as 

you have worked with all of our delegation and you’ve been admirably with your dealings with your parish and I think you’ve set 

a fine example. 

I want to pursue a bit about this canal debris and waterway 

clean up because you have obviously done a good job getting the 

debris off your roads and your land. So for the record speak again 

about what some of these complications are and for the senators 

not from our area and I think both of you, not maybe so much from 

Oklahoma, Senator Coburn, but surely the Senator from Delaware 

understands waterways, water management, canals——

Senator COBURN. Hey, we have waterways, come on now. 

Senator LANDRIEU. You have some in Oklahoma, you got a few 

but maybe not as many as we have on the coast. But managing to 

keep those waterways open and clear of debris is absolutely critical 

for safety of the residents but also, Mr. Chairman, for the businesses. Our shrimpers need to get back into that water. Their nets. 

I mean, I don’t have to explain all of this, but tell us for the record, 

Mr. Davis, just a minute more about how the overlapping of Federal agencies are hindering your ability to get those waterways 

cleared and we don’t even know how much debris is there but we’re 

estimating quite a bit. 

Mr. DAVIS. We’re estimating about $60 million worth. At this 

point. I think—I get confused sometimes, we’ve been through 7 

43

months of this, but I think it all goes back to the Stafford Act that 

creates a problem because that’s where we get into this different 

agency and my understanding is, and I’m no expert, I’m just going 

by all these months of working with it, we have the NRCS who I 

want to tell you, and the Department of Agriculture, let them run 

this. Those folks have been super; NRCS, great; EPA, great; National Guard. Where we get into this conflict of these bayous and 

canals is, is it commercial, navigatable waterways because then 

FEMA says because of the Stafford Act another agency is tasked 

to do that. That would be the Coast Guard. But then you also have 

the Corps of Engineers; then we have NRCS who whenever I go to 

them they say, yes sir, we’re going to take care of that. They have 

been great work. All of the other agencies can’t figure out if it really is their responsibility. 

Senator LANDRIEU. So what your testimony is today for our 

panel, there seems to be some confusion about the jurisdiction of 

these canals based on the nature of what they are and if we can 

help you get this cleared up because your parish is very typical of 

many parishes in Louisiana that lie low have a lot of waterways 

in and around and surrounding them. 

One final question, Mr. Woods. You testified that you thought it 

wasn’t necessarily the failing of the act or the law itself, but the 

management or lack of management therein that you have been 

finding as you investigate or look into. Would you elaborate on 

that? Did I misunderstand what you said because that’s an issue 

I think this Subcommittee needs to look at. Being one thing, the 

law being insufficient or inadequate and the other is the law is 

fine, but the management is really short. 

Mr. WOODS. I’m glad you gave me the opportunity to clarify. 

When I said that perhaps the law was sufficient in this area I’m 

referring to just in Federal contracting law and there we found 

that both the laws and the regulations provided sufficient flexibility for agencies to do the right thing. 

Senator LANDRIEU. But it’s not being used? 

Mr. WOODS. It was not being used appropriately. The existing 

law and existing regulations were not being used appropriately in 

many cases. But there’s no question that the Stafford Act, the law 

generally that governs the Federal response in these areas is going 

to have to be looked at across a broad range of activities. My comment just referred to the contracting area that the Stafford Act 

really does not deal with. That’s not a primary piece of legislation 

in the contracting area. 

Senator LANDRIEU. Thank you. 

Senator COBURN. Representative Jindal. 

Mr. JINDAL. I promised the Chairman I’ll be quick so I’ll make 

two quick statements and ask to very targeted questions. Mr. 

Scalise, I want to thank you for your testimony and I think your 

suggestion are exactly right. If we went to residents and said you 

have a choice of getting a trailer or you can have this much money 

to spend on your behalf, I imagine they would be much more efficient at buying trailers, fixing their homes, renting apartments. I 

thank you for your very specific and helpful suggestions. 

Mr. Woods, I also want to thank you for being here. The comment that struck me the most out of the many good things you said 

44

was that you can’t legislate common sense. That some of these 

come down to management issues and I know we have many bills 

that we need to vote on and amend the Stafford Act and at the end 

of the day we need better execution and I thank you for that perspective. 

Mr. Cohoon,, I’ve got a very quick question. I know one of the 

perceptions is that the government felt like it had to go to these 

large primary contractors. I believe they did a disservice to Louisiana contractors given their experience of handling large, industrial and other contracts even pre-Katrina. You may have heard 

FEMA talk about instead of doing $500 million no bid contracts, 

doing $150 million contracts. If you have the number at this time, 

in your mind what would be an ideal target number for the government to say we’re going to try to break down the contracts to be 

no larger than this number to allow more competitive bidding. 

What would that number be that would allow local contractors to 

participate? 

Mr. COHOON. Congressman Jindal, from my perspective if you’re 

utilizing the services of a program manager, whether it’s $500 million or $150 million or for that matter $20 million, it’s irrelevant 

to me. What you’ve got to do is you’ve got to drive it down to the 

local level. Such as Mr. Davis said and you’ve got to bid it. 

Mr. JINDAL. Thank you. And again I want to just reiterate we do 

have local contractors capable of doing very large projects. They 

built multi billion dollar plants. They’re capable of doing this work. 

Mr. Davis, my last question of the day is for you and I’ll ask you 

to be brief for the sake of the time of the panel. Thank you for the 

great work you’ve done. I know we worked hard to make sure you 

could use local contractors. We’ve worked hard on the waterways 

issue. My question is for you just to quickly—St. Tammany in 

terms of pre-contracting out some of this work versus what the 

Federal Government does is a great example. It’s a contrast of 

black and white about how it should have been done and how it 

could have been done. Could you just quickly tell the panel what 

you all did even before the storms to get ready? 

Mr. DAVIS. From the debris standpoint? 

Mr. JINDAL. Yes. 

Mr. DAVIS. As I heard someone say earlier wherever you live you 

are accustomed to some disasters that are pretty much going to 

happen and we know hurricanes. So when I took my administration 5 years ago we pre-bid everything. Publicly bid, as the gentleman said earlier. We advertised the bid and then the low bidder 

is awarded that. Then when a storm comes in the Gulf we go into 

emergency operations and at a certain latitude we call our contractors and we bring them in prior to the storm. So we can look at 

what their deployment abilities are going to be able to function for 

us and everything else and they’re on standby. Then the storm 

comes through, they come meet with us within 24 hours because 

all that’s in the bid and then we go out and start clearing roadways. 

Mr. JINDAL. Thank you, Mr. Chairman. 

Senator COBURN. Let me thank each of you for spending the time 

here before us today. We will be submitting some additional quesVerDate 0ct 09 2002 08:26 Jan 22, 2007 Jkt 028237 PO 00000 Frm 00048 Fmt 6633 Sfmt 6601 C:\DOCS\28237.TXT SAFFAIRS PsN: PAT
45

tions if you will be so kind to respond to those within 2 weeks. The 

Subcommittee hearing is adjourned. 

[Whereupon, at 1:47 p.m., the Subcommittee was adjourned.] 

(47)

A P P E N D I X 


28237.001
48


28237.002
49


28237.003
50


28237.004
51


28237.005
52


28237.006
53


28237.007
54


28237.008
55


28237.009
56


28237.010
57


28237.011
58


28237.012
59


28237.013
60


28237.014
61


28237.015
62


28237.016
63


28237.017
64


28237.018
65


28237.019
66


28237.020
67


28237.021
68


28237.022
69


28237.023
70


28237.024
71


28237.025
72


28237.026
73


28237.027
74


28237.028
75


28237.029
76


28237.030
77


28237.031
78


28237.032
79


28237.033
80


28237.034
81


28237.035
82


28237.036
83


28237.037
84


28237.038
85


28237.039
86


28237.040
87


28237.041
88


28237.042
89


28237.043
90


28237.044
91


28237.045
92


28237.046
93


28237.047
94


28237.048
95


28237.049
96


28237.050
97


28237.051
98


28237.052
99


28237.053
100


28237.054
101


28237.055
102


28237.056
103


28237.057
104


28237.058
105


28237.059
106


28237.060
107


28237.061
108


28237.062
109


28237.063
110


28237.064
111


28237.065
112


28237.066
113


28237.067
114


28237.068
115


28237.069
116


28237.070
117


28237.071
118


28237.072
119


28237.073
120


28237.074
121


28237.075
122


28237.076
123


28237.077
124


28237.078
125


28237.079
126


28237.080
127


28237.081
128


28237.082
129


28237.083
130


28237.084
131


28237.085
132


28237.086
133


28237.087
134


28237.088
135


28237.089
136


28237.090
137


28237.091
138


28237.092
139


28237.093
140


28237.094
141


28237.095
142


28237.096
143


28237.097
144


28237.098
145


28237.099
146


28237.100
147


28237.101
148


28237.102
149

Æ


28237.103