Department of Homeland Security 

Office of Inspector General 

Improvements Needed in FEMA's 
 

Disaster Contract Management
 


OIG-10-53 February 2010 
Office of Inspector General 

U.S. Department of Homeland Security

 Washington, DC 25028 

 February 3, 2010 

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was 

established by the Homeland Security Act of 2002 (Public Law 107-296) by amendment 

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and 

special reports published as part of our oversight responsibilities to promote economy, 

effectiveness, and efficiency within the department. 

This report addresses the strengths and weaknesses of the Federal Emergency Management 

Agency’s (FEMA) disaster contract management. We contracted with the independent 

public accounting firm of Foxx & Company to perform the audit. The contract required 

that Foxx & Company perform its audit according to generally accepted government 

auditing standards. Foxx & Company identified five areas where FEMA’s disaster contract 

management should be improved. The report contains two recommendations addressed to 

the Administrator of FEMA, and three recommendations addressed to the Director, 

Acquisition Management Division. 

Foxx & Company is responsible for the attached auditor’s report dated January 15, 2010, 

and the conclusions expressed in the report. 

The recommendations herein have been developed with the best knowledge available to 

our contractor. We trust that this report will result in more effective, efficient, and 

economical operations. We express our appreciation to all who contributed to the 

preparation of this report. 

Richard L. Skinner 
 

Inspector General 
 
January 22, 2010 

Mr. Matt Jadacki 

Deputy Inspector General for Office of Emergency Management Oversight 

Office of Inspector General 

Department of Homeland Security 

245 Murray Drive, SW, Building 410 

Washington, DC 20528 

Dear Mr. Jadacki: 

Foxx & Company performed an audit of Selected FY 2008 Federal Emergency 

Management Agency (FEMA) Disaster Contracts. The audit was performed according to 

Task Order No. TPDFIGBPA070007, dated December 11, 2008. 

This report presents the results of the audit and includes recommendations to help 

improve the FEMA’s Acquisition Management Division’s management and oversight of 

disaster contracting. 

Our audit was conducted according to applicable Government Auditing Standards, July 

2007 revision. The audit was a performance audit as defined by Chapter 1 of the 

Standards, and included a review and report of program activities with a compliance 

element. We did not perform a financial audit, the purpose of which would be to render 

an opinion on the agency’s financial statements. 

We appreciate the opportunity to have conducted this audit. Should you have any 

questions, or if we can be of any further assistance, please call me at (513) 639-8843. 

Sincerely, 

Foxx & Company 

Martin W. O’Neill 

Partner 
Table of Contents/Abbreviations 
 

Executive Summary.............................................................................................................1
 


Background..........................................................................................................................2
 


Results of Audit ...................................................................................................................5
 


Acquired Goods and Services........................................................................................5 
 

Recommendation .........................................................................................................10 
 

Management Comments and Contractor Analysis ......................................................10 
 

Costs Incurred for Acquisitions ...................................................................................12 
 

Recommendation .........................................................................................................16 
 

Management Comments and Contractor Analysis ......................................................16 
 

Improvements Needed in Pre-planning and Pre-positioning of Contracts ..................19 
 

Recommendation .........................................................................................................23 
 

Management Comments and Contractor Analysis ......................................................23 
 

Improvements Needed in Contract Management ........................................................24 
 

Recommendation .........................................................................................................28 
 

Management Comments and Contractor Analysis ......................................................28 
 

Establishing a Joint Field Office..................................................................................29 
 

Recommendation .........................................................................................................37 
 

Management Comments and Contractor Analysis ......................................................37 
 

Appendices 

Appendix A: Purpose, Scope, and Methodology.......................................................39 
 

Appendix B: Management Comments on the Draft Report ......................................41 
 

Appendix C: List of Related Reports and Testimonies .............................................45 
 

Appendix D: FEMA Organization Chart...................................................................47 
 

Appendix E: Report Distribution ..............................................................................48 
 

Abbreviations 

AMD FEMA Acquisition Management Division 
 

DHS Department of Homeland Security 
 

FAR Federal Acquisition Regulation 
 

FEMA Federal Emergency Management Agency 
 

GAO Government Accountability Office 
 

GPE Government Point of Entry 
 

GSA General Services Administration 
 

HHS Department of Health and Human Services 
 
Table of Contents/Abbreviations 
 

IA-TAC Individual Assistance-Technical Assistance Contract 

JFO Joint Field Office 

MLS Multiple Listing Service 

NRF National Response Framework 

OIG Office of Inspector General 

SOP Standard Operating Procedure 
OIG
 


Department of Homeland Security 

Office of Inspector General 

Executive Summary 

Foxx & Company audited a selected sample of the Federal Emergency 

Management Agency’s Acquisition Management Division fiscal year 

2008 disaster contracts. The audit objectives were to assess FEMA’s 

management of the contracts; safeguards used against fraud, waste, and 

abuse; communications and coordination within FEMA and with other 

federal agencies and states regarding disaster contracts; and the extent to 

which contracting polices and procedures were followed. 

More than half of the 49 contracts reviewed had one or more of the 

following five issues: 

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Goods and services purchased were either not needed or 
 

significantly underutilized; 
 

Funds were expended on questionable acquisitions; 

Additional advanced planning or establishment of pre-positioned 

contracts for recurring disaster goods was needed; 

Acquisition decisions were not adequately documented; and 

Monitoring of contractor performance needs improvement. 

In addition, questionable decisions in establishing a Joint Field Office 

resulted in excessive expenditures of federal funds and risked the health 

and safety of the employees. 

As a result of these issues, FEMA did not always provide the most costeffective solution through contract support for disaster relief. We are 

making five recommendations that will improve contract management 

and decrease the risk of fraud, waste, and abuse. 

FEMA recognizes some of these problems and is taking corrective 

actions. 

FEMA’s response to our recommendations is summarized and evaluated 

in the body of this report and included in its entirety as Appendix B. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 1 

Background 

State and local government agencies and organizations act as first 

responders to emergencies (natural and manmade). When state 

and local governments become overwhelmed by the size or scope 

of a disaster, state officials may request assistance from the federal 

government. President Carter issued Executive Order 12127 in 

March 1979, which merged many separate disaster-related federal 

functions into the Federal Emergency Management Agency 

(FEMA). Following the terrorist attacks of September 11, 2001, 

the Homeland Security Act of 2002 (Public Law 107-296) 

transferred FEMA to the newly formed Department of Homeland 

Security (DHS). 

In FY 2004, FEMA spent almost $1 billion for goods and services. 

Spending rose to almost $5 billion in FY 2005 and to more than $7 

billion in FY 2006. Most of the increase in these 2 years was 

attributable to the response to the 2005 Gulf Coast hurricanes. By 

FY 2007, FEMA’s overall spending had fallen to about $1.5 

billion; for FY 2008, it was $1.8 billion (see Figure 1).the 

Figure 1: FEMA’s FY 2004–2008 Acquisition Spending 

FEMA’s Acquisition Spending 

0

2

4

6

$8

2004 2005 2006 2007 2008

Billions 

of 

Dollars 

Fiscal Year 

Source: Federal Procurement Data System—Next Generation Data 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 2 

 

To meet urgent needs in past disasters, FEMA’s tendency has been 

to acquire goods and services quickly, but with insufficient 

attention to costs, definition of requirements, and competition. 

Reports issued by Congress, the White House, Office of Inspector 

General (OIG), and the Government Accountability Office (GAO), 

among others, identified issues, including contracting deficiencies, 

that have marred FEMA’s response capabilities (see Appendix C). 

With so much spending, it is imperative that acquisition officials 

take the steps necessary to ensure successful disaster contracting 

outcomes. Recent audits have identified deficiencies, as well as 

opportunities for improvement, in many aspects of FEMA’s 

disaster acquisition process.1 

This extensive body of work by the OIG and GAO has reported the 

following disaster assistance issues: 

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FEMA could have reduced response costs for Hurricane Ike 

by as much as $18 million by consistently applying 

National Response Framework (NRF) principles. 

Fraudsters can bypass FEMA’s current controls to obtain 

housing assistance and receive duplicate payments for 

bogus hotel expenses. 

Contract documentation does not always explain the 

reasons goods or services were acquired, provide evidence 

of competition, or document contractor performance. 

FEMA’s disaster acquisition process needs additional 

safeguards to protect assets and prevent and detect errors in 

the process. 

DHS acquisition did not have the capacity to monitor 

contractor performance due to limited expertise and 

workload demands. 

FEMA’s role in assisting disaster survivors is challenging. It 

requires balancing the need to quickly provide goods and services 

to those affected while maintaining public confidence that FEMA 

is spending taxpayers’ money wisely and preventing fraud, waste, 

and abuse. FEMA’s acquisition policies and procedures, the NRF, 

and other disaster response manuals provide guidance on the 

sourcing process. However, this guidance is sometimes shortcircuited when officials, such as political appointees or elected 

representatives of the disaster area, use their influence to ensure 

1

 For a list of related audits, see Appendix C. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 3 
 

that goods and services are provided. While often well-meaning, 

this pressure can result in waste when the goods or services are not 

needed and can be disruptive to the sourcing process.2 

Disaster response activities require close coordination and 

cooperation among all levels of government, nonprofit 

organizations, the private sector, and individuals. The NRF 

defines key principles, roles, and structures of participants who 

respond to incidents to ensure a coordinated, effective national 

response. FEMA acquisition officials must respond quickly to 

acquire goods and services to assist survivors, but they must do so 

while complying with Federal Acquisition Regulation (FAR) 

requirements and utilizing their emergency responder partners as 

outlined in the NRF. 

The Office of Federal Procurement Policy’s Emergency 

Acquisitions Guide identifies the importance of clearly defining 

roles and responsibilities among the various functions that support 

emergency operations in order to ensure timely and effective 

decisionmaking.3 

For this audit, DHS OIG contracted with Foxx & Company to 

evaluate the effectiveness of FEMA’s disaster contract 

management. The audit objectives were to assess: 

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FEMA’s ability to track, manage, and monitor disaster 

contracts; 

What safeguards were included to reduce, deter, and detect 

fraud, waste, and abuse; 

The level of communication and coordination within 

FEMA and with other federal agencies and states regarding 

disaster contracts; and 

The extent to which processes and controls have not been 

followed and the impact on the delivery of goods and 

services. 

We reviewed 49 FY 2008 disaster contracts for compliance with 

the FAR and with supporting and pertinent Acquisition 

Management Division (AMD) policies and procedures.4 

2

 DHS OIG: FEMA’s Sourcing for Disaster Response Goods and Services, OIG-09-96, August 2009. 

3 Office of Management and Budget, Office of Federal Procurement Policy: Emergency Acquisitions 

Guide, May 2007. 4 We had 50 contracts in our sample, but FEMA could not locate one of the contracts. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 4 
Results of Audit 
 

FEMA’s decisionmaking for awarding, managing, and monitoring 

disaster contracts needs improvement. FEMA contracted for 

goods and services that were not needed or were underutilized and 

purchased several categories of items that it had not typically 

purchased in the past. 

Also, a better strategy is needed for planning and providing prepositioned contracts for required commodities of a recurring nature 

and for multiple disasters. 

Several of the contracts reviewed were not in compliance with the 

FAR or AMD contracting policies and procedures for emergency 

acquisitions. Several contracts had significant increases in the 

funds obligated and expended after negotiation of the initial 

contract amounts. 

There was questionable decisionmaking in establishing the Joint 

Field Office (JFO) in Brentwood, Tennessee, resulting in excessive 

expenditures of federal funds and subjecting JFO employees to 

potentially unsafe and unhealthy working conditions. The 

decisions made in selecting and setting up this JFO exemplify the 

problems with FEMA acquisitions and the need for improvements. 

FEMA contracting officials generally agreed that improvements 

are needed in FEMA’s management and administration of disaster 

contracts. Actions are ongoing to correct deficiencies and improve 

compliance with the FAR and FEMA’s policies and procedures. 

FEMA provided written comments on the draft report (see Appendix B). 

FEMA concurred with three of the five recommendations in this report 

and provided corrective actions taken in response to our 

recommendations We have included our analysis to FEMA’s response to 

the two recommendations which they disagreed with in the appropriate 

sections in the report. In addition, FEMA provided additional clarifying 

comments which we have addressed and incorporated in the report as 

appropriate. 

Acquired Goods and Services 

FEMA did not always follow proper procedures or appropriately 

estimate the required goods and services for disasters. As a result, 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 5 
goods and services were acquired that were either not needed or 

were significantly underutilized, wasting taxpayer dollars. 

Contracting specialists need to work closely with program and 

project managers in their agency who may be called on during an 

emergency. They should also work with other personnel who 

support the acquisition process—including information technology 

specialists, financial management officials, logistics personnel, and 

legal counsel—to develop a common and coordinated 

understanding of how to meet the government’s needs during an 

emergency. Working together, these personnel can review 

historical data to identify the products and services that the agency 

has been called on to provide during past emergencies. If FEMA 

officials had taken such steps, the following problems might have 

been avoided.5 

Mobile Medical Units 

After Hurricane Ike made landfall, Galveston Island was without 

functioning medical facilities and the state requested that FEMA 

acquire mobile medical units. Under the NRF, medical needs are 

the primary responsibility of the Department of Health and Human 

Services (HHS). FEMA worked with HHS to acquire the 

requested units, which were to be supported by local medical staff. 

FEMA leased and sent to the island two mobile surgery units and 

one mobile recovery unit for 60 days at a contract cost of $1 

million. However, the units were never used. In addition, 

according to the HHS contracting office technical representative, 

the state university hospital and health services did not have the 

staff to support the units, and much of the population had access to 

other facilities on the mainland. The contract file did not 

document why this information was not available prior to the 

contract being awarded. After 30 days, the state determined that 

the units were not going to be used. FEMA terminated the contract 

for the convenience of the government at a cost of $470,000. The 

contracting officer told us that this was an example of “jumping” 

on a request before FEMA was sure there was a need. While it is 

difficult to criticize a decision that might have saved lives, in the 

future FEMA should carefully consider all alternatives and assess 

whether there is a real need and personnel are available to operate 

the facilities before committing to such a costly acquisition. 

5 Office of Management and Budget, Office of Federal Procurement Policy: Emergency Acquisitions 

Guide, May 2007. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 6 
Figure 2: Mobile Medical Unit 

Source: FEMA photo library 

Base Camps 

FEMA contracted for two base camps in Texas to house and feed 

emergency personnel after Hurricane Ike, which did not operate 

near capacity. The first base camp, at Scholes Airport, was 

contracted at the request of JFO leadership. The second base 

camp, at Orange County Airport, was requested by DHS 

headquarters senior leadership, over the objections of the JFO 

leadership. The initial task orders were for $4.7 million and $4 

million for each base camp, respectively, to operate for 30 days. 

Each base camp was to house 500 occupants and provide 1,500 

meals per day. For the first 30 days, there was an average of 310 

occupants and 632 meals served for the first camp, and only 236 

occupants and 320 meals served for the second camp. 

Figure 3: Base Camp 

Source: FEMA photo library 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 7 
 

According to FEMA, once the base camps were activated there 

was no way to change the size of the base camps or meals to meet 

actual needs. In spite of the underutilization, FEMA extended the 

duration of both base camps for more than 30 days, adding $4.4 

million and $4.1 million, respectively, to each task order. 

However, FEMA did not need to extend both base camps beyond 

the first 30 days when one base camp could have handled the 

actual occupancy for both camps. Thus, FEMA could have 

avoided spending more than $4 million by consolidating its 

requirements into one base camp. 

In addition, there were two significant issues associated with the 

base camps that indicate FEMA was not properly managing 

contracts: 

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JFO and other nonauthorized FEMA staff, who were 

receiving per diem to cover meals and incidentals, were 

using the base camps to obtain free meals and services. 

One onsite technical representative did not always stay at 

the base camp but signed the daily logs as though he were 

there. Another technical representative did not sign any of 

the daily logs.6 

Underutilization of base camps and wasted taxpayer dollars has 

been an issue for some time. GAO reported in March 2006 that 

better management of requirements development could have 

avoided costs to house workers and survivors after Hurricanes 

Katrina and Rita. Based on information provided by local 

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

were never used.7

 Two months later, GAO issued testimony 

identifying practices in the public and private sectors that can help 

federal agencies better manage their disaster-related procurements. 

These practices included establishing a scalable operations plan to 

adjust the level of capacity required to respond to needs.8 

A 2009 OIG report also cited the problem of base camp capacity 

exceeding demand. This report stated that, against the advice of 

FEMA’s emergency managers at the disaster site’s JFO, a DHS 

6

 Daily logs document the base camp occupancy and meal and laundry counts. 
 

7

GAO Briefing: Agency Management of Contractors Responding to Hurricanes Katrina and Rita, GAO­


06-461R, March 2006.
 
 8

GAO Testimony: Hurricane Katrina: Improving Federal Contracting Practices in Disaster Recovery
 


Operations, GAO-06-714T, May 4, 2006. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 8 
headquarters official ordered a 500-person base camp (the Orange 

County Airport base camp discussed above) for a location only 30 

miles from an existing 2,000-person base camp. This report found 

that FEMA incurred about $5 million in costs to open and operate 

the second camp.9 

To improve base camp planning and acquisitions, in May 2009, 

FEMA implemented a Concept of Operations for FEMA 

Responder Support Camps that will enable FEMA to better size 

base camps to meet actual needs, versus being locked into initial 

estimates of quantity and duration. 

Mobile Sleeper Units 

Another contract was authorized to provide mobile sleeper units 

for a period not to exceed 30 days. The state requested the mobile 

sleepers to provide accommodations for first responders and 

volunteers. However, the manager of the base camp determined 

that the sleepers were not needed, and they were never set up. As 

discussed above, there was significant excess capacity at the two 

base camps in the vicinity, which FEMA should have been aware 

of, negating the need for the mobile sleepers. FEMA terminated 

the contract for the mobile sleeper units for the government’s 

convenience, incurring an expense of more than $637,000. This 

expense could have been avoided had there been better planning, 

communications, and coordination. 

Conclusion 

FEMA did not always follow proper procedures or appropriately 

estimate the goods and services needed for disasters. As a result, 

FEMA contracted for goods and services that exceeded the 

disasters’ needs and for goods and services not used at all. In 

response to pressure from internal and external officials, FEMA 

officials made decisions that were not necessarily based on actual 

need or a request from the affected state, including mobile 

sleepers, hospital units, or base camp contracts. Because of these 

decisions, the most cost-effective acquisition of goods and services 

was not achieved, and FEMA expended millions for goods and 

services that were never used. 

9

 DHS OIG: Management Advisory Report: FEMA’s Response to Hurricane Ike, OIG-09-78, June 2009. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 9 

Recommendation 

We recommend that the Administrator of FEMA: 

Recommendation #1: Adhere to the National Response 

Framework principles by clarifying the authority of federal, state, 

local, and regional emergency managers and ensure, to the extent 

possible, that acquisitions are based on accurate estimates of needs. 

Management Comments and Contractor Analysis 

FEMA concurs with this recommendation. FEMA will review 

existing processes and procedures to facilitate better coordination 

with the above mentioned officials. 

Contractor Analysis: We consider FEMA’s planned action to 

review existing processes and procedures to facilitate better 

coordination and adherence to the National Response Framework, 

responsive to the recommendation. Therefore, the 

recommendation is resolved and open pending FEMA’s successful 

coordination efforts, which the OIG will continue to monitor. 

Within their comments to the draft report, FEMA disagreed with a 

specific example cited in the report which stated that FEMA could 

have avoided spending over $4 million by consolidating its base 

camp requirements from two 500 person base camps into one 500 

person base camp. FEMA cited that during the first 30 days of use 

the two 500 person camps averaged 310 and 236 occupants and 

thus this total of 546 could not have been housed at one 500 person 

camp. FEMA also stated that the two camps were established in 

two different, geographically distinct, Texas counties in order to 

best meet the needs of the responders. 

We disagree with FEMA’s objection to consolidating the two base 

camps mentioned in the report. Our report stated that “FEMA did 

not need to extend both base camps beyond the first thirty days 

when one base camp would have more than handled the actual 

occupancy at both camps.” This is based on the fact that at the end 

of the first 30 days, the average occupancies dropped to 197 and 

158 occupants, respectively, for a total of 355 persons. The 355 

persons could have been housed at one 500 person base camp. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 10 

In addition, FEMA stated that the two 500 person base camps were 

in two different, geographically distant counties. One was located 

at the Scholes International Airport in Galveston, Texas. The other 

facility was at the Orange County Airport near Beaumont, Texas. 

While these two camps are over 100 miles away from each other, 

the Orange County base camp was within 25 miles of a third, 2,000 

person base camp already operating in Beaumont, Texas. This 

Beaumont base camp could have accommodated the 158 occupants 

who remained after the first 30 days at the Orange County Airport 

base camp. In fact, the FEMA Federal Coordinating Officer and 

Logistics Section Chief who were on site at the disaster had 

objected to even opening the Orange County Airport base camp 

since the Beaumont base camp was only 25 miles away. The field 

officials told us that they were overruled and ordered by a senior 

DHS headquarters official to open the Orange County Airport base 

camp. 

In its response, FEMA stated that it had implemented the Concept 

of Operations for FEMA Responder Support Camps in May 2009 

to improve base camp planning and acquisitions. This document 

introduced the concept of modular and scalable base camps and 

clarifies the process for defining the requirements for base camps. 

It appears that this document will address many of the problems 

which the OIG, GAO, and others have identified with base camps. 

However, the OIG will continue to monitor its implementation and 

effectiveness. 

Improvements Needed in FEMA’s Disaster Contract Management 


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Costs Incurred for Acquisitions 

Costs were incurred for goods and services of a questionable 

nature. FEMA officials were requested to purchase items typically 

provided by other organizations because these entities, or the state 

itself, did not have funding to purchase the items. 

According to FEMA’s response and recovery policy and 

procedures, first response to a disaster is the job of local 

government’s emergency services with help from nearby 

municipalities, the state, and volunteer agencies. In a disaster, and 

if the governor requests, federal resources can be mobilized 

through FEMA for search and rescue, electrical power, food, 

water, shelter, and other basic human needs. 

In July 2009, FEMA’s Administrator stated that organizations at 

every level of government, as well as those within the private and 

voluntary sectors, need to make investments of time and money to 

prepare for emergencies. In addition, the Nation’s citizens and 

families must recognize and embrace their own responsibilities to 

be prepared. FEMA reported in July 2009 that only half of 

Americans have put together an emergency kit and only 40% have 

created a family emergency plan. Every family should take the 

most basic preparedness actions, such as having sufficient water 

and nonperishable food to support the family for at least 72 hours. 

The public’s inadequate preparation pulls responders and critical 

resources away from those who truly need such assistance, both 

the casualties of the disaster and the most vulnerable populations, 

such as persons with disabilities and children.10 

10 Testimony of Craig Fugate, FEMA Administrator, before the House Committee on Transportation and 

Infrastructure, Subcommittee on Economic Development, Public Buildings and Emergency Management, 

Post-Katrina: What It Takes to Cut the Bureaucracy and Assure a More Rapid Response After a 

Catastrophic Disaster, July 27, 2009. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 12 
Figure 4: FEMA’s Recommended Emergency Supplies 

Source: FEMA photo library 

Response activities require close coordination and cooperation 

among all levels of government, nonprofit organizations, the 

private sector, and individuals. As reported earlier, the Nation’s 

disaster response playbook, the NRF, provides guidelines for first 

responders at all levels. Local, state, and federal emergency 

management professionals coordinate the disaster response. The 

NRF also recognizes that elected and appointed officials at all 

levels have significant roles and responsibilities in disaster 

response. FEMA could reduce costs by consistently applying NRF 

principles and redirecting political influence on operational 

decisions. 

Mobile Homes 

After Hurricane Ike devastated Galveston Island, a FEMA 

headquarters official instructed field office staff to award a 

contract to provide mobile homes and “to get it done at all costs.” 

The official instructed this to be done so local residents and the 

media would see mobile homes arriving in the disaster area one 

week sooner than would have occurred using the Individual 

Assistance-Technical Assistance Contract (IA-TAC) process for 

providing mobile homes. FEMA paid more than $1 million to haul 

and install 25 mobile homes for the disaster survivors. 

It should be noted that after the field officials acquiesced to the 

FEMA headquarters’ instructions, it was discovered that only five 

mobile homes were available to install at that time. Therefore, 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 13 
FEMA had to locate and transport the additional 20 homes to 

fulfill the demands of the headquarters official. Because FEMA 

was paying for expedited services, the price per mobile home 

exceeded the government’s independent cost estimate by 264%. 

Had FEMA used the IA-TAC contract process, mobile homes 

would have arrived in about 10 days and FEMA would have saved 

more than $700,000. 

FEMA officials provided us with information on the new IA-TAC 

contract process – IA-TAC III—that was awarded in May 2009. 

The officials said that the new IA-TAC contract will streamline the 

process of providing temporary housing units, enable FEMA to 

respond faster to the housing needs of survivors, and be more costefficient. The officials also stated that FEMA is in the process of 

developing playbooks for the FEMA regions so that the roles, 

responsibilities, and key contact points for utilities, medical, fire, 

police, and other services are known before a disaster, allowing the 

regions to react more efficiently. 

Apartment Leases 

In September 2008, FEMA awarded a task order for leasing 83 

apartments for FEMA staff deployed for Hurricane Ike in the 

Austin, Texas, area because disaster survivors were using local 

hotel rooms. The daily lease cost for each apartment was $175, or 

a monthly total of $5,250 per apartment. The current daily 

government rate for hotels is $107 per night in the Austin area, 

which equates to $3,210 per month. As of May 2009, FEMA 

employees were still using some of the apartments, even though 

hotel rooms were available. FEMA has no policy or process to 

assess employees’ housing at a disaster site to ensure that the least 

expensive option is used. FEMA officials believe that employees 

working long hours at disaster sites should have comfortable 

housing and not be made to relocate continuously. 

Other Purchases 

Two contracts totaling almost $300,000 provided for the purchase 

and delivery of baby and adult diapers, baby wash and shampoo, 

baby food, and female hygiene products to food banks in the Baton 

Rouge, Louisiana, area after Hurricane Gustav. The state did not 

have the resources to purchase the items and requested that FEMA 

purchase them. Normally FEMA does not purchase these types of 

items. The field contracting official questioned using federal funds 

for this purchase but was overruled by FEMA headquarters. This 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 14 
issue of purchasing items typically not funded by FEMA is not 

new. During the aftermath of Hurricane Katrina, a FEMA official 

said that state officials requested the purchase of $3 million of 

Pedialyte.11 He, too, questioned whether FEMA should purchase 

this, but he was directed to do so by FEMA headquarters officials. 

FEMA acquired the Pedialyte, but it was never used. When it 

expired, it was thrown out. 

Conclusion 

FEMA’s role in assisting disaster survivors is very challenging. It 

requires balancing the need to provide assistance to those affected 

by the disaster while maintaining public confidence that FEMA is 

spending money wisely and preventing fraud, waste, and abuse. 

FEMA could have reduced costs by consistently applying NRF 

principles on operational decisions, which should originate with, 

and be decided by, the local, state, and federal emergency 

managers on the ground. 

In addition, FEMA does not have policies and procedures to define 

what contracting officials may or may not purchase. Senior FEMA 

officials told us that they will buy or obtain anything a state or 

local government requests, as long as it is legal, and that 

Acquisition Management Division’s (AMD) responsibility is to 

acquire what is requested and not question the need. This attitude 

may result in FEMA’s purchase of items that local, state, and tribal 

governments, as well as charitable organizations, typically provide, 

as these entities view FEMA as the “deep pockets” after a disaster. 

If FEMA becomes the default purchaser in response to disasters, 

more and more questions may arise about FEMA purchasing 

decisions. 

In addition, due to the downturn in our Nation’s economy, many 

states and localities are likely to become even more financially 

strapped. For example, a recent National League of Cities survey 

reported that almost 90% of cities said they are less able to meet 

their financial needs in 2009 than they were the year before.12 

Thus, in future disasters more of a burden may fall on FEMA to 

11 Pedialyte is an oral electrolyte maintenance solution to replace fluids and electrolytes and help prevent 

dehydration in infants and children. 

12 National League of Cities: City Fiscal Conditions in 2009, September 2009. This report is based on a 

national survey of finance officers in U.S. cities conducted in the spring-summer of each year; 335 city 

finance officers responded to this recent survey. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 15 
provide resources that were once the responsibility of state and 

local governments and volunteer organizations. This state of 

affairs makes it more crucial for FEMA to better define and 

delineate its disaster response roles and responsibilities. 

Recommendation 

We recommend that the Director, Acquisition Management 

Division: 

Recommendation #2: 

�	 

�	 

�	 

Require the contracting officer to document in the contract 

file any purchase made when a recommendation by field 

staff not to make the purchase is overruled by a 

headquarters official. 

Develop after action reports for each major disaster that (1) 

identify goods and services purchased; (2) identify goods 

and services not needed or underutilized; and (3) discuss 

the justifications for such purchases. 

Develop criteria to assess employees’ housing at a disaster 

site at least twice a year to ensure that the most cost 

effective option is being used. 

Management Comments and Contractor Analysis 

FEMA non-concurs with the recommendation stated in our draft 

report, which was that FEMA develop criteria to define the 

commodities it may purchase for disaster response. FEMA stated 

in its response that it must have the flexibility to respond to unique 

requirements including possible limitations that some of its 

partners may experience due to resource shortfalls. FEMA added 

that it has the authority to purchase any type of commodity that is 

not unauthorized or otherwise illegal. Therefore, FEMA stated 

that defining the types of commodities that FEMA can purchase is 

considered redundant and unnecessary. FEMA also stated that the 

draft report indicated that FEMA made purchases that it normally 

did not buy, yet this is not the equivalent of stating that FEMA had 

no authority to make such purchases or that purchases were not 

appropriate under the circumstances. 

With respect to the housing aspect of the recommendation, FEMA 

stated that it houses employees during a disaster where it can and 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 16 
added that at no time did FEMA violate the housing per diem that 

was established. 

Contractor Analysis: The report did not intend to state or imply 

that FEMA had purchased any type of commodity that was not 

authorized or otherwise illegal. The report stated that FEMA 

officials made decisions that resulted in the Federal government 

incurring costs for goods and services that had not been purchased 

before or were questioned by FEMA field personnel. 

FEMA’s official position is to buy or obtain anything that is 

requested by a state or local government, without questioning the 

need, as long as it is legal. Thus, it is logical that FEMA would not 

see the need for preparing a list of commodities and or services 

that it may purchase. However, this policy has had the effect of 

FEMA becoming the nation’s “deep pockets” after a disaster. We 

found numerous examples where FEMA field officials questioned 

the justification for purchasing certain items. However, when 

objections were raised further up the chain of command, the people 

questioning the request were told to procure whatever was 

requested. 

We identified several examples where purchases were made, not 

because the purchases were actually needed, but because: 

�	 

�	 

�	 

FEMA “jumped” on a request before a need was 
 

established.
 

Pressure was exerted from internal and external officials. 

Officials wanted the local residents and media to see 

activity was occurring. 

We recognize that addressing the concept of what FEMA should or 

should not purchase after a disaster declaration is controversial and 

raises significant philosophical questions. As we stated in our 

report, FEMA is placed in a difficult position of balancing the need 

to provide assistance while maintaining the public trust that the 

taxpayer’s money is being spent wisely and with sound financial 

responsibility and accountability. However, it is imperative that 

FEMA carefully consider what is being purchased to ensure that it 

is a necessary expense and not a waste of taxpayer money. 

Our report documents financial problems facing our Nation’s 

cities. In addition, the National Association of State Budget 

Officers recently issued a report which stated that “States are 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 17 
 

currently facing one of the worst, if not the worst, fiscal periods 

since the Great Depression.”13 The report stated that the states’ 

fiscal year 2010 budget gap is almost $15 billion and could be as 

high as about $22 billion in 2011. Because cities and states are 

under so much financial pressure, FEMA is being called on to buy 

goods that commonly were provided to survivors by local and state 

governments. Given this bleak financial situation, FEMA must 

spend the taxpayer’s dollars wisely and where it is needed, not on 

the basis of political pressure. 

After considering FEMA’s comments to our draft report, we 

revised this recommendation to recommend that FEMA prepare 

after action reports that identify the costs and types of commodities 

and services purchased after each major disaster. At a minimum, 

these reports should identify the types of services or commodities 

purchased, total cost, and an assessment of services and 

commodities that were underutilized or not used at all. In time, 

these reports will provide an inventory of the magnitude and types 

of goods and services that FEMA is procuring and are needed and 

minimize the unnecessary and underutilized purchases identified in 

the reports. This information should also be shared among FEMA 

headquarters and field personnel for the development of lessons 

learned or best practices. 

We recognize that FEMA’s response for not wanting to develop 

criteria for what they will purchase is based on the premise that 

they will purchase anything that is legal and requested by a state or 

local entity. However, given the need for sound financial 

purchases and accountability, FEMA needs to identify patterns or 

types of products or services purchased and those that were not 

used or necessary. 

The requirement to document decisions by headquarters officials to 

overrule the recommendation by staff on site not to buy an item 

does not need to be an onerous or bureaucratic one, but, at a 

minimum, should include a memo that states who made the 

decision to overrule the decision in the field and why. This memo 

then should be placed in the contract file. 

Regarding whether FEMA should house employees in apartments 

or hotels, we did not intend to report or imply that FEMA violated 

housing per diem. We also understand that short term housing 

13 The National Association of State Budget Officers (NASBO) has served as the professional membership 

organization for state finance officers for more than sixty years. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 18 
such as hotels in the immediate disaster area are reserved for 

survivors and that FEMA had to acquire apartments at the time of 

the disaster – September 2008 – to house employees. Our report 

stated that employees were still using the higher price apartments 

in May 2009 even though less expensive hotel lodging was then 

available. Our finding and recommendation was for FEMA to 

develop criteria to assess employees’ housing options in the 

months subsequent to the initial disaster response to ensure that the 

most cost effective option is used and thus Federal funds are better 

spent. 

This recommendation is considered unresolved and open until 

FEMA develops and implements the after action reporting process, 

justification process for overruling FEMA field staff decisions, and 

the criteria to assess employees’ housing at a disaster site, and until 

the OIG reviews and accepts these processes and policies. 

Improvements Needed in Pre-planning and Pre-positioning 

of Contracts 

Improvements are needed to FEMA’s process of pre-planning and 

pre-positioning of contracts for necessary goods and services of a 

recurring nature. FEMA has not identified all needed prepositioned contracts for goods and services required for a disaster. 

Also, FEMA has not properly planned for access to suppliers who 

could provide cost-effective and efficient options for commodities 

needed in multiple disasters. 

According to FAR 26.203, in anticipation of potential emergency 

response requirements, agencies involved in response planning 

should consider awarding emergency response contracts before a 

major disaster or emergency occurs to ensure immediate response 

and relief. These contracts should be structured to respond to 

immediate emergency response needs, and should not be structured 

in any way that may inhibit the transition of emergency response 

work to local firms. 

The OIG issued guidance in October 2008 on managing disasterrelated project costs. This guide addressed how to (1) document 

and account for disaster-related costs, (2) minimize the loss of 

FEMA disaster assistance program funds, (3) maximize financial 

recovery, and (4) prevent fraud, waste, and abuse of disaster 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 19 

funds.14 In addition, GAO has recommended practices for better 

managing disaster procurements that include developing 

knowledge of contractor capabilities and prices by identifying 

commodities and services and establishing vendor relationships 

before they are needed.15 

As demonstrated by the following situations, FEMA’s prepositioned contracts were not adequate to handle disaster 

requirements. 

Self-help Tarps 

In our sample, four contracts were awarded to various vendors for 

self-help tarps. FEMA officials informed us that additional 

contracts were awarded at the same time to other vendors. The 

tarps, approximately 20 x 25 feet, are distributed to hurricane 

survivors to temporarily cover leaking roofs. Following 

Hurricanes Ike and Gustav, the supply of self-help tarps at 

FEMA’s distribution centers was quickly exhausted and FEMA’s 

contractor was unable to quickly provide more tarps. FEMA 

contracting officials located and purchased all available tarps from 

multiple sources. FEMA officials said they were successful in 

meeting the demand. However, we noted that tarps were 

purchased in different sizes and at different prices. There were 

also some delivery problems that increased costs. FEMA 

distribution facilities generally have enough self-help tarps to meet 

demand, but the two hurricanes occurring together caused a 

shortage. FEMA should consider a solution, such as prearranged 

sources or increased stocking levels, so it is prepared for multiple 

disasters in the future. 

Aerial Photography 

FEMA awarded Fugro EarthData a sole source contract to interpret 

aerial photographs and document the damage related to Hurricane 

Ike in coastal and low-lying areas in Texas (see Figure 5). The 

goal of the contract was to determine the inland extent of damage 

caused by storm-surge-induced flooding as well as the damage 

caused further inland by wind forces. The contract file 

documentation stated that the procurement was based on unusual 

and compelling urgency, and a sole source justification and 

14 DHS OIG: Audit Tips for Managing Disaster-Related Project Costs, October 2008. 15 GAO Testimony: Hurricane Katrina: Improving Federal Contracting Practices in Disaster Recovery 

Operations, GAO-06-714T, May 4, 2006. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 20 
approval was prepared and approved by the contracting officer and 

the Office of Chief Counsel. However, no controls were in place 

to ensure that a fair and reasonable price was obtained. The 

proposal in the contract file did not include cost or price details, 

such as labor rates, hours, indirect rates, or profit. 

Section 6.303-1(a) of the FAR states, “A contracting officer shall 

not commence negotiations for a sole source contract, commence 

negotiations for a contract resulting from an unsolicited proposal, 

or award any other contract without providing for full and open 

competition unless the contracting officer (1) Justifies, if required 

in 6.302, the use of such actions in writing; (2) Certifies the 

accuracy and completeness of the justification; and (3) Obtains the 

approval required by 6.304.” 

The interpretation of aerial photographs has not always been used 

for past disasters but has become more prevalent during recent 

hurricanes. Consequently, FEMA may want to evaluate and 

determine if a pre-positioned contract for these services may be 

beneficial for future disasters. 

Figure 5: Aerial photograph of Hurricane Ike damage 

Source: FEMA photo library 

Flood Map Needs 

During the November 2007 California wildfires, FEMA made two 

modifications to an existing contract with Michael Baker, Jr., Inc. 

Baker’s original contract was to develop, plan, implement, and 

monitor an initiative known as Multi-Hazard Flood Map 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 21 
Modernization for flood hazard mitigation across the United States 

and its territories. Specifically, the base contract provided FEMA 

support in conducting a large-scale overhaul of the Nation’s flood 

hazard maps. The work included data collection and analysis, map 

production, product delivery, and effective program management. 

According to FEMA acquisition personnel, there were no preexisting or pre-positioned contracts for the aerial photography 

needed to support the California wildfires. Consequently, FEMA 

decided to amend Baker’s original contract to provide geospatial 

services for the duration of response and recovery efforts for the 

California wildfires. The base contract was amended instead of 

soliciting bids from other sources because the information needed 

for these projects came from the database that Michael Baker 

managed for FEMA under the base contract. A FEMA contracting 

official said Baker could do the work faster and cheaper than any 

other contractor could; and no other contractor had the expertise, 

familiarity, and experience needed to support FEMA’s geospatial 

needs in a timely manner. 

However, FEMA did not prepare sole source justifications for the 

two modifications as required by FAR 6.303-2, or post the 

procurement on the federal procurement opportunities website as 

required by FAR 5.2.16 The contracting officer agreed that the 

contract modifications were sole source procurements and those 

justifications should have been prepared and approved for the 

procurements. He also agreed that the procurements should have 

been posted on the website. 

Portable Equipment Leasing 

Another contract in our sample was a sole source emergency 

contract to M.A.S.S. Services, a portable equipment leasing 

company, to provide portable shower units following Hurricane 

Ike in Louisiana. Emergency workers deployed to a disaster 

recovery center had not showered for days because no showers 

were available near their location. Two six-head portable showers 

were provided for 14 days for $72,072. A few days later, one sixhead shower unit was provided to another location for 28 days for 

16 The federal procurement opportunities website is defined in FAR 5.201 where it states that the 

contracting officer must transmit a notice to the Government Point of Entry (GPE) for certain proposed 

contract actions. The GPE may be accessed via the Internet at http://www.fedbizopps.gov. FedBizOpps 

is the single, web-enabled resource that lists and provides detailed information on all federal 

procurement opportunities over $25,000. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 22 
$81,984. Although contracting staff did what they could to ensure 

quick delivery of the showers at reasonable prices, both delivery 

time and prices might have been improved had the contract for 

portable showers been awarded and pre-positioned before the 

disaster, under either national or regional contracts. FEMA should 

evaluate and determine if a pre-positioned contract for portable 

showers may be beneficial for future disasters. 

Conclusions 

Some of FEMA’s disaster contracts for recurring services were 

costly and inefficient. As a result, some commodities were not 

available when needed for the disasters, and those acquired were 

not supported by documentation showing that the contracting was 

done in a cost-effective manner and according to the FAR and 

FEMA policy. FEMA needs better preplanning for backup sources 

in multiple disasters. FEMA says, “every disaster is different.” 

Nonetheless, there are so many similarities that FEMA should 

“learn lessons” and not repeat inefficient acquisitions. 

Recommendation 

We recommend that the Director, Acquisition Management 

Division: 

Recommendation #3: Direct FEMA contracting specialists to 

improve coordination with operations and logistics and other 

personnel who support the acquisition process. Coordinate with 

FEMA directorates to develop a common and coordinated plan for 

how to meet the government’s needs during an emergency and 

when emergency supplies in warehouses are exhausted. FEMA 

should also consider communicating with stakeholders in the 

General Services Administration, the Defense Logistics Agency, 

and the U.S. Corps of Engineers who may have their own standby 

contracts for disaster-related commodities and services. 

Management Comments and Contractor Analysis 

FEMA concurs with this recommendation. FEMA is undertaking a 

review of certain contracts for recurring items and services to 

determine whether such requirements should be placed under a 

pre-positioned contract or under a contractual vehicle that will 

permit acquisitions at a fair and reasonable price/cost. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 23 
�	 

Contractor Analysis: We consider FEMA’s planned action 

responsive to the recommendation. Therefore, the 

recommendation is resolved and open pending FEMA’s issuance 

and the OIG’s review of the results of its analysis of contracts for 

recurring items. 

Improvements Needed in Contract Management 

Several of the contracts reviewed did not comply with the FAR or 

FEMA contracting policies and procedures for emergency 

acquisitions. In addition, several contracts had significant 

increases in the funds obligated and spent after negotiation of the 

initial contract amounts. 

FAR and FEMA Guidance 

An OIG report on FY 2007 disaster contracts found that FEMA 

was not in compliance with FAR or AMD contracting policies and 

procedures for emergency acquisitions. Most of the contracts 

reviewed needed more documentation to explain why the goods or 

services were acquired, provide evidence of competition, and 

document contractor performance. The report stated that FEMA 

did not follow acquisition process safeguards such as including 

documentation justifying sole source awards, verifying proof of 

inspection of goods, or completing the checklists of required 

contract documentation.17 

Generally, there were improvements between the FY 2007 and 

2008 contracts sampled. AMD’s new contract file management 

system contained all but one file in our sample, and more of the 

contracts used the required checklists. However, several contracts 

needed more documentation to explain why some of the goods and 

services were acquired, and why contract costs increased 

significantly. 

Section 4.801(b) of the FAR states that the documentation in the 

contract files shall be sufficient to constitute a complete history of 

the transaction for: 

Providing a complete background as a basis for informed 

decisions at each step in the acquisition process, 

17 DHS OIG: Challenges Facing FEMA’s Disaster Contract Management, OIG -09-70, May 2009. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 24 

�	 

�	 

�	 

Supporting actions taken, 

Providing information for reviews and investigations, and 

Furnishing essential facts in the event of litigation or 

congressional inquiries. 

Similar to the FY 2007 contracts we reviewed, some of the 2008 

contracts were handled by multiple contracting officials. The high 

turnover of contracting officials results in contracts being handed 

over multiple times to new contracting officials with no knowledge 

of the acquisition’s history. This situation, coupled with the lack 

of contract documentation, does not allow reviewing officials to 

determine whether the federal government received the contracted 

goods and services or that fraud, waste, and abuse did not occur. 

In addition, FAR 1.602.2 states that contracting officers are 

responsible for ensuring performance of all necessary actions for 

effective contracting, ensuring compliance with the terms of the 

contract, and safeguarding the interests of the United States in its 

contractual relationships. Because of the high turnover of FEMA 

contracting officials, it is imperative that each official, while 

responsible for a contract, document all activities to enable the 

next contracting official to manage the contract effectively and 

efficiently. 

Most of the files we reviewed did not document whether the 

contractor performed as contracted. Some contracting officials 

told us that they monitored performance by telephone, which is not 

adequate proof that the federal government actually received the 

contracted goods and services. Senior FEMA officials 

acknowledged that monitoring contractor performance is a 

problem that needs to be addressed. 

In August 2008, FEMA issued a standard operating procedure 

(SOP), Labeling and Organizing Official Contract Files, which 

instructs employees to prepare and maintain relevant acquisition 

documents supporting all award and modification decisions and 

actions. This SOP provided a contract file checklist of acquisition 

documents to be included in the contract file. In January 2009, 

FEMA began to conduct internal audits of contract files and is 

using the reports from these audits to address and correct contract 

file deficiencies. In addition, in May 2009 FEMA issued a revised 

Disaster Contracting Guide that specifies the roles and 

responsibilities of the contracting official involved in the 

procurement process. It covers the entire process, from submittal 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 25 
of a requisition through receipt of the services or supplies and 

payment to the vendor. This guide should assist FEMA 

contracting officials in continuing to improve contract 

management. 

Contract Cost Increases 

Several contracts had significant increases in the federal funds 

obligated and expended after negotiation of the initial contract 

cost. However, explanations for the increases were not discernable 

in the contract documentation. In addition, we could not determine 

whether such increases violated competition requirements for 

federal acquisitions. Furthermore, in numerous cases, FEMA did 

not conduct independent cost estimates, or the price analyses were 

missing from the files. Some examples of the funding increases 

are shown in Table 1. 

Table 1: Contract funding increases 

Company Services 

Original 

Contract 

Amount 

Funding 

Added 

Total 

Obligated 

Percentage 

Increase 

Alltech 

Housing 

inspections $83,653 $3,095,154 $3,178,807 3700% 

Crowne 

Plaza 

Hotel 

lodging $53,000 $585,447 $638,447 1105% 

Hawkeye 

Electric 

Electrical 

upgrades 

for mobile 

homes $50,000 $500,000 $550,000 1000% 

Murillo 

Modular 

Portable 

toilets and 

handwashing 

stations $100,000 $393,500 $493,500 394% 

Roto 

Rooter Plumbing $25,000 $70,000 $95,000 280% 

PaTH, 

LLC IA-TAC $17,689,290 $12,738,916 $30,428,206 72% 

Source: FEMA contract files and Foxx & Company analysis 

FEMA officials said funding was added to the Alltech and PaTH 

contracts because they had underestimated the extent of the 

disaster damage. Therefore, more inspections and housing units 

were needed. FEMA officials added that the Alltech and PaTH 

contracts were awarded under indefinite delivery indefinite 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 26 
quantity contracts and incremental funding was how these 

contracts are designed to work.18 The needs for the other four 

contracts listed above were also underestimated, and thus 

modifications were used to add funding. Murillo Modular and 

Crowne Plaza contracts had justifications and approvals for their 

awards; Roto Rooter and Hawkeye Electric were awarded under 

full and open competition. 

The contract with Crowne Plaza was awarded to provide housing 

for survivors of the Iowa flooding. It was needed to secure 

alternate housing after mold was discovered in the mobile homes 

FEMA provided for the survivors. The initial contract began July 

19, 2008, and was funded for $53,000; the contract was modified 

and extended through August 2008 and funding increased to more 

than $638,000. This contract was increased and extended as mold 

continued to be discovered in mobile homes and FEMA needed to 

provide alternate housing for the survivors until the mold was 

remediated. 

Modifications added $500,000 to the Hawkeye Electric contract, 

which was initially funded for $50,000. The contracting officials 

said that the initial funding was to get the contract under way 

because electrical services were needed to set up temporary 

housing. When the contracting officials realized that the 

requirements for these services would increase significantly, given 

the scope of the Iowa flooding, they asked the IA-TAC officials if 

these services could be incorporated into the IA-TAC mission. 

The IA-TAC officials said no because the IA-TAC contractor 

would probably use Hawkeye Electric to provide the same 

services. Since FEMA contracting already had the contract vehicle 

in place, IA-TAC officials stated that the increase in award was 

correct and AMD should continue this contract. 

Conclusion 

Although improvements have been made in contract management, 

FEMA was not appropriately safeguarding all contract files and 

not following FAR or FEMA acquisition contracting procedures 

and processes. As a result, the files were not readily accessible to 

users. For contracts without adequate documentation, it was 

difficult to determine the basis for cost escalations, whether FEMA 

18 This type of contract provides for an indefinite quantity of supplies or services during a fixed period of 

time. These contracts allow for a certain amount of contract process streamlining, as negotiations can be 

made only with the selected company. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 27 
was paying fair prices for goods and services, or the rationale for 

the acquisition. In addition, it was difficult to determine whether 

contracts were effectively managed and monitored or whether 

appropriate controls were in place to prevent waste, fraud, or 

abuse. If FEMA does not evaluate performance, it is not in a 

position to exclude poor-performing contractors from receiving 

future contracts from FEMA and other federal agencies. 

Another recently issued report on FEMA’s acquisition internal 

controls stated that many files could not be located, AMD did not 

have a standardized approach to documentation and file 

maintenance, and supervisors did not hold contracting officers 

accountable for maintaining contract files.19 We reiterate the 

recommendation in that report that the Director, AMD, require 

supervisors to monitor contract file maintenance and hold 

contracting officers and specialists accountable by including an 

assessment of their contract file maintenance activities in their 

annual performance evaluation. 

Recommendation 

We recommend that the Director, Acquisition Management 

Division: 

Recommendation #4: Ensure compliance with existing contract 

file maintenance regulations, policies, and procedures and provide 

a strong control environment in headquarters, regional offices, and 

field offices by: 

�	 

�	 

Conducting periodic reviews of contract files, and 

Requiring that files provide an explanation for contracting 

decisions and actions. 

Management Comments and Contractor Analysis 

FEMA concurs with this recommendation. FEMA said it has 

already taken action to implement this recommendation. An 

internal audit program has been established and an internal review 

of contract files to determine the inclusion of necessary and 

required acquisition documentation occurred throughout fiscal year 

2009 and will continue into fiscal year 2010. FEMA has issued a 

standard operating procedure that identifies those acquisition 

19 DHS OIG: Internal Controls in the FEMA Disaster Acquisition Process, OIG-09-32, February 2009. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 28 

documents that need to be maintained. FEMA plans to develop 

and implement an electronic contract file maintenance system in 

fiscal year 2010. 

Contractor Analysis: We consider FEMA’s actions taken and 

those planned responsive to the recommendation. Therefore, the 

recommendation is resolved and open pending FEMA’s successful 

implementation and the OIG’s review of the electronic contract file 

maintenance system. 

Establishing a Joint Field Office 

FEMA exercised questionable decision-making in establishing the 

JFO in Brentwood, Tennessee. The selection of the JFO site 

resulted in excessive expenditures of federal funds and put the JFO 

employees at risk because the building used was a potentially 

unsafe and unhealthy facility. 

After a disaster is declared, a JFO is set up to establish a base for 

FEMA and other federal, state, and local employees to provide 

assistance to the survivors. On February 5 and 6, 2008, a series of 

severe storms and tornadoes struck several counties in western and 

north central Tennessee. A disaster declaration was issued on 

February 7, 2008. 

According to General Services Administration (GSA) Realty 

Services Letter RSL – 2008 – 06, GSA must provide contracting 

support services to FEMA consistent with mission assignments and 

tasks issued by FEMA. Pursuant to 40 U.S.C. § 585, GSA may 

enter into a lease for the accommodation of a federal agency in 

buildings or improvements for a term of up to 20 years. FEMA is 

to provide GSA with the JFO requirements—square footage, 

parking, building access, location, janitorial services—and then 

GSA is to use the Multiple Listing Service (MLS) to identify 

buildings that are available and meet the FEMA requirements.20 

Immediately after the disaster declaration, FEMA and GSA 

officials began to take steps to establish a JFO. However, the 

decisions made and the process followed for selecting the facility 

at 219 Franklin Road in Brentwood, Tennessee, were seriously 

flawed, resulting in excessive expenditures of federal funds. 

20 An MLS database and software is used by real estate brokers representing sellers under a listing contract 

to share information about properties with real estate brokers who may represent potential buyers or wish to 

cooperate with a seller's broker in finding a buyer for the property. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 29 
Additionally, because of the condition of the site, the health and 

safety of the JFO employees were potentially put at risk.21 

FEMA did not use the best possible sources for selection of the 

JFO. Instead of making possible building selections from an MLS, 

two individuals, one from FEMA and one from GSA, drove around 

Nashville looking for acceptable locations. (FEMA tries to locate 

JFOs near state capitals to encourage good communications 

between FEMA and state emergency officials.) According to 

several FEMA officials, these two individuals were responsible for 

the decision-making process and selection of this facility. 

During our review, several FEMA officials referenced the decision 

to select the Brentwood facility for the JFO as “political.” We 

were able to identify one document justifying the “urgent and 

compelling circumstances” for the Brentwood location that 

contained this sentence: “It is in the city limits of Brentwood, TN, 

and is in an area which presents a high public visibility of FEMA.” 

According to the current FEMA logistics chief, Region IV, “it was 

a lease that went horribly wrong.” He said that: 

�	 

�	 

�	 

�	 

�	 

�	 

There were plumbing issues and you could smell raw 

sewage. 

The building was not condemned but was in a condemnable 

state and that it was in “a pretty deplorable shape.” 

There were dead insects and roaches on the floors. 

The local police were using a portion of it as a practice 

facility and firing range, and there were shell casings on the 

floor in one section of the building. 

It was a building he would not have let his staff go into if 

he had been in charge at the time. 

The facility caused health issues for the employees because 

of the raw sewage smell and varying sections of the 

building were too hot or too cold. 

There were major inconsistencies or deficiencies in virtually every 

aspect of the process used to select this facility. 

JFO Building Inspection 

First, we were told that FEMA inspected and found the building 

acceptable before agreeing to sign the lease. However, the FEMA 

21 The building was the former site of the world headquarters for the Murray Lawn Mower company. At 

the time it was chosen to be used for the JFO, it had been vacant for about 18 months. 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 30 
safety officer told us that a complete and thorough inspection was 

not performed. The inspections that were performed were at night, 

in the dark, using flashlights, because the building had no electric 

power. The building was locked when FEMA staff arrived in the 

afternoon for the inspection; they viewed it from the outside. 

FEMA officials did not gain access to the inside of the building 

until 9 p.m. The electricity and water had been shut off. 

Therefore, the inspection team was unable to check the heating and 

air conditioning system, emergency lighting, and alarm systems. 

The team could not determine if the plumbing was functioning or 

the water potable. 

Second, the FEMA official who led the selection process told us up 

to 500 people worked in the JFO, which is why such a large 

building—upwards of 100,000 square feet—was needed. 

However, a staffing report showed that the highest number of 

employees assigned to the JFO at any given time was 259. Other 

FEMA officials told us that many of these employees worked out 

of FEMA Disaster Recovery Centers in the surrounding area and 

thus were not working at the Brentwood facility. 

The FEMA official who led the selection told us that the lower 

lease rate per square foot of the Brentwood building made it most 

cost-effective to select this building, make any necessary repairs, 

and pay for the utilities and janitorial services, rather that lease one 

of two other buildings that were considered. The estimates for the 

Brentwood building size ranged from 50,000 to 100,000 square 

feet; no one in FEMA or GSA could provide us with the actual 

square footage used for the JFO operations. Several officials who 

worked at the JFO told us that the facility was much too big for 

their needs. The chief of staff for the JFO estimated that 14,000 

square feet were used. Based on this estimate of space used, the 

cost of the building was not the best value or most cost-effective. 

Full-Service Leases 

We were told that the other buildings considered offered fullservice leases, in which all utility and maintenance expenses were 

included in the lease rate and paid by the owner. However, no one 

in FEMA or GSA could provide a written cost comparison of the 

three buildings. The FEMA official cited above said the analysis 

was “all in his head” and that a written comparison was never 

done. The GSA contract lease file did not contain a cost analysis 

of the three buildings considered. Furthermore, neither FEMA nor 

GSA officials could provide us with the addresses of the two other 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 31 
buildings considered. Thus, we were not able to inspect the 

condition of the other two buildings. 

We were told that one of the other buildings considered was 

rejected because it was in a high-crime area and not acceptable. 

FEMA officials said that the other building considered was 

rejected because its handicap access entrance, a standard 

requirement of a government lease, was at a different side of the 

building than the main entrance, thus requiring additional security 

with its attendant costs. However, GSA crossed out the lease 

language in the Standard Conditions and Requirements section of 

the Brentwood lease that required the leased space be handicapped 

accessible. 

Condition of the Brentwood JFO 

Although we were told by FEMA and GSA that the Brentwood 

facility was acceptable as a JFO, numerous problems were 

identified to us: 

�	 

�	 

�	 

�	 

�	 

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The heating system’s boiler was a constant problem— 

someone had to watch it 24/7 so it would not explode or 

crack. 

The temperature was not stable throughout the building— 

sections were either too hot or too cold. The comptroller 

said she had to wear her coat, hat, and gloves while 

working there. 

The building’s water supply was not potable— FEMA had 

to purchase and bring in bottled water for drinking and 

washing hands. The water main broke one day and the 

employees were sent home. 

Some of the FEMA officials called it a “sick building.” 

When a senior management official from the FEMA 

regional office had plans to visit the JFO, he was urged not 

to come because so many employees were sick. One of the 

employees had an unexplained facial rash for 3 months 

after working at this building. 

Sewage leaks occurred and employees had to be sent home. 

The roof leaked—the chief of staff told us “waste baskets 

were usually able to handle the leaks.” 

Portions of the building were not suitable for working 

owing to solvent odors and possible contamination. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 32 

Figure 6: “Do not use” water sign on drinking fountain 

Source: Foxx & Company 

The lease that FEMA signed required FEMA to be responsible for 

all utility, maintenance, and repair expenses. The senior 

management official from the FEMA regional office said he had 

“never done this type of lease before and [he] would never do it 

again.” 

FEMA officials told us there was an urgent and compelling need to 

lease this facility so they could begin to serve the disaster 

survivors. The official’s goal was to have the JFO open and 

operational—ready to serve the survivors—within 72 hours of the 

disaster declaration. However, FEMA chose the Brentwood 

building instead of leasing one of the other full-service buildings 

that could have been open and operational immediately. The 

Brentwood building had to be cleaned and repaired for 3 days 

before it could open. FEMA contracted with a firm and paid 

$95,000 to clean the sections of the building that FEMA used for 

JFO operations. Another company’s bid for cleaning the building 

was $1.2 million, which indicates the poor condition of the entire 

building. As discussed above and as shown in Figures 7 and 8, 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 33 
several sections of the building could not be used because of the 

debris, solvents, and possible contaminants that existed. The 

cleaning estimate of $1.2 million reflects the level of effort 

required to clean the building so that all of it could have been used. 

In addition, while FEMA’s goal was to have the JFO operational to 

serve the survivors, water main and sewage line breaks caused the 

building to be closed for 2 days, thus interrupting FEMA’s mission 

of assisting survivors. 

Figure 7: Room filled with debris 

Source: Foxx & Company 

Figure 8: Debris in former equipment testing area 

Source: Foxx & Company 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 34 
The JFO logistics chief said when staff began to move in to the 

facility, he had an immediate concern about using it as the JFO. 

He said it was a “horrible building to work out of” and that he “did 

not care how much money it showed on paper that the government 

may have saved by leasing this building—it was not worth it in 

personnel costs and discomfort.” 

The comptroller for this JFO told us that the continual funding 

requests to repair the building she received concerned her so much 

that she began tracking the expenses. She said she had “never seen 

anything like it.” Her analysis showed that it was more expensive 

to set up than other similar JFOs. She said “the janitorial services 

were extraordinarily high, the electricity and plumbing expenses 

were outrageous” and that “clearly the government did not get a 

good deal on this.” She also said that the facility was far larger 

than needed for the estimated 300 staffers. 

Disaster Safety Officer Report 

We obtained the lead disaster safety officer’s log, which had 


notations on the issues we noted above. For example: 


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On February 7, he wrote, “Approved the building selected 

with reservations. Very concerned that the heating, 

ventilation, and air conditioning system; plumbing; and 

electrical systems might be a problem in a building that had 

been vacant for over a year.” He added, “Also very 

concerned that the building was much too large” and “the 

building is a maze of buildings loosely formed.” 

On February 8, he wrote, “There was still no gas, 

electricity, or heat in the building so a complete evaluation 

was not possible. Walked through on final selection 

property and did some preliminary planning until we got 

news around 4:00 p.m. that the lease had been signed.” 

On February 9, he wrote, “Initial evalution (sic) of drinking 

water was that any water quality test would wait until the 

major plumbing leaks were addressed.” He added, “A 

waiver was received and bottled water purchased.” 

JFO Chief of Staff Reports 

The chief of staff for the Brentwood JFO provided us several of his daily 

status reports with information on the condition of the JFO. Following 

are some excerpts: 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 35 
�	 

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February 23: “Contractor has estimated cost of $6,000 just to turn 

on the air conditioning systm (sic). This does not include costs of 

any repairs.” “Working with Logisitics (sic) to replace dead 

batteries in the emergency lighting system.” 

February 26: “Sewage leak in electrical room on ground floor.” 

“Boiler room continues to be monitored 24/hr/day” (see Figure 

9). “Concern still strong about the potential failure of air 

conditioning system.” “Safety has ordered ear plugs for logistics 

staff who work the boiler room detail.” 

February 27: “Report from yesterday’s sewage leak by plumber 

warns that there may be more breaks/leaks.” “The boiler watch is 

still an issue . . . Safety issues involved, but any personnel 

involved will be thoroughly trained in safety precautions and 

boiler procedures.” 

February 29: “With today’s rain, leaks are expected. Trash cans 

have been pre-deployed for possible use.” 

March 4: “Work will be done on the boiler again today. May 

cause alarms to go off.” “Safety will shut off alarm system to fire 

department.” 

Figure 9: Chairs used by employees to watch boiler 

Source: Foxx & Company 

FEMA used the building for less than 3 months and incurred more than 

$122,000 in lease expense and more than $607,000 in operating, 

maintenance, and repair expenses, for a total of $729,000. A lease for a 

full-service building that FEMA also considered in this same area would 

have cost about $344,000. Thus, FEMA paid more than twice as much 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 36 

for a facility that subjected the JFO employees to potentially unhealthy 

and unsafe work conditions. 

Conclusion 

Federal leasing procedures and policies were not followed in selecting 

the JFO. FEMA established a self-imposed deadline of 72 hours to have 

the JFO operational. A series of judgments and decisions were made that 

resulted in excessive expenditures of taxpayer money to make the facility 

operational. The poor conditions of the JFO exposed employees to 

potential health and safety risks. 

Recommendation 

We recommend that the Administrator of FEMA: 

Recommendation #5: Ensure compliance with FEMA and GSA 

leasing policies, procedures, and requirements. The lease contract 

files should provide a history of all contractual activities and 

determination of price reasonableness. The documentation should 

include explanatory memos, notes, email messages, and 

correspondence, as well as references to other files or locations 

that contain information supporting the acquisition. 

Management Comments and Contractor Analysis 

FEMA non-concurs with this recommendation. As currently 

written, FEMA did not concur with this recommendation, citing 

that FEMA does not have the authority to enter into or negotiate 

lease agreements in support of a Presidential Declaration. FEMA 

stated that GSA is the principal agency responsible for leasing 

authority under the National Response Framework to assist FEMA 

in establishing a facility to support disaster response. FEMA 

further stated that FEMA contracting personnel do not have the 

authority to administer or maintain contract administration for 

lease agreement awards and therefore FEMA contracting should 

not be responsible for completing the required documentation for 

lease awards. 

Contractor Analysis: We agree that FEMA does not enter into 

leases. We recommended compliance with FEMA and GSA 

leasing policies, procedures, and requirements but did not state that 

FEMA had the authority to enter into or negotiate lease 

agreements. Regarding contract file documentation, according to 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 37 
FEMA’s Disaster Leasing Process directive issued in May 2009, 

FEMA is responsible for completing procedures and forms and 

maintaining this information, as well as a copy of the signed lease, 

in support of the leasing process. Therefore, we consider this 

recommendation unresolved and open. 

Regarding FEMA’s response that FEMA’s written contracts in 

support of the JFO were competed successfully and complied with 

Federal procurement regulations, our issue is not with how the 

contracts were awarded or were organized. The contracts were 

properly executed and managed. Our issue is with the decision 

making and judgment in establishing this JFO. During our review, 

several FEMA officials raised concerns about its selection. As 

stated in the report, a complete and thorough inspection was not 

performed to ensure the building was habitable. As stated in 

FEMA’s Disaster Leasing Process directive, the Federal 

Coordinating Officer is to “complete a thorough review of all 

facilities that are candidates for acquisition to support an efficient, 

timely response and to ensure that safe and healthful facilities are 

provided.” In the future, compliance with the new FEMA 

directive should result in JFO facilities that provide safe and 

healthy environments for their users. 

Regarding FEMA’s self imposed deadline of opening a JFO within 

72 hours after a Presidential Declaration, we understand and 

appreciate FEMA’s goal of being available as soon as possible to 

assist the disaster survivors. However, all the proper inspections 

and approvals should be completed to ensure that a safe and 

healthy facility is acquired for FEMA employees and survivors 

seeking assistance. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 38 

 

Appendix A 

Purpose, Scope, and Methodology 

The purpose of this audit was to assess FEMA’s management of 

disaster contracts. The FEMA disaster contracting function was 

challenged in responding to the 2005 Gulf Coast hurricanes. 

FEMA is attempting to improve its acquisition functions, including 

contracting, to prepare for, respond to, and mitigate the effects of 

disasters, as well as improve its day-to-day operations. The DHS 

OIG has a requirement to determine if FEMA’s policies have been 

successfully implemented. 

The objective of the audit of selected FY 2008 disaster contracts 

was to conduct detailed contract reviews, assess FEMA’s 

execution and management of the contracts, and determine 

whether the federal government is getting a fair return for the 

goods and services it has contracted for. The specific objectives of 

the audit were to assess: 

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FEMA’s ability to track, manage, and monitor selected FY 

2008 disaster contracts; 

What safeguards were included to reduce, deter, and detect 

fraud, waste, and abuse; 

The level of communication and coordination within 

FEMA and with other federal agencies and states regarding 

disaster contracts; and 

The extent to which FAR and AMD policies and 

procedures have not been followed and the impact on the 

delivery of goods and services. 

FEMA is required to adhere to contract management policies and 

procedures that are promulgated in the FAR.22 FEMA also is 

required to adhere to the Homeland Security Acquisition 

Regulation and the Homeland Security Acquisition Manual, Office 

of Federal Procurement Policy guidance, and the Stafford Act.

23 

22 The FAR, codified in Title 48 of the United States Code of Federal Regulations, was developed pursuant 

to the Office of Federal Procurement Policy Act of 1974 (Public Law 93-400), as amended by Public Law 

96-83. 

23 FEMA’s statutory authority comes from the Robert T. Stafford Disaster Relief and Emergency 

Assistance Act, as amended. The Stafford Act was enacted in 1988 (Public Law 100-707), and it amended 

the Disaster Relief Act of 1974 (Public Law 93-288). 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 39 
Appendix A 

Purpose, Scope, and Methodology 

The sample included contracts awarded at FEMA headquarters in 

Washington, DC, and at five FEMA regions: 

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Region IV (Atlanta, GA) 

Region V (Chicago, IL) 

Region VI (Denton, TX) 

Region VII (Kansas City, MO) 

Region IX (Oakland, CA) 

We also visited FEMA’s Federal Finance Center in Mt. Weather, VA, to 

obtain payment information on the contracts in our sample. 

The contracts selected represented a variety of: 

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Dollar values, 

Contract types: (time and materials, cost reimbursable, firm 

fixed price, and others), 

Types of goods and services acquired, 

Contractors with duplicative high-dollar contracts used in 

various regions, 

Contracting officers, 

Contracts written at FEMA headquarters but managed in a 

regional office, and 

Other contracts that are considered risky due to past 
 

performance. 
 

We conducted this performance audit according to generally 

accepted government auditing standards (Government Auditing 

Standards, July 2007 revision). 

Our audit considered FEMA and AMD policies and procedures 

implemented since the 2005 Gulf Coast hurricanes, as well as other 

applicable federal acquisition requirements. At all of the locations 

visited, we interviewed officials and obtained documentation to 

verify changes or corrective actions taken. Field office work was 

conducted from January through July 2009. 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 40 

l'.S-Uop..."".", or 1l.",<I."d S«"";,,

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DEC 3 D 2009

MEMORANDUM FOR: Matt J<ldaeki

Deputy Inspector General

Office of Emergency M<lnagcment Oversight

Office of Inspcetor General

FROM: David J. Kaufinan ~c..:;;;;~ Fi¥­

Dire<:tor

Office of I'olicy and I'rogram Analysis

SUBJECT: Comments on OIG Draft Report. ImpfOl'{!IIJ(mts Needed in

FEMA 's Disastef COiftract MIlIJagemCI/I

Thank you for the opportunity to review and eommcnt on thc omcc of InspC:l;tor

Gencral's (OIG's) subject draft audit report. As the Federal Emergency Management

Agency (FEMA) works toward refining its programs. the OIG"s independent analysis of

program perfoffilanec grcatly bcncfits our ability to continuously improve our actiVities.

With respect to the draft report's discussion ofthe establishment of a Joint Field Office

(JFO) in Brentwood, Tennessee. we wish to point Ollt that FEMA's written contracts in

support ofthe JFO were competed successfully and complied with Federal procurement

regulations. The contract files for opeTDtion and maintenance eontainlxl <Ill of the

required documentation to support the contracting decision ntade by the FEMA

Contracting Officer. Moreover. the draft audit repor1 docs not identify the positivc

commcnts made by Fo};}; & Company regarding FEMA disaster contract administf'Jtion

in suppor1 of Brentwood. TN.

FEMA concurs with three ofthe draft repor1's five recommendations. FEMA has bcen

working diligently to com;et the issues identified in your audit. While we will be

providing corrective action plans in our 90-day response. we provide the following

infOllllatiOll relative to the five recOlmnend<ltions. induding the reasons for our nonconcurrence Wilh r<:commendations 2 and 5:

Recommendation I: Adhere to the National Response Framework principles by

ehuifying the authority of federal. st<lte, local. and regional emergency managers and

ensure, to the extent possible, that acquisitions nrc based on accurate cstimat(;s of needs.

Appendix B 

Management Comments on the Draft Report 

Improvements Needed in FEMA’s Disaster Contract Management 
 

Page 41 
 
Page 2

Response: FEMA concurs with this recommendation in principle and will review

existing processes and procedures to facilitate better coordination among the above

mentioned officials. Further, as the DIG report indicates, FEMA has since implemented

a Concept ofOperations for FEMA Responder Support Camps in May 2009, which

introduced the concept ofmodular and scalable base camps and clarifies the process for

defining the requirements for base camps.

Nevertheless, FEMA disagrees with the finding that FEMA could have avoided spending

more than $4 million by consolidating two base camps into one. The example provided

indicates that FEMA established two 500-bed base camps in the State ofTexas for an

initial 30 days near the Scholes Airport and near the Orange County Airport. This was a

significant improvement from the 2000 occupant base camps FEMA had contracted for in

the past. The services were extended for an additional 30 days. One ofthe Texas base

camps housed 310 occupants and served 632 meals; whereas the other base camp housed

236 occupants and served 320 meals. However, it is clear that 546 occupants (310 plus

236) could not be housed within a single 500-bed base camp. It is also clear that FEMA

had to establish either two 500-bed base camps (this is the minimum occupancy rate

available) or a single 1000-bed base camp. The two camps were established in two

different, geographically distant, Texas counties in order to best meet the needs ofthe

responders.

This recommendation is considered closed.

Recommendation 2: Develop criteria defining the types of commodities that FEMA can

purchase in response to a disaster including criteria to assess employees' housing at a

disaster site to ensure that the least expensive option is used.

Response: FEMA does not concur with this recommendation. With respect to "defining

the types of commodities that FEMA can purchase in response to a disaster," FEMA

must have the flexibility to respond to unique requirements including possible limitations

that some of our partners may experience due to resource shortfalls. FEMA has the

authority to purchase any type of commodity that is not unauthorized or otherwise

illegal. Therefore, defining the types of commodities that FEMA can purchase is

considered redundant and unnecessary. The audit report indicates that FEMA made

purchases that it normally did not buy. Yet, this is not the equivalent ofstating that

FEMA had no authority to make such purchases or that the purchases were not

appropriate under the circumstances.

With respect to "criteria to assess employees' housing at a disaster site to ensure that the

least expensive option is used," FEMA houses employees during a disaster where it can.

At no time did FEMA violate the housing per diem that was established for the response

effort. Short term housing such as hotels in the immediate disaster area are reserved for

survivors so that they can be close to their property and help re-establish their lives.

Appendix B 

Management Comments on the Draft Report 

Improvements Needed in FEMA’s Disaster Contract Management 
 

Page 42 
 
Page 3

Recommendation 3: Direct FEMA contracting specialists to improve coordination with

operations and logistics and other personnel who support the acquisition process.

Develop a common and coordinated plan for how to meet the government's needs during

an emergency and when emergency supplies in warehouses are exhausted. FEMA should

also consider communicating with stakeholders in General Services Administration,

Defense Logistics Agency, and the U.S. Corp of Engineers who may have their own

standby contracts for disaster related commodities and services.

Response: FEMA concurs with this recommendation and has undertaken a review of

certain contracts for recurring items and services to determine whether such requirements

should be placed under a pre-positioned contract or under a contractual vehicle that will

permit acquisition at a fair and reasonable price/cost. This recommendation is considered

implemented.

Recommendation 4: Ensure compliance with existing contract file maintenance

regulations, policies, and procedures and provide a strong control environment in

headquarters, regional offices, and field offices by:

•

..

Conducting periodic reviews of contract files, and

Requiring that files provide an explanation for contracting decisions and actions.

Response: FEMA concurs with this recommendation. FEMA's Acquisition

Management Division (AMD) has already implemented this recommendation. An

internal audit program was established in November 2008 and an internal review of

contract files to determine the inclusion ofnecessary and required acquisition

documentation are maintained occurred through FY 2009 and will continue into FY

2010. A standard operating procedure was issued in FY 2008 identifying those

acquisition documents that needed to be maintained to support the acquisition decisions.

An electronic contract file maintenance system will be developed and implemented in FY

2010. This recommendation is considered implemented.

Recommendation 5: Ensure compliance with FEMA and GSA leasing policies,

procedures, and requirements. The lease contract files should provide a history of all

contractual activities and determination of price reasonableness. The documentation

should include explanatory memos, notes, email messages, and correspondence, as well

as references to other files or locations that contain information supporting the

acquisition.

Response: As currently written, FEMA does not concur with this recommendation.

FEMA does not have the authority to enter into or negotiate lease agreements in support

of a Presidential Declaration. GSA is the principal agency responsible for leasing

authority under the National Response Framework to assist FEMA in establishing a

facility to support disaster response. FEMA contracting personnel do not have the

authority to administer or maintain contract administration for lease agreement awards.

Appendix B 

Management Comments on the Draft Report 

Improvements Needed in FEMA’s Disaster Contract Management 
 

Page 43 
 
Page 4

Therefore, FEMA contracting should not be responsible for completing the required

documentation for lease awards.

However, FEMA recognizes the obligation to work with GSA in establishing Joint Field

Offices. To that end, FEMA issued a Disaster Leasing directive in May 2009 (copy

attached). The substance ofthe FEMA directive is in accord with and strictly complies

with the draft report's referenced GSA Realty Service Letter. While GSA is the

contracting entity that acquires the space for FEMA, it is imperative that the process

allow for health and safety reviews prior to execution ofthe lease. Regarding the "self

imposed" deadline to have space available and FEMA open for business within 72 hours

of a declaration, FEMA typically works with the GSA lease contracting representative for

several days and sometimes more than a week before the actual declaration date. FEMA

totally supports the need to comply with established leasing policies, procedures, and

disaster lease requirements. The GSA disaster lease policy provides for an expedited

lease acquisition process, but field personnel interfacing with GSA must learn to comply

with and meet all necessary requirements to avoid a repeat ofthe Brentwood, Tennessee

example. Sometimes it is forgotten that the acquisition of a leasehold interest in real

property is a federal procurement where the price must be justified either by competition,

or by a valid independent government estimate (appraisal). Compliance with both the

FEMA disaster lease directive and GSA disaster lease policy will avoid the problems

described in the audit report.

Thank you again for the opportunity to comment on this draft report and we look forward

to working with you on other issues as we both strive to improve FEMA.

Attachment

Appendix B 

Management Comments on the Draft Report 

Improvements Needed in FEMA’s Disaster Contract Management 
 

Page 44 
 
GAO: FEMA Strengthened Its Fraud Prevention Controls, but Customer Service Needs 

Improvement, GAO-09-671, June 2009 

Appendix C 

List of Related Reports and Testimonies 

DHS OIG: FEMA’s Sourcing for Disaster Response Goods and Services, OIG-09-96, 

August 2009 

DHS OIG: Management Advisory Report: FEMA’s Response to Hurricane Ike, OIG-09­

78, June 2009 

DHS OIG: Challenges Facing FEMA’s Disaster Contract Management, OIG-09-70, 

May 2009 

DHS OIG: FEMA’s Implementation of Best Practices in the Acquisition Process, OIG09-31, February 2009 

DHS OIG: Internal Controls in the FEMA Disaster Acquisition Process, OIG-09-32, 

February 2009 

DHS OIG: Challenges Facing FEMA’s Acquisition Workforce, OIG-09-11, November 

2008 

DHS OIG: FEMA’s Sheltering and Transitional Housing Activities After Hurricane 

Katrina, OIG-08-93, September 2008 

DHS OIG: Hurricane Katrina Temporary Housing Technical Assistance Contracts, 

OIG-08-88, August 2008 

DHS OIG: Costs Incurred for Rejected Temporary Housing Sites, OIG-08-86, August 

2008 

DHS OIG: Hurricane Katrina Multitier Contracts, OIG-08-81, July 2008 

DHS OIG: Acquisition Workforce Training and Qualifications, OIG-08-56, May 2008 

DHS OIG: FEMA’s Preparedness for the Next Catastrophic Disaster, OIG-08-34, 

March 2008 

DHS OIG: FEMA’s Award of 36 Trailer Maintenance and Deactivation Contracts, OIG07-36, March 2007 

DHS OIG: A Performance Review of FEMA’s Disaster Management Activities in 

Response to Hurricane Katrina, OIG-06-32, March 2006 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 45 

Appendix C 

List of Related Reports and Testimonies 

GAO: Department of Homeland Security: Progress and Continuing Concerns with 

Acquisition Management, GAO-08-1164T, September 2008 

GAO: Emergency Management: Observations on DHS's Preparedness for Catastrophic 

Disasters, GAO-08-868T, June 2008 

GAO: Department of Homeland Security: Better Planning and Oversight Needed to 

Improve Complex Service Acquisition Outcomes, GAO-08-765T, May 2008 

GAO: Department of Homeland Security: Better Planning and Assessment Needed to 

Improve Outcomes for Complex Service Acquisitions, GAO-08-263, April 2008 

GAO: Department of Homeland Security: Status and Accountability Challenges 

Associated with the Use of Special DHS Acquisition Authority, GAO-08-471T, February 

2008 

GAO: National Disaster Response: FEMA Should Take Action to Improve Capacity and 

Coordination between Government and Voluntary Sectors, GAO-08-369, February 2008 

GAO: Department of Homeland Security: Improved Assessment and Oversight Needed 

to Manage Risk of Contracting for Selected Services, GAO-07-990, September 2007 

GAO: Homeland Security: Observations on DHS and FEMA Efforts to Prepare for, and 

Respond to Major and Catastrophic Disasters and Address Related Recommendations 

and Legislation, GAO-07-1142T, July 2007 

GAO: Hurricane Katrina: Improving Federal Contracting Practices in Disaster 

Recovery Operations, GAO-06-714T, May 4, 2006. 

GAO: Hurricane Katrina: Planning for and Management of Federal Disaster Recovery 

Contracts, GAO-06-622T, April 2006 

GAO: Agency Management of Contractors Responding to Hurricanes Katrina and Rita, 

GAO-06-461R, March 2006. 

Testimony of Craig Fugate, FEMA Administrator, before the House Committee on 

Transportation and Infrastructure, Subcommittee of Economic Development, Public 

Buildings and Emergency Management, Post-Katrina: What it Takes to Cut the 

Bureaucracy and Assure a More Rapid Response after a Catastrophic Disaster, July 27, 

2009 

Improvements Needed in FEMA’s Disaster Contract Management 


Page 46 

Appendix D 

FEMA Organization Chart 

Improvements Needed in FEMA’s Disaster Contract Management 
 

Page 47 
 
Appendix E 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff for Operations 

Chief of Staff for Policy 

Deputy Chiefs of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Under Secretary, Management 

FEMA Audit Liaison (Job Code 09-011-EMO) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Improvements Needed in FEMA’s Disaster Contract Management 

Page 48 
ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4100, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal or noncriminal 

misconduct relative to department programs or operations: 

• Call our Hotline at 1-800-323-8603; 

• Fax the complaint directly to us at (202) 254-4292; 

• Email us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.