FEMA’s Advance Contract 

Strategy for Disasters in 

Puerto Rico 

March 23, 2020 

OIG-20-20 
 

 

 

 

DHS OIG HIGHLIGHTS
 

FEMA’s Advance Contract Strategy

for Disasters in Puerto Rico 

March 23, 2020 

Why We Did 

This Audit 

The Post-Katrina Emergency 

Management Reform Act of 

2006 requires FEMA to 

maximize the use of advance 

contracts to expedite the 

acquisition of supplies and 

services during emergencies. 

FEMA introduced advance 

contracts as a way to 

expedite the acquisition of 

supplies and services during 

emergencies. Our objective 

was to determine to what 

extent FEMA’s planning for 

advance contracts in Puerto 

Rico addresses identified 

capability deficiencies and 

needs. 

What We 

Recommend 

We made four 

recommendations to help 

FEMA improve its strategy 

for advance contracts, its 

process for identifying 

capability needs and gaps, 

and its contract file 

management practices. 

For Further Information: 

Contact our Office of Public Affairs at 

(202) 981-6000, or email us at 

DHS-OIG.OfficePublicAffairs@oig.dhs.gov 

What We Found 

Following Hurricane Maria, the Federal Emergency 

Management Agency (FEMA) did not maximize the use of 

advance contracts to address identified capability 

deficiencies and needs in Puerto Rico. Specifically, we 

identified 49 of 241 new contracts issued in the aftermath 

of Hurricane Maria for the same goods or services covered 

by existing advance contracts. In addition, FEMA Region 

II did not issue any new advance contracts prior to 

Hurricane Maria and did not perform analysis to identify 

goods or services to obtain through advance contracts. 

We attributed FEMA’s limited use of advance contracts to 

its lack of strategy and documented planning process for 

ensuring maximum use of advance contracts. Although 

FEMA reported to Congress in December 2007 it had a 

strategy in place, we determined it was a one-time strategy 

that did not meet the intent of the Post-Katrina Emergency 

Management Reform Act of 2006. Without advance 

contracts to expedite acquisitions, goods and services for 

people in need may have been delayed or were more costly 

to the Government. 

Further, FEMA did not maintain contract files in 

accordance with Federal acquisition regulations and 

departmental or its own policy. This occurred because 

FEMA’s Office of the Chief Procurement Officer did not 

have controls in place to ensure contract personnel follow 

Federal regulations and departmental or its own internal 

policy. As a result, FEMA’s ability to hold contractors 

accountable for deliverables is hindered if contract files 

are not easily located. 

FEMA’s Response 

FEMA concurred with all four recommendations and 

described corrective actions it plans to take. However, 

FEMA’s corrective actions do not meet the intent of the 

recommendations. Therefore, we consider all four 

recommendations open and unresolved. 

www.oig.dhs.gov OIG-20-20 
March 23, 2020
	
 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table of Contents 

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

Results of Audit .............................................................................................. 4 

FEMA Region II/JFO Did Not Maximize the Use of Advance Contracts ... 4 

FEMA Did Not Manage Contract Files in Accordance with Regulations 

and Policy............................................................................................ 10 

Recommendations......................................................................................... 12 

Appendixes 

Appendix A: Objective, Scope, and Methodology ................................. 16 

Appendix B: FEMA Comments to the Draft Report ............................... 19 

Appendix C: Office of Audits Major Contributors to This Report ........... 22 

Appendix D: Report Distribution .......................................................... 23 

Abbreviations 

FAR Federal Acquisition Regulation 

FEMA Federal Emergency Management Agency 

HSAM Homeland Security Acquisition Manual 

JFO Joint Field Office 

OCPO Office of the Chief Procurement Officer 

OIG Office of Inspector General 

www.oig.dhs.gov OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Background 

The Federal Emergency Management Agency’s (FEMA) mission is to support 

citizens and first responders and ensure, as a Nation, we work together to 

build, sustain, and improve our capability to prepare for, protect against, 

respond to, recover from, and mitigate all hazards. To fulfill its mission, FEMA 

must thoroughly plan responses to different natural and manmade disasters. 

These disasters require timely response to begin recovery efforts in the affected 

communities. 

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, as 

amended, Pub. L. No. 93-288 (1974) (Stafford Act), authorizes the Federal 

Government to provide necessary relief and assistance prior to and during a 

natural disaster. It directs the Government to provide work and services to 

save lives and protect property, such as debris removal, search and rescue, 

emergency medical care, shelter, food, water, and essential needs that include 

movement of supplies or persons. It also requires awarding contracts to local 

businesses to help stimulate the economy. 

The Post-Katrina Emergency Management Reform Act of 2006, Pub. L. No. 

109-295 (Post-Katrina Act), addressed various shortcomings identified in 

preparation for and response to Hurricane Katrina. It requires FEMA to 

identify an advance contracting strategy maximizing the use of advance 

contracts to the extent practical and cost effective in advance of a natural or 

non-natural disaster. 

Advance contracts are for recurring disaster response requirements, including 

specific goods and services for which FEMA is capable of contracting in 

advance of a natural disaster, act of terrorism, or other manmade disaster that, 

when used, may be cost effective. FEMA introduced advance contracts as a 

way to expedite the acquisition of supplies and services during emergencies. 

FEMA must identify these recurring requirements prior to a disaster in order to 

enter into advance contracts meeting needs of affected communities. 

Advance Contracting Process 

The procurement process for awarding advance contracts is the same as any 

other contract, because advance contracts are not a separate type of 

contracting vehicle. Advance contracts are completed prior to an emergency to 

meet the regional or program office requirements. According to FEMA, 

contracts, including advance contracts, may be found in the Federal 

Procurement Data System-Next Generation, a repository of U.S. Governmentwide procurement data. 

www.oig.dhs.gov 2 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

FEMA’s Office of the Chief Procurement Officer (OCPO) requires certain 

documentation from its program offices before it moves forward with a 

procurement. FEMA program offices route required planning documents 

identifying goods and services to be acquired by FEMA OCPO. The documents 

include, but are not limited to, statement/scope of work and independent 

government cost estimates. FEMA OCPO initiates advance contracts and 

authorizes all regional contracting officers to award advance contracts. 

Once an emergency occurs, FEMA will set up a Joint Field Office (JFO) to 

manage its portion of the emergency response efforts in the devastated area. 

During this time, the JFO may use advance contracts or enter into new 

post-disaster contracts in order to respond to the state or territory’s needs. 

Hurricane Maria 

On September 18, 2017, the President approved an emergency declaration for 

Puerto Rico. On September 20, 2017, Hurricane Maria made landfall. It was 

the strongest hurricane to make landfall in Puerto Rico since 1928. Hurricane 

Maria’s powerful winds and heavy rainfall damaged communication and power 

grids, destroyed homes, and downed trees leaving Puerto Rico’s 3.7 million 

people without power or communication. Almost 4 months after the hurricane 

made landfall, approximately 45 percent of the power company’s customers 

were still without power. 

Figure 1. Puerto Rico after Hurricane Maria 

Source: DHS OIG 

According to FEMA, as of January 31, 2019, it spent more than $1 billion 

during its response to Hurricane Maria in Puerto Rico, with more than $550 

million spent on advance contracts. 

www.oig.dhs.gov 3 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

FEMA Region II services the area encompassing Puerto Rico. During Hurricane 

Maria, Puerto Rico provided its requirement shortfalls to FEMA Region II and 

the JFO, which in turn used headquarters advance contracts or entered into 

post-disaster contracts to meet the needs of Puerto Rico’s residents. 

Since Hurricane Maria’s landfall in Puerto Rico, other reports also highlighted 

shortcomings in FEMA contracting: 

	 The U.S. Government Accountability Office issued a report titled 2017 

Disaster Contracting - Action Needed to Better Ensure More Effective Use 

and Management of Advance Contracts, GAO-19-93. This report 

discussed an out-of-date advance contract strategy and poor contract file 

management. 

	 The Department of Homeland Security Office of Inspector General (OIG) 

issued a report titled FEMA Should Not Have Awarded Two Contracts to 

Bronze Star LLC, OIG-19-38. According to the report, FEMA did not 

follow procurement laws, regulations, and procedures when awarding 

two emergency contracts to Bronze Star LLC for tarps and plastic 

sheeting, valued at $30 million, in Puerto Rico. 

We conducted this audit to determine to what extent FEMA’s planning for 

advance contracts in Puerto Rico addressed identified capability deficiencies 

and needs. 

Results of Audit 

FEMA Region II/JFO Did Not Maximize the Use of Advance 

Contracts 

Following Hurricane Maria, FEMA did not maximize the use of advance 

contracts to address identified capability deficiencies and needs in Puerto Rico. 

Specifically, we identified 49 of 241 new contracts issued in the aftermath of 

Hurricane Maria for the same goods or services covered by existing advance 

contracts. In addition, FEMA Region II did not issue any new advance 

contracts prior to Hurricane Maria and did not perform analysis to identify 

goods or services to obtain through advance contracts. We attributed FEMA’s 

limited use of advance contracts to its lack of strategy and documented 

planning process for ensuring maximum use of advance contracts. Although 

FEMA reported to Congress in December 2007 it had a strategy in place, we 

determined it was a one-time strategy and did not meet the intent of the PostKatrina Act. Without advance contracts to expedite acquisitions, goods and 

www.oig.dhs.gov 4 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

services for people in need may have been delayed or were more costly to the 

Government. 

Limited Use of Advance Contracts after Hurricane Maria 

The Post-Katrina Act requires FEMA to maximize the use of advance contracts 

to the extent practical and cost effective. However, in the aftermath of 

Hurricane Maria, contracting officers in FEMA Region II/JFO did not always 

use existing advance contracts, issue new advance contracts, or perform 

analysis to identify goods or services for potential advance contracts to meet 

Puerto Rico’s needs. 

FEMA Region II/JFO Did Not Use Existing Advance Contracts 

We identified 49 of 241 contracts FEMA Region II/JFO awarded after Hurricane 

Maria for the same goods or services covered by existing advance contracts. 

For example: 

	 FEMA Region II/JFO awarded a post-disaster cleaning supply contract 

even though an existing advance contract was available for use. 

Cleaning supplies can be essential in an environment without running 

water or proper waste removal in limiting or stopping the spread of 

disease. 

	 FEMA Region II/JFO awarded new post-disaster housing and lodging 

assistance contracts instead of using the existing advance contract in 

place. Providing available housing and lodging promptly is vital since 

citizens may be without habitable living conditions or may be unable to 

satisfy basic survival needs. 

Contracting officers provided several reasons for not using advance contracts. 

We interviewed 10 contracting officers associated with 44 of the 49 contracts 

(90 percent) to determine whether they considered the advance contracts 

already in place. Contracting officers were able to provide documentation 

supporting their decision to not use an advance contract for 4 of the 44 

contracts. For the other 40 contracts, contracting officers provided reasons for 

not using existing advance contracts such as the existing advance contracts 

could not provide the goods and services when needed or were not cost 

effective. However, when asked, the contracting officers could not provide any 

documentation to support their assertions. One contracting officer provided 

documentation showing an advance contract was considered, but did not 

explain why the scope of the existing advance contract did not meet the 

agency’s needs. Contracting officers also said the Stafford Act directs them to 

www.oig.dhs.gov 5 OIG-20-20 
 

 

 

                                                      

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

award post-disaster contracts to local vendors. Contracting officers indicated 

the priority was to contract with local vendors before using advance contracts. 

While the Stafford Act requires FEMA to award contracts to local private 

organizations, firms, or individuals, it states that should be done to the extent 

feasible and practicable. The Stafford Act does not preclude FEMA from 

awarding local advance contracts. Finally, contracting officers believed their 

decisions were justified based on a July 19, 2010 FEMA memo, Promoting the 

Use of Local Vendors in Disasters. However, this memo reiterates following the 

Stafford Act and discusses transitioning from national advance contracts to 

local vendors within 6 months of a disaster event or sooner if/when feasible or 

practicable. 

FEMA Region II Did Not Issue Any New Advance Contracts 

In 2007, 10 years before Hurricane Maria, FEMA provided a report1 to 

Congress with a list of goods and services suitable for advance contracts. 

However, FEMA Region II has not issued any new advance contracts since 

2007. The Post-Katrina Act requires FEMA to maximize the use of advance 

contracts to the extent practical and cost effective. Maximizing the use of 

advance contracts in this context includes expanding the number of advance 

contracts based on identified needs. 

We determined FEMA Region II contracting officers awarded 49 contracts for 

goods or services it previously reported on this list, including items such as box 

truck rentals and armed security guards. Table 1 shows examples of suitable 

goods and services included in the 2007 congressional report. 

1 FEMA’s Report to Congress, Advance Contracting of Goods and Services, December 2007, not 

currently available online. 

www.oig.dhs.gov 6 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table 1: Examples of Goods and Services Suitable for Advance Contract 

Good/Service Category Example 

Cleaning Supplies Brooms, Buckets, Mops, Rags, Soap, Trash Bags 

Food Items Baby Food, Canned Goods, Ice, Packaged Foods, 

Powdered Milk, Water 

Transportation All-Terrain Vehicles (ATVs) / 4-Wheel Drive Vehicles, 

Bus Rental, Trains, Truck Rental 

Communication Services 

Communications Improvement, Disaster Satellite 

Communication, Mobile Communication Power, Private 

Sector Calling Services, Satellite Phone Services, 

Translation Services, Wireless Services 

Law Enforcement and Security 

Force 

Automated Personnel Security System Support, Security 

Support Services, FEMA Security Office 

Logistics and Transportation 

Support 

Commodity Management, Fuel/Fuel Management, Ice 

Storage, Mortuary Services, Truck Transportation for 

Personnel, Water Transport - Potable (Drinkable) Water 

Source: FEMA’s Report to Congress on Advance Contracting of Goods and Services, December 2007 

According to Region II contracting personnel, they had not issued any new 

advance contracts because contracting officers were unaware regions had the 

authority to enter into advance contracts and believed only FEMA headquarters 

had the authority to do so. However, we identified another FEMA regional 

office that had awarded advance contracts in the past. 

FEMA Region II Did Not Perform Analysis to Identify Goods or Services for 

Potential Advance Contracts 

To ensure the Government meets its needs in the most effective, economical, 

and timely manner, acquisition planning should begin as soon as an agency 

identifies a need. However, FEMA Region II personnel responsible for disaster 

planning in Puerto Rico were not required to perform analysis to identify 

needed goods or services that could have been obtained through advance 

contracts. As part of disaster planning, FEMA’s Region II created several plans 

to respond to emergencies. The plans include an All-Hazards Plan, Hurricane 

Response Plan, and the Hurricane Annex for Puerto Rico and U.S. Virgin 

Islands. These plans discuss prepositioning goods prior to an emergency but 

do not discuss gaps or needs in terms of planning in advance of an emergency. 

FEMA Region II planning personnel informed us since the Region II Hurricane 

Annex for Puerto Rico and U.S. Virgin Islands did not plan for a total island 

destruction, FEMA used the June 2012 Puerto Rico Catastrophic Tsunami 

Annex and Puerto Rico Catastrophic Earthquake Annex plans in response to 

Hurricane Maria. However, these plans only provide guidance for initial 

Federal response and long-term recovery from catastrophe. It references 

activation of the advanced contract initiative for debris removal, water, 

www.oig.dhs.gov 7 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

temporary roofing, and emergency power contract support, but does not assess 

how the needs for these goods and services were determined. In addition, the 

Puerto Rico Catastrophic Earthquake Annex plan does not identify needs and 

gaps for advance contracts. The Earthquake Annex plan does mention specific 

advance contracts, but does not specify how FEMA identified these contracts to 

fulfill its needs. It also uses the term preposition, but it is in reference to 

prepositioning of resources and commodities. 

According to FEMA planning personnel, they work with the Commonwealth of 

Puerto Rico to develop plans before disasters. Specifically, FEMA works with 

the Puerto Rico State Agency for Emergency and Disaster Management to make 

sure the plans meet Puerto Rico’s needs. FEMA chooses the most realistic 

planning scenario using historical data, as well as the Threat and Hazard 

Identification and Risk Assessments and the State Preparedness Reports, to 

develop each plan. FEMA’s plans describe how it will respond to and recover 

from incidents and includes planning assumptions. However, the plans do not 

consider the potential for advance contracts to prepare for a disaster. Region II 

relies on advance contracts written by headquarters or its own post-disaster 

contracts to fulfill their needs. 

FEMA Lacks Strategy with a Documented Process and Performance Goals 

to Maximize Use of Advance Contracts 

We attributed FEMA’s limited use of advance contracts to its lack of: 

 strategy for maximizing the use of advance contracts; 

 a documented planning and decision-making process, particularly for 

considering state and local needs; and 

 performance goals and measures to assess progress. 

No Advance Contract Strategy 

The Post-Katrina Act requires FEMA to develop an advance contracting strategy 

to maximize the use of such contracts. Having an advance contracting strategy 

would provide guidance for decision makers on awarding and using advance 

contracts, potentially improving the responsiveness and availability of 

resources before a disaster strikes. It also allows FEMA to take into 

consideration the priorities of the local community affected by disasters and 

rapidly mobilize resources. Although the Post-Katrina Act does not specify 

what should be included in the advance contracting strategy, FEMA defines a 

strategy as a carefully devised plan of action to achieve one or more objectives. 

Although FEMA reported to Congress in December 2007 it had an advance 

www.oig.dhs.gov 8 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

contracting strategy in place, we determined it was a one-time strategy and did 

not meet the intent of the Post-Katrina Act. Instead, this strategy only 

identified a list of goods and services deemed appropriate for advance 

contracting and a list of fiscal year 2007 advance contracts. 

No Documented Planning and Decision-making Process 

FEMA’s December 2007 advance contract strategy did not include a 

documented planning process that considered the possibility of updating the 

number of advance contracts to address ongoing demands and changing 

needs. 

According to FEMA OCPO personnel, they did not use a documented planning 

process and primarily identified new advance contracts based on the needs of 

the previous disasters. FEMA OCPO stated it collaborated with other program 

offices to identify needs, but did not have documentation to support its 

decisions. In the same report to Congress, FEMA also stated it had developed 

an acquisition tracker to help define future requirements; however, we could 

not identify anyone in FEMA who knew whether the acquisition tracker existed. 

In addition, FEMA’s strategy lacked a documented process for contracting 

officers to justify not using existing advance contracts. 

Further, the Post-Katrina Act requires FEMA to coordinate with state and local 

governments and other Federal agencies, and establish a process to ensure 

Federal pre-negotiated contracts for goods and services are coordinated with 

state and local governments, as appropriate. FEMA’s advance contract strategy 

did not include a documented process for considering the needs of its state and 

local partners. According to FEMA planning personnel in Region II, they work 

with the Commonwealth of Puerto Rico before disasters to develop plans on 

how it will respond and recover from disasters. However, documentation did 

not exist to show FEMA Region II considered local community needs in 

deciding how to use advance contracts to help those communities quickly 

respond and recover from disasters. 

No Performance Goals and Measures 

Finally, FEMA’s advance contract strategy did not include any performance 

goals and measures to assess progress of maximizing advance contracts. 

www.oig.dhs.gov 9 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

According to the GPRA Modernization Act of 2010, Pub. L. No. 111-352, 

performance plans covering program activities shall include: 

 performance goals to define the level of performance to be achieved; 

 goals expressed in an objective, quantifiable, and measurable form; 

 a description of how the performance goals are to be achieved; and 

 performance indicators to be used in measuring or assessing progress 

toward performance goals. 

Since FEMA did not have an advance contract strategy, we cannot be certain it 

had enough advance contracts in place to provide assistance to the residents of 

Puerto Rico after Hurricane Maria made landfall. In addition, FEMA may have 

missed opportunities to provide goods and services promptly to citizens affected 

by Hurricane Maria, and those goods and services may have been more costly. 

FEMA Did Not Manage Contract Files in Accordance with 

Regulations and Policy 

FEMA did not maintain contract files in accordance with the Federal 

Acquisition Regulation (FAR) and departmental or FEMA policy guidance. FAR 

Part 4.800 prescribes the Federal requirement for establishing, maintaining, 

and disposing of contract files. The FAR requires the head of each office 

performing contracting, contract administration, or paying functions to 

establish contract files containing all contractual actions. In addition, 

according to FAR Part 4.802, if contract files are decentralized, responsibility 

for their maintenance must be assigned. A central control and, if needed, a 

locator system should be established to ensure the ability to promptly locate 

any contract files. 

The FAR is not strict about having a paper contract file and allows for contract 

files to be maintained in any medium (paper, electronic, microfilm, etc.). 

However, the Homeland Security Acquisition Manual (HSAM), section 3004.803­

70, requires DHS components to have an official contract file folder for every 

contract awarded. Further, FEMA’s standard operating procedure for contract 

file management requires contracting officers and contract specialists to create 

and maintain official contract files. It also requires headquarters contract files 

be stored in a central file room within 5 business days after award of a contract 

or issuance of an order. The same standard operating procedure requires field 

offices to establish a central file location (where practicable) for all active files. 

We requested 133 task orders associated with 9 advance contract files from 

FEMA to determine the completeness and accuracy of Region II/JFO 

procurement logs, which are lists of all contracts, including advance and postwww.oig.dhs.gov 10 OIG-20-20 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

disaster contracts, Region II/JFO used during Hurricane Maria. Requests for 

all contract files and associated task orders were made to FEMA OCPO. We 

made these requests more than a month in advance to afford FEMA OCPO 

enough time to gather the requested files. We sent multiple follow-up emails, 

indicating these files would be needed and should be made ready for our 

review. However, FEMA OCPO did not make all the requested task orders 

available. 

We were provided access to 18 task orders associated with 7 contract files — 4 

hardcopy task order files located in FEMA headquarters and 14 electronic task 

order files from FEMA Region II. FEMA OCPO did not provide us the remaining 

99 FEMA headquarters task order files, which should have been located in the 

headquarters central file room, as required by FEMA’s standard operating 

procedure. In addition, FEMA OCPO did not produce the remaining 16 task 

order files that should have been available in hardcopy at a central file room 

located at FEMA Region II. Overall, FEMA OCPO did not produce 115 of the 

133 task orders we requested. 

This occurred because FEMA OCPO does not have controls to ensure contract 

personnel are following the FAR, HSAM, and FEMA’s standard operating 

procedure. For example, a Region II Contracting Officer stated personnel are 

behind on printing hardcopy files. They print the hardcopy files as needed or 

requested for audits and do not have enough storage space for the hardcopy 

files. Further, a FEMA OCPO staff member informed us there are no 

requirements in place to perform any checks on contracting officers to ensure 

they are following the FEMA OCPO policy requiring all contracting officers to 

store contract files in the central file room. As a result, FEMA may not be able 

to hold contractors accountable for deliverables if contract files are not easily 

located. 

www.oig.dhs.gov 11 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Recommendations 

Recommendation 1: We recommend the Regional Administrator, FEMA 

Region II develop and implement a formal documented process to identify 

capability needs and gaps for potential advance contracts in Puerto Rico. 

Recommendation 2: We recommend the Head of Contracting Activity for 

FEMA develop and implement an advance contract strategy that: 

• includes a documented planning process to support the addition or 

removal of available advance contracts; 

• encourages awarding advance contracts at the regional level; 

• provides clear guidance for when a contracting officer should defer to 

the Post-Katrina Act or the Stafford Act; 

• incorporates a formal process to identify capability needs and gaps for 

potential advance contracts; 

• includes a schedule for updating its guidance and processes; 

• requires state, territory, and local input; and 

 specifies performance measures. 

Recommendation 3: We recommend the Head of Contracting Activity for 

FEMA direct all contract personnel to follow the FAR, HSAM, and their 

standard operating procedure for creating and maintaining contract files. 

Recommendation 4: We recommend the Head of Contracting Activity for 

FEMA implement controls to ensure FEMA personnel are following the FAR, 

HSAM, and their standard operating procedure for creating and maintaining 

contract files. 

FEMA Comments and OIG Analysis 

The Department concurred with all four of our recommendations. However, 

FEMA’s planned actions do not meet the intent of the recommendations. We 

have included a copy of the management comments in their entirety in 

appendix B. According to FEMA, it is committed to ensuring contracting for 

preparedness, response, and recovery efforts against all hazards are in full 

compliance with laws, regulations, and policies. FEMA is equally committed to 

maintaining updated information on the availability and use of advance 

contracts for the FEMA acquisition workforce. 

In addition, FEMA provided technical comments to our draft. We evaluated 

those comments but did not make changes to our report. 

www.oig.dhs.gov 12	 OIG-20-20 
 

  

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Response to Recommendation 1: Concur. FEMA’s OCPO agrees with the 

need for a formal process to identify capability needs and gaps for potential 

advance contracts, and claims one already exists. Specifically, FEMA OCPO 

establishes advance contracting on a nation-wide basis, not region-by-region. 

It is not a function of FEMA Region II to develop and implement a formal 

documented process for potential advance contracts in Puerto Rico, since 

FEMA’s nation-wide establishment of advance contracts to meet the agency’s 

mission-essential needs includes the Regions. To improve the existing process, 

OCPO established an agency-wide Disaster Strategy Forum in February 2019, 

which brings together FEMA’s major disaster operational functions, including 

FEMA Regions, on a bi-weekly basis. This forum allows these functions to 

strategize future approaches to disaster contracting issues and needs, such as 

mitigating mission shortfalls and identifying capability gaps. FEMA requested 

this recommendation be closed and resolved. 

OIG Analysis: The agency’s response does not address the intent of the 

recommendation. The agency describes actions taken at the agency-wide level 

to establish advance contracts. However, the agency does not specify how it 

will address identifying capability needs and gaps, specifically in Puerto Rico, 

that can then be shared at the regional level via the newly developed Disaster 

Strategy Forum to guide national discussions. Therefore, this recommendation 

is considered open and unresolved until FEMA can provide a documented 

process identifying capability gaps and needs for potential advance contracts in 

Puerto Rico. 

Response to Recommendation 2: Concur. According to FEMA, OCPO has 

been assessing the advance contracts list as an ongoing activity since well 

before the 2017 hurricane season. Based on this activity, OCPO took steps, 

beginning in October 2018, to improve the planning, management, and 

visibility of advance contracts. These steps include regularly assessing the 

advance contracts list, in consultation with headquarters and regional 

partners, to ensure commodities and services are available to meet the mission. 

Further, the issuance of new advance contracts is now based on known 

recurring goods and services that will be used in advance of natural or 

manmade disasters, as a result of the FEMA Disaster Strategy Forum. FEMA 

OCPO is memorializing this process to manage and track advance contracts by 

creating a FEMA Acquisition Manual, and updating its current Disaster 

Contracting Desk Guide to ensure clear guidance is given to contracting 

personnel on the proper use of advance contracts. The estimated completion 

date is August 31, 2020. 

OIG Analysis: The agency’s response does not fully address the intent of the 

recommendation. FEMA indicated it has taken steps toward an advance 

www.oig.dhs.gov 13 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

contracting strategy by creating an acquisition manual and providing clear 

guidance on the proper use of advance contracts. However, the Post-Katrina 

Act of 2006 requires FEMA to maximize the use of advance contracts to 

expedite the acquisition of supplies and services during an emergency. 

According to FEMA, it is basing its decision to issue new advance contracts on 

recurring goods and services that will be used in advance of a disaster. 

Therefore, this recommendation is considered open and unresolved until FEMA 

provides documentation of an advance contract strategy describing the process 

to be followed to address all elements our recommendation. 

Response to Recommendation 3: Concur. According to FEMA, OCPO 

personnel, including contract personnel, are instructed through the standard 

operating procedure, Labeling and Organizing Official Contract File Folders, 

dated August 31, 2009, to manage all contract files in accordance with the FAR 

and HSAM. In addition, FEMA will transition to an Electronic Contract Filing 

System by March 31, 2020. In April 2019, OCPO also drafted an Acquisition 

Alert, Contract File Accountability, requiring the use of the Electronic Contract 

Filing System as the system of record. This alert is scheduled for issuance 

during the third quarter of fiscal year 2020. The estimated completion date is 

June 30, 2020. 

OIG Analysis: The agency’s response does not fully address the intent of the 

recommendation. FEMA stated an August 31, 2009 standard operating 

procedure instructs personnel to manage all contract files in accordance with 

the FAR and HSAM. However, FEMA did not address its standard operating 

procedure for contract file management, which requires contracting officers 

and contract specialists to create and maintain official contract files in 

hardcopy. It also requires headquarters contract files to be stored in a central 

file room within 5 business days after award of a contract or issuance of an 

order. The same standard operating procedure requires field offices to 

establish a central file location (where practicable) for all active files. Until 

FEMA transitions to an Electronic Contract Filing System, the current 

standard operating procedure to maintain hardcopy contract files must be 

followed. Therefore, this recommendation is considered open and unresolved 

until the Head of Contracting Activity for FEMA directs all contract personnel 

to follow all current regulations and policies until the acquisition alert 

requiring use of an Electronic Contract Filing System is issued. 

Response to Recommendation 4: Concur. According to FEMA, the standard 

operating procedure, Labeling and Organizing Official Contract File Folders, 

dated August 31, 2009, instructs FEMA OCPO personnel to manage all 

contract files in accordance with the FAR and HSAM. From April 29 to May 2, 

2019, FEMA OCPO provided training to OCPO personnel for creating and 

www.oig.dhs.gov 14 OIG-20-20 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

maintaining contract files during the Mission Rehearsal Training. The FEMA 

OCPO also drafted an Acquisition Alert, Contract File Accountability, in April 

2019 to reiterate existing controls ensuring all OCPO personnel comply with 

the contract filing process, including the use of the Electronic Contract Filing 

System. This alert is scheduled for issue during the third quarter of FY 2020. 

The estimated completion date is June 30, 2020. 

OIG Analysis: The agency’s response does not fully address the intent of the 

recommendation. FEMA stated it trained staff on the creation and 

maintenance of contract files. FEMA also stated the acquisition alert that has 

been drafted, but not released, reiterates existing controls ensuring all OCPO 

personnel comply with the contract filing process. However, we did not find 

any evidence that such controls were in place. Therefore, this recommendation 

is open and unresolved until FEMA provides documentation it has 

implemented controls to ensure personnel are following all current regulations, 

policies, and standard operating procedures for creating and maintaining 

contract files. 

www.oig.dhs.gov 15 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

The Department of Homeland Security Office of Inspector General was 

established by the Homeland Security Act of 2002, Pub. L. No. 107−296, by 

amendment to the Inspector General Act of 1978. 

FEMA introduced advance contracts as a way to expedite the acquisition of 

supplies and services during emergencies. Our objective was to determine to 

what extent FEMA’s planning for advance contracts in Puerto Rico addresses 

identified capability deficiencies and needs. The scope of our audit included 

reviewing advance and post-disaster contracts used between 

September 20, 2017 and May 31, 2018. This includes contract modifications, 

task orders, requisition forms, and other file documentation. 

FEMA provided a list of 121 advance contracts. This list became our universe 

for selecting a judgmental sample. We judgmentally selected 40 advance 

contract files for review in consultation with the OIG statistician. We reviewed 

documents in the contract files to determine whether FEMA identified 

capability deficiencies and needs. 

We reviewed requisitions (FEMA form 143) for supplies, equipment, personnel, 

and/or teams; statements of work; performance work statements; statements 

of objective; and independent government cost estimates to determine whether 

FEMA may have documented identified capability deficiencies and needs on 

these forms instead of including this information in contract files. 

We compared post-disaster contracts awarded from September 20, 2017, 

through May 31, 2018 by Region II/JFO to the advance contract list in order to 

identify whether FEMA maximized its use of advance contracts in lieu of postdisaster contracts. In addition, we compared the goods and services acquired 

through post-disaster contracts by Region II/JFO with the list of goods and 

services appropriate for advance contracts FEMA reported to Congress in 2007. 

We identified and reviewed pertinent Federal criteria related to our audit 

objective, which included the Post-Katrina and Stafford Acts. We reviewed 

related DHS and FEMA policies and FEMA standard operating procedures. 

FEMA and the government of Puerto Rico identified and provided disaster 

planning documents, which included: 

 Threat and Hazard Identification and Risk Assessment; 

 State Preparedness Report; 

 Puerto Rico Catastrophic Tsunami Annex; 

www.oig.dhs.gov 16 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

 Puerto Rico Catastrophic Earthquake Annex; 

 Puerto Rico Catastrophic Planning Annex; 

 FEMA Region II Hurricane Annex for Puerto Rico and U.S. Virgin Islands; 

 Incident Management Assistant Team Reports; and 

 Puerto Rico Hazard Mitigation Plan.
 

We interviewed personnel responsible for identifying needs and acquisition 

planning at the Federal, regional, and state levels. We met with various FEMA 

and Puerto Rico offices including: 

FEMA: 

 Office of the Chief Procurement Officer, Washington, D.C.; 

 Response and Recovery, Washington, D.C.; 

 Logistics, Washington, D.C.; 

 Region II, New York; 

 Mission Assignments and Operations, Puerto Rico; 

 Logistics, Puerto Rico; 

 Federal Coordinating Officer, Puerto Rico; 

 Region II Caribbean Office, Puerto Rico; and 

 Finance and Administration, Puerto Rico. 

Puerto Rico: 

 Departamento de Transportacion y Obras Publicas (Department of 

Transportation), Puerto Rico; 

 Agencia Estatal para el Manejo de Emergencias y Administración de 

Desastres (Puerto Rico State Agency for Emergency and Disaster 

Management), Puerto Rico; 

 State Coordinating Officer, Puerto Rico; and 

 Central Office for Recovery, Reconstruction, and Resiliency (COR3), 

Puerto Rico 

We attempted to obtain and identify the complete universe of FEMA’s advance 

contracts in order to address our audit objective. We requested a list of 

advance contracts available for use in Puerto Rico after Hurricane Maria to 

select our sample. We were unable to identify a complete universe of FEMA’s 

advance contracts from which to select our sample. Based on discussions with 

key FEMA personnel, we found the advance contract list is manually 

generated. There were no databases or documentation to verify completeness 

of the advance contract list. 

To identify advance contracts used in Region II/JFO, we obtained Region 

II/JFO procurement logs and compared them with the FEMA headquarters’ 

www.oig.dhs.gov 17 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

advance contract list. We assessed the reliability of Region II/JFO 

procurement logs for the audit by attempting to review contract files and 

associated task orders. However, FEMA did not provide all requested task 

orders, which prevented us from determining whether Region II/JFO 

procurement logs were complete. Therefore, we used Federal Procurement 

Data System-Next Generation to determine whether contracts and select task 

orders were used in Puerto Rico during Hurricane Maria. We found advance 

contracts used in Puerto Rico for Hurricane Maria not on the Region II/JFO 

procurement log. Although the data provided was incomplete, we believe the 

data was sufficient to meet our audit objectives and conclusions. 

We conducted this performance audit between April 2018 and June 2019 

pursuant to the Inspector General Act of 1978, as amended, and according to 

generally accepted government auditing standards. Those standards require t 

we plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based upon our 

audit objectives. We believe the evidence obtained provides a reasonable basis 

for our findings and conclusions based upon our audit objectives. 

www.oig.dhs.gov 18 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B 

FEMA Comments to the Draft Report 

www.oig.dhs.gov 19 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

www.oig.dhs.gov 20 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

www.oig.dhs.gov 21 OIG-20-20 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C 

Office of Audits Major Contributors to This Report 

Carolyn Hicks, Director 

Cheryl Jones, Audit Manager 

Duane Albert, Analyst-in-Charge 

Aneet Marwaha, Program Analyst 

Quentien Brewington, Program Analyst 

Areti Bruno, Program Analyst 

Jessica Jackson, Auditor 

Marc Cruz, Program Analyst 

Lindsey Koch, Communications Analyst 

Alfonso Dallas, Independent Referencer 

www.oig.dhs.gov 22 OIG-20-20 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chiefs of Staff 

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

FEMA Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees 

www.oig.dhs.gov 23 OIG-20-20 
Additional Information and Copies 

To view this and any of our other reports, please visit our website at: 

www.oig.dhs.gov. 

For further information or questions, please contact Office of Inspector General 

Public Affairs at: DHS-OIG.OfficePublicAffairs@oig.dhs.gov. 

Follow us on Twitter at: @dhsoig. 

OIG Hotline 

To report fraud, waste, or abuse, visit our website at www.oig.dhs.gov and click 

on the red "Hotline" tab. If you cannot access our website, call our hotline at 

(800) 323-8603, fax our hotline at (202) 254-4297, or write to us at: 

Department of Homeland Security 

Office of Inspector General, Mail Stop 0305 

Attention: Hotline 

245 Murray Drive, SW 

Washington, DC 20528-0305