DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

Hurricane Katrina Temporary Housing 

Technical Assistance Contracts 

OIG-08-88 August 2008 
 

Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

August 20, 2008 

Preface 

The Department of Homeland Security, Office of Inspector General, 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 prepared as part of 

our oversight responsibilities to promote economy, efficiency, and effectiveness within the 

department. 

This report, prepared for us by Williams, Adley & Company, LLP, addresses contract costs 

incurred by the Federal Emergency Management Agency for the four Individual Assistance 

Technical Assistance Contracts for Hurricane Katrina Relief Efforts. These contracts tasked the 

contractor to provide and coordinate comprehensive project management services for temporary 

housing solutions in the aftermath of the hurricane. It is based on interviews with employees and 

officials of relevant agencies, direct observations, and a review of applicable documents. 

The recommendations herein have been developed to the best knowledge available to our office 

and have been discussed in draft with those responsible for implementation. It is our hope that 

this report will result in more effective, efficient, and economical operations. We express our 

appreciation to all of those who contributed to the preparation of this report. 

Richard L. Skinner 

Inspector General 
 
 Williams, Adley & Company, LLP 

Table of Contents/Abbreviations 

Executive Summary 1 

Background 2 

Results 4 

Conclusions 10 

Recommendations 11 

Management Comments and Auditor Evaluation 12 

Figures 

Figure 1: Total FEMA Contract Obligations 1 

Figure 2: IA – TAC Contract Obligations for Hurricane Katrina 3 

Figure 3: Task Order Funding Increase 3 

Figure 4: Task Order Timeline 6 

Appendices 

Appendix 1 – Objectives, Scope, & Methodology 

Appendix 2 – FEMA Official Comments 

Appendix 3 – Questioned Costs 

Appendix 4 – Results of Trailer Site Location Review 

Appendix 5 – Report Distribution 

Abbreviations 

COTR 

DCAA 

DHS 

FAR 

FEMA 

Contracting Officer’s Technical Representative 

Defense Contract Audit Agency 

Department of Homeland Security 

Federal Acquisition Regulation 

Federal Emergency Management Agency 

FRRATS FEMA Response & Recovery Applicant Tracking System 

IA-TAC Individual Assistance – Technical Assistance Contract 

LIMS Logistics Inventory Management System 

OIG Office of Inspector General 

WA&Co Williams Adley & Company LLP 
 

 

 

Williams, Adley & Company, LLP 

Executive Summary 

In 2005, the Federal Emergency Management Agency (FEMA) issued noncompetitive Individual 

Assistance – Technical Assistance Contracts (IA-TACs) to four large contractors: Fluor 

Enterprises, Inc., Shaw Group, CH2M Hill Constructors, Inc., and Bechtel National, Inc. These 

contractors were tasked to provide and coordinate comprehensive project management services. 

This report describes the results of Williams, Adley & Company, LLP’s review of the contractor 

costs incurred by the Department of Homeland Security – FEMA for temporary housing solutions 

for the Hurricane Katrina relief effort. Tasks performed under the IA-TACs include: the design 

and construction of temporary housing unit group sites on property such as parking lots and 

farmland; the purchase of a base camp; and, the primary focus of this review, the delivery, 

installation and maintenance of temporary housing units on group, commercial and private sites. 

A detailed explanation of the scope of this review is provided in Appendix 1. The objectives of the 

review were to determine whether: 

 FEMA performed effective price reasonableness determinations; 

 FEMA developed definitive statement of work requirements and specifications, and 

implemented control procedures to ensure contractor compliance with those requirements and 

specifications to minimize the risk of fraud, waste, and abuse; 

 FEMA effectively inspected, accepted, and paid for services rendered; and 

 The contractors complied with statement of work requirements and specifications. 

The effectiveness of controls, and the ability to ensure accountability when controls fail, is critical 

to any organization. We determined that the combination of deficiencies in acquisition planning 

and contract oversight led to waste of government funds and questioned costs of $45.9 million of 

the $3.2 billion contract obligation. Although no instances of fraud were uncovered by our limited 

review, we observed a correlation between deficient procurement practices and contract 

management procedures, and uncontrolled growth in the amount of funds obligated and expended 

under the contracts. FEMA’s ability to properly inspect and accept goods and services was 

hampered because of (1) the number and complexity of contractor invoices it received, 

(2) inadequate FEMA staffing, and (3) unclear contractor invoices. Of the $45.9 million of 

questioned costs, $37.2 million or 81% related to inspection and acceptance of goods and services. 

Figure 1: Total FEMA Contract Obligations 

As of early December 2006, $10.7 billion IA-TAC Contract Obligation FEMA had obligated $3 2 billion - 30% 

approximately $3.2 billion for the 

IA-TACs for the Hurricane Katrina 

relief effort, which represented 

30% of the total $10.7 billion that 

FEMA had obligated for all 

contracts awarded in that time 

period as shown in the graphic. 

We reviewed task orders totaling Other Contract Obligations 

$7 5 billion - 70% 

$2.1 billion or 67% of the value of 

all task orders obligated for the Source: Federal Procurement Data System - Next Generation 

Hurricane Katrina Temporary Housing Technical Assistance Contracts 

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period September 30, 2005, through September 30, 2006. See Appendix 1, Objectives, Scope and 

Methodology, for additional information. 

We recognize that FEMA has already begun the process of improving its operation and controls. 

New competitively bid contracts were awarded in August 2006 and FEMA has been working to 

improve policy and procedures. It is well understood that one of FEMA’s biggest challenges 

during disaster relief efforts is to balance the need to quickly provide assistance to victims while 

ensuring accountability to protect against waste, fraud, and abuse. However, contracts, if not in 

place prior to an event, should be finalized quickly and cost/price analysis should be completed in 

a timely manner. FEMA should enforce terms of the contracts and perform more contract 

oversight to ensure contractor compliance with statement of work requirements and specifications. 

Although there were established procedures to inspect goods and services, and perform invoice 

reviews, amounts invoiced by the contractors needed to include adequate cost details to allow 

FEMA to link invoices to specific contractor activities under the statement of work. We question 

how FEMA determined that the amounts invoiced were allowable and reasonable. 

Overall, an adequate number of staff should be employed to 1) sufficiently plan acquisitions; 2) 

monitor contracts and hold contractors compliant to the terms of the contract; and 3) inspect and 

accept services rendered. Additionally, we recommend that FEMA recover the unsupported or 

excessive charges. 

Background 

On August 29, 2005, Hurricane Katrina devastated the Gulf Coast regions of Louisiana, 

Mississippi, and Alabama. During early September 2005, the FEMA human capital resources 

were not sufficient to coordinate the massive and urgent logistical response effort without 

substantial assistance. FEMA awarded contracts to four contractors, issued on a sole-source basis 

based on urgent and compelling need, to provide immediate assistance1

. 

The urgent need for housing pressured FEMA to act quickly. No-bid contracts were awarded to 

Fluor Enterprises, Inc. (Fluor), Shaw Group (Shaw), CH2M Hill Constructors, Inc. (Hill), and 

Bechtel National, Inc. (Bechtel). These contracts tasked the contractors to provide and coordinate 

comprehensive project management services for temporary housing, to include all phases of 

design, planning, budgeting, construction, destruction, and site restoration from project beginning 

through completion and closeout. The scope of these contracts encompassed numerous support 

functions including the transportation, storage, installation, and subsequent deactivation of 

temporary housing units. In addition, the contractors were tasked with identifying and confirming 

appropriate housing sites based on feasibility analyses, performing temporary housing group site 

designs and site preparation work, and providing ongoing maintenance and security for each of the 

sites. One contractor’s task order included the purchase of a base camp as a housing solution. As 

1

 FEMA awarded the four contracts as Indefinite Delivery Indefinite Quantity contracts. These definitive contracts 

allowed for cost type and time and materials task orders primarily related to temporary housing efforts. FEMA issued 

sole source task orders based on geographic area and the capacity of the prime contractor. 

Hurricane Katrina Temporary Housing Technical Assistance Contracts 

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Total $3.2 Billion 

Fluor - $1.3 billion – 43% 

Hill - $463 million – 15% 

Bechtel - $517 million – 16% 

Shaw - $830 million – 26% 

Source: WA&Co analysis of IA-TAC Task Order Summary December 2006, 

provided by FEMA 

 Williams, Adley & Company, LLP 

of early December 2006, FEMA had obligated approximately $1.3 billion for Fluor, $830 million 

for Shaw, $464 million for Hill, and $517 million for Bechtel. In total, at this time approximately 

$3.2 billion had been obligated for the Individual Assistance – Technical Assistance Contracts (IATACs) for the Hurricane Katrina relief effort, as illustrated in Figure 2. 

The initial contracts were Figure 2: IA-TAC Contract Obligations for Hurricane Katrina executed on the basis of preaward authorization notices 

without preaward audits or a 

defined statement of work. 

Each contract had an initial 

ceiling of $100 million. The 

government was committed to 

reimbursing the contractors for 

funds expended without the 

benefits of the defining terms 

and conditions associated with 

a contract or task order. 

Because of the devastation 

caused by the hurricane, 

housing needs exceeded 

FEMA’s capability, and FEMA 

relied on the contractors who had the ability to quickly provide needed assistance. Work 

continued to be tasked to these contractors without FEMA performing cost estimates and 

negotiating prices. However, it was not until significant costs had been incurred and after the 

contractors solidified the statements of work that the task orders were finally definitized. The 

contract ceilings continued to increase without the establishment of the controls needed to contain 

costs. 

Figure 3 depicts the growth in funds of the task orders we reviewed. As modifications were 

Figure 3: Task Order Funding Increase 

$0 

$500 

$1,000 

$1,500 

$2,000 

$2,500 

Sep05 Oct05 Nov05 Dec05 Jan06 Feb06 Mar06 Apr06 May06 Jun06 Jul06 Aug06 Sep06 

Month 

Amount in Millions 

Source: WA&Co analysis of IA-TAC Task Order Summary September 2006, provided by FEMA 

Hurricane Katrina Temporary Housing Technical Assistance Contracts 

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issued, the funding of the cumulative task orders increased significantly, by 3,235%, during the 

period of performance. When the period of performance ended, FEMA competitively bid the 

requirements and awarded IA-TAC-II contracts to six contractors in August 2006 for a two-year 

period. 

FEMA is aware that it needs to strengthen its emergency management capabilities in advance of 

another catastrophic disaster and has taken steps to address previously identified problems, such as 

increasing staffing. We remain concerned that waste may occur under the current IA-TAC II 

contracts due to further 

improvements needed in the areas of 

oversight, knowledge transfer, and 

support systems. Prior to issuance of 

the IA-TAC III contracts in August 

2008, it is critical that FEMA 

implement recommendations not 

already considered that will reduce 

the risk of fraud, waste, and abuse 

during future disaster recovery 

efforts. 

Results 

A combination of problems led to 

questioned costs of $45.9 million 

and waste of government funds. 

FEMA had insufficient trained 

acquisition staff and inadequate 

controls in place to: 

 Plan these major acquisitions; 

 Provide oversight of contractor 

compliance; 

 Review the combination of 

voluminous and complex 

invoices to ensure that costs 

billed to the government were 

allowable and allocable to the 

task order being charged; and 

 Ensure proper accountability of 

temporary housing units. 

The contracting and technical 

oversight organizational structure 

following Hurricane Katrina 

reflected limited staffing for the size, 

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Base Camp Case Study 

On August 26, 2005 FEMA contacted Fluor, an existing IATAC contractor, to assist with the development and 

mobilization of an action plan to house an anticipated 

300,000 displaced persons pending the arrival of Hurricane 

Katrina. The task order required Fluor to conduct a site 

inspection before ordering tents, but Fluor ordered the tents 

in advance of inspecting the site. FEMA purchased $20.2 

million worth of base camp materials (tents) without 

competition and without analysis to determine if there was a 

viable use for them. Furthermore, FEMA purchased the base 

camp after it was determined that the designated site was not 

suitable for the tents. A price reasonableness analysis was 

performed after the fact and used questionable assumptions. 

We questioned costs totaling $8,686,175 as follows: 

 Fluor’s negotiated purchase price did not identify the 

lease cancellation amount of $7,628,079 separately and 

included the amount as part of the cost of goods 

purchased; 

 The lease cancellation fees should have been waived in 

lieu of the purchase of the tents and associated 

equipment; 

 Shipping costs of $430,000 were not based on actual 

expenses; and 

 Administrative fees of $628,096 were paid as a result of 

the lease cancellation figure. 

The base camp was never used as intended and remained in 

storage without being inventoried from the date of delivery in 

November 2005 to October 2006. FEMA did not provide 

adequate oversight in the decision making process, and we 

were not provided with information to indicate that any 

FEMA employee has been held accountable for the purchase 

decision, the subsequent lapse in inventorying the items, or 

for making the payment to Fluor without proper inspection 

and acceptance of the materials. 

Source: WA&Co analysis 
 

 

Williams, Adley & Company, LLP 

scope, and urgency of the contracting effort from both procurement management and contract 

monitoring perspectives. The decision making process was decentralized in the field without 

adequate accountability as a mitigating control. 

Cost/Price Reasonableness 

An acquisition oversight report dated June 2006 and prepared by the Department of Homeland 

Security (DHS) Office of the Chief Procurement Officer concluded overall that IA-TAC contract 

files were so poor that they did not demonstrate that FEMA paid a fair and reasonable price for the 

services provided. The DHS Office of the Chief Procurement Officer further concluded that: 

 The IA-TAC contract documentation was noncompliant; 

 The contracting approach did not fully protect the government’s interests; and 

 Lack of acquisition planning hampered FEMA’s ability to provide necessary services. 

Among other recommendations, the DHS Office of the Chief Procurement Officer recommended 

that FEMA develop and use a contract administration plan to train program staff, Contracting 

Officer’s Technical Representatives (COTRs), and contract monitors regarding contract ceilings. 

In assessing the conclusions reached by the DHS Office of the Chief Procurement Officer, it is 

important to understand that the four IA-TAC contracts were awarded on a sole-source basis, 

based on the urgent and compelling need to provide immediate assistance to hurricane victims. 

FEMA was not prepared to respond to this catastrophic event and, consequently, they procured 

services on the basis of pre-award authorization notices without pre-award audits or a defined 

statement of work. 

In general, the results of our review support the conclusions reached by the DHS Office of the 

Chief Procurement Officer. FEMA did not consistently perform an independent cost/price analysis 

as required. For example, the Shaw and Hill task orders reviewed, and the purchase of the base 

camp procured under Fluor’s contract did not have independent cost/price analyses performed. 

Under Federal Acquisition Regulation (FAR) subpart 15.4 the contracting officer is responsible for 

obtaining information to evaluate the reasonableness of the price. The contract files were missing 

required documents, and we were unable to trace pricing information and support. Specific 

examples are described below. 

Work had been substantially completed under the Shaw and Hill task orders before the task orders
 

were definitized. Although we requested cost/price proposals during our testing, FEMA officials 

could not provide sufficient documentation to properly support that the costs billed on the invoices 

were based on approved rates. With respect to the Shaw IA-TAC, FEMA relied upon Shaw’s cost 

estimates exclusive of any independent pricing data or competition, which is not in compliance 

with FAR subpart 15.4. For the Hill IA-TAC, the contract files and supporting documentation 

were incomplete, which made pricing verification unattainable. The timeline of events from
 

contract award through contract closeout for each of the task orders reviewed for the IA-TAC 

contractors shows the delays in defining the statement of work as shown in Figure 4 below. For 

many of the task orders presented below, the sequence of events supports our observation and the 

Hurricane Katrina Temporary Housing Technical Assistance Contracts 

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Contractor 

Task 

Order 

(1) 

Contract 

Award 

Date 

(2) 

Preauthorization 

Notice Issued to 

Commence Work 

(3) 

Cost 

Price 

Proposal 

Submitte 

d 

(4) 

Task Order 

Definitized 

(5) 

Performance 

Period Ending 

Date 

(6) 

Elapsed 

Days 

Column 

(3) minus 

Column 

(5) 

FLUOR 

TO-02 9/3/05 9/9/05 10/4/05 10/14/05 9/30/06 35 

TO-08 9/3/05 9/5/05 11/12/05 2/23/06 9/30/06 171 

TO-11 11/10/05 9/22/05 4/18/06 2/28/06 10/31/06 110 

TO-13 9/3/05 9/22/05 10/25/05 2/28/06 9/30/06 159 

 TO-19 9/3/05 8/31/05 10/21/05 10/28/05 9/30/06 58 

SHAW TO-15 9/12/05 1/13/06 5/2/06 8/31/06 9/30/06 230 

HILL TO-20 9/30/05 9/19/05 3/3/06 4/27/06 9/30/06 220 

BECHTEL TO-03 9/30/05 9/3/05 10/18/05 12/22/05 9/30/06 110 

Williams, Adley & Company, LLP 

conclusion of the DHS Office of the Chief Procurement Officer that the contracting approach did 

not fully protect the government’s interests. One task order was not definitized for seven months, 

near the end of the contract, and cost/price data was not confirmed until much of the work had 

been performed. 

Figure 4: Task Order Timeline 

Source: WA&Co analysis of data provided by FEMA 

In addition, the price reasonableness analysis for the $20.2 million base camp purchase, discussed 

on page 4, was performed after the fact. Without an approved cost/price analysis, FEMA’s COTR 

did not have a basis for determining cost reasonableness and allowability when accepting costs 

billed for services rendered. FEMA exposed itself to greater risk than warranted because 

procurement and contract administration activities were not performed as required. Because the 

Shaw and Hill task orders remained undefinitized for almost the entire contract period, with 

limited controls over contractor performance or billing practices, there was an increased risk for 

fraud, waste, and abuse of government resources. 

Monitoring Contract Compliance 

We observed that FEMA’s controls over contractor compliance were not sufficient to ensure 

proper service delivery to temporary housing unit tenants. Fluor, under its maintenance task order, 

was required to perform 100% maintenance of units, grounds, and facilities, and to notify the 

COTR of all emergency maintenance requests. The COTR was not aware of emergency 

maintenance work order requests performed on group sites, nor was he aware that it was a task 

order requirement for Fluor to provide that information. The frequent turnover of FEMA staff, the 

absence of redundancy in key positions, and the ineffective transfer of critical information 

contributed to the COTR’s limited understanding of the contract. 

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During our site inspections we spoke to a small number of occupants regarding the maintenance of 

the temporary housing site and individual units. The most prominent concerns related to repair or 

replacement of equipment such as air conditioning units, refrigerators, stoves, and propane tanks. 

While the contractor maintained work orders, neither FEMA nor Fluor officials were able to 

provide documentation of COTR notifications. Fluor said that there was mutual agreement with a 

FEMA COTR not to comply with the notification requirements for emergency maintenance work 

order requests due to the volume of such requests, but evidence of any appropriate authorization to 

modify the task order was not provided. Also, we questioned how FEMA COTRs were able, 

without proper documentation, to inspect and accept costs billed for rendering these services. 

Our review of a maintenance service task order was limited to one IA-TAC contractor, Fluor. The 

results of our initial review of Fluor indicated that the performance of hauling and installing 

temporary housing units posed the greatest risk to FEMA for potential fraud, waste, and abuse; 

therefore the scope of the remaining IA-TAC audits was limited to these task orders. 

Inventory Control 

Because FEMA’s inventory control procedures were inadequate, at no point in time did FEMA 

know how many trailers they had available. In addition, the recording and tracking of trailers and 

the base camp were insufficient to accurately identify the actual location of these assets. Such 

inadequate inventory tracking increases the risk of misappropriation or cannibalization of 

government property. 

The Office of Management and Budget’s revised Circular A-123 – Management’s Responsibility 

for Internal Control, dated December 21, 2004, requires that agency managers incorporate basic 

management controls in the strategies, plans, guidance and procedures that govern their programs 

and operations. These standards include: 

 Reasonable assurance and safeguards – management controls must provide reasonable 

assurance that assets are safeguarded against waste, loss, unauthorized use, and 

misappropriation; and 

 Recording and documentation – transactions should be promptly recorded, properly classified, 

and accounted for in order to prepare timely accounts and reliable financial and other reports. 

Even though FEMA had some procedures in place, they were not always followed. Insufficient 

staffing and inadequate support systems to track and monitor the trailers compounded the problem. 

 Trailers 

FEMA did not have a real-time inventory control system or mitigating inventory control 

procedures to obtain timely updates and reconcile inventory records with IA-TAC 

contractor data to ensure accurate and timely monitoring of government property. Because 

such procedures were not in place, FEMA was unaware of the actual number of units or 

other property installed, and of their location. Many of the temporary housing units were 

missing from the locations where FEMA records reported they could be found. Overall, 

10.3% (467 units out of 4,521) of the units selected for verification were not found at the 

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sites recorded in the FEMA records. Also, 1,152 units were located at the sites visited but 

were not recorded in FEMA records. Differences existed between the number of 

temporary housing units recorded in the FEMA Response & Recovery Applicant Tracking 

System (FRRATS) and the number of units physically verified at the sites selected for 

review for all four contractors. 

During site visits, we observed that FEMA temporary housing unit records were based on 

projections and did not reflect the actual number of temporary housing units installed at the 

time. FEMA’s Site Inspection Direct Housing Operations Field Support Guide states that 

FEMA must track travel trailers from manufacturers to staging areas and track travel 

trailers, manufactured homes, and other mobile units from staging areas to installation sites 

via an automated systematic and program management system to ensure proper tracking of 

assets. Once units were dispatched to the IA-TAC contractor, FEMA did not keep accurate 

records of the physical location of the temporary housing units in FRRATS. 

During our review of the distribution process, we observed four possible causes for the 

inaccurate information: 

 FEMA did not update information into FRRATS in a timely manner; 

 Contractors did not forward information to FEMA in a timely manner; 

 FEMA Inspection Form 90-13 may have been incorrectly completed; or 

 Information was incorrectly transferred from the FEMA Inspection Form to FRRATS.
 

Given this weakness in the tracking systems, it is not possible to determine if government 

property was really missing and possibly stolen, or just had not been properly tracked. 

Appendix 4 shows the discrepancies between the FRRATS records and the numbers of 

units that could be verified at the sites visited during the time of our review in July and 

August 2006, and again in February and April 2007.
 

FEMA relied on the IA-TAC contractors to maintain control over government assets. At 

the time Hurricane Katrina struck, FEMA did not have a sufficient number of staff to 

handle a disaster of that size and proportion. Initially, only one COTR was assigned to 

oversee disaster recovery efforts in Louisiana. This COTR was responsible for approving 

sites, coordinating with contractors on site design, verifying work, and approving invoices. 

Within months, two more COTRs and several technical monitors were sent to support the 

effort but the workload remained unmanageable given the magnitude of the disaster and the 

speed with which services were needed. 

We observed that the number of units and the geographical area under the purview of the 

COTR and support staff were so expansive that effective oversight was not possible. For 

example, in Louisiana where Fluor and Shaw provided services, there were more than 

40,000 private temporary housing unit sites located in more than 50 separate parishes. In 

Louisiana, staff was required to provide 24-hour coverage, 7 days per week. FEMA 

employees on average worked 12-hour shifts, 7 days a week. 

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 Base Camp 

FEMA inventory policies and procedures were not followed with respect to the purchase of 

the base camp valued at $20.2 million, which was purchased under Fluor’s IA-TAC. 

During our site visits, we located base camp components at three separate locations in 

Alabama, Maryland, and California, where the contractor was instructed to deliver the 

goods. In Selma, Alabama, where 19 truckloads of materials were received, and at the 

Cumberland, Maryland, site where 29 truckloads of components were received, the transfer 

of materials forms signed by FEMA did not match the itemized packing lists signed by 

Fluor, its subcontractor, or the seller. 

FEMA has not provided any evidence of attempts made to reconcile these documents. At 

one location, Sierra Army Depot, FEMA had no personnel onsite to inspect and accept 

delivery of the 14 truckloads of base camp components, because of staffing limitations, and 

did not make arrangements for Sierra Army Depot personnel to perform this function on its 

behalf. Therefore, FEMA was not able to confirm that all of the components were received 

and accounted. Instead, FEMA relied on the contractor’s certification that the goods were 

delivered as instructed. 

The base camp purchase was not entered into the Logistics Inventory Management System 

(LIMS), FEMA’s property tracking system, until after we initiated inquiries during our 

review, almost one year after the November 2005 delivery of the goods. Title 48 of the 

CFR, §45.505(c)2

 states that official government property records must identify all 

government property and provide a complete, current, auditable record of all transactions. 

Due to the insufficient number of qualified government personnel, FEMA relied heavily on the 

contractors’ to control government assets. FEMA did not properly account for inventory assets, 

i.e., temporary housing units and the $20.2 million base camp. 

Inspection and Acceptance of Goods and Services 

Because of insufficient or missing supporting documentation, proper inspection and acceptance of 

goods and services totaling $37million could not be confirmed. Each IA-TAC contractor used its 

own invoice format, which varied with respect to how information was presented and the amount 

of detail provided. Invoices were voluminous and complex, and often included thousands of pages 

of support. When reviewing supporting documentation for delivery, installation, and maintenance 

of temporary housing units, we were unable to determine the breakdown of costs per sites or verify 

the number of sites billed to FEMA and their locations. With respect to the base camp purchase, 

items were not inventoried at the locations when received and FEMA did not have signed 

receiving reports on file detailing the quantity or condition of items shipped and received. As 

such, reasonable inspection and acceptance of $20.2 million in assets was not performed prior to 

payment and it is uncertain whether all the items paid for were received. 

2

 Effective June 14, 2007, Part 45 of Title 48 of the CFR was moved to the Federal Acquisition Circular 2005-17. 

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Although FEMA stated they had procedures in place to inspect goods and services and authorize 

payment, FEMA officials could not provide a copy of the procedures and would not have been 

able to confirm adherence to such procedures due to the insufficient or missing documentation. 

Therefore, it is unclear how FEMA determined that the amounts invoiced by the contractors were 

allowable and reasonable, and why payment was approved for the unsupported costs. Further, 

FEMA did not provide information to indicate that any FEMA employee was held accountable for 

authorizing payments to contractors without proper inspection and acceptance. 

FEMA is responsible for ensuring that the contractor complies with all terms of the agreement and 

conducts business in the best interest of the government. FEMA is also responsible for inspecting 

and accepting deliverables and certifying that invoices submitted for payment are reasonable. 

FAR, Subpart 1.602-2 requires contracting officers to ensure the performance of all necessary 

actions for effective contracting, to include compliance with the terms of the contract and 

safeguarding the interest of the United States in its contractual relationships. According to the IATACs, the final inspection and acceptance shall be by the contracting officer or his/her duly 

authorized representative specified in individual task orders. 

We determined that unsupported costs totaling $37 million (see Appendix 3 – Questioned Costs) 

were approved and paid. With limited staffing at FEMA—three COTRs were assigned to 

Louisiana with hundreds of locations in several parishes to oversee—it was unreasonable to expect 

FEMA COTRs to accurately account for the costs incurred using the invoice formats provided by 

the IA-TAC contractors within the time constraints imposed by the Prompt Payment Act. 

Conclusions 

We recognize that the devastation caused by Hurricane Katrina was monumental and the 

magnitude of the disaster relief effort required is unprecedented. Since the hurricane, FEMA has 

implemented many controls to ensure better service delivery to future disaster victims. 

Additionally, they have engaged the Defense Contract Audit Agency to perform incurred costs 

audits on each of the IA-TACs. Implementation of our recommendations will serve to address the 

need for better controls in the areas of oversight, knowledge transfer, and support systems that we 

noted throughout our reviews of the four IA-TACs. The effectiveness of controls, and the ability 

to ensure accountability when controls fail, is critical to any organization. The combination of 

deficiencies led to waste of government funds and, although no instances of fraud were uncovered 

by our limited review, this environment provided opportunities for fraud and abuse to occur. 

These four contracts were the largest written by FEMA during the response to Hurricane Katrina, 

and the services provided were critical to meeting the needs of displaced residents. Although 

FEMA replaced the original IA-TAC contracts with six competitively bid contracts in August 

2006, these contracts will expire in August 2008. As FEMA begins to plan the next acquisition, 

there is an opportunity to review all recommendations and analyze contract and program strengths 

and weaknesses, to assure needed corrective actions have been addressed in the new acquisition 

plan. 

Hurricane Katrina Temporary Housing Technical Assistance Contracts 

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Recommendations 

The following provides a comprehensive list of recommendations based on the results of our 

review of the four IA-TAC contractors. We recommend that FEMA: 

Cost/Price Reasonableness 

	 Recommendation #1: Develop a detailed statement of work, perform timely cost analysis, 

and negotiate reasonable terms and conditions during the acquisition planning process to 

ensure that contract terms are in the best interest of the government. 

	 Recommendation #2: Recover the $8,686,175 in questioned costs associated with the base 

camp purchase, and determine if the equipment is needed by FEMA; and if it is unnecessary, 

develop a strategy to recover costs, including options to sell it. 

Inspection and Acceptance of Goods and Services 

	 Recommendation #3: Recover unsupported or excessive charges identified as questioned 

costs totaling $37,226,491 related to inspection and acceptance of goods and services, as noted 

in Appendix 3. 

	 Recommendation #4: Develop a standard invoicing format so that the COTR can reasonably 

determine the type of service performed, the price or unit cost of the service, and the location 

or unit for which the service was provided. FEMA should also establish a risk-based review 

process such that invoices receive a thorough review to ensure that the government does not 

pay for goods and services not received or in excess of the agreed upon amount. 

	 Recommendation #5: Establish a system of checks and balances to minimize the risk of 

fraud, waste, and abuse of government funds by holding individuals accountable for accepting 

goods and services, accounting for performance deficiencies, accounting for noncompliance 

with contract requirements, and avoiding authorization and payment of invoices without proper 

inspection. 

Inventory Control 

	 Recommendation #6: Establish and adhere to inventory control protocols, develop an 

interface between FEMA FRRATS and the contractors’ system of tracking government 

property, and post to LIMS so that information is maintained on a real-time basis and 

governmental property is accounted for. 

	 Recommendation #7: Account for all temporary housing units to determine actual inventory 

amounts and ensure proper recordation. 

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Management Comments and Auditor Evaluation 

FEMA provided written comments on the draft of this report and concurred with all of our 

recommendations except for a technical non-concurrence regarding recommendation 6. FEMA’s 

written comments are contained in Appendix 2. 

In response to recommendation 1, that FEMA develop a detailed statement of work, perform 

timely cost analysis, and negotiate reasonable terms and conditions during the acquisition planning 

process, FEMA concurred on the basis that this review pertained to the IA-TAC I contracts. 

FEMA concluded that this recommendation has been incorporated into the IA-TAC II contracts 

through revised Source Selection Plan, Acquisition Plan, and Contract Administration Plans. 

FEMA discussed its plans for administering the acquisition, selection and monitoring of 

contractors with our auditors at a summary level, during the exit briefing, subsequent to the 

issuance of IA-TAC II contracts. The DHS-OIG will review the effectiveness, compliance, and 

execution of these revised plans in future FEMA audits. 

In response to recommendation 2, that FEMA mitigate the base camp cost to the government, 

FEMA concurred and asked the Defense Contract Audit Agency (DCAA) to determine which 

costs claimed by a contractor are in fact allowable and allocable for reimbursement under relevant 

procurement regulations and cost principles. 

We have examined the costs associated with the base camp purchase and determined that the 

questioned costs should not be allowed. However, DCAA may identify additional costs related to 

this purchase that should be recovered. At the conclusion of the DCAA audit, FEMA should 

recover all questioned costs and complete a cost-benefit analysis to determine the disposition of 

the base camp materials kept in inventory. 

In response to recommendation 3, that FEMA recover unsupported or excessive charges identified 

as questioned costs totaling $37,226,491 related to inspection and acceptance of goods and 

services, FEMA concurred with the recommendation. According to FEMA, DCAA will help 

determine which costs claimed by a contractor are in fact allowable and allocable for 

reimbursement purposes under the cost principles. FEMA will pursue efforts to recover 

unallowable, unallocable, and unreasonable charges. 

In response to recommendation 4, that FEMA develop a standard invoicing format so that the 

COTR can reasonably determine the type of service performed, the price or unit cost of the 

service, and the location or unit for which the service was provided and that FEMA establish a 

risk-based review process, FEMA concurred with the recommendation. FEMA now requires 

contractors to use Standard Form 1034 as the standard invoicing form, it has revamped its COTR 

training program and issued a COTR Training Handbook, and FEMA has trained and certified 947 

COTRs as of June 18, 2008. 

FEMA has taken a number of positive steps to enhance its monitoring capabilities. We conclude 

that our recommendation has been addressed in part. FEMA should provide additional 

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information on steps taken to identify risk levels and mitigation efforts to diminish the impact of 

these contractor invoicing risks. The risks include invoicing excessive costs, costs for work that 

was not completed or services that were not rendered, and using inappropriate rates or service 

periods. FEMA should assure that the COTR Handbook adequately addresses how to identify 

such risks and the mitigation techniques for reducing these risks to an acceptable level. 

In response to recommendation 5, that FEMA establish a system of checks and balances to 

minimize the risk of fraud, waste and abuse of government funds, FEMA concurred with the 

recommendation. In November 2007, FEMA issued a “Contracting Officer Technical 

Representative Interim Policy” that addresses the process of nominating and appointing COTRs 

who represent the contracting officer in the administration and management of a contract. The 

policy outlines the responsibility of the COTR to adequately inspect and accept only conforming 

goods or services; to inform the contractor of performance deficiencies; and to evaluate contractor 

performance through the use of the Contractor Performance System. The COTR Interim Policy 

and the COTR Handbook will be reviewed to determine the effectiveness of these tools in future 

audits. 

In response to recommendation 6, that FEMA establish and adhere to inventory control protocols, 

develop an interface between FEMA Response & Recovery Applicant Tracking System 

(FRRATS) and the contractors’ system of tracking government property, and post to LIMS, FEMA 

did not concur from a technical standpoint. According to FEMA, the Sunflower Asset 

Management System (SAMS) will be replacing LIMS within the next twelve months, and 

therefore, posting to LIMS is not a value-added endeavor at this time. Linkage to FRRATS will be 

built into SAMS. As a result, FEMA believes that this recommendation should be closed. 

We agree that it is not cost effective to develop an interface of FRRATS data into LIMS since it is 

being replaced, but suggest FEMA implement mitigating controls in the interim until the new 

system is in place and functioning. 

In response to recommendation 7, that FEMA account for all temporary housing units to determine 

actual inventory amounts and ensure proper recordation, FEMA concurred with this 

recommendation and has initiated a 100% physical inventory that should conclude in September 

2008. 

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Appendix 1 – Objectives, Scope & Methodology 

Our performance reviews of the four IA-TAC contractors began with our review of Fluor. The 

scope of our review of Fluor was more extensive than our reviews of Bechtel, Hill, and Shaw, and 

included selection of five task orders for: 

 Acquisition of base camp; 

 The delivery, installation, and maintenance of temporary housing units on group, 

commercial, and private sites; 

 Administrative and technical support for tracking temporary housing units; and 

 Identification and construction of temporary housing sites. 

Because the results of our review of Fluor indicated that the performance of delivery, installation, 

and maintenance services posed the greatest risk to FEMA for potential fraud, waste, and abuse, 

we limited the scope of our reviews of Bechtel, Hill, and Shaw to selection of one task order each 

for the delivery, installation, and maintenance of temporary housing units on group, commercial, 

and private sites. 

Objectives 

The objectives of our reviews were to determine whether: 

 FEMA performed effective price reasonableness determinations; 

 FEMA developed definitive statement of work requirements and specifications, and 

implemented control procedures to ensure contractor compliance and to minimize the risk of 

fraud, waste, and abuse; 

 FEMA effectively inspected, accepted, and paid for services rendered; and 

 IA-TAC contractors complied with statement of work requirements and specifications. 

Scope 

The scope of our review included task order services performed during the period September 1, 

2005, through June 30, 2006. We conducted physical site verifications during July and August 

2006, and February and April 2007. We conducted visits to distribution centers and the Sierra 

Army Depot in September and October 2006 to verify base camp inventories. We did not 

independently test contractor payroll costs or FEMA’s adherence to procurement and contracting 

requirements. We relied on the payroll audits performed by the Defense Contract Audit Agency 

and the acquisition oversight reviews performed by the DHS Office of the Chief Procurement 

Officer to separately address these issues. 

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The following table summarizes the task orders reviewed under Fluor, Bechtel, Hill, and Shaw’s 

IA-TACs. The task orders were selected by DHS-OIG, in conjunction with WA&Co, based on 

dollar amount of the task orders, the type of services provided, and potential risk. 

Task Orders Reviewed 

Contractor 

Contract 

Number 

Task Order 

Number 

Dollar 

Amount of 

Task Order 

Description of 

Services 

Fluor HSFEHQ-05-D-0471 HSFEHQ-06-J-0002 $ 31,008,517 track temporary 

housing units 

HSFEHQ-06-J-0011 $ 875,108,859 haul & install 

HSFEHQ-06-J-0013 $ 158,474,869 construction, 

materials, labor and 

equipment to 

support temporary 

housing 

HSFEHQ-06-J-0019 $ 99,774,978 identify temporary 

housing sites 

HSFEHQ-06-J-0008 $ 20,212,867 purchase base camp 

Bechtel HSFEHQ-05-D-0572 HSFEHQ-05-J-0003 $ 334,935,403 haul & install 

Hill HSFEHQ-05-D-0592 HSFEHQ-06-J-0020 $ 133,768,875 haul & install 

Shaw HSFEHQ-05-D-0573 HSFEHQ-05-J-0015 $ 464,176,452 haul & install 

Methodology 

We performed our reviews under the authority of the Inspector General Act of 1978, as amended, 

and according to Generally Accepted Government Auditing Standards. We conducted our work in 

accordance with agreed-upon procedures and standards, and executed tests; conducted interviews; 

made observations; and performed examinations as appropriate. During our site visits and testing 

activities we: 

 Interviewed FEMA and contractor personnel to obtain an understanding of policies and 

procedures followed and to identify potential internal control weaknesses and their 

causes. 

 Obtained copies of task order files from FEMA personnel. We reviewed each task 

order and modifications available in the files, and identified the government 

specifications in the statement of work and other documentation providing work 

specifications to determine whether FEMA clearly specified and documented the task 

orders’ work requirements for the contractor. 

 Reviewed task order files to determine whether the contractor was in compliance with 

the performance work statement specifications in the contract (for Fluor we also 

reviewed initial strike team site assessments, work plans, and group site designs). 

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	 Tested expenditures invoiced by the contractor and paid by FEMA, and determined 

whether proper controls were in place to ensure the allowability and allocability of 

costs incurred by the contractor for each task order reviewed. 

	 Conducted group site, private site, and commercial site visits and performed physical 

verification of temporary housing units reported by FEMA. 

	 Performed a temporary housing unit location verification to determine whether FEMA 

properly tracked and monitored government furnished temporary housing units (for 

Fluor, also ensured contractor was properly tracking government furnished temporary 

housing units from staging area to the locations where units were installed). 

	 Reviewed the contractor’s maintenance service guidance system and work order 

system, and performed tests to determine whether any compliance violations had 

occurred and the resolution of such violations (Fluor only). 

The following table identifies locations where testing was performed for each of the IA-TAC 

reviews: 

Contractor Testing Locations 

Fluor • DHS and FEMA headquarters – Washington, DC 

• JFO – Baton Rouge, LA 

• FEMA Distribution Center – Baton Rouge, LA 

• Fluor Staging Area – New Orleans, LA 

• St. Bernard, Orleans, and Plaquemines parishes, LA 

Bechtel • DHS and FEMA headquarters – Washington, DC 

• TRO – Biloxi, MS 

• FEMA Distribution Center – Purvis, MS 

• Hancock, Harrison, and Jackson counties, MS 

Hill • DHS and FEMA headquarters – Washington, DC 

• TRO – Biloxi, MS 

• FEMA Distribution Center – Purvis, MS 

• Hancock, Harrison, and Jackson counties, MS 

Shaw • DHS and FEMA headquarters – Washington, DC 

• FEMA staging area – Baton Rouge, LA 

• Jefferson, Orleans, and Baton Rouge parishes, LA 

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Appendix 2 – FEMA Official Comments 

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FEMA Response to Draft DHS Office of the Inspector 

General Report --Hurricane Katrina Temporary Housing 

Technical Assistance Contracts, May 2008 

Cost/Price Reasonableness 

•	 Recommendation #1: Develop a detailed statement of work, perform timely cost analysis, and 

negotiate reasonable terms and conditions during the acquisition planning process to ensure 

that contract terms are in the best interest of the government. 

Response: Concur. The subject OIG report audited the IA-TAC I contract. FEMA has since 

re-competed the acquisition using a performance-based statement of work. These newer 

contracts are referred to as IA-TAC II. A revised Source Selection Plan and Acquisition Plan 

were developed for IA-TAC II. FEMA performed a cost analysis on each cost proposal and 

awarded six contracts on a “best value” to the Government basis in IA-TAC II. Additionally, 

the Contract Administration Plans sets forth a competitive task order proposal process under 

which each IA-TAC II contractor is alerted of a need and asked to compete for the resulting 

task order based on a detailed statement of the particular requirements. FEMA believes that 

these actions with respect to IA-TAC II meet this recommendation, which should be 

considered closed. 

•	 Recommendation #2: Recover the $8,686,175 in questioned costs associated with the base 

camp purchase, and determine if the equipment is needed by FEMA; and if it is unnecessary, 

develop a strategy to recover costs, including options to sell it. 

Response: Concur. The costs questioned by the DHS OIG arose under a cost reimbursable 

contract. FEMA has asked the Defense Contract Audit Agency (DCAA) to determine which 

costs claimed by a contractor are in fact allowable and allocable for reimbursement under 

relevant procurement regulations and cost principles. DCAA is to not only audit the overall IATAC I contracts, but to also conduct task order-specific audits on all task orders issued. FEMA 

took this unusual additional action to ensure that all costs to be paid by the Government are 

allowable and allocable under the costs principles and contracts. Given these actions, FEMA 

believes this recommendation has been met, and that it should be considered closed. 

Inspection and Acceptance of Goods and Services 

•	 Recommendation #3: Recover unsupported or excessive charges identified as questioned 

costs totaling $37,226,491 related to inspection and acceptance of goods and services, as noted 

in Appendix 3. 

Response: Concur. As noted in Response to Recommendation #2, above, FEMA has 

contracted with DCAA to audit the costs charged under the IA-TAC I contracts as well as costs 

charged under specific task orders. DCAA will help determine which costs claimed by a 

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contractor are in fact allowable and allocable for reimbursement purposes under the cost 

principles. FEMA and DCAA will pursue efforts to recover unallowable, unallocable, and 

unreasonable charges. Given these actions, FEMA believes this recommendation has been met, 

and that it should be considered closed. 

•	 Recommendation #4: Develop a standard invoicing format so that the COTR can reasonably 

determine the type of service performed, the price or unit cost of the service, and the location 

or unit for which the service was provided. FEMA should also establish a risk-based review 

process such that invoices receive a thorough review to ensure that the government does not 

pay for goods and services not received or in excess of the agreed upon amount. 

Response: Concur. FEMA now requires contractors to use Standard Form 1034 as the 

standard invoicing form. In addition, the Contracting Officer’s Technical Representative 

(COTR) Program has been revamped. In August 2007, FEMA issued a “COTR Handbook” 

that provides guidance on establishing and using a COTR administration plan, the performance 

of the contractor, inspection and acceptance of deliverables, and the identification of corrective 

actions to take in the event the contractor fails to perform as required in the contract. FEMA 

also has placed increased emphasis on COTR training and certification. As of June 18, 2008, 

FEMA has 947 DHS-certified COTRs. Given these actions, FEMA believes this 

recommendation has been met, and that it should be considered closed. 

•	 Recommendation #5: Establish a system of checks and balances to minimize the risk of fraud, 

waste, and abuse of government funds by holding individuals accountable for accepting goods 

and services, accounting for performance deficiencies, accounting for noncompliance with 

contract requirements, and avoiding authorization and payment of invoices without proper 

inspection. 

Response: Concur. See Response to Recommendation 4, above. In addition, in November 

2007, FEMA issued a “Contracting Officer Technical Representative (COTR) Interim Policy” 

that addresses the process of nominating and appointing COTRs who represent the contracting 

officer in the administration and management of a contract. The policy outlines the 

responsibility of the COTR to adequately inspect and accept only conforming goods or 

services; to inform the contractor of performance deficiencies; and to evaluate contractor 

performance through the use of the Contractor Performance System. Given these actions, 

FEMA believes this recommendation has been met, and that it should be considered closed. 

Inventory Control 

•	 Recommendation #6: Establish and adhere to inventory control protocols, develop an 

interface between FEMA FRRATS and the contractors’ system of tracking government 

property, and post to LIMS so that information is maintained on a real-time basis and 

governmental property is accounted for. 

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Response: Technical Non-concur. The Logistics Directorate is replacing the LIMS database 

system with the Sunflower Asset Management System (SAMS) within the next twelve months, so 

it does not make sense to link the LIMS systems with FRRATS. SAMS is expected to be fielded 

by July, 2009. The Property Management Division has the lead action on that project, as a part of 

the overall upgrade of FEMA Information Management systems being managed by the Office of 

the CIO. This technical non-concurrence is based on the analysis of the cost of upgrading the 

current LIMS system to link with the FRRATS system versus adding this requirement to be built 

in to the SAMS. This requirement will be added to the Sunflower requirements; therefore, the 

objective of the recommendation will be met, but not through LIMS. 

Recommendation #7: Account for all temporary housing units to determine actual inventory 

amounts and ensure proper recordation. 

Response: Concur. As a result of this recommendation, the Property Management Division of the 

Logistics Management Directorate is undertaking a 100% physical inventory of all housing units in 

storage beginning in July 2007. A contract is being awarded for contractors under the direct 

oversight of the Chief of the Property division to conduct the inventory with government staff from 

the Inventory Management Branch providing COTR support. This inventory is scheduled to 

continue through the end of September, 2008. First site to be inventoried will be Hope, Arkansas 

followed by the other sites, in accordance with a schedule being developed by the contractors and 

the Property Management Division. 

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Appendix 3-Questioned Costs 

Contractor Description Amount

FLUOR Cost/Price Reasonableness 

Base Camp Purchase: 

• Lease Cancellation $7,628,079 

• Administrative Fees $628,096 

• Shipping Costs $430,000 

$8,686,175 

BECHTEL Inspection and Acceptance of Goods and Services 

• Invoice #513266 

• Invoice #513418 

$22,511,151 

$5,229,367 

HILL Inspection and Acceptance of Goods and Services 

• Invoice #5038771 

• Invoice #5038920 

$2,822,386 

$4,508,892 

SHAW Inspection and Acceptance of Goods and Services 

• Invoice #140588 $2,154,695 

Total Contractor Questioned Costs $45,912,666 

Source: WA&Co analysis 

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The following provides a narrative explanation of the questioned costs outlined in the table above. 

FLUOR 

•	 Cost/Price Reasonableness - FEMA authorized Fluor to purchase base camp components 

totaling $20.2 million, without competition and without sufficient analysis to determine if there 

was a viable use or requirement for them. We questioned costs totaling $8,686,175 as follows: 

Fluor’s negotiated purchase price did not identify the lease cancellation amount of $7,628,079 

separately and included the amount as part of the cost of goods purchased; the lease 

cancellation fees should have been waived in lieu of the purchase of the tents and associated 

equipment; shipping costs of $430,000 were not based on actual expenses; and $628,096 for 

administrative fees paid as a result of the lease cancellation figure. 

BECHTEL 

•	 Inspection and Acceptance of Goods and Services - FEMA was unable to provide complete 

supporting documentation for invoice #513418, totaling $5,229,367, and for transactions 

totaling $22,511,151 on invoice #513266. It is unclear as to whether Bechtel provided FEMA 

with full documentation for all transactions at the time the transactions were billed. We could 

not confirm how FEMA determined that the amounts invoiced by Bechtel were allowable and 

reasonable and why payment was approved for the unsupported costs. 

HILL 

•	 Inspection and Acceptance of Goods and Services - We calculated questioned costs of 

$2,822,386 for invoice #5038771 and $4,508,892 for invoice #5038920 for transactions that 

were not properly supported. The COTR said that FEMA did not enforce a protocol where the 

COTRs were required to review 100% of every invoice to determine whether costs billed by 

the contractor were reasonable and allowable. Therefore, prior to approving the payment of an 

invoice, the COTR performed a cursory review of billed amounts and proceeded to authorize 

payment. The summary invoices that the contractor provided itemized the charges according 

to expense categories, but not by site or unit address. In addition, labor charges were billed at 

hourly rates but were not identified to the sites where the services were rendered. 

SHAW 

•	 Inspection and Acceptance of Goods and Services - We calculated questioned costs of 

$2,154,695 for invoice #140588 for transactions that were not properly supported. When 

reviewing supporting documentation, we were unable to determine the breakdown of costs for 

temporary housing units or verify the number of units billed to FEMA. 

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Appendix 4 – Results of Trailer Site Location Review 

Results 

Contractor 

Type of 

Temporary 

Housing Site 

Total 

Units 

issued 

per FEMA 

Units per 

FEMA 

records 

selected 

for 

verification 

Units 

counted 

by 

auditors 

Net 

difference 

between 

FEMA 

records 

and counts 

Variance % Explanation of Discrepancies 

Fluor 

Commercial, 

Group & 

Private 

25,186 1,811 1,698 113 134 units were not at the addresses FEMA provided. 21 

units were at the sites visited but were not recorded in 

FRRATS for those sites. The net difference is 113 units. 

6.2% 

FEMA contends that the differences were caused by 

replacement units at the private sites, delayed installation 

of units while awaiting permits, and unfinished site 

construction and changes in the design that changed the 

number of units the site would accommodate. FEMA's 

records were not updated timely, which accounted for 

differences between FEMA records and the auditors' 

physical verifications. 

Shaw 

Commercial, 

Group & 

Private 

15,123 2,339 2,194 145 

317 units were in FEMA's system but were not at the 

addresses FEMA provided. 172 units were at the sites 

visited but were not recorded in FRRATS for those sites. 

The net difference is 145 units. 

6.2% 

FEMA suggests possible causes could be: deactivated 

units or replacement units not properly recorded in 

FRRATS; number of units in system based on projected 

number and not actual installed number; a change in the 

number of units for the site that was not timely recorded in 

the system. 

Bechtel 

Commercial, 

Group, & 

Private 

5,091 108 846 738 

2 units were in FEMA's system but were not at the 

addresses FEMA provided. 740 units were at the sites 

visited but were not recorded in FRRATS for those sites. 

The net difference is 738 units. 

683.3% 

FEMA stated that the recorded amounts were estimates 

and may not have been updated to include actual units 

installed. Also, for two private site units, a possible cause 

could have been deactivated or replacement units not 

properly recorded in FRRATS. The auditors also could 

not confirm that 26 units were FEMA units, based on the 

barcode and VIN information. 

CH2M Hill 

Commercial, 

Group, & 

Private 

3,589 263 468 205 

14 units were in FEMA's system but were not at the 

addresses FEMA provided. 219 units were at the sites 

visited but were not recorded in FRRATS for those sites. 

The net difference is 205 units. 

77.9% 

Originally, 14 units were in FEMA's system but were not at 

the addresses FEMA provided. 423 units were at the 

sites visited but were not recorded in FRRATS for those 

sites. The net difference was 409 units. 249 of the 423 

units were reverified with FEMA. 204 of those units were 

verified without exception with updated FEMA information. 

The remaining 45 units included 24 units that FEMA listed 

as deactivated, 15 units that could not be verified, and 6 

units with a different address. 

Source: WA&Co analysis 

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Appendix 5 – Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretary 

Under Secretary for Management 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Chief Procurement Officer 

Director, DHS GAO/OIG Liaison Office 

Chief Privacy Officer 

FEMA Deputy Administrator 

FEMA GAO/OIG Audit Liaison 

FEMA Director of Management and Chief Acquisition Officer 

FEMA Chief Procurement Officer 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as appropriate 

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Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General 

(OIG) at (202) 254-4199, 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.