Disaster Contracting: FEMA Needs to Cohesively Manage Its Workforce and Fully Address Post-Katrina Reforms
Published: 2015-09-29T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: FEMA obligated $2.1 billion in fiscal years 2013 and 2014 for products and services, which included almost $770 million from offices responsible for disaster contracting. Providing disaster relief in a timely manner is essential, while adhering to contracting laws and regulations helps safeguard taxpayer dollars. Following Hurricane Katrina, Congress passed PKEMRA to improve FEMA's disaster contracting.
GAO was asked to review FEMA's disaster contracting practices. This report assesses the extent to which FEMA (1) made efforts to build and manage its contracting workforce and structure since PKEMRA, and (2) adopted PKEMRA reforms and demonstrated good management practices for disaster contracting.
GAO analyzed data on FEMA's workforce from fiscal years 2005 through 2014, reviewed workforce guidance, and reviewed 27 contracts—including 16 selected through a random sample and 11 through a nonprobability sample based on factors including high cost—to determine the extent to which PKEMRA provisions were met. GAO also met with contracting officials.
section_title: What GAO Found
paragraphs: The Federal Emergency Management Agency (FEMA) has more than tripled the number of contracting officers it employs since Hurricane Katrina in 2005, but it does not have a sufficient process in place to prioritize disaster workload and cohesively manage its workforce. Some of the workforce growth is attributed to the establishment of the Disaster Acquisition Response Team (DART) in 2010, which has the primary mission of deploying to provide disaster contracting support, such as contracting for blankets or debris removal. DART has gradually assumed responsibility for administering the majority of disaster contract spending, but FEMA does not have a process for prioritizing the team's work during disasters. Without such a process, FEMA is at risk of developing gaps in contract oversight during major disasters. Further, in 2011, FEMA established an agreement that regional contracting officers would report to headquarters supervisors for technical oversight while continuing to respond to regional supervisors—who have responsibility for administrative duties—for everyday operations. This agreement has led to challenges for FEMA in cohesively managing its workforce, including heightening the potential for an environment of competing interests for the regional contracting officers. Further, FEMA has not revisited this agreement on annual basis as called for in the agreement. As a result, it does not incorporate lessons learned since its creation 4 years ago.
FEMA has not fully implemented 2006 Post-Katrina Emergency Management Reform Act (PKEMRA) contracting reforms due in part to incomplete guidance.
section_title: What GAO Recommends
paragraphs: GAO recommends, among other things, that the FEMA Administrator establish procedures to prioritize DART's workload, revisit the agreement for oversight of regional contracting officers, and improve guidance on PKEMRA requirements. DHS concurred with GAO's recommendations.

section_title: Letter
paragraphs: In meeting its mission to help prepare for, mitigate, respond to, and  recover from disasters, the Federal Emergency Management Agency  (FEMA)—a component of the Department of Homeland Security (DHS)— contracts for a variety of products and services, ranging from providing  tarps and blankets for disaster survivors to computer systems support. In  fiscal years 2013 and 2014, FEMA obligated more than $2.1 billion for its  disaster and non-disaster contracts. The focus of this report is FEMA’s  disaster contracting, which during this period included obligations of $631  million from the FEMA headquarters contracting offices primarily  responsible for supporting disasters, and almost $137 million from  FEMA’s regional offices.
Buying needed products or services in a timely manner is essential,  particularly when supporting an active disaster, but these needs must be  balanced with other requirements, including following contracting laws  and regulations. Congress passed the Post-Katrina Emergency  Management Reform Act of 2006 (PKEMRA) to address various  shortcomings in FEMA’s disaster response capabilities. Among the more  than 300 reform provisions are 4 requirements for DHS and FEMA to  improve contracting practices to strengthen preparedness and  accountability. In 2008, GAO reported on actions taken by DHS and  FEMA to implement those requirements and found that FEMA had  generally made preliminary progress but work remained to fully  implement the provisions.
You asked us to review FEMA’s contracting practices in support of  disasters and its efforts to implement requirements from PKEMRA. This  report addresses the extent to which FEMA has (1) made efforts to build  and manage its contracting workforce and structure to support disasters  since the enactment of PKEMRA and (2) adopted contracting reforms  identified in PKEMRA and demonstrated good management practices to  enhance its disaster contracting.
To assess FEMA’s efforts to build and manage its contracting workforce  and structure, we reviewed and analyzed data on FEMA’s workforce  since Hurricane Katrina, which occurred in 2005, to identify staff size,  rates of attrition, and years of experience. To assess the reliability of the  workforce data used in the review, we reviewed information on the data  collection process and compared key data elements from the workforce  data to statements about start dates, home offices, and deployments  made by officials that we interviewed. We concluded the workforce data  was sufficiently reliable for the purposes of this review. To understand  how FEMA manages its workforce, including the contracting officers who  deploy to disaster areas, we met with officials in the Office of the Chief  Procurement Officer (OCPO) that support disaster contracting activities  and contracting officials and their supervisors in FEMA’s 10 regional  offices. We reviewed available workforce documents, including training  materials and requirements for deployment, to determine the range of  activities carried out by regional and headquarters contracting staff. We  analyzed the agreement that governs headquarters’ role in regional  contracting to determine the roles and responsibilities of regional offices  and headquarters in disaster contracting. We also reviewed guidance  from the Office of Federal Procurement Policy and FEMA regarding  training requirements for contracting officers. Further, we reviewed  federal internal control standards to determine if any major performance  challenges exist. We also assessed the extent to which FEMA relies on  contractors to support its acquisition function by identifying acquisition  support contracts and interviewing contracting officials. We found that  FEMA’s use of acquisition support contracts was limited.
To assess FEMA’s adoption of PKEMRA contracting reforms and good  management practices that support requirements for internal controls, we  analyzed data from the Federal Procurement Data System-Next  Generation (FPDS-NG) to identify contracts awarded by offices principally  involved in planning for or responding to disasters. Because the  PKEMRA contracting reforms only apply to disaster support contracts, we  focused on contracting offices most likely to award such contracts. We  identified the contracting offices based on our analysis of FEMA’s  obligations in FPDS-NG, which we confirmed with senior FEMA  contracting officials. From these offices, we selected a non-representative  sample of 27 contracts and task orders with obligations in fiscal years  2013 and 2014 and confirmed that they supported disaster response  efforts. Sixteen of the contracts and orders were selected using a  stratified random sample that reflected key elements of PKEMRA  contracting reforms and the other eleven were selected through a  nonprobability sample selected based on factors including high cost.  Although the information collected from our review of contracts is not  generalizable to all relevant contracts, it was valuable for supplementing  interviews with FEMA contracting officials in the contracting offices most  likely to support disaster contracts and from FEMA’s 10 regions. To  understand steps taken to implement PKEMRA contracting requirements,  we spoke to officials from DHS OCPO and FEMA policy officials. We also  reviewed FEMA’s quarterly reports to Congress on contracting activities,  and spoke to officials responsible for these reports, to determine if the 27  contracts and task orders we studied were accurately reported. Further,  we reviewed documentation related to good management practices,  including the Federal Acquisition Regulation (FAR) and DHS guidance on  required contracting reviews. Additional details on our objectives, scope,  and methodology can be found in appendix I.
We conducted this performance audit from October 2014 to September  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: State and local entities are typically responsible for disaster response  efforts, but federal law establishes the process by which a state may  request a presidential disaster declaration to obtain federal assistance.  The Robert T. Stafford Disaster Relief and Emergency Assistance Act  (Stafford Act), as amended, permits the President to declare a major  disaster after a governor of a state or chief executive of an affected tribal  government finds that a disaster is of such severity and magnitude that  effective response is beyond the capabilities of the state and local  governments and that federal assistance is necessary. The act also  generally defines the federal government’s role during disaster response  and recovery and establishes the programs and processes through which  the federal government provides disaster assistance. Figure 1 shows the  number of major disasters declared in the United States since Hurricane  Katrina, from fiscal years 2005 through 2014.
Federal financial assistance for a major disaster comes through the  Disaster Relief Fund, a source of appropriated funding that provides  grants and other support to state, local, and tribal governments during  disaster recovery. The fund is also used by FEMA for its administrative  costs related to providing and managing disaster assistance, and for  contracts in support of disaster relief efforts. For example, FEMA awarded  contracts worth more than $347 million in fiscal years 2013 and 2014 to  provide technical support—such as architecture and engineering  services—to the public assistance program that helps states and local  governments rebuild damaged infrastructure.
subsections: section_title: Contracting Workforce in FEMA’s Headquarters and Regions
paragraphs: FEMA’s contracting efforts are supported by a contracting workforce in  OCPO, located in FEMA headquarters and in its 10 regions. This office is  led by FEMA’s Chief Procurement Officer, who is also the Head of  Contracting Activity. Figure 2 shows the current structure of the OCPO,  which reflects a recent reorganization effective January 1, 2015.
FEMA’s contracting officers in headquarters support a variety of  functions, including supporting information technology, activities to  prepare for and mitigate disasters, and disaster response. The disaster  and field operations division manages contracting for disaster response  efforts including  logistics—delivering goods and services to support disaster survivors  and communities, including life-sustaining commodities such as  meals, blankets, and electricity generators,  response—coordinating capabilities needed immediately following a  disaster, such as air and ground evacuation services and emergency  sheltering, and  recovery—primarily supporting rebuilding efforts, including technical  assistance programs.
In fiscal years 2013 and 2014, FEMA’s headquarters contracting offices  primarily responsible for supporting disaster relief efforts—including  logistics, response, and recovery—obligated $631 million in contracts and  task orders.
While the majority of FEMA’s contracting workforce is located in  headquarters, contracting officers are also located in each of FEMA’s  regional offices. Figure 3 identifies the location of FEMA’s headquarters  and 10 regional offices.
While they support a variety of contracting functions for their respective  regions, these contracting officers serve as the first response for  contracting if a disaster occurs in their region. During a disaster, the  regional offices can request additional contracting support from  headquarters if needed. Contracting officers are typically located in each  regional office’s mission support division, which provide essential  administrative, financial, information technology, and acquisition support  for the region. Regional contracting officers report to both their mission  support division supervisors and their OCPO supervisor in headquarters,  as shown in figure 4. Each region is headed by a Regional Administrator  who reports directly to the head of FEMA.
In fiscal years 2013 and 2014, FEMA’s regional contracting offices  obligated almost $137 million for various efforts, including contracts for  regional support, such as supplies and services to support regional  offices, as well as disaster support.
Like FEMA’s overall workforce, the contracting staff consists of a  combination of employees hired under different authorities. The authority  under which employees are hired affects the type of work all employees— including contracting staff—can support at FEMA:
Title 5 employees are both permanent and temporary employees  who make up FEMA’s day-to-day workforce and are responsible for  administering the agency’s ongoing program activities in headquarters  and regional offices. During disasters, these employees can be  deployed as needed. These employees are hired under title 5 of the  United States Code which established the law for managing human  resources in the federal government.
Stafford Act employees provide support for disaster-related activities  and augment FEMA’s disaster workforce at facilities, regional offices,  and headquarters. Stafford Act employees include a Cadre of On-Call  Response/Recovery Employees, who have 2- to 4-year renewable  appointments and can be deployed to fulfill any role specifically  related to the incident for which they are hired and qualified, such as  contracting, during disaster assistance response and recovery efforts.  They also include reservists, who work on an intermittent basis and  are deployed as needed.
FEMA contracting officials explained that this means title 5 contracting  officers can award and administer all types of FEMA contracts, while  Stafford Act employees are limited primarily to disaster-related  contracting efforts. Most FEMA contracting offices, at headquarters and in  the regions, include a combination of both title 5 and Stafford Act  employees.
The contracting workforce includes professionals in several job series,  with qualifications that are standard across civilian government  contracting. These job series include the following:
Contracting specialists in the 1102 series, which includes contracting  officers who have warrants that authorize them to obligate and commit  government funds. Some warrants are unlimited; others are limited to  a specific dollar amount or functions, such as construction. To  maintain their warrants, contracting officers must meet core  education, training, and experience requirements set by the Office of  Federal Procurement Policy.
Purchasing agents in the 1105 job series who are qualified to contract  for smaller purchases, typically under $150,000.
For the purposes of this report, we refer to staff in the contracting  specialist job series, not purchasing agents, as the contracting workforce.
After a major disaster is declared, FEMA establishes a joint field office, a  temporary office through which it coordinates disaster response and  recovery efforts with state and local governments and organizations. Led  by a federal coordinating officer, the joint field office is supported by  incident management staff of various FEMA teams that are deployed to  support the disaster. One of these teams includes contracting support  staff that may come from headquarters or regional offices. Once the need  for disaster response and recovery ends and a joint field office is closed,  the contracts supporting the disaster are returned to the cognizant  regional contracting office. In cases where long-term recovery is needed,  FEMA may transition a joint field office into a long-term recovery office.  For example, the joint field offices established in New York and New  Jersey to support Hurricane Sandy in 2012 became long-term recovery  offices in 2014.
section_title: PKEMRA Contracting Requirements
paragraphs: PKEMRA was enacted to address various shortcomings identified in the  preparation for and response to Hurricane Katrina. In a November 2008  report, we identified more than 300 provisions associated with PKEMRA  and we described actions that DHS and FEMA had taken toward  implementation of the law. These included 4 provisions related to  FEMA’s contracting:  restricting the contract period to 150 days for noncompetitive disaster  support contracts justified as an urgent need,  identifying products and services suitable for advance contracts—for  example, food and cots for survivors and engineering services—and  establishing such contracts, providing a contracting preference to local vendors for disaster  response contracts, justifying awards made to non-local vendors, and  transitioning any contracts awarded prior to disasters, such as  housing inspection contracts, to local vendors, and  limiting the use of subcontracts to 65 percent of the cost of cost- reimbursement contracts, task orders, or delivery orders. This  applies to contracts and orders that exceed $150,000 and are used to  support disaster response and recovery efforts.
In our 2008 report, we reported that FEMA had taken preliminary action  on the PKEMRA provisions we reviewed. For example, we found that  FEMA had drafted a regulation to limit the use of subcontracting in certain  contracts, but it was still under review at the time of our report.
section_title: FEMA Has Expanded Its Contracting Workforce since 2005 but Does Not Have Sufficient Processes to Prioritize Disaster Workloads or Cohesively Manage Contracting Officers
paragraphs: FEMA’s contracting officer workforce has grown significantly since  Hurricane Katrina, but the agency has struggled with attrition at times.  Turnover in FEMA’s contracting officer workforce has had particular  impact on smaller regional offices which, with only one or two contracting  officers, face gaps in continuity. FEMA’s workforce increases are due in  part to the creation of the Disaster Acquisition Response Team (DART) in  2010, headquarters staff charged with supporting disasters. DART has  gradually assumed responsibility for administering the majority of FEMA’s  disaster contract spending, but FEMA does not have a process for how  the team will prioritize its work when they are deployed during a disaster.  Further, in 2011, FEMA established an agreement between the regions  and headquarters to revise regional contracting staff reporting  responsibilities; however, we found challenges with how the agreement is  being implemented, particularly in that it heightens the potential for an  environment of competing interests for the regional contracting officers.  FEMA has not updated the agreement, even though the agreement states  it will be revisited each year, leaving it in conflict with more recent  guidance that increases contracting officer training requirements.
subsections: section_title: FEMA Has Increased the Size of Its Contracting Workforce since Hurricane Katrina
paragraphs: The size of FEMA’s contracting officer workforce at the end of fiscal year  2014 was more than triple the size of its workforce at the time of  Hurricane Katrina. When Hurricane Katrina struck in 2005, FEMA had a  total of 45 contracting officers in its headquarters and regional offices. In  addition to hiring headquarters and regional contracting officers after  Hurricane Katrina, FEMA also established long-term recovery offices to  assist with lengthy recovery efforts in Louisiana and elsewhere. By the  time Hurricane Sandy landed in 2012, the workforce had grown to over  170 contracting officers. This number has declined slightly since then,  with FEMA having 163 contracting officers by the end of fiscal year  2014. See figure 5 for additional information.
During this period of growth, FEMA struggled with attrition at times,  experiencing years in which the number of contracting officers leaving the  job series outpaced the number of new additions. As seen in figure 6,  FEMA was able to replace about two-thirds of the departures in fiscal  years 2009, 2010, and 2013.
FEMA officials noted that some of these departures were to be expected  due to the natural decline in workload at long-term recovery offices for  various disasters, including Hurricane Katrina. FEMA officials also  explained that this slowdown in hiring occurred at FEMA due to budget  shortfalls, but they received authorization to hire additional staff in 2014  and began to fill these positions in 2015.
Turnover has disproportionately affected some of FEMA’s 10 regions,  where each office had two to five contracting officers at the end of fiscal  year 2014. For example, at the end of fiscal year 2014, 6 of FEMA’s 10  regional offices had contracting officers with an average of 3 years or less  of contracting experience at FEMA. This turnover results in gaps in  continuity, particularly for regions that have a smaller number of  contracting officers; for example:
Officials stated that, as of July 2015, one region was without  contracting officers due to recent staff departures and relied on  headquarters assistance to meet its contracting needs. The  headquarters staff is providing the assistance in addition to their usual  duties, so the region has limited contracting capacity and potential  continuity challenges.
In two regions, officials said they received complaints from unhappy  vendors due to unpaid invoices left by previous contracting officers.
Another contracting officer noted that the contracting staff only know  about open contracts when unspent funds remain and do not know  how many open contracts were complete but waiting to be closed.
The turnover also limits the cumulative amount of disaster contracting  experience within each regional office. As a result, some regional offices  have contracting officers with limited hands-on disaster experience, yet  they are tasked with being the first response for contracting should a  disaster occur in his or her region.
In a 2008 memorandum about assessing the acquisition functions of an  agency, the Office of Federal Procurement Policy stated that retention  and turnover issues can be signs of potential staff loss or indicators of  other matters related to morale, cautioning agencies that high turnover  can impact mission accomplishment. Senior level FEMA officials said that  morale was a challenge in addition to the high demand for contracting  officers across the government. In one region, a regional supervisor  stated that contracting officers can easily find other opportunities for  advancement without the hassles of disaster contracting, especially if  they hold certain kinds of warrants, such as for construction contracts.  Headquarters officials noted that the recent reorganization was  implemented partly to create more opportunities for promotion and  improve morale because staff will leave if there are not enough  opportunities. In addition, the officials said they have also prioritized hiring  efforts to rebuild their workforce after recent years of limited hiring, which  affected morale.
section_title: FEMA Created a Team of Disaster Contracting Officers to Provide Increased Oversight, but Has Not Established a Process for Prioritizing Workload
paragraphs: In a 2010 business case to justify hiring additional contracting staff,  OCPO officials said it had substantially added to the size of its contracting  workforce in the years since Hurricane Katrina, but that it did not have  enough specialized contracting staff to manage the contract  administration and oversight requirements of several simultaneous large- scale disasters or a catastrophic event. FEMA identified contract  oversight as a priority after a DHS Inspector General report found that  FEMA incurred over $5 million in excessive contract costs because of  inadequate controls during Hurricane Katrina. To address the need for  improved contract oversight, in 2010, FEMA created 18 new contracting  officer positions to form DART, a team whose primary purpose is to  support contract administration for disasters. Most DART members are  located in three regional offices when not deployed to disasters, but are  considered headquarters staff for management purposes. If a region  needs additional contracting assistance for a disaster, it can come from  reservists, who have limited procurement authority as purchasing agents  and can support smaller disasters, and from DART if larger contracts or  contracts that require specific warrants are needed. For example, FEMA  officials reported that a DART member was deployed to a recent disaster  in Alaska because none of the regional contracting officers had the  architecture warrant needed to support the disaster. To illustrate how  FEMA deploys DART, Figure 7 shows how and when DART members  were deployed to support Hurricane Sandy response efforts. For  example, two of the three DART contracting officers in Oakland,  California deployed to Hurricane Sandy.
In its 2010 business case, OCPO stated that with DART, FEMA would be  able to deploy experienced personnel to joint field offices to provide  increased oversight of complex contracts during a disaster. These  oversight duties would include making necessary modifications to  complicated contracts and monitoring of contractor performance, such as  assessing contractor compliance with the terms of awarded contracts and  tracking costs and invoice payments.
Since its establishment in 2010, DART has gradually assumed more  responsibility for administering the majority of FEMA’s disaster contract  spending, which senior officials explained was the original intent. Much of  this expansion in their responsibilities has occurred during a time period  in which FEMA has responded to fewer disasters. In addition to deploying  and supporting joint field offices during disasters, DART’s duties also now  include the following:
Administering FEMA’s national contracts for housing inspection  services, telecommunication services, and construction of temporary  camps for disaster response personnel. Some contracts are  multimillion dollar contracts. For example, FEMA obligated more than  $117 million in fiscal years 2013 and 2014 for housing inspection  services, and the estimated overall value of these contracts ranges  from $550 to $800 million. A FEMA official stated that permanent full- time contracting officers at headquarters previously handled most of  these contracts.
Preparing to manage FEMA’s public assistance contracts, which  are used to assess the extent of damage to public facilities and critical  infrastructure and account for the largest share of FEMA’s disaster  support contracts—$348 million of the $631 million obligated by  contracting offices in headquarters that support disasters in fiscal  years 2013 and 2014. Further, officials explained that a permanent  full-time contracting officer at headquarters previously handled these  contracts.
Assisting other non-disaster efforts in FEMA. For example, in a  2014 memo, FEMA’s Head of Contracting Activity noted that he had  asked for DART’s assistance in augmenting headquarters staff to  close out contracting actions, even though DART is normally reserved  for disaster response support. In addition, FEMA officials stated that  DART has been called upon to provide support in a region that was  without a contracting officer since November of 2014.
As DART has assumed more responsibilities, FEMA has not established  a process for prioritizing workload during busy disaster seasons. FEMA  officials in charge of DART said that they review requests for DART’s  assistance on an ad hoc basis and follow FEMA’s standard agency policy  about how to redistribute their work if DART members were suddenly  deployed to a disaster. While FEMA policy addresses the process for  transitioning contract files from one contracting officer to another, it does  not address how decisions will be made to prioritize which contracts the  deployed DART member will remain responsible for during their  deployment and which contracts will transition to another contracting  officer. If a disaster were to strike, DART contracting officers said they  would take some of their current workload with them while other tasks  might have to wait until they could return to their normal contracting  duties, or be reassigned to other contracting officers. Federal internal  control standards call for agencies to document responsibilities through  policies and have mechanisms in place to react to risks posed by  changing conditions. Although disaster response often occurs in a  changing environment, FEMA’s 2010 business case for establishing  DART and the policy for transitioning contract files do not provide a  standardized process through which requests for assistance will be  assessed and prioritized, or how individuals’ workloads will be prioritized  during disasters. Without additional guidance that specifies FEMA’s  criteria for prioritizing DART contracts and is tailored for a workforce  expected to frequently deploy in support of disasters, FEMA risks creating  oversight gaps that may affect its largest contracts.
section_title: Agreement Establishing Headquarters and Regional Responsibilities Poses Challenges for FEMA to Cohesively Manage Its Contracting Workforce
paragraphs: In 2011, FEMA created a formal agreement between the regions and  headquarters to establish a new role for FEMA’s OCPO in overseeing  regional contracting staff. Prior to the agreement, regional contracting  officers only reported to their respective supervisor in the region, with no  formal link to OCPO. FEMA instituted this agreement in response to a  2009 DHS Inspector General report which recommended, in keeping with  DHS guidance and federal internal control standards, that only  contracting officials should manage the technical performance of  contracting officers. The report stated that having the contracting  officer’s performance and career advancement controlled by someone  who is not a contracting professional was an internal control risk and  created a potential conflict-of-interest situation for the contracting officer.  As a result of this agreement, regional contracting officers have a dual  reporting chain to both OCPO and their supervisor within the region.
The 2011 agreement outlines responsibilities of the regional contracting  officer’s supervisors in OCPO and in the region. OCPO serves as the  contracting officers’ official performance reviewer, while a regional  supervisor manages their day-to-day activities. Table 1 details the  responsibilities established through the agreement.
The agreement states that its intent is to establish roles and  responsibilities for an oversight arrangement that requires greater  collaboration between headquarters OCPO and regional supervisors in  order to be successful. While the current arrangement is an improvement  over the prior situation, where regional contracting officers had no  reporting chain to the headquarters Chief Procurement Officer, we found  four challenges with the current agreement that limit cohesive  implementation: it creates the potential for competing interests, limits full  visibility into the contracting officers’ workload, does not mitigate the  potential for miscommunication between headquarters and regions, and  does not reflect new training requirements.
Competing interests. With respect to operational control, we found that  the dual reporting chain to both headquarters and regional mission  support, set forth in the service level agreement, heightens the potential  for an environment of competing interests for the regional contracting  officers. Specifically, in some regions, supervisors have assigned duties  outside of a contracting officer’s responsibilities. In other cases,  contracting officers have experienced pressure from program officials to  make decisions that may not be appropriate. In both situations, being  physically located in a regional office where their regional supervisor is  not a contracting professional gives contracting officers less standing to  resist requests; for example:
Based on our discussions with regional supervisors and contracting  officers, we found that regional supervisors in three regions had asked  contracting officers to take on additional duties outside of their  contracting responsibilities. In one case, an internal review at FEMA  showed that a regional contracting officer did not deploy to a disaster  because he was carrying out non-contracting tasks as requested by a  regional supervisor not typically responsible for overseeing  contracting officers. As a result of the internal review, FEMA  reassigned the contracting officer to a regional mission support  supervisor to follow the management structure used in other regions.
Contracting officers in four regions reported resistance from regional  program staff in following contracting processes, such as meeting  competition requirements. One mission support supervisor explained  that when there are questions about contracting processes, she does  not necessarily understand what the contracting officer is required to  do in order to adhere to contracting regulations. In one case  contracting officers reported that program staff wanted them to  eschew contracting requirements and award a noncompetitive  contract. The program officials complained to the regional supervisor,  who in turn pressured the contracting officers to make the award.
In a July 2010 report, we found that the potential exists for program  offices, which play a significant role in the contracting process, to exert  pressure on contracting officers or that may not result in the best use of  taxpayer dollars. Further, a 2008 Office of Federal Procurement Policy  memorandum states that agencies should consider where an acquisition  function is placed because it may be viewed as an administrative support  rather than as a business partner, so that contracting requirements are  circumvented. Under the current agreement, the risks associated with  the divided structure of FEMA’s regional contracting offices, and actions  that may be taken to mitigate these risks, are not specifically addressed.
Limited insight into contracting officers’ work. Dividing supervisory  responsibilities between headquarters and regional staff has resulted in  cases where neither had full insight into contracting officers’ work, in both  the operational control and training areas of responsibility. In some cases,  problems were not detected by management and led to gaps in oversight;  for example:
A regional supervisor reported discovering poor contract  administration after the departure of a contracting officer. The  problems included: awarding a contract to an incorrect vendor,  miscommunicating about the period of performance on a contract, and  neglecting to send a copy of a contract to a vendor.
Contracting officers in three regions discovered overdue invoices, and  contracting officers in one of the regions said they had to reestablish  creditability with the local vendor community that had been lost due to  unpaid invoices left by previous contracting staff. Contracting officers  said this situation increased some vendors’ unwillingness to work with  FEMA, and cited it as a potential barrier to competition in geographic  areas where there are relatively few vendors available.
Regional supervisors in one region stated that they were unaware of  the extent of the training requirements for contracting officers until one  of their contracting officers temporarily lost his warrant after not  meeting them. Regional supervisors noted that it was difficult to  operate without one of their contracting officers and ultimately decided  to ask for help from headquarters and said that DART temporarily  supported the region.
Senior FEMA officials noted that they recently established a quality  review team in headquarters that will provide more oversight to help  ensure contract actions and documentation prepared by regional and  headquarters contracting officers adhere to government-wide and  agency-specific regulations. The quality review team is to examine  contract files for contracts starting at $500,000 and above, while  contracting staff are to conduct peer reviews of contracts below $500,000.
Challenges with communication and coordination. Overall,  headquarters and regional supervisors said that even with the agreement  in place, communication and coordination are challenging across most of  the areas of divided responsibilities. For example, one regional supervisor  said that it was difficult to address personnel issues without being the  official performance reviewer, as headquarters retains this function under  the agreement. In another region, the regional supervisor said he was not  made aware of an escalating disagreement between a regional  contracting officer and headquarters, until the day before a task order  needed to be awarded. With the current task order set to expire, the  regional supervisor said that the region ultimately ceded to headquarters’  preferences, even though the contracting officer felt pressured to do so.  The regional supervisor noted that the current agreement with OCPO  does not adequately address the roles of headquarters or regional  supervisors, especially when there is a difference of opinion about how to  manage staff, and further, it was difficult to find someone at headquarters  to discuss how to handle the situation. A headquarters supervisor noted  that the dual reporting structure sometimes created confusion about who  was supposed to make specific decisions. For example, regional staff  were not sure who would decide how workload would be covered while  contracting officers were at training. Key practices for successful  collaboration among government agencies include clear roles and  responsibilities, compatible policies and procedures, and articulation of a  common outcome. Additionally, internal control standards require the  easy flow of information throughout the organization, especially between  functional activities such as procurement and production.
Addressing changes in training requirements. The agreement does  not reflect current training requirements for contracting officers.  Specifically the agreement states that contracting officers could satisfy  their ongoing training requirements through online courses available at  the time the agreement was written and that these online courses would  not require the regions to pay for contracting officers’ travel costs to take  the training. However, in 2014, FEMA issued guidance that required  contracting officers to obtain classroom training to fulfill their requirements  for ongoing training, and the Office of Federal Procurement Policy  increased classroom requirements needed for contracting officers to  advance to the next certification level. Contracting officers in three  regions told us that meeting these requirements would likely require travel  funds due to the scarcity of course availability in some regions. One  regional supervisor noted that these travel funds would be paid out of the  region’s training budget, even if there is no fee for a course. In one  region, a contracting officer reported that she had to cancel her travel  plans the day before her scheduled departure for a course due to lack of  funding. The Office of Federal Procurement Policy had previously  established guidance in 2008 that encourages agencies to provide  contracting staff with resources for continuous learning efforts, as skills  and knowledge gaps can inhibit contracting officers’ ability to properly  oversee the types of contracts used. Without addressing recent changes  to training requirements, there is a risk that contracting officers will not  meet training requirements.
Although the formal agreement between the regions and OCPO states  that both parties are to revisit it on an annual basis, senior FEMA  headquarters officials stated this has not occurred and that they did not  see a need to revisit it because they had not received feedback that the  regions wanted to do so. As a result, the agreement does not address the  concerns identified above, and has not been updated in the more than 4  years since its creation to reflect good practices or lessons learned.
section_title: Contracting Reforms Are Not Fully Implemented and Disaster Contract Management Practices Are Inconsistent
paragraphs: FEMA has taken actions to address most of the four PKEMRA  requirements we examined, but the agency has not fully implemented  them. Additionally, inconsistent contract management practices during  disaster deployments—such as incomplete contract files and reviews— create oversight challenges.
subsections: section_title: FEMA Has Not Fully Implemented Required Contracting Reforms Following Hurricane Katrina
paragraphs: Based on our review of 27 disaster support contracts from fiscal years  2013 and 2014, FEMA has made progress in addressing some aspects of  the contracting reforms required by PKEMRA, including the use of  contracts established prior to a disaster for goods and services that are  typically needed during a disaster response—known as advance  contracts. However, we found that confusion exists about key  requirements, including the 150-day limit on certain noncompetitive  contracts and transitioning awards to local vendors. This confusion is  furthered by a lack of specific guidance on how to implement these  requirements, including a clear definition of the term local contracting. In  addition, DHS has taken no action on the requirement involving limits on  subcontracting. See table 2 for more information.
Our review of 27 disaster support contracts and task orders included 13  that were not competitively awarded, which contracting officers explained  as necessary due to unusual and compelling urgency. More than half—8  of the 13—exceeded the PKEMRA time limit of 150 days, which was put  in place to reduce the use of noncompetitive contracts. However, we  found that FEMA had not approved any of these to exceed 150 days, as  required. These 8 contracts and task orders exceeded this time limit from  a few months to one and a half years. DHS acquisition regulations require  that this approval be given by FEMA’s senior acquisition official, the Head  of Contracting Activity, who reported that he had rarely been asked to  approve extensions beyond the 150 days during his time in office.
For the eight contracts and task orders that exceeded the 150-day limit,  contracting officers were either unaware of the time limitation or did not  take steps to get approval from the Head of Contracting Activity as  required. For example, five of the eight were for hotels to house FEMA  employees in the immediate aftermath of Hurricane Sandy. Contracting  officials explained that these contracts, which totaled almost $6 million in  fiscal year 2013 and 2014 obligations, were urgent because of difficulties  FEMA faced in finding enough hotel rooms at government per diem rates  for deployed FEMA employees. A FEMA report following the hurricane  noted that almost 10,000 employees were deployed to support Hurricane  Sandy. At the same time, more than 11,000 displaced survivors from New  York and New Jersey were housed in hotels and motels in the area.  While this situation was clearly urgent in the immediate aftermath of the  hurricane, we found no documentation in the contract files as to why the  hotel rooms were still needed more than 150 days after the disaster or  why they did not obtain the necessary approval to extend the contracts.  The other three contracts that exceeded the 150-day time limit included:
A $66 million task order for architect and engineering technical  assistance awarded after Hurricane Sandy, which was extended a  year and a half beyond the 150-day limit. Contracting officials did not  realize that the 150-day PKEMRA limit applied to the order.
A $200,000 contract for leases of mobile home park spaces to provide  temporary housing for Hurricane Sandy disaster victims, which was  extended more than a year beyond the 150-day limit. Contracting  officials explained that such services are often not competed because  of the limited number of available vendors in disaster areas, but the  contract file did not contain a justification for exceeding the PKEMRA  requirement.
A $200,000 contract for security services after Hurricane Irene, which  struck the New York area in August 2011. The contract had a  justification but was it not approved by the Head of Contracting  Activity as required. This contract exceeded the 150-day limit by about  a year.
Contracting officers in two regions and DART contracting officers said  they might not transition a noncompeted contract to a competed award  after 150 days because it may not be a priority, noting that adequate  vendor performance, workload prioritization, and the potential costs to re- compete the contract as factors that may be considered.
In addition to the case studies we reviewed, FEMA contracting officials in  five regions were confused by the 150-day requirement for noncompeted  disaster support contracts or the appropriate use of the “urgent and  compelling” justification for noncompetitive contract awards. For example,  in several instances we were told that the 150-day restriction was not  absolute, or that all contracts are considered urgent in a disaster. While  the FAR provides some flexibility for disaster contracting, officials are to  justify noncompeted contracts and meet the 150-day restriction for  disaster contracts justified based on an urgent need. One official also said  they were not aware of any guidance on the appropriate use of the  urgency justification for disaster contracts. While this information is  included in the DHS’s justification and approval guide and a 2008 FEMA  standard operating procedure for sole source justification and approvals,  FEMA does not address this requirement in training materials or other  guidance to its contracting officers. For example, FEMA’s desk guide and  disaster contracting training course do not mention this disaster-specific  150-day restriction. Senior FEMA contracting officials said the  requirements will be reviewed in future training updates.
In accordance with PKEMRA, FEMA has submitted quarterly reports to  Congress since December 2007 that list all disaster contracting actions,  including details on contracts awarded by noncompetitive means.  However, in our review of reports to Congress in fiscal years 2013 and  2014, we found that some did not capture all of FEMA’s noncompetitive  task order actions. We found that $32 million in noncompetitive  obligations were not reported in fiscal year 2013. This number included  more than $14 million in obligations to a $66 million technical assistance  award that was not competed because of an urgent need for services  immediately following Hurricane Sandy. A FEMA official explained that  there had been an error in the data compilations prior to mid-2013 that  inadvertently excluded noncompeted task orders issued under  competitively awarded contracts. The official stated that FEMA has since  updated its process to capture these types of awards, including  implementing additional quality control reviews such as comparisons with  federal procurement data sources and adding more people in the review  process. As a result, the FEMA official stated that the quarterly reports  submitted after the third quarter of fiscal year 2013 are accurate. We  confirmed that similar task orders were included in FEMA’s fiscal year  2014 reports, but FEMA officials told us that they have not notified  Congress of the errors in prior reports and do not plan to do so. Without  accurate information, Congress does not know the full extent of FEMA’s  past noncompetitive awards and cannot use these reports to evaluate  FEMA’s noncompetitive spending over time.
subsections: section_title: Advance Contracting and Agreements
paragraphs: PKEMRA required FEMA to identify and establish contracts for goods and  services that can be obtained before a disaster and FEMA has done so  for many of the categories identified, such as nonperishable food items  and housing assistance. PKEMRA also required FEMA to develop a  contracting strategy that maximized the use of advance contracts to the  extent practical and cost-effective. As we found in 2006 following  Hurricane Katrina, agencies need to have competitively awarded  contracts in place before a disaster to be effective. According to FEMA,  establishing contracts for goods and services in advance ensures they  can rapidly mobilize resources in immediate response to disasters and  can reduce the need to buy disaster relief and recovery items through  noncompetitive contracts. In 2008 we found that FEMA provided  Congress with a list of categories of the products and services suitable for  establishing contracts in advance and a plan for maximizing the use of  these contracts, as required by PKEMRA. FEMA officials explained that  indefinite-delivery indefinite-quantity (IDIQ) contracts facilitate the goal of  having contracts available if there is a disaster. In addition, as part of  their overall acquisition strategy, FEMA officials said that they use other  advance vehicles through which they obtain goods and services,  including interagency agreements and mission assignments, which are  work orders directed to other federal agencies to complete a specified  task. See table 3 for examples of these contracts and agreements.
Although the contracting officers we spoke with were aware of certain  headquarters advance contracts, such as for housing inspections and  technical assistance—which made up the majority of FEMA’s fiscal year  2013 and 2014 obligations from disaster support and regional contracting  offices—they reported varying awareness of information available on  other advance contracts. FEMA headquarters maintains a list of these  contracts through its shared document management system and  identifies additional contracts in training sessions, but we found that  contracting officers in three regions were not aware of such information  and did not know how to access the contracts. These contracting officers  only learned about the list when they were told to use the list for certain  items, such as fuel and translation services. In one case, a regional  contracting officer tried to establish a contract in advance for fuel but was  stopped because he was not aware that these efforts violated policy to  use a headquarters contract for this item. Another contracting officer had  a similar experience when trying to award a contract for translation  services. We found that the information in FEMA’s lists and training  material do not comprehensively identify all of the advance contracts or  vehicles available. For example, officials told us that FEMA has an  interagency agreement with another agency to provide law enforcement  and security forces, which is one of the service categories that FEMA  previously identified as appropriate for advance contracts. However, this  interagency agreement is not identified in FEMA’s lists or training  materials. A senior contracting official explained that these services may  no longer need to be on the advance contract list since FEMA makes an  effort to award security contracts to local law enforcement as part of their  local business efforts. Fire and rescue support services are another  requirement met by mission assignment to another agency that is not  identified in FEMA’s list or training materials.
PKEMRA also requires that FEMA coordinate advance contracts with  state and local governments and that FEMA encourage state and local  governments to engage in similar pre-planning for contracting. Our review  found that outreach with state and local governments varied greatly,  limiting FEMA’s ability to support advance contracting efforts. Several  regions, including two with a larger number of contracting staff and more  disaster contracting experience, described how they engage in advance  contracting efforts.
One region’s contracting officers began disaster pre-planning and  conducted outreach to state vendors in an effort to build internal  advance contract capacity. Contracting officers said these efforts have  since expanded to help several states access contracts awarded in  advance, such as General Services Administration schedule  contracts.
Similarly, contracting officials from another region emphasized that  they take the initiative to engage in strategic planning to identify needs  and conduct regular outreach to local businesses across the region.  They told us these activities facilitate local awards and provide for  multiple sourcing options during a disaster. They said these pre- planning efforts are often efficient enough to have the bulk of a  disaster’s contracting in place soon after the disaster.
In contrast, contracting staff in the other FEMA regions have more limited  capacity for outreach or do not know that it is expected. One regional  contracting officer said that he does not have any contacts within the  state and has not taken steps to coordinate regional advanced contracts.  Other regional contracting officials said they would like to do more  outreach to states, but find it difficult with their current workloads or  staffing shortages. FEMA’s existing guidance and training for contracting  officers does not address their relationship with state and local  contracting counterparts or the expectation for how they will support  advance contracts.
section_title: Contracting with Local Businesses
paragraphs: The FAR, which implements the PKEMRA requirement to provide a  contracting preference to local firms where feasible, offers contracting  officers some flexibility to increase local awards, including setting work  aside for only local firms to compete. The FAR requires that contracting  officers document any decision to award disaster contracts to non-local  firms—those companies or individuals that do not reside or primarily do  business in a declared disaster area—in the contract file. The FAR also  requires transitioning non-local contracts awarded before a disaster  strikes to local vendors as soon as possible, with FEMA policy stating that  this should be accomplished for contracts awarded within 180 days.
Federal Acquisition Regulation 26.201-26.202 Local area preference  When awarding emergency response contracts during the term of a major disaster or  emergency declaration by the President of the United States under the authority of the  Robert T. Stafford Disaster Relief and Emergency Assistance Act (42.U.S.C 5121, et  seq.), preference shall be given to the extent feasible and practicable, to local  firms.  “Local firm” means a private organization, firm, or individual residing or doing business  primarily in a major disaster or emergency area.  “Major disaster or emergency area” means the area included in the official Presidential  declaration(s) and any additional areas identified by the Department of Homeland  Security.
Figure 8 is an example of a FEMA disaster declaration that depicts which  counties are included in which the vendors would be considered local.
While contracting officials recognized the importance of local contracting,  in five of the 10 regions we met with, contracting officers either showed a  great degree of confusion about determining which awards were local or  told us that the process for determining if a vendor is local is not well- defined; for example:
One official said that vendors could be considered local if they are in  the same zip code of the designated disaster zones, even though the  FAR says location is based on the area’s declared disasters, which  are typically counties.
Other officials said that contracting officers could exercise their  discretion as to what constituted a local award, regardless of the  declared area, with one contracting officer noting that if vendors in the  declared area were unavailable due to the disaster, then going to  vendors in nearby counties could be considered local. While this is  permissible, the contracting officer would not be able to call the  contract local and would have to document the action in the contract  file.
Several contracting officers said that they would like additional  clarification on local area contracting requirements, specifically what  could be considered local. One said there were so many different  approaches that she was not sure which ones were correct.
Confusion over the definition of local was evident in the contract files we  reviewed. Our analysis found that FEMA awarded 13 of the 26 contracts  or task orders to vendors located outside the counties declared as  disasters, but in only one of the cases was the award to a non-local  vendor documented or otherwise addressed as required. Among these  were two task orders issued under contracts that had been awarded  before the disaster; these task orders exceeded 180 days but were not  transitioned to local vendors as required by FEMA policy. See figure 9.
The two awards that did not transition to local vendors after 6 months  were housing inspection and technical assistance task orders, which are  services that account for the majority of FEMA’s disaster contract  obligations. A contracting official explained that they do not have a  process for moving these awards to local vendors after 6 months,  although FEMA’s 2010 guidance specifies that such contracts require  transition. Further, contracting officials had incorrectly identified 4 of the  13 contracts as local in FEMA’s data systems. FEMA created a Local  Business Transition Team in 2007 as a pilot program in part to support  the transition to local vendors, and officials said they folded the team into  FEMA’s broader industry outreach efforts that can provide virtual  assistance.
FEMA’s training materials and guidance do not fully address the  requirement to document the contract file when making awards to non- local vendors. For example, FEMA’s existing training does not reflect the  FAR provision that requires documentation in any cases where local  vendors are not used. Further, FEMA’s Emergency Contracting Desk  Guide misconstrues the local requirement, incorrectly stating that  contracts must be set aside for local vendors unless a written justification  is provided. In contrast, the FAR states that local preference may take the  form of local area set-asides or an evaluation preference. As a result of  our review, a FEMA official responsible for developing the contracting  officers’ training curriculum said that local contracts will be addressed in  more detail in a future revision to a course on disaster contracting  planned for late fiscal year 2015.
section_title: Limits on Tiered Subcontracting
paragraphs: In 2010, DHS published a proposed rule to implement Section 692 of  PKEMRA, the provision of the law that prohibits the use of subcontracts  for more than 65 percent of the cost of cost-reimbursement type contracts  that exceed the simplified acquisition threshold—which is generally  $150,000—and are used to support disaster response and recovery  efforts. However, DHS has not issued a final rule. DHS policy officials  said they have delayed implementing this rule because of comments they  received that indicate the limitation would have a negative impact on  small businesses. Officials explained that FEMA uses cost-type contracts  primarily for construction services that often brings an array of specialists  together on one job, creating the need for subcontracting. These officials  explained that construction specialists are often small businesses; they  noted that limitations imposed by this rule could inhibit these businesses’  ability to get work. While we understand DHS’s concern about the  potential limitations this could place on small businesses, the requirement  has not been addressed. DHS officials said they are considering  requesting a congressional amendment to the law which would delete the  requirement to limit the use of subcontractors under Section 692 of  PKEMRA. However, other than publishing the proposed rule in 2010,  DHS has taken no further action regarding implementation of Section  692. Without taking further action, DHS risks not addressing Congress’s  direction to limit the use of subcontracts as is required under Section 692  of PKEMRA.
section_title: FEMA Experienced Challenges with Contract Management during Disasters
paragraphs: Contract management is the primary part of the procurement process that  assures the government gets what it paid for, of requisite quality, on time,  and within budget. We have previously reported that contract  management presents challenges for agencies within the federal  government. For FEMA, contract management is further complicated by  the dynamic environment in which contracting officers operate during a  disaster. FEMA contracting officials must respond quickly to acquire  goods and services to assist survivors, but they must do so while  complying with federal law and FAR requirements. They must also work  within the joint field office structure and deployment processes that may  result in multiple contracting officials supporting individual contracts at  different points in time, particularly in cases where staff is deployed to  support the region. These conditions can present challenges to good  management of disaster support contracts. The issues we saw in the files  reviewed and heard from contracting staff included the following:  Incomplete documentation: In one region, mission support and  contracting staff reported not receiving any files from contracts that  had been awarded at the joint field office; others only learned of  contracts when they received vendor invoices after the joint field office  had closed. In another region, a deployed contracting officer awarded  several contracts for hotels during the immediate response to  Hurricane Sandy but returned to headquarters shortly thereafter  before having an opportunity to bring the contract files up to date. This  resulted in key documents missing from the file, including justifications  for noncompetitive awards. Additionally, a $66 million task order for  technical assistance services did not have the justification and  approval required for a noncompetitive award.
Lack of contract closeouts: Contracting officers in several regions  told us that they have backlogs of contracts to be closed out. Contract  closeout begins when all services have been performed and products  delivered and closeout completes when all administrative actions  have been completed and final payment to the vendor has been  made. Prompt contract closeout is critical to ensure that all  government debts are paid and unneeded funds are de-obligated.  FEMA officials told us they are trying to address this issue by setting  the goal for deployed staff to close out 90 percent of files before  returning to their home office. FEMA training that included contracting  officer metrics from fiscal years 2011 to 2014, showed that FEMA had  de-obligated over $116 million and that over 1,900 contracts were  available for closeout.
No evidence of higher-level reviews: Nine of the 27 contract files  we reviewed required review and approval by a person at least a level  above the contracting officer. Three files contained some evidence of  communication with a reviewer at the appropriate level, but only one  of the files documented the required approval. For example, a $1.8  million security contract did not include evidence of the required  review.
DHS’s Office of the Chief Procurement Officer has conducted several  internal reviews and found similar problems with FEMA contracts. A major  finding from the most recent review, in September 2014, was that FEMA’s  poor contracting practices had extended over a period of time, and that  FEMA required significant improvement in the quality, documentation and  management of their contract actions to comply with laws and  regulations. For example, the audit found problems with missing or  incomplete contract files, lack of funding documentation, and a lack of  required Congressional notifications. The report also cited FEMA’s  inability to comply with their corrective action plans from prior reports,  which FEMA acknowledged. In our discussions with the DHS reviewers,  we were told that FEMA is now responding to its corrective action plan  and that management was responsive to addressing the issues raised.
section_title: Conclusions
paragraphs: FEMA often contracts for products and services under extreme pressures  to deliver these items to disaster survivors, and sometimes under the  scrutiny of the entire nation. FEMA can leverage different resources to  provide contracting support in a disaster, with regional contracting officers  being the first to respond. Although FEMA has taken steps to increase the  size of its contracting workforce, it does not manage its headquarters and  regional workforce in a cohesive manner resulting in contracting problems  that are sometimes missed or overlooked. FEMA’s development of DART  in 2010 has helped to increase its capacity to provide contracting support  for disasters, but the relatively low number of disasters in recent years led  FEMA to increase the responsibilities of this team when not deployed,  including taking on responsibility for some of FEMA’s largest disaster- related contracts. Without updated guidance on this team’s prioritization  of workload in the event of a disaster, FEMA is at risk of not having  complete coverage of its contracts during a disaster.
Hurricane Katrina occurred 10 years ago and spurred the PKEMRA  contracting requirements discussed in this report. Even after 10 years, we  found variation in the extent to which contracting officers were aware of  and complied with the statutory requirements of PKEMRA, putting  efficient use of taxpayer dollars at risk. Additionally, decision makers in  FEMA and Congress need timely and accurate information, but FEMA  has not informed Congress of errors it made in its quarterly reports on  noncompetitive contracts prior to 2014. Without this information,  Congress does not know the full extent of FEMA’s past noncompetitive  awards and cannot use these reports to evaluate spending over time.  Finally, without taking steps to implement Section 692 of PKEMRA, the  provision regarding limits to subcontracting or seeking an amendment to  the law which would delete the requirement, DHS runs the risk of never  addressing this statutory requirement.
section_title: Recommendations for Executive Action
paragraphs: We are making eight recommendations to the FEMA Administrator and  one recommendation to the Secretary of Homeland Security.
To help ensure that FEMA is prepared to manage the contract  administration and oversight requirements of several simultaneous  large-scale disasters or a catastrophic event, we recommend that the  FEMA Administrator update its guidance to establish procedures for  prioritizing DART team members’ workloads when deployed to a  disaster.
To improve coordination and communication between FEMA OCPO and  region mission support officials, we recommend that the FEMA  Administrator direct OCPO and the regional administrators to revisit the 2011  service level agreement to: add details about the extent of operational  control headquarters and regional supervisors should exercise to  minimize potential competing interests experienced by regional  contracting officers; further detail headquarters and regional  supervisors’ roles and responsibilities for managing regional  contracting officers to improve coordination and communication; and  ensure that the agreement reflects any new requirements, including  recent changes in training that may require travel funds, and establish a plan to ensure that the agreement is reviewed on an  annual basis as intended.
To improve implementation of the contracting provisions of PKEMRA, we  recommend that the FEMA Administrator provide new or updated  guidance to ensure all contracting officers are aware of requirements  concerning  the 150-day limit on noncompetitive contracts justified as urgent and  compelling,  current information on available advance contracts and how they  should be accessed and used,  the need to conduct outreach to state and local governments to  support their use of advance contracts, and how to contract with local vendors, including an understanding of the  regulatory definition of “local,” the documentation requirements for the  use of non-local vendors, and the process for transitioning non-local  awards to local vendors within required timelines or documenting why  the transition was not completed.
To ensure the accuracy of information provided under PKEMRA, we  recommend that the FEMA Administrator  inform Congress of errors in reporting noncompetitive task orders in  quarterly reports issued prior to 2014.
To address PKEMRA, we recommend that the Secretary of Homeland  Security should:  take action to address the requirements of Section 692 to implement  subcontractor limitations or request that Congress amend the law to  delete Section 692.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DHS for review and comment. In its  written response, reproduced in appendix II, DHS agreed with our  findings and recommendations. The written response also includes  information on the steps that FEMA and DHS will take to address each  recommendation and provides an estimated completion date for these  actions.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Homeland Security, and the Administrator of  FEMA. In addition, the report will be available at no charge on the GAO  website at http://www.gao.gov.
Should you or your staff have questions about this report or need  additional information, please contact me at (202) 512-4841 or  mackinm@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this   report. Other staff making key contributions to the report are listed in  appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: To assess the Federal Emergency Management Agency’s (FEMA) efforts  to build and manage its contracting workforce and structure, we reviewed  and analyzed data on FEMA’s workforce since Hurricane Katrina, which  occurred in 2005, to identify staff size, rates of attrition, and years of  experience. To assess the reliability of the workforce data used in the  review, we reviewed information on the data collection process and  compared key data elements from the workforce data to statements about  start dates, home offices, and deployments made by officials that we  interviewed. We concluded the workforce data was sufficiently reliable for  purposes of this report. To understand how FEMA manages its  contracting workforce, including staff that support disasters, we met with  contracting officers in FEMA’s 10 regional offices and in headquarters  offices in Washington, D.C. that support disaster contracting activities.  We also analyzed available workforce documents, including training  materials and requirements for deployment, to determine the range of  activities carried out by regional and headquarters contracting staff. We  analyzed the agreement that governs headquarters’ role in regional  contracting to determine the roles and responsibilities of regional offices  and headquarters in disaster contracting. We also met with the FEMA  headquarters officials responsible for regional contracting officers and the  mission support officials from each of FEMA’s regional offices to discuss  FEMA’s contracting workforce. We reviewed Office of Federal  Procurement Policy and FEMA guidance regarding training requirements  for contracting officers. Further, we reviewed federal internal control  standards to determine if any major performance challenges exist. We  also assessed the extent to which FEMA relies on contractors to support  its acquisition function by identifying acquisition support contracts in  federal procurement data, reviewing available files, and interviewing  contracting officials in FEMA’s headquarters and regional offices  regarding whether such contracts are in use. We found that FEMA’s use  of acquisition support contracts was limited.
To assess the adoption of the Post-Katrina Emergency Management  Reform Act of 2006 (PKEMRA) contracting reforms and good  management practices, we analyzed data from the Federal Procurement  Data System-Next Generation (FPDS-NG) to identify contracts awarded  by offices principally involved in planning for or responding to disasters.  Because the PKEMRA contracting reforms only apply to disaster support  contracts, we focused on contracting offices most likely to award such  contracts. We identified the contracting offices based on our analysis of  FEMA’s obligations in FPDS-NG, which we confirmed with senior FEMA  contracting officials. These included contracting offices responsible for  response, recovery, and logistics in FEMA’s headquarters and the  contracting offices in FEMA’s 10 regions, which award contracts for both  disaster and non-disaster support efforts. From these offices, we selected  a non-representative sample of 27 contracts and task orders with  obligations in fiscal years 2013 and 2014 and confirmed that they  supported disaster response efforts. Our selection process was as  follows:
Sixteen of the contracts and orders were selected using a stratified  random sample that reflected key elements of PKEMRA contracting  reforms. These included contracts and orders that were (1) not  competed and justified based on an unusual and compelling urgency;  (2) not awarded in advance through indefinite-delivery indefinite- quantity contracts (IDIQs) to understand how decisions regarding  advance and local contracts were made; and (3) from the products  and services FEMA obligated the most money during the time period  to understand how FEMA spends the majority of its contracting dollars  for disaster-support.
Eleven contracts and orders were selected from the random sample  or to reflect the regional offices we visited, based on factors including  their representation of PKEMRA elements, such as local contracts in  that region, or significant obligations relative to other contracts  awarded by the region.
We reviewed the contract files for the 27 contracts and task orders to  identify the documents related to the PKEMRA requirements, such as  justifications for noncompetitive contracts exceeding 150 days and  documentation of non-local awards, and compared this information to  requirements stated in PKEMRA, the Federal Acquisition Regulation  (FAR), and Department of Homeland Security (DHS) and FEMA  acquisition guidance. Although the information collected from our review  of contracts is not generalizable to all relevant contracts, it was valuable  in supplementing interviews with FEMA contracting officials in the  contracting offices most likely to support disaster contracts and from  FEMA’s 10 regions.
To understand steps taken to implement PKEMRA contracting  requirements, we spoke to DHS officials from the Office of the Chief  Procurement Officer (OCPO) and FEMA policy officials. We also  reviewed FEMA’s quarterly reports to Congress on contracting activities,  including noncompetitive awards, and spoke to officials responsible for  these reports, to determine if they accurately reported information  identified in the 27 contracts and orders we reviewed. We compared  FEMA’s 2007 report on the categories of products and services most  appropriate for advance contracting and compared the categories to  FEMA’s current lists of available advance contracts to determine the  extent to which FEMA has established contracts for products and  services identified in 2007 and how that information is made available in  FEMA’s training and guidance. We also met with contracting officers in  FEMA’s 10 regional offices and from the headquarters offices most likely  to award contracts supporting disaster relief efforts to discuss their  understanding of PKEMRA’s requirements. In addition, we met with  officials responsible for FEMA’s Local Business Transition Team to  discuss their role in supporting local vendors. We reviewed  documentation related to good management practices, including the FAR  and DHS guidance on required contracting reviews. Additionally, we met  with contracting officials responsible for most of the contracts and orders  we examined to clarify questions we had regarding the contract files.
We conducted this performance audit from October 2014 to September  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Comments from the Department of Homeland Security
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Molly Traci, Assistant Director;  Jennifer Dougherty; Brett Caloia; LeAnna Parkey; Manuel A. Valverde;  Jocelyn Yin; Julia Kennon; Virginia Chanley; John Krump; Emily Bond;  and Roxanna Sun made key contributions to this report.