Senate Report Details Major Disaster Response Contracting Failures

The 2018 hurricane season starts in just over a month. Considering the severity and impact of last year’s storms, the nation should ask if we are adequately prepared for the next major disaster. Unfortunately, the findings of a recent Congressional investigation raise serious concerns.

A recent report from the staff of Senator Claire McCaskill (D-MO), Ranking Member of the Committee on Homeland Security and Governmental Affairs, calls into question an important aspect of disaster preparations by the Federal Emergency Management Agency (FEMA). The report details many shortcomings of the state of FEMA contracts for disaster response supplies.

During the first few days after a major disaster, FEMA is called upon to provide vital supplies to the affected communities. FEMA relies on a network of large supply centers that can quickly respond, delivering thousands of pallets of basic commodities such as water, food, blankets, plastic tarps for emergency shelter and repairs, electrical generators, and other supplies and equipment. For disasters the size of the 2017 hurricanes that struck the southeastern states and Caribbean, FEMA also has to quickly engage with the private sector to procure and deliver large additional amounts of these same basic commodities.

FEMA is supposed to have “prepositioned” contracts in place before a major disaster. While no one can predict all the needs for a specific disaster, the basic commodities that are needed in very large, easily deliverable quantities don’t change. To ensure that continued delivery is uninterrupted, FEMA should have contracts for these supplies already vetted and ready to act on. This strategy follows current law, which correctly requires that FEMA follow a “contracting strategy that maximizes the use of advance contracts to the extent practical and cost-effective.”

The McCaskill report details how FEMA did not adequately prepare for last year’s hurricane season with prepositioned contracts for at least some disaster commodities. For example, of the $206.9 million in plastic sheeting and tarps contracts for the 2017 hurricanes, only 3.5 percent was through prepositioned contracts. In fact, FEMA had only three prepositioned contracts for tarps and none for plastic sheeting before the start of the 2017 hurricane season. After the hurricane disasters struck the United States, FEMA needed to award eleven additional contracts for those basic commodities.

And the new contracts weren’t vetted through the appropriate process. Media outlets had previously reported on contracting failures for plastic sheeting and tarps. However, the McCaskill report described a broader context of contract failure by FEMA. Before awarding a contract, federal agencies must assess contractor capabilities to deliver the required goods and services. For the most part, FEMA failed to do this. While contracts can fail at times due to reasons beyond the control of an agency, the report gave examples of glaring problems in FEMA’s review process. For example, FEMA awarded $73 million in new contracts for plastic sheeting and tarps to companies that had formed just months earlier and had little or no experience with the product.

It is worth noting that there were other reported FEMA contracting failures beyond what was examined in the McCaskill report. A $156 million FEMA contract with the Georgia-based consulting firm Tribute Contracting LLC was terminated “for cause,” having only delivered 50 thousand of the required 30 million meals. Oddly, the firm, which had little experience in this level of disaster work, consisted of just one person, calling into question why it was tapped for such an important and massive contract. Worse, in 2016, the Government Publishing Office (GPO) terminated “for default” an unrelated Tribute contract to make 3,000 tote bags, and excluded the company from receiving further contracts above $35,000 until January 7, 2019, unless “there is a compelling reason.” The GPO’s contract exclusion should have raised red flags for FEMA because the federal government’s own database clearly lists the Tribute contract prohibition.

Most importantly, the McCaskill report revealed that many of the problematic contracts resulted in delayed delivery of the commodities to those in need within affected communities.

During a hearing of the Senate Homeland Security and Governmental Affairs Committee on April 11, FEMA Administrator William “Brock” Long discussed the report, admitting that “I realize we got work.” He assured the panel that FEMA will address the contracting problems.

POGO will continue to press federal agencies to adequately prepare for the next major disaster. A good place to start would be to improve contracting procedures at FEMA in order to ensure that vital supplies and services reach those suffering in the aftermath of a disaster.