POGO Supports Improved FEMA Proposal Aiding Puerto Rico and the U.S. Virgin Islands

Dec 07, 2017

To: Kirstjen Nielsen, Secretary of Homeland Security

Cc: William Long, Director of the Federal Emergency Management Agency; John Kelly, Acting Inspector General, Department of Homeland Security; Dustin Brown, Acting Deputy Director of Management, Office of Management and Budget

Dear Secretary Nielsen:

On November 17, 2017, the Federal Emergency Management Agency issued RFI #70FA301BR00000008 soliciting public comment on a proposal to hire a single vendor to handle all of the shipping, transportation, logistics, and delivery of disaster relief to Puerto Rico and the U.S. Virgin Islands for the next 12 months. The contract represents a vital link in the delivery of over $1 billion in disaster aid and will have an immense impact on the speed of recovery.

We believe the draft Performance Work Statement and the overall mega-contracting strategy for disaster aid delivery will result in the continuation of a pattern of delay and waste. Therefore, we recommend that FEMA alter the draft Performance Work Statement (PWS) to better serve the people of Puerto Rico and the USVI, as well as this nation’s taxpayers, with an emphasis on local business and hiring, collaborative partnership approaches, iterative requirements development with public engagement in quality assurance, and open data. Of immediate concern are FEMA’s joining of sea based shipping with local transportation requirements and the lack of independent verification and validation (IVV) for contractor performance.

Our recommendations are based on the voice of industry and the general public, as well as our experience as leaders in the Federal government and within Puerto Rico. Among the many respondents to the RFI, thirty gave permission to “publish quotes from [their] response as part of our efforts to improve the quality of disaster aid delivery in Puerto Rico and USVI.” Their responses to the RFI send a clear message that there is a better way for FEMA to ensure the efficient and cost effective delivery of life sustaining resources to the people of Puerto Rico and the USVI. (We have consolidated their comments as Nine Points for RebuildPR Contracting)

We recommend FEMA engage with the community through an iterative process that reflects the real facts on the ground. Respondents to the RFI agree: there is a better way for FEMA to deliver disaster aid to Puerto Rico and the USVI. Rather than award a single mega-contract through rushed deadlines and secret channels, FEMA must communicate with local business, government, and non-governmental organizations, and work with public.

Breaking the immense task of rebuilding Puerto Rico into smaller, more manageable chunks will reduce risk and allow FEMA to track and iterate throughout its relief efforts. We acknowledge that distributing millions of dollars through dozens of contracts with small local businesses would require a more intense management strategy than FEMA has previously employed for disasters. But as small businesses report on their progress, FEMA will gain a more honest, on-the-ground view of the recovery from the members of the community themselves.

Evidence from recent natural disasters shows the risks of a highly centralized rebuilding model. After Hurricane Katrina, although FEMA said it wanted to prioritize small, local, and minority-owned businesses for contracts, most of the money was awarded in giant chunks, as large as $500 million, to massive companies like Halliburton and Bechtel. These mega-contracts do not provide decent paying jobs to locals and instead bring in labor from outside the disaster zone, as happened after Katrina. Outside contractors also often fail to provide long term improvement in public service infrastructure because they lack the relevant experience and relationships.

The dangers of issuing a big contract to a single vendor are already evident in Puerto Rico. In late November 2017, The Associated Press reported that an unproven, Florida-based company had been awarded $30 million in contracts from FEMA to deliver tarps for repairs to damaged homes. But the contract was terminated after the awardee, Bronze Star LLC, failed to deliver any of the supplies to the island. This would be the first of many unfulfilled and partially filled awards.

Local knowledge has been shown to be critical for rebuilding efforts. The challenge of rebuilding after a disaster is too great for a single Federal agency—or a single company—to handle alone. What we have learned from other hurricane rebuild efforts is hard to miss—that local input isn’t a “nice to have,” but a “need to have.” After Hurricane Sandy, the New Jersey recovery was spearheaded by 30 local businesses with Federal contracts. Similarly, in post-Katrina New Orleans, repopulation picked up steam when Federal and local teams came together to share information about individual neighborhood blocks and collectively address the challenges of rebuilding.

Some of the most effective efforts in Puerto Rico over the past two months have been led by coalitions of innovators and activists on the ground. A partnership led by Chef José Andrés has served over 3 million meals. Lin Manuel Miranda has created a $2.5 million hurricane relief fund. These local contributions have been leading the recovery fight and picking up the slack where the Federal government and contractors have fallen behind.

Unfortunately, based on the RFI, it is clear that the agency intends to go the opposite direction. The proposed strategy would not require that the chosen vendor possess any expertise or past performance relevant to the needs of local transportation or delivery, and it doesn’t incorporate local input. With no incentive to solicit local knowledge or labor, a single-vendor contract could mean an army of unprepared mainland workers will descend for the large payouts.

There is a better way for FEMA to award Federal disaster aid. The Rebuild Puerto Rico RFI Initiative asks FEMA to engage companies that hire locally; engage with the community and communicate with local business, government, and non-governmental organizations; and work with public participation to set quality standards and review overall performance. In addition, the initiative requests to make public all data on spending and deliveries.

Local businesses and NGOs can—and should—play a central role in the delivery of services and the rebuilding of their own community. As taxpayers, active citizens, and former Federal officials, we are asking you to make this possible. It’s the only way for Puerto Rico to truly recover.

Signed,

The Supporters of the Rebuild Puerto Rico RFI Initiative:

Vivian Graubard

NewAmerica

Bernhard Kluger

Public Insights Corp

Eduardo Ortiz, Victor Garcia, Andrew Miller

&Partners

Frances Colón

Jasperi Consulting

Miguel A. Columna

Duke University, MBA Student