Tuesday, April 24, 2018

U.S. gov’t reveals failures in FEMA contracting during hurricane season

By on April 11, 2018

SAN JUAN — As Puerto Rico and other U.S. jurisdictions still struggle to recover from the devastating 2017 hurricane season, the U.S. Senate revealed Wednesday that the Federal Emergency Management Agency (FEMA) failed to adequately hire contractors to provide emergency tarps and sheeting.

Per the request of Ranking Member Claire McCaskill, the U.S. Senate Committee on Homeland Security and Governmental Affairs conducted an investigation into FEMA’s hiring process in the aftermath of the multiple hurricanes that impacted Puerto Rico, the U.S. Virgin Islands, Texas and Florida. This led to the discovery that FEMA, which is tasked with ensuring critical goods and services in the wake of a natural disaster, did not adequately use prepositioned contracts and awarded more than $73 million in contracts to two contractors without experience, delaying the provision of essential materials to disaster victims.

(Juan J. Rodríguez/CB)

FEMA is required by Congress to have readily available taps, sheeting and other essential commodities to distribute in the immediate aftermath of a disaster. However, before the 2017 hurricane season, the federal agency only had three prepositioned contracts for emergency tarps and no contracts for plastic sheeting. It wasn’t until Oct. 6, weeks after Hurricane Maria struck Puerto Rico, that FEMA ordered tarps and sheeting.

In total, FEMA granted 14 post-hurricane awards worth $206.9 million. However, the agency acknowledged there were deficiencies in the process, claiming that “the unprecedented hurricane activity exhausted the delivery capacity” of its prepositioned contractors.

“FEMA plans to reevaluate its pre-positioned contracts for blue tarps to ensure sufficient capacity exists among our pre-positioned contract holders,” the agency informed the Democratic staff of the Committee.

One of the aforementioned deficiencies lied in the vetting process for companies Bronze Star LLC and Global Computers and Networks LLC, both hired to provide emergency tarps to hurricane survivors. The contracts for both companies totaled more than $73 million, but neither had any “relevant past performance.” FEMA had not taken adequate steps to determine their capabilities and ultimately canceled their contracts because both companies failed to deliver, the report concluded.

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Defending its hiring decisions, FEMA indicated that “in accordance with the [Federal Acquisition Regulations (FAR)], when an officer has no record of relevant past performance or information on past performance is not available, the officer may not be evaluated favorably or unfavorably on past performance.”

Nonetheless, the agency’s vetting process did not meet FAR requirements for evaluating prospective contractors. The regulations establish that before awarding a contract, government entities must determine that the other party is capable of fulfilling contract requirements. In addition, the prospective contractor must provide sufficient information to ensure compliance.

Bronze Star and Global Computers’ contracts in particular also raised red flags due to the fact FEMA provided short timeframes for bidders to respond to the agency’s call. On average, the contract solicitations were open for three days, but five of these were open for less than a day and gave vendors only two hours to respond. This hasty selection process potentially had a negative impact on competition and quality of service.

Many of FEMA’s other contractors had difficulty delivering their products within the agency’s 14-day deadline. As of April 6, only six of FEMA’s eight new contractors for tarp and sheeting had finished their delivery. Master Group USA LLC put a hold on its delivery due to a stop work order. Meanwhile, RCG of North Carolina LLC is expected to do delivery by June 30, nine months after the hurricane made landfall.

In order to avoid another humanitarian crisis in the event of another natural disaster, the committee suggested that “FEMA should consider increasing its use of prepositioned contracts for emergency supplies, ensure that appropriate steps are taken to assess contractor capabilities prior to awarding contracts, and take steps to ensure adequate competition occurs.”

Despite deficiencies in its hiring process, however, FEMA said other factors contributed to the delays in providing essential goods and services to affected communities. Hurricanes Harvey and Irma had exhausted much of the agency’s resources by the time Maria made its passage through the Caribbean.

In addition, FEMA said it had logistical challenges such as a truck and driver shortage, hindering distribution; a shortage of contractors to perform the needed repairs; and difficulties obtaining required authorization from homeowners.

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