Federal auditors have found that the US government wasted millions of dollars awarding the contracts, including at least A$4.07 million for 4,000 beds that never were used.
The Government Accountability Office's review of 13 major contracts, many awarded with limited or no competition after the August 29 storm, offers the first preliminary overview of the process.
Waste and mismanagement were widespread due to poor planning and miscommunication which led to payment of money for work never used.
"The government's response to Hurricanes Katrina and Rita depended heavily on contractors to deliver ice, water and food supplies; patch rooftops; and provide housing to displaced residents," said the report by the GAO, Congress' auditing arm. "FEMA did not adequately anticipate needs."
Nicol Andrews, a spokeswoman for the Federal Emergency Management Agency, said the agency was working hard to improve its awarding of billions of dollars of government contracts as it prepares for the next hurricane season.
Homeland Security Secretary Michael Chertoff removed the FEMA administrator from working on the disaster days after the hurricane hit and FEMA’s director, Michael Brown, announced his resignation soo after.
Contract competition
By and large, the initial criticism of FEMA, from members of Congress and others, was that the agency moved too slowly to assist hurricane victims.
Of more than 700 contracts valued at A$678,656 or greater, more than half were awarded without full competition or with open-ended terms and many went to politically connected companies such as Halliburton subsidiary Kellogg, Brown & Root, Bechtel. and AshBritt.
Democrats have demanded in recent weeks that limits be imposed on no-bid agreements, which they say have been awarded to politically connected companies at the expense of a slow rebuilding effort on the devastated northern coast of the Gulf of Mexico.
"The Bush administration has learned nothing from its disastrous contract management in Iraq," said Henry Waxman, top Democrat on the House Government Reform Committee. "The administration seems incapable of spending money in a way that actually meets the needs of Gulf Coast residents."
The GAO report speaks broadly and does not deal with the validity of no-bid contracts; those reviews are currently under way by inspectors general at Homeland Security and other agencies. Still, it found significant problems in its general review of the 13 contracts, most of which were awarded with limited bids.
According to the report, the GAO praised government agencies for securing contracts after the disaster but said millions could have been saved had they adopted previous GAO recommendations to hire personnel, prearrange contracts and train their staffs better.