TOPIC: Katrina & Gulf Coast Recovery
May 2, 2006
His Amendment to Stop No-Bid Contracts for Gulf Coast Recovery and
after the devastation of Hurricane Katrina, millions of Americans
opened their hearts, their homes, and their wallets to help the
victims in the Gulf Coast. Even before Katrina’s winds and
rains died down, Americans across the country called national hotlines
and pledged their hard-earned dollars, their time, and their prayers
to the relief effort.
But they didn’t
just pledge ? they also delivered. They delivered to the tune of
$3.5 billion dollars. Many of these donations came from working-class
families who didn’t have much to give, but they gave what
Like the American
people, President Bush made a pledge after the disaster. He pledged
that he would provide the Gulf Coast with the federal assistance
it needed to get back on its feet. With the bill now before us,
the total amount of federal funding for hurricane recovery will
exceed $100 billion, and it’s safe to say that more money
will be needed in the months and years to come.
But in order to
make good on the President’s pledge, we need to do more. We
need to pledge to be responsible stewards of taxpayer dollars. We
owe this to the Americans who donated their own funds to hurricane
relief efforts and who trust us each day with the tax money they
send to Washington.
we haven’t done a very good job so far of delivering on this
Coburn and I came to the floor to detail the numerous instances
of waste, fraud, and abuse in the use of Katrina funds.
We know that FEMA
spent nearly $880 million in taxpayer money on 25,000 temporary
housing trailers stored around the country, including 11,000 that
are rusting away in a field in Arkansas.
There are reports of prime contractors charging upwards of $30 per
cubic yard for debris removal ? work that actually costs subcontractors
as little as $6 per cubic yard.
And, as the Washington Post reported, four large companies are charging
a 1,500% mark-up to cover damaged roofs with plastic tarps.
Senator Coburn and I have tried to address these problems by offering
a sensible package of amendments to ensure fiscal accountability
and transparency. We have proposed the appointment of a chief financial
officer to oversee the spending of federal funding. We have proposed
limits on the amount of overhead expenses that a contractor can
charge the federal government. And we have proposed that the details
of all large Katrina contracts be posted on the Internet.
these amendments are not germane now that cloture has been invoked.
That is unfortunate.
It’s unfortunate because the interests of the American taxpayer
are not being well-served by the U.S. Senate. Even though we will
have appropriated well over $100 billion by the end of this week
for Katrina relief and recovery, we haven’t put any accountability
systems in place to ensure that the money is well-spent.
I know I’m
new to this body, but I’m troubled that Senate rules are getting
in the way of sound policy. I understand that’s how the Senate
works, so Senator Coburn and I are here to offer one modest amendment
to protect taxpayer dollars. Our amendment addresses no-bid contracting
and is germane to the underlying bill.
the hurricane, FEMA awarded four $100 million no-bid contracts to
four large companies. $400 million taxpayer dollars, without full
and open competition.
Acting FEMA Director
David Paulison was asked about these contracts when he testified
before the Senate Homeland Security and Governmental Affairs Committee
on October 6, 2005. He said the following:
"I've been a public servant for a long time, and I've never
been a fan of no-bid contracts. Sometimes you have to do them because
of the expediency of getting things done. And I can assure that
you we are going to look at all of those contracts very carefully.
All of those no-bid contracts, we are going to go back and rebid."
Senator Coburn and I expected Director Paulison to stick to his
word and rebid these contracts. But a month and a half passed, and
the contracts still had not been rebid. So last November, we introduced
an amendment to the tax reconciliation bill expressing the Sense
of the Senate that FEMA should immediately rebid these contracts.
Our colleagues agreed and passed this amendment by unanimous consent.
After our amendment
passed, both Senator Coburn and I met with Director Paulison, and
again he assured us that these contracts would be rebid.
Yet, these contracts
still have not been rebid. And to add insult to injury, FEMA said
in March that the contracts would not be rebid after all. In fact,
the contracts actually have been extended, despite the fact that
GAO found that three of these four firms had wasted millions of
dollars in taxpayer funds.
The abuse doesn’t
stop with these four contracts. We learned just two weeks ago that
the Army Corps of Engineers missed an opportunity to negotiate a
lower price on a $40 million contract for portable classrooms in
Mississippi. Instead, a no-bid and overpriced contract was awarded
to an out-of-state firm.
heard it said that the definition of insanity is doing the same
thing over and over again, and expecting different results. Frankly,
what we’re doing with Katrina funding borders on insanity
? we in Congress just keep trusting FEMA to enter into competitive
contracts even though there’s no evidence that it has any
intention of doing so.
So the amendment
we’re offering today is our effort to say enough is enough.
Our amendment requires all federal agencies to follow competitive
bidding procedures for any Katrina-related contracts exceeding $500,000.
This is a common sense amendment. Eight months after Katrina, there’s
no longer any emergency that justifies a no-bid contract that might
have been entered into the days after Katrina.
The American people
deserve the benefits of competition on government contracts. Competition
is good for American business and it’s good for the government.
It helps to ensure high quality and low costs. That’s what
the American people have a right to expect, and that’s what
our amendment seeks to deliver.
Before we spend
another dollar in the Gulf Coast, let’s make sure that we
have some transparency and accountability systems in place to ensure
that federal money is helping those people most in need, instead
of lining the pockets of a contractor.
In our rush to
get money to the Gulf Coast eight months ago, we didn’t do
that, and the American taxpayers ? and more importantly, the victims
of Katrina ? paid a heavy price. Let’s not repeat that mistake
I urge my colleagues
to support Senator Coburn and me in this effort.