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FEMA was in the process of competing this contract—bids had been solicited and evaluated, but no contract was in place. Therefore, FEMA awarded “no-bid” contracts to four major engineering firms (Bechtel Corporation, Fluor Corporation, the Shaw Group Incorporated, and CH2M Hill Incorporated) for, among other things, the support of staging areas for housing units, installation of housing units, maintenance and upkeep, site inspections and preparations, site restoration, group site design, group site construction, site assessments, property and facility management, as well as housing unit deactivation and rehabilitation. In total, FEMA made almost $3 billion in payments to Bechtel, Fluor, Shaw, and CH2M Hill from September 2005 to January 2007. After much public criticism and investigations of the costs claimed by the four contractors,12 FEMA solicited proposals for new contracts for the maintenance and deactivation (MD) of mobile homes and trailers and for group site maintenance (GSM).

Mississippi Maintenance and Deactivation Contracts: In November 2005, FEMA posted two solicitations indicating its intent to award multiple contracts for the maintenance and deactivation of manufactured homes and travel trailers. One solicitation was set aside for small businesses and the other was designated for 8(a) business development concerns (small businesses owned by socially and economically disadvantaged individuals). The solicitations for the small business and 8(a) awards were essentially the same, with each requiring prospective bidders to submit a technical and a business proposal listing their price for each of 37 contract line items. Additionally, in order to provide preference to local businesses, FEMA notified bidders that the proposed total price for any nonlocal business would be increased by 30 percent for price evaluation purposes. In May 2006, FEMA awarded five contracts to small businesses and five to 8(a) business development concerns. Each award was an indefinite delivery/indefinite quantity fixed price type contract with a 5-year term and each had a guaranteed minimum of $50,000 and a maximum funding limitation of $100 million. In total, nine businesses received these awards because one business received two awards–one as a small business and one as an 8(a) business concern. In addition, of the 10 awards, 8 went to businesses classified as local for price competition purposes and 2 went to

12Department of Homeland Security Inspector General, Management Advisory Report on the Major Technical Assistance Contracts (Nov. 2005) (OIG-06-02) and Defense Contract Audit Agency, Application of Agreed-Upon Procedures to Evaluate Bechtel National, Inc.’s Proposal for Contract No. HSFEHQ-05-D-0572, Task Order HSFEHQ-05-J-004, Revision 2, Site Maintenance and Food Services (Rept. No. 4281-2006D28000002) (Nov. 10, 2005).

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GAO-08-106 Hurricane Katrina

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