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companies that FEMA deemed nonlocal. FEMA also awarded similar maintenance and deactivation contracts in Louisiana, Alabama, and Texas.

In May 2006, following award of the Mississippi MD contracts, FEMA issued two task orders to each of the 10 awardees. The initial task order for each contractor initiated a phase-in period for contract ramp-up. The cost of each contractor’s phase-in period was based on the amount agreed to in their contract. FEMA obligated the amount for the initial phase-in cost proposed by each MD contractor, which ranged from a low of $23,220 to a high of $6,111,000. The second task order provided an estimated quantity and projected dollar amount for each of the contract line items for the first 11 months of performance. Those task orders stated that the estimated usage was a “good faith estimate on the part of the government and was developed solely to arrive at an estimated total for the task order.” The amount obligated for each of those “good faith estimates” was between $19.2 million and $20.6 million, for a total obligation amount of over $200 million. FEMA elected not to compete the task orders among the 10 contractors nor did they consider price or cost under each task order as a factor in their source selection decision. However, both the MD contract and the FAR state that a contracting officer must provide each contractor with a fair opportunity to be considered for each order issued under multiple task order contracts. The FAR further states that the contracting officer may exercise “broad discretion” in developing task order issuance procedures, as long as these procedures are fair, included in the solicitation, and factor in price or cost.13

Mississippi Group Site Maintenance Contracts: In May 2006, FEMA posted its intent to award multiple contracts for group site maintenance. These contracts were set aside exclusively for service disabled veteran- owned small businesses and were further limited to proposing firms residing in or primarily doing business in Mississippi. The solicitation required each submitter to provide a price for maintaining group sites at various threshold sizes, including sites with less than 50 trailer pads, 51 to 100, 101 to 300, 301 to 600, and 601 or more. FEMA awarded these contracts in September 2006 and also awarded similar group site maintenance contracts in Louisiana.

13FAR 16.505. The FAR also lists exceptions to this fair opportunity process, including, among others, that need for supplies and services is so urgent that providing a fair opportunity would result in unacceptable delays and that only one awardee is capable of providing the supplies or services required at the level of quality required.

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GAO-08-106 Hurricane Katrina

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