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According to an August 2007 report, FEMA’s current “exit strategy” for residents at the group and commercial sites involves partnering with the Department of Housing and Urban Development (HUD) to assist in locating rental properties for applicants through HUD’s National Housing Locator System (NHLS). In addition, Congress has provided $400 million for the Alternative Housing Pilot Program (AHPP) to develop and evaluate alternatives to travel trailers and mobile homes.26 However, it is still uncertain what will happen to those residents who continue to need housing assistance beyond the March 2009 trailer and mobile home occupancy extension.

Evidence of Improper Activity Related to Contract Award Process

During the course of our work on the MD and GSM contracts, we found that FEMA awarded GSM contracts to two companies that did not appear to have submitted independent bids and also made false statements on proposals submitted to FEMA. We also found that a FEMA contracting officer may have improperly awarded the UFAS contract to make the housing units accessible to individuals with disabilities, resulting in $3 million in unnecessary expenses. We have referred both of these matters to the Department of Justice and the DHS IG for further investigation and we have notified the Katrina Fraud Task Force about our findings.

FEMA Awarded GSM Contracts to Companies That May Not Have Bid Independently

FEMA awarded GSM contracts to two companies that did not appear to have submitted independent bids and that also made false statements on proposals submitted to FEMA. As previously discussed, FEMA awarded five GSM contracts in Mississippi. In reality, FEMA awarded one business two contracts: one contract as a “single entity” and one as part of a “joint venture” with another firm. Although making this type of award is not prohibited, the circumstances surrounding this case merit further investigation. Specifically, both the “single entity” and the “joint venture” are required to adhere to the Certificate of Independent Price Determination, as set forth in the contract solicitation. By signing the certificate, each bidder affirms that it has arrived at its price independently

26FEMA states that it awarded $275 million to Mississippi for alternative housing—-the Park Model and Mississippi Cottage project. According to FEMA, Mississippi has started installing these units and moving families into the new housing alternatives.

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GAO-08-106 Hurricane Katrina

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