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In the aftermath of the storm, FEMA placed the temporary housing units on private properties where individuals were rebuilding their homes. For predisaster renters, FEMA also placed housing units at preexisting commercial sites (e.g., trailer parks) and at FEMA-constructed group sites at leased locations, such as stadium grounds and school fields. To support the temporary housing, FEMA originally awarded sole source contracts to four major firms and paid these firms billions of dollars to set up and maintain the units and sites. According to FEMA, it awarded these contracts noncompetitively because of the urgent need for a rapid emergency response. After much public criticism and investigations of the costs claimed by the four contractors, FEMA solicited proposals for new contracts for the maintenance and deactivation (MD) of mobile homes and trailers and for group site maintenance (GSM). The MD contracts are primarily for monthly preventative trailer maintenance, emergency repairs, and unit deactivation and removal, while the GSM contracts cover maintenance of the grounds facilities at the site, lawn care, and road and fence repair. In Mississippi, FEMA awarded 10 MD contracts in May 2006 to maintain approximately 30,000 housing units and 5 GSM contracts in September 2006 to maintain 39 group sites.

Both the MD and GSM awards have a 5-year term and FEMA guaranteed each contractor a minimum amount for the first year: $50,000 for MD contracts and $100,000 for GSM contracts. FEMA has subsequently decided to issue task orders under only five of the MD contracts for the second year; however, the 5 remaining contractors are still eligible to have task orders issued against their existing contracts. According to FEMA, it paid the 10 MD contractors almost $63 million from May 2006 through May 2007 and paid the 5 GSM contractors about $9 million from September 2006 through May 2007. In addition, FEMA data shows it has spent over $13 million on site leases, $6.5 million for security services at the sites, and $4.4 million on utilities. FEMA data also shows it spent over $4 million to lay asphalt around 150 travel trailers in group sites to make them accessible to disabled individuals in compliance with Uniform Federal Accessibility Standards (UFAS).

You asked us to investigate whether there were indications of fraud, waste, and abuse related to FEMA’s oversight of the 10 MD and 5 GSM contracts in Mississippi. We focused our efforts on investigating (1) FEMA’s issuance of task orders to the MD contractors and (2) FEMA’s invoice review process. We also prepared case studies to assess the costs associated with the placement of travel trailers at group sites and investigated allegations of criminal and improper activity related to the contracts.

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GAO-08-106 Hurricane Katrina

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