More than 80 percent of the US$1.5 billion in contracts signed by the Federal Emergency Management Agency to clean up after Hurricane Katrina were awarded without bidding or with limited competition, the New York Times reported Monday.
The newspaper, citing government records, said some of the bids are provoking concern among auditors and government officials about the potential for favouritism or abuse.
The first detailed tally of commitments from federal agencies since Hurricane Katrina hit the Gulf Coast four weeks ago shows more than 15 contracts exceed US$100 million, including five of US$500 million or more. Most were for clearing trees, homes and cars strewn across the region; purchasing mobile homes; or providing trucks, ships, buses and planes.
Already, the Times said, questions have been raised about the political connections of two contractors - the Shaw Group and Kellogg, Brown & Root, a subsidiary of Halliburton that has been represented by lobbyist Joe Allbaugh, President George W. Bush's ex-campaign manager and former head of FEMA.
"When you do something like this, you do increase the vulnerability for fraud, plain waste, abuse and mismanagement," the Times quoted Richard Skinner, inspector general for the Department of Homeland Security, as saying. "We are very apprehensive about what we are seeing."
Bills have come in for deals that apparently were clinched with a handshake, with no documentation to back them up, said Skinner, who declined to provide details.
Some industry and government officials questioned the costs of debris-removal contracts, saying the Army Corps of Engineers had allowed a rate that was too high, the Times said.
Congressional investigators are also looking into the US$568 million awarded to AshBritt, a Pompano Beach, Florida company that was a client of the former lobbying firm of Governor Haley Barbour of Mississippi, the Times said.
The newspaper said some businesses awarded large contracts have records of performing similar work, but they also have had some problems. CH2M Hill and the Fluor Corp, two engineering companies awarded a total of US$250 million in contracts, were previously cited by regulators for safety violations at a weapons plant cleanup.
The Bechtel Corp, awarded a contract that could be worth $100 million, is under scrutiny for its oversight of the "Big Dig" construction project in Boston, the Times said.
And Kellogg, Brown & Root, which was given US$60 million in contracts, was rebuked by federal auditors for unsubstantiated billing from the Iraq reconstruction and criticized for bills like US$100-per-bag laundry service.
Source: China Daily