- The Washington Times - Saturday, November 12, 2005

Despite a month-old pledge, the Federal Emergency Management Agency has yet to reopen four of its biggest no-bid contracts for Hurricane Katrina work and won’t do so until the contracts are almost complete.

A promise to hire more minority-owned firms also is largely unfulfilled.

The no-bid contracts for temporary housing, worth up to $100 million each, were given to Shaw Group Inc., Bechtel Corp., CH2M Hill Inc. and Fluor Corp. right after Katrina swamped the Gulf Coast. Charges of favoritism helped prompt last month’s pledge by FEMA’s acting director, R. David Paulison, but now officials with the Homeland Security Department, which oversees FEMA, say the contracts won’t be awarded again until February.

The disclosure outraged some lawmakers and business groups that think the Bush administration has not done enough to ensure Katrina contracts are spread around. In particular, they say small and minority-owned Gulf Coast businesses have been shortchanged.

FEMA promised to boost the number of contracts given to minority-owned businesses, but in the past month the percentage has increased only slightly, from 1.5 percent to 1.8 percent of the $3.1 billion awarded. That’s still well below the 5 percent of federal contracts normally set aside for minority-owned firms.

“FEMA’s performance falls far short,” said Mississippi Rep. Bennie Thompson, ranking Democrat on the House Homeland Security Committee. “The federal government must make a major shift in both policy and implementation if the lives of the people of the Gulf Coast are to be effectively rebuilt and restored.”

Mr. Thompson said he would introduce legislation to require the Homeland Security Department to maintain a permanent database for small and minority-owned businesses to be hired as prime contractors, rather than lower-paid subcontractors.

“I am from Mississippi, and I know sharecropping when I see it,” Mr. Thompson said.

Harry Alford, president of the National Black Chamber of Commerce, decried the dearth of small and minority Katrina contracts as “shameful.” But he still is hopeful, noting that President Bush met with him and other minority leaders Thursday to discuss how to improve business opportunities.

“Less than 2 percent of contracts going to minority-owned businesses is totally unacceptable,” Mr. Alford said. “Now is showtime. We’ve been hurt. I think our concerns have been taken seriously, and I believe we’re going to work it out.”

FEMA also has been criticized for the no-bid contracts. Officials said they awarded those contracts to speed recovery efforts that might have been slowed by competitive bidding, but critics saw it as a way to reward politically connected firms.

Bechtel Chief Executive Officer Riley Bechtel served on Mr. Bush’s Export Council from 2003 to 2004, and the Shaw Group’s lobbyist, Joseph Allbaugh, is a former FEMA director and friend of Mr. Bush. Both companies have denied political connections played a role.

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