Are roofing, school-building companies making windfall profits?
Tags: fema, army corps of engineersFrom Winners of Katrina contracts defend deals:
…During the [House] hearing, lawmakers criticized several contracting deals. They cited some news reports in which roofing companies allegedly were making a windfall from overpriced Army Corps deals.
When Col. Norbert Doyle, who handles contracting for the Army Corps, said he didn't have any information about the agreements and would need to look into it, lawmakers responded testily.
"The biggest complaint I have is who's in charge here?" said Rep. Michael McCaul, R-Texas.
Davis noted later: "If there are problems here, we need to look at the contracting officers. They're the ones who negotiate the deal."
David Cooper, a director at the Government Accountability Office, the auditing arm of Congress, released a preliminary report that found initial signs of inflated prices.
The initial report criticizes a no-bid deal to provide classrooms with a company that had a pre-existing relationship with the government. In its haste to get a deal, the Army Corps accepted the unnamed company's $39 million price tag based on open-ended terms that have been since repeatedly modified, the audit said.
"We found the Corps modified the contract, the day after it was awarded, to allow the contractor to substitute a different mix of classrooms than required by the contract," Cooper said. "We found little evidence that the Corps conducted a complete analysis to determine the impact of the modifications on the contract price."
Earlier in the hearing, Doyle told lawmakers that the Army Corps expected to be awarding a new round of contracts by year's end for demolition work in Louisiana, $500 million, and Mississippi, $600 million.
Priorities will be given to local and minority-owned business, although for now, contracts will still be awarded on an expedited, limited-bid basis.
"It is our goal to return to standard procurement operations as soon as possible," Doyle said.
