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Businesses located in the affected areas following hurricanes Katrina and Rita have received just a small percentage of contracts from the Federal Emergency Management Agency (FEMA), according to a report by Gannett News Service.
Of the 413 post-hurricane contracts that FEMA had awarded to Louisiana companies as of Nov. 18, only 125 were worth more than $100,000, according to a Gannett News Service analysis. And only 50 were worth $500,000 or more.
Of the $3.7 billion FEMA has spent on contracts related to the two hurricanes, about $201 million – or 5.4% – went to Louisiana companies, according to the analysis of all 2,009 contracts FEMA had awarded by Nov. 18.
The other storm-hit states, Mississippi and Alabama, haven’t fared any better. Businesses in Mississippi received 3.45% and Alabama, 5.15% of FEMA contract money.
Companies in Georgia, Indiana and Texas have received the most FEMA money. Maryland and Virginia – which are near Washington, D.C., and are home to the offices of most major government contractors – also are high on the list.
Some of the top companies winning contracts are Gulf Stream Coach of Nappanee, Ind., which is providing FEMA travel trailers for about $521 million, and Circle B Enterprises, a manufactured housing company in Ocilla, Ga., that has a FEMA contract worth about $287 million.
Gannett reported that the largest FEMA deal in Louisiana was a $37.3 million contract with CS&M Associates of New Orleans for hotel rooms.
That contract was awarded based on limited bidding. Some have been awarded with no competition at all.
Responding to criticism of the no-bid contracts, acting FEMA Director David Paulison told a Senate panel last month he will rebid some of those agreements, but that hasn’t happened yet.
Last week, a non-binding resolution was approved by the Senate to require FEMA to rebid the no-bid contracts.
“The Hurricane Katrina contracting process has been rife with problems from the very beginning,” said Sen. Barack Obama, D-Ill., the resolution’s sponsor. “Rather than use the reconstruction process to help those companies and those workers in the affected regions, we are seeing many of the large prime contacts go to some of the biggest contractors in the country.”
Many Gulf Coast lawmakers have accused FEMA of ignoring the Stafford Act, which requires federal agencies to give preference to local businesses when they award contracts.
FEMA officials say they’re doing everything they can to make sure small businesses in storm-hit states benefit from the government’s disaster spending.