A man works to clean up after Hurricane Katrina.

In the aftermath of Hurricane Katrina, the Bush Administration turned to private contractors to provide relief and recovery services worth billions of dollars. Now, one year later, it is apparent that taxpayers and the residents of the Gulf Coast are paying a steep price for the failure to stop waste, fraud, and abuse in federal contracting.

At the request of Reps. Waxman, Cardoza, Obey, Tanner, Norton, and Tierney, this report examines procurement spending in response to Hurricane Katrina. The report identifies 19 Katrina contracts, collectively worth $8.75 billion, that have experienced significant overcharges, wasteful spending, or mismanagement.

There are indications that federal officials may repeat many of the same mistakes in responding to future disasters. Earlier this month, the Federal Emergency Management Agency awarded new contracts worth over $1 billion to several of the same companies implicated in the wasteful Hurricane Katrina response.

Key findings in the report include the following:

• Full and Open Competition is the Exception, Not the Rule. As of June 30, 2006, over $10.6 billion has been awarded to private contractors for Gulf Coast recovery and reconstruction. Nearly all of this amount ($10.1 billion) was awarded in 1,237 contracts valued at $500,000 or more. Only 30% of these contracts were awarded with full and open competition.
• Contract Mismanagement Is Widespread. Hurricane Katrina contracts have been accompanied by pervasive mismanagement. Mistakes were made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight. Compounding this problem, there were not enough trained contract officials to oversee contract spending in the Gulf Coast.
• The Costs to the Taxpayer Are Enormous. This report identifies 19 Katrina contracts collectively worth $8.75 billion that have been plagued by waste, fraud, abuse, or mismanagement. In the case of each of these 19 contracts, reports from the Government Accountability Office, Pentagon auditors, agency inspectors general, or other government investigators have linked the contracts to major problems in administration or performance.