Washington D.C. Office
713 Hart Senate Office Building
Washington, D.C. 20510
(202) 224-2854
(202) 228-4260 fax
(202 228-1404 TDD
Email our office

Chicago Office
John C. Kluczynski Federal Office Building
230 South Dearborn St.
Suite 3900 (39th floor)
Chicago, Illinois 60604
(312) 886-3506
(312) 886-3514 fax
Toll free: (866) 445-2520
(for IL residents only)

Springfield Office
607 East Adams Street
Springfield, Illinois 62701
(217) 492-5089
(217) 492-5099 fax

Marion Office
701 North Court Street
Marion, Illinois 62959
(618) 997-2402
(618) 997-2850 fax

Moline Office
1911 52nd Avenue
Moline, Illinois 61265
(309)736-1217
(309)736-1233 fax

Obama Calls on FEMA to Immediately Re-bid All No-bid Katrina Reconstruction Contracts

Thursday, November 17, 2005

FOR IMMEDIATE RELEASE
Obama Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Illinois Contact: Julian Green, (312) 886-3506
Date: November 17, 2005

Obama Calls on FEMA to Immediately Re-bid All No-bid Katrina Reconstruction Contracts
Resolution Introduced in Senate Today

WASHINGTON - U.S. Senators Barack Obama (D-IL) and Tom Coburn (R-OK) today introduced legislation calling for the Federal Emergency Management Agency (FEMA) to immediately competitively re-bid all no-bid contracts awarded in the wake of Hurricane Katrina. The bipartisan Sense of the Senate resolution was introduced earlier today.

"The Hurricane Katrina contracting process has been rife with problems from the very beginning," said Obama. "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 contracts go to some of the biggest contractors in the country. There is no accountability in how this money is being spent - no accountability to the American taxpayers, and no accountability to the people who need this help most."

In its rush to award contracts in response to the devastation of Hurricane Katrina, FEMA abandoned many standard contracting procedures and awarded four large no-bid emergency housing contracts of $100 million each to the Shaw Group, the Fluor Corporation, Bechtel National, and CH2M Hill despite the fact that other local companies expressed a desire to do the work.

In response to complaints from Congress and the American taxpayers, on October 6, 2005, Acting FEMA Under Secretary Paulison announced that these contracts would be re-bid. More than a month later, the contracts have not been re-bid, and FEMA officials reported on November 11, 2005, that they would not re-bid the contracts until February 2006. By February, however, most of the contracts will be complete.

"The American taxpayers have provided $62 billion for the reconstruction effort precisely so that the people of the Gulf Coast region - including some of the most vulnerable citizens in our society - would immediately receive help," said Obama. "And yet, we have no idea where and how this money is being spent, why it's not being spent on the most pressing problems facing survivors, and why they're still sitting on nearly $40 billion that hasn't been spent at all."

Obama and Coburn's legislation expresses the Sense of the Senate that FEMA should immediately competitively re-bid all no-bid contracts awarded in the wake of hurricane Katrina.

Obama and Coburn have also introduced legislation that would create a Chief Financial Officer (CFO) to oversee all expenditures associated with the Hurricane Katrina relief and reconstruction effort. The Hurricane Katrina CFO would be appointed by the President, confirmed by the Senate, staffed with experts from relevant federal agencies, and would have management and oversight over any agency using federal funds for the recovery. The CFO would issue monthly financial reports to Congress, and the Government Accountability Office would issue quarterly reports to Congress reviewing the work of the CFO and recovery activities.