Obama Amendment to End No-bid Contracts for Hurricane Katrina Reconstruction Passes Senate
Thursday, May 4, 2006
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Washington Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Illinois Contact: Julian Green, (312) 886-3506
Date: May 4, 2006
Obama Amendment to End No-bid Contracts for Hurricane Katrina Reconstruction Passes Senate
WASHINGTON - Legislation requiring competitive bidding for Federal contracts for Gulf Coast reconstruction proposed by U.S. Senator Barack Obama (D-IL) passed the Senate today by a vote of 78 to 20.
Immediately after the hurricane, the Federal Emergency Management Agency (FEMA) awarded four $100 million no-bid contracts to four large companies without full and open competition. Last year, Obama and Senator Tom Coburn, M.D. (R-OK) met with Acting FEMA Director David Paulison and received assurances from him that all no-bid contracts would be re-bid. In March, FEMA announced that the contracts would not be re-bid despite Paulison's previous assurance.
"The total amount of federal funding for hurricane recovery will now exceed $100 billion, and it's safe to say that more money will be needed in the months and years to come," said Obama. "But in order to make good on the President's pledge to rebuild the Gulf Coast, we need to do more. We need to pledge to be responsible stewards of taxpayer dollars. Unfortunately, we haven't done a very good job so far of delivering on this pledge."
Obama's legislation requires that all Federal contracts in excess of $500,000 paid for with funds from the $27 billion allocated to Gulf Coast reconstruction in the emergency supplemental bill be competitively bid.
Just two weeks ago, a federal audit found that the Army Corps of Engineers missed an opportunity to negotiate a lower price on a $40 million contract for portable classrooms in Mississippi. Instead, a no-bid and overpriced contract was awarded to an out-of-state firm.
"I've often heard it said that the definition of insanity is doing the same thing over and over again, and expecting different results," Obama said. "Frankly, what we're doing with Katrina funding borders on insanity - we in Congress just keep trusting FEMA to enter into competitive contracts even though there's no evidence that it has any intention of doing so. The American people deserve the benefits of competition on government contracts. Before we spend another dollar in the Gulf Coast, let's make sure that we have some transparency and accountability systems in place to ensure that federal money is helping those people most in need, instead of lining the pockets of a contractor."
In addition to Senator Coburn, the amendment was also cosponsored by Senators Mary Landrieu (D-LA), Ted Kennedy (D-MA), and Hillary Clinton (D-NY).