White House Blasted On Katrina Contracts

Floodwaters from Hurricane Katrina flow over a levee along Inner Harbor Navigational Canal, New Orleans, Louisiana, Aug. 30, 2005. AP (file)

The Bush administration has shown little progress — and in some cases backtracked — on its pledge to do a better job in awarding contracts to small, Gulf Coast businesses for Hurricane Katrina work, a congressional analysis shows.

The review of federal contracts from five government agencies, conducted by the House Small Business Committee, is the latest to document missteps in the award of billions of dollars of lucrative government work since the 2005 storm.

The findings were provided Wednesday to The Associated Press in advance of a hearing by the committee Thursday at which officials from the five agencies were to testify about the contract awarding system.

The committee's review found that small businesses in Louisiana had an overall net loss of $8.9 million in contracting dollars since April, when the agencies reaffirmed their commitment to give smaller companies a share of the work. The loss was due in part to a decision at the Homeland Security Department to modify several existing agreements instead of awarding significant new contracts.

In addition, the review found the five agencies — Homeland Security, General Services Administration, Defense, Veterans Affairs and Small Business Administration — had claimed falsely that 259 contracts were awarded to small businesses when in fact they went to large companies or ineligible recipients. That created the false impression that more than $95 million in contracts was awarded to small companies, when they actually went elsewhere.

Overall, about 7.4 percent of Katrina contracts so far have gone to small businesses in Louisiana, down from 12.5 percent in April, according to the committee.

"There is absolutely no excuse for failing to use local companies that are responsible for this region's recovery," said Rep. Nydia Velazquez, D-N.Y., who chairs the House panel. "I can assure you that this committee will continue to hold the federal government accountable for making sure this money is properly invested in the region."

Russ Knocke, a DHS spokesman, responded that the department has been working to fix errors but could not immediately say how many. He said the committee had not provided its information to the department despite requests by DHS; the committee said the data on which it based its analysis was available publicly.

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