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"We initiated this audit in response to Congressional concerns that, in the wake of hurricanes Katrina and Rita, multitier subcontracting (1) increased costs to the government, (2) limited opportunities for small and local businesses to participate in response and recovery efforts, and (3) resulted in layers of subcontractors being paid profit and overhead while adding little or no value to the work performed under the contract. Our objectives were to determine the validity of these concerns, as well as to determine the potential effect Section 692 of the Post-Katrina Emergency Management Reform Act of 2006 could have on future disaster contracting.

"It does not appear that multitier subcontracting, as an isolated factor, caused significant increases in costs to the government, nor did it reduce subcontracting opportunities for small and local businesses. The prime contractors subcontracted a significant amount of the value of their contracts to small and local businesses.

"Although FEMA relied on large national prime contractors, initially preventing small and local businesses from participating as prime contractors themselves, the national prime contractors generally did well hiring small and local subcontractors. However, because subcontractor invoices generally do not include specific information on lower tier subcontractors, we could not determine how many layers of subcontracting existed on contracts or whether any layers involved contractors charging profit without contributing substantially to the work being performed on the contract.

"Although Section 692 of the Post-Katrina Emergency Management Reform Act of 2006 would limit subcontracting to 65% of total contract costs, nothing in this legislation specifically restricts the number of tiers of subcontractors. Further, by limiting subcontracting, Section 692 could restrict funding available to small and local businesses while potentially impairing FEMA's ability to respond quickly to future catastrophic disasters. The Department of Defense has promulgated less restrictive rules to control multitiering that reduce the risks inherent in Section 692. Therefore, we recommend FEMA officials work with DHS officials, the Office of Federal Procurement Policy and Congress to promulgate less restrictive rules over multitier contracting." —Executive Summary.

"It is likely that in some heavily damaged parts of New Orleans redevelopment will be restricted, either temporarily, or even permanently. The possibility of such restrictions immediately gives rise to the following question: Will restrictions on development in New Orleans effect compensable regulatory takings under the Fifth Amendment of the U.S. Constitution? In this paper, we try to answer that question, or to at least provide a framework for answering it. We conclude, although cautiously, that it is more likely than not that temporary restrictions will not effect compensable takings because property owners still have economically valuable interests, while it is more likely than not that permanent restrictions will result in compensable takings because of owner expectations and a lack of reciprocity of advantage.

"We have three primary goals. First, we summarize the proposal for redevelopment which explicitly allows for the possibility of moratoria on redevelopment in certain neighborhoods. Second, we situate the current case law on this issue within the larger context of takings jurisprudence. Understanding the courts' trends on this issue, if any are discernible, will be indispensable in trying to get a sense of how courts would rule in litigation that might arise out of regulating redevelopment in New Orleans. Third, we give an analysis of how current holdings on takings issues might apply to the situation in New Orleans. Because of the complexity of takings jurisprudence, and because of the somewhat unusual nature of the situation in New Orleans, it is difficult to make a confident prediction about how such claims would come out."—Abstract.

"Hurricane Katrina not only devastated a large area of the nation's Gulf coast, it also raised fundamental questions about ways the nation can, and should, deal with the inevitable problems of economic risk and social responsibility. This volume gathers leading experts to examine lessons that Hurricane Katrina teaches us about better assessing, perceiving, and managing risks from future disasters.

"In the years ahead we will inevitably face more problems like those caused by Katrina, from fire, earthquake, or even a flu pandemic. America remains in the cross hairs of terrorists, while policy makers continue to grapple with important environmental and health risks. Each of these scenarios might, in itself, be relatively unlikely to occur. But it is statistically certain that we will confront such catastrophes, or perhaps one we have never imagined, and the nation and its citizenry must be prepared to act. That is the fundamental lesson of Katrina.

"The 20 contributors to this volume address questions of public and private roles in assessing, managing, and dealing with risk in American society and suggest strategies for moving ahead in rebuilding the Gulf coast."

"Just compensation is critical to post disaster recovery in the wake of a devastating flood, especially when prior shortcomings of the government might be partially to blame. Assessing the full extent of compensation given to private landowners may help for future disaster flood recovery and planning. Despite profound geographic, demographic, and legal differences between France, Louisiana, and California a comparison of their post-disaster compensation models proves useful to identify past, present, and future models of a similar problem of postflood redevelopment compensation outside of private insurance schemes.

"Inquiring into eminent domain concepts surrounding just compensation principles in France, Louisiana, and California provides a framework for addressing post-disaster homeowner compensation. France supplies a model that demonstrates strong flood disaster prevention and land use planning measures alongside a full recovery compensation scheme. In contrast, Louisiana and California do not have explicit disaster compensation frameworks. Existing Louisiana law offers an existing legal and moral framework that can be applied by the state entity currently deliberating on post-disaster compensation program. California, on the other hand, currently offers the most unforgiving compensation scheme, but also has the time to adopt tailored flood compensation and planning principles."—Abstract.

"Throughout this post-Katrina period, FEMA has remained dedicated to helping Louisiana families and communities recover. To date, in partnership with and in support of the state of Louisiana, we have provided more than $15.2 billion in assistance. We maintain our steadfast commitment to the resilient survivors of Louisiana as they continue along the path to full recovery.

"So, on the 5th anniversary of this unprecedented event, we can say that a lot has been accomplished, but we an also say that a lot remains to be done. FEMA is committed to being here for as long as it takes to fully recover, and we’re working to do so in a way that builds, sustains and improves south Louisiana’s capability to protect against future hazards."—Mike Karl, EMA Louisiana Recovery Office Interim Director, "Unprecedented Disaster, Unprecedented Recovery."

1. "To collect demographic information about laborers employed in the construction and related industries in New Orleans and its environs;
2. "To assess the needs and experiences of workers in the construction industry including job security, safety, fair pay, discrimination, and access to adequate housing and health care; and
3. "To study the overall impact of the changing workforce demographics in the Gulf Coast region."

"This paper will review the federal, state, and local response to date as it relates to the important goal of creating a better New Orleans. This paper does not attempt to review every decision made on every aspect of the recovery, but instead tries to highlight areas of priority.

"The paper will begin with a quick overview of the federal, state, and local roles to date on post-Katrina recovery.

"It will then evaluate how well the overall recovery response has performed in meeting the three goals of a creating a more inclusive, sustainable, and prosperous New Orleans. In each of these goals, the paper reviews pre-Katrina conditions in New Orleans and puts forth a vision for the future. It then highlights those areas of meaningful progress at the federal, state, and local levels in support of those goals and closes with an action plan to further the recovery progress."—Introduction.

"Two years after Hurricane Katrina much has become clear. We know that the devastation in New Orleans and surrounding areas was less a natural than a man-made disaster. Katrina's surge into New Orleans was the direct result of poorly constructed levees, an ill-conceived navigation channel, and the destruction of millions of acres of coastal wetlands. Furthermore, the storm's intensity itself was fueled by unusually warm waters in the tropical Atlantic due, in part, to global warming pollution.

"How have Congress and the Administration responded to these lessons of Katrina and addressed the chief causes of its tragic aftermath? A report card is due on the federal government's response to global warming, reforming the Army Corps of Engineers and the Federal Emergency Management Agency (FEMA), and restoring the wetlands along the Gulf Coast that act as a natural buffer to storms."

"The awareness of federal, state and local governments of the potential for levees in New Orleans to fail and decimate poor neighborhoods of the city was widely reported following the hurricane Katrina disaster. Demographics in the areas likely to incur the most severe damage were known to be neighborhoods of predominately poor, black residents. In addition to understanding the likely geographical impact of the impending disaster, the federal government was aware of the extensive social science and legal challenges detailing the likelihood of minority citizens to experience the worst consequences and slowest recovery from natural disasters. Studies dating back to the 1950s and numerous reports of the Red Cross support this conclusion. FEMA itself was sued in federal court for its inadequate response to marginalized communities during hurricane Andrew in 1992. While the federal government may not be held legally responsible for its discretionary policies within the disaster relief context, the horror of hurricane Katrina surely calls for a long overdue re-thinking of the federal approach to assisting marginalized communities in disaster recovery. Social science, the practical problems raised within legal challenges, as well as successful strategies from other disasters and even within the Katrina tragedy offer numerous opportunities for such reform."—Abstract.

• Volume I: Executive Summary and Overview ? Summary of findings and lessons learned. Overview of performance evaluation activities and reports.
• Volume II: Geodetic Vertical and Water Level Datums ? Update of geodetic and water level references for the region and determining accurate elevations for all critical structures.
• Volume III: The Hurricane Protection System ? Documentation of the character of the hurricane protection system, including the design assumptions and criteria, as built and maintained condition.
• Volume IV: The Storm ? Determining the surge and wave environments created by Katrina and the time history and nature of the forces experienced by protection structures during the storm.
• Volume V: The Performance ? Levees and Floodwalls ? Understanding the behavior of individual damaged structures and development of criteria for evaluation of undamaged sections. Providing input to repairs and ongoing design and planning efforts.
• Volume VI: The Performance ? Interior Drainage and Pumping ? Understanding the performance of the interior drainage and pumping systems with regard to extent and duration of flooding. Examination of scenarios to understand system-wide performance.
• Volume VII: The Consequences ? Determination of the economic, human safety and health, environmental, and social and cultural losses due to Katrina. Examination of scenarios to understand implications of losses and possible recovery paths on future risk.
• Volume VIII: Risk and Reliability ? Determination of the inherent risk for all parts of the system prior to and following Katrina. Provision of capability for risk-based decision support for continuing improvement and development of hurricane protection.
• Volume IX: Supporting Appendices ? Documentation of information resources and management, program management, and communications."

"The devastating hurricanes of 2005 had a two-fold impact on DOI. First, DOI was called upon to assist in the federal relief efforts under the National Response Plan (NRP). Second, DOI's bureaus were greatly affected by the disasters. DOI sustained significant damage to 12 parks and preserves, 86 refuges, 68 water monitoring gauges, and the Mineral Management Service's (MMS) Gulf of Mexico Regional Office. As of September 30, 2006, DOI spent approximately $104 million on hurricane relief and recovery. This included approximately $61 million for NRP activities and $43 million to respond to and address internal damage.

"We are pleased to report that overall, the bureaus effectively managed their 2005 hurricane-related expenditures. Given the magnitude of the damage sustained to the Gulf Coast and DOI facilities, the issues we identified through our expenditure testing were relatively insignificant, and the bureaus performed well."—Earl E. Devaney, Inspector General.

"The U.S. Army Corps of Engineers Principal Assistant Responsible for Contracting requested a review on the administration of the ice delivery process between International American Products, Worldwide Services and the U.S. Army Corps of Engineers. Specifically, we limited our review to only the administration of the ice delivery process during the Hurricane Katrina recovery effort. The report also addresses other matters identified during our review of the administration of the 2003 ice delivery contract. We issued DoD Inspector General Report No. 2006-116, 'Ice Delivery Contracts Between International American Products, Worldwide Services and the U.S. Army Corps of Engineers,' on September 26, 2006. That report addressed Congressman Bennie Thompson's concerns on the award of the ice delivery contracts between International American Products, Worldwide Services and the U.S. Army Corps of Engineers. This report addresses the administration of the 2003 ice delivery contract related to the Hurricane Katrina recovery effort....

"The U.S. Army Corps of Engineers Charleston District did not effectively administer the 2003 ice delivery contract for the Hurricane Katrina recovery effort. The Corps Charleston District did not provide adequate training and guidance for invoice processing over the National Ice/Water Mission. They made inaccurate or inadequately supported payments on 142 of the 342 invoices received in the amount of about $262,000."—Executive Summary.

"The Government purchase card program was designed to save the Government money by avoiding costly paperwork and to expedite the process of making purchases. In response to Hurricane Katrina, Public Law 109-62 authorized agencies to streamline certain purchasing requirements for procurement of supplies or services to support rescue and relief operations. This report (1) determines whether Government purchase card purchases related to Hurricane Katrina complied with requirements for the use of the card and (2) identifies lessons learned from Hurricane Katrina purchases to assist in the administration of the Government purchase card program during future emergency situations.

"We found that 15 percent of purchases did not comply with purchase card requirements. Additionally, cardholders had questions and concerns regarding some purchases and over half of cardholders expressed the need for additional written guidance regarding emergency purchasing procedures. Lastly, we found that Hurricane Katrina purchase data contained inaccuracies.

"We recommend that the Assistant Secretary for Administration and Management provide additional written guidance on emergency purchasing procedures. We also recommend that ASAM require training on emergency purchasing procedures. Finally, we recommend that ASAM develop a tracking system for monitoring Government purchase card purchases during emergency situations. In its comments to the draft report, ASAM concurred with our recommendations and stated that it has set a course of action to strengthen the Department of Health and Human Services' purchase card program."

"Starting in fiscal year 2005, and continuing through early 2007, Federal Emergency Management Agency (FEMA) officials used funds received from the sale of used travel trailers and mobile homes to partially finance the operations of a dozen Emergency Housing Unit (EHU) sites in seven states. However, more than $13.5 million of the sales proceeds were expended for ineligible purchases. This occurred because FEMA program officials failed to ensure that the EHU expenditures met General Services Administration (GSA) regulations on the use of sales proceeds.

"Proceeds from the sale of government property are restricted-use funds that can be used for the purchase of a select group of replacement type items within a specified time. GSA regulations specify conditions that must be met in order to participate in the program, and if not met, an agency must return proceeds to the United States Treasury.FEMA officials used approximately one half of the sales proceeds, or about $13.5 million, on ineligible expenditures including (1) contracts to support and equip storage sites, (2) replenishment of purchase card accounts, and (3) travel expenses. These purchases generally represented operating expenses of the EHU sites, but were ineligible expenditures under GSA regulations. Because of the unbudgeted nature of these funds and the need for better oversight and control, unnecessary and uneconomical purchases were made.

"FEMA requested this review in early 2007 and FEMA's Disaster Finance Center initiated its own detailed review concurrently. The Disaster Finance Center review, completed in June 2007, concluded that most of the sales proceeds were used for ineligible purposes or not used within prescribed timeframes. The Disaster Finance Center recommended that appropriate fund account adjustments be made and that improperly used funds be returned to the U.S. Treasury. We concur with the Disaster Finance Center recommendations and make additional recommendations to prevent misuse in the future."—Executive Summary

• Overstated the need for land
• Sought unneeded kitchen space, refrigerators, and microwaves
• Did not consider multi-story office space
• Unnecessarily required a 6-foot fence
• Did not clearly indicate whether private rooms per person were needed"

"Since its inception in 1995, the EMAC network has grown significantly in size, volume, and the type of resources it provides. EMAC's membership has increased from a handful of states in 1995 to 52 states and territories today, and EMAC members have used the compact to obtain support for several types of disasters including hurricanes, floods, and the September 11, 2001 terrorist attacks. The volume and variety of resources states have requested under EMAC have also grown significantly. For example, after the September 11, 2001 terrorist attacks, New York requested 26 support staff under EMAC to assist in emergency management operations; whereas, in response to the 2005 Gulf Coast hurricanes, approximately 66,000 personnel—about 46,500 National Guard and 19,500 civilian responders— were deployed under EMAC from a wide variety of specialties, most of whom went to areas directly impacted by the storms.

"While the EMAC network has developed a basic administrative capacity,opportunities exist for it to further build on and sustain these efforts. The EMAC network has adopted several good management practices, such as using after-action reports to learn from experiences and developing a 5-year strategic plan. However, the EMAC network can enhance its administrative capacity by improving how it plans, measures, and reports on its performance. FEMA provided $2 million to help build this capacity in 2003, but the agreement has recently expired. FEMA and EMAC leadership are in the process of finalizing a new 3-year cooperative agreement. Such an agreement would enhance the EMAC network's ability to support its collaborative efforts." —What the GAO found.

"In February 2006, the Deficit Reduction Act of 2005 (DRA) appropriated $2 billion for certain health care costs related to Hurricane Katrina through Medicaid and the State Children's Health Insurance Program (SCHIP). The Centers for Medicare & Medicaid Services (CMS) was charged with allocating the $2 billion in funding to states directly affected by the hurricane or that hosted evacuees.

"GAO performed this work under the Comptroller General's statutory authority to conduct evaluations on his own initiative. In this report, GAO examined: (1) how CMS allocated the DRA funds to states, (2) the extent to which states have used DRA funds, and (3) whether selected states—Alabama, Louisiana, Mississippi, and Texas—anticipate the need for additional funds after DRA funds are expended."—Why GAO Did this Study.

"Under the Bush Administration, the 'shadow government' of private companies working under federal contract has exploded in size. Between 2000 and 2005, procurement spending increased by over $175 billion dollars, making federal contracts the fastest growing component of federal discretionary spending.

"This growth in federal procurement has enriched private contractors. But it has also come at a steep cost for federal taxpayers. Overcharging has been frequent, and billions of dollars of taxpayer money have been squandered."—Executive Summary.

A section devoted to "Wasteful Katrina Contracts" begins on p.58.