Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, December 6, 1993 TAG: 9312060088
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: NEW RIVER VALLEY
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Disaster agencies, scrambling to help flood victims, hastily signed off on millions of dollars worth of contracts for urgently needed items from generators to bottled water.
When Des Moines, Iowa, lost its water plant, for example, the government rented portable toilets from a Kansas company for $600 a month each even though others closer to home offered them for far less - one for as little as $130 each.
To shore up strained levees, an Army Corps of Engineers office in Illinois bought millions of sandbags - at 38 cents each, more than double what some companies charged.
Federal agencies lacked information about the prices and availability of some essential services, The Associated Press found in a review of $24.6 million in emergency contracts awarded by the corps and the Federal Emergency Management Agency.
Amid the chaos of such a vast disaster, federal officials readily acknowledged they chose convenience over frugality.
Some federal contracting officers flipped through the Yellow Pages to find emergency services. Others used agency lists of preferred contractors that have more to do with a company's initiative than best prices.
At least seven companies got on those lists and received contracts ranging from $100,000 to more than $2 million by simply contacting the government to tout their services - some long before the flood started, others in its early days.
"You contact the proper people and get your name out there. That part is not that hard," said Dave Farber, whose Iowa company got on the list years ago by calling. His company got the most sandbag business even though it charged at least nine cents per bag more than any other provider.
Federal officials say they try to anticipate needs, but in the frenzy of a disaster have little time to do extensive comparison shopping.
"The most important thing is the delivery date and the quantity. Cost is really the last thing," said Tom Bales, an Army Corps official in Illinois.
Critics say the government could save taxpayers money if disaster planning included a more comprehensive effort to nail down the best prices.
"The Army Corps of Engineers and FEMA didn't or don't have an emergency response plan. . . . They didn't have a clue," said Dave Bandauski, co-owner of Portable John in Monee, Ill., which supplied about 500 portable toilets to the government for $281 each.
Jerry Ostendorf, Iowa's disaster coordinator, agreed federal agencies had inadequate information about some supplies and recommended the government create a database of services with specific prices.
Larry Zensinger, head of FEMA's interagency planning office in Washington, said the government keeps extensive information on services like debris removal and construction and for specialty items, such as water purifiers used to take salt out of water.
But lists are not as complete for such common items as portable toilets and diapers, he said.
Congress plans to review flood contracting early next year. But few want to criticize the disaster agencies for hasty contracting, since Congress pressed them to respond faster following hurricanes Andrew and Hugo.
The AP reviewed emergency spending contracts awarded by FEMA and the corps through the end of August, when the worst flooding subsided. Through October, FEMA had spent $288 million on the flood.
The AP surveyed contractors' prices nationwide for various emergency services. The review found that the government paid about average for many products, from bottled water to mobile homes.
During disasters, federal agencies do not have to follow the usual competitive bidding process for contracts. The primary guideline FEMA gives the agencies is that priority be given to local companies before contracting out of the region.
Memo: shorter version ran in the Metro edition.