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August 31, 2007: 

Congressional Requesters: 

Subject: Disaster Housing: Implementation of FEMA's Alternative Housing 
Pilot Program Provides Lessons for Improving Future Competitions: 

The Department of Homeland Security's (DHS) Federal Emergency 
Management Agency (FEMA) provides direct temporary housing assistance 
in response to disasters primarily through a combination of travel 
trailers and manufactured homes and for a period of up to 18 
months.[Footnote 1] In 2005, Hurricanes Katrina and Rita devastated 
much of the housing stock across the Gulf Coast region, leaving 
thousands of persons in need of temporary housing for lengthy periods. 
Uncertainty with respect to neighborhood and community recovery and 
individual and community resistance to the use of travel trailers for 
extended temporary housing challenged the effectiveness of FEMA's 
traditional temporary housing options. 

Recognizing these challenges, Congress, in the Fiscal Year 2006 
Emergency Supplemental Appropriations Act for Defense, the Global War 
on Terror, and Hurricane Recovery,[Footnote 2] provided for alternative 
housing pilot programs in the areas hardest hit by Hurricane Katrina 
and the other hurricanes of the 2005 season, and appropriated $400 
million to DHS for this purpose. To implement this provision of law, 
FEMA announced a competitive grant program--the Alternative Housing 
Pilot Program (AHPP)--inviting the five Gulf Coast states (Alabama, 
Florida, Louisiana, Mississippi, and Texas) to submit proposals for 
projects that would demonstrate alternatives for housing disaster 
victims. FEMA convened a panel of officials to evaluate and score the 
projects. In December 2006, FEMA announced that it was awarding 
Mississippi up to $281.3 million for two projects, Louisiana up to 
$74.5 million for one project, Texas up to $16.5 million for one 
project, and Alabama up to $15.7 million for one project. 

You asked us to review FEMA's implementation of the AHPP. This report 
examines (1) the processes FEMA followed for soliciting and evaluating 
AHPP project proposals, and for selecting projects for funding and 
determining the funding amounts; (2) how FEMA's processes compare with 
those of other agencies that carry out similar types of competitive 
grant programs; and (3) how the group of projects FEMA selected for 
AHPP funding, as well as other funding options, addresses the goal of 
identifying alternative forms of disaster housing. 

To assess the processes FEMA followed for soliciting and evaluating 
AHPP project proposals, and for selecting projects for funding and 
determining the funding amounts, we reviewed the AHPP guidance and 
application materials prepared by FEMA, and interviewed agency 
officials knowledgeable about the development of these documents. In 
addition, we reviewed the applications and the 29 project proposals 
submitted by the five states, and interviewed state officials 
knowledgeable about the preparation of these documents. We also 
analyzed documentation of FEMA's evaluation of the project proposals, 
including the written comments of the evaluation panel members. We 
interviewed FEMA officials and three members of the evaluation panel to 
ascertain how the evaluation and scoring process worked in practice and 
obtain their views on the program guidance and related issues. We did 
not independently verify FEMA's calculations of aggregate scores for 
the 29 projects based on the panelists' individual scores. To assess 
how FEMA's processes compare with those of other agencies that carry 
out similar types of competitive grant programs, we compared FEMA's 
processes to those of three other federal agencies: the Environmental 
Protection Agency (EPA), the Department of Education (Education), and 
the Department of Housing and Urban Development (HUD). We selected 
these agencies on the basis of our familiarity with their competitive 
grant processes and their implementation of recommendations we 
previously made to improve these processes. We reviewed the competitive 
grants procedures for FEMA and the other three federal agencies, and 
interviewed officials at each agency knowledgeable about the 
procedures. To assess how the group of projects FEMA selected for AHPP 
funding, as well as other funding options, addresses the goal of 
identifying alternative forms of disaster housing, we analyzed 
documents describing the rationale for FEMA's selection and funding of 
project proposals and interviewed cognizant officials. In addition, we 
reviewed the DHS Inspector General's March 2007 evaluation report on 
the AHPP.[Footnote 3] The DHS Inspector General's evaluation was 
conducted in accordance with the Quality Standards for Inspections 
prescribed by the President's Council on Integrity and Efficiency. We 
also interviewed staff who prepared that report about the work they 
conducted as well as their findings and conclusions. We determined that 
the information presented in the DHS Office of the Inspector General 
(OIG) report was sufficiently reliable for the purposes of our work. 
Last, we reviewed statements and testimony from a hearing on the AHPP 
conducted by the Senate Homeland Security and Government Affairs 
Committee, Subcommittee on Disaster Recovery, on April 24, 2007. We 
conducted our work in Washington, D.C., from February 2007 through 
August 2007, in accordance with generally accepted government auditing 
standards. 

Results in Brief: 

FEMA solicited applications for the AHPP based on guidance developed by 
staff with disaster housing expertise, convened a national evaluation 
panel to review and score project proposals from the states, and 
selected projects for funding based on the evaluation panel results and 
other considerations. Overall, FEMA elected to implement the AHPP as a 
competitive grants program, and in September 2006 released written 
guidance to solicit applications and project proposals. According to 
FEMA officials, the agency restriction of eligible applicants to the 
five Gulf Coast states was consistent with its understanding of the 
legislation authorizing the pilot program. In addition to providing 
information on how states should apply and the deadlines for submitting 
applications, the guidance went on to explain the five criteria against 
which FEMA would rate the applications, and how FEMA would ultimately 
make project selections. To evaluate the 29 distinct project proposals 
that the states subsequently submitted, FEMA convened a national panel 
of 11 federal and private sector individuals, whose backgrounds 
represented a variety of disciplines such as architecture, community 
recovery, disaster housing operations, and engineering. The panelists 
scored each project based on the established rating criteria. According 
to FEMA, 19 of the 29 projects scored competitively, and four of the 
five states (the exception was Florida) submitted at least one 
competitive project. To select projects for funding, FEMA designated a 
selecting official and provided the official with the results of the 
national evaluation panel, written comments and recommendations from 
individual panelists, and the written project proposals, including the 
requested funding amounts for each. To assist the selecting official, 
FEMA's Deputy Director for Gulf Coast Recovery distilled the panel's 
results into three options for allocating the available funds; these 
options called for selecting from as few as 2 to a maximum of 10 
competitive projects. According to FEMA, the chosen funding option-- 
partially funding the single highest-scoring project from Alabama, 
Louisiana, Mississippi, and Texas at 85 percent of the requested 
funding amounts, and allocating the remaining funding to the next- 
highest-scoring project, which was submitted by Mississippi--maximized 
the number of competitive states receiving AHPP awards. 

FEMA's competitive grant processes for the AHPP were generally similar 
to those of Education, EPA, and HUD, but we identified differences-- 
including a generally shorter time period for submitting applications, 
the absence of established maximum (or minimum) award amounts, and the 
absence of explicit weights or indicators of the relative importance of 
the rating criteria--that could have affected the program's results. 
The three agencies' processes include a number of similar requirements. 
For example, each agency generally requires that its program offices 
establish a review panel to evaluate applications and that the 
panelists independently review applications based on criteria outlined 
in the program guidance. Each agency also requires that the selecting 
official recommend applications for funding based on the review panel's 
ranking and recommendations and document the basis for any deviation 
from the rankings. However, we found several differences between the 
processes used by Education, EPA, and HUD and the processes FEMA 
followed for the AHPP: 

* The three agencies generally provide applicants longer time frames 
(ranging from 45 to as much as 180 days) to submit applications for new 
or complex competitive grant programs; in comparison, FEMA provided its 
applicants 35 days for the AHPP. According to FEMA officials, the 
agency desired to assist victims affected by the 2005 hurricanes in the 
fastest amount of time. However, officials in each of the five states 
told us that it was difficult to prepare their applications within the 
35-day time frame, and they would have benefited by having additional 
time. Similarly, the DHS Inspector General reported that FEMA might 
have been able to solicit and fund more innovative and creative 
disaster housing solutions had the agency allowed applicants more time. 

* Education, EPA, and HUD officials told us that they generally include 
minimum and/or maximum award amounts for their competitive grant 
programs, which helps to ensure that the program offices will fund 
multiple proposals--as in the case of a pilot program--without having 
to partially fund any project. According to FEMA officials, the agency 
did not specify minimum or maximum AHPP grant amounts because they 
believed that any limitations would constrain the market-driven nature 
of the program. However, a HUD grants official told us that it can be 
more difficult to judge competitive grant applications without award 
limits, because the requested funding amounts may vary widely (the 
requested funding amounts for the 29 AHPP project proposals ranged from 
$600,000 to $400 million). Similarly, the DHS Inspector General 
reported that it would have been easier to compare the costs of each 
project had FEMA requested that each project include a budget showing 
the minimum amounts required to implement each concept, rather than 
allowing the applicants to submit a "wish-list" budget for each 
project. 

* Education, EPA, and HUD disclose the relative importance of rating 
criteria used to evaluate applications in the program guidance for 
their competitive grant programs. In contrast, FEMA's AHPP guidance 
provided no indication regarding the relative importance of the five 
rating criteria. According to FEMA officials, the AHPP guidance could 
have more clearly stated that the rating criteria would be weighted 
equally. 

Because agencies have some discretion in designing competitive grants 
processes, these differences do not represent a lack of compliance with 
applicable law or regulations. However, they may have affected the 
quality and thoroughness of the proposals FEMA received, reduced the 
amount of time it had to answer questions from potential applicants, 
and potentially reduced the number of disaster housing alternatives 
explored through the program. In this regard, FEMA's implementation of 
the AHPP provides lessons that can inform similar competitions in the 
future. 

According to FEMA, its selection of five projects for AHPP funding 
helped to identify alternative forms of disaster housing by maximizing 
the number of competitive states that received grant awards. However, 
by choosing a different funding option, FEMA could have similarly 
maximized the number of states receiving grant funding and, at the same 
time, doubled the number of projects it funded. According to FEMA, the 
five projects selected for funding offer a number of housing options 
that will improve upon FEMA's traditional disaster housing in areas 
such as innovative design, energy efficiency, ease of construction, and 
community support. To meet the AHPP's goal of identifying disaster 
housing alternatives, FEMA elected to maximize the number of 
competitive states that received grant awards (four) and, within those 
states, to fund the top-rated projects. According to FEMA officials, 
this funding option best reflected the competitive nature of the 
program--what the market brought to them in response to the 
solicitation for proposals--and allowed them to fund the strongest 
proposal in each state. However, given the number of projects 
determined to be competitive, based on the aggregate scores of the 
national evaluation panel members, FEMA could have funded more projects 
under a variety of possible options. For example, FEMA could have 
doubled the number of projects funded--and more thoroughly addressed 
the program goal of evaluating alternatives--by awarding smaller 
amounts to the top projects and using the remaining funding for five 
additional competitive projects (an option that would have allowed the 
agency to award grants to the same four states as in the case of its 
chosen option). According to FEMA, doing so would have penalized the 
"most competitive" proposals by significantly reducing their funding. 
However, the DHS Inspector General reported that by choosing to fund 
only five projects, FEMA did not fund an optimum number of "innovate 
and creative" disaster housing solutions, citing specifically the 
example of FEMA's choice to award one project $275 million of the $388 
million available.[Footnote 4] We found that evaluation panel members' 
comments showed similar concerns, as 10 out of 11 panelists recommended 
partially funding this large project--some at significantly lower 
levels. While the funding option FEMA chose is consistent with the 
authorizing legislation, it resulted in fewer housing alternatives to 
evaluate under the AHPP. 

This report includes a recommendation that, in the event that FEMA 
conducts future competitive grant processes for the purpose of 
identifying alternative, new, or innovative forms of disaster housing, 
the Secretary of DHS direct FEMA to consider (1) longer time frames for 
applicants to prepare and submit applications, (2) minimum and/or 
maximum funding amounts for grant awards, and (3) stating explicitly 
the relative importance of the rating criteria that the agency will use 
to evaluate applications. In reviewing a draft of this report, DHS 
concurred with the recommendations and offered no other comments. HUD 
also reviewed the draft report but had no comments. 

Background: 

FEMA was established in 1979 in an effort to consolidate many federal 
policies related to the management of emergencies, including 
preparedness, mitigation, and disaster response and recovery. Since its 
inception, FEMA's responsibilities have been wide-ranging, including, 
among other things, coordination of civil defense and civil emergency 
planning, federal disaster relief and disaster preparedness, and 
coordination of preparedness and planning to reduce the consequences of 
major disasters or terrorist incidents. FEMA became part of the new DHS 
in March 2003. 

The Robert T. Stafford Disaster Relief and Emergency Assistance 
Act[Footnote 5](the Stafford Act) grants the principal authority for 
the President to provide assistance in mitigating, responding to, and 
preparing for disasters and emergencies such as earthquakes, 
hurricanes, floods, tornadoes, and terrorist acts. FEMA administers the 
Stafford Act and provides direct temporary housing assistance (e.g., 
travel trailers and manufactured homes) under its Individual and 
Households Program (IHP).[Footnote 6] FEMA provides these units, 
acquired by purchase or lease, directly to disaster victims, who, 
because of a lack of available housing resources, would be unable to 
make use of financial assistance to rent alternate housing 
accommodations (fig. 1). 

Figure 1: Example of FEMA Travel Trailer: 

This is an image of a FEMA trailer. 

[See PDF for image] 

Source: FEMA/Robert Kauffman. 

[End of figure] 

Hurricane Katrina made landfall in late August 2005 and devastated much 
of the Gulf Coast; the storm surge caused major or catastrophic damage 
along the coastlines of Alabama, Mississippi, and Louisiana. Hurricane 
Rita caused further devastation, making landfall on the Gulf Coast in 
September 2005. According to FEMA, several factors related to these 
storms have challenged the efficacy of the agency's traditional 
temporary housing options, which are limited to an 18-month period by 
the Stafford Act.[Footnote 7] These factors include the following: 

* A significant number of homes on private lots were completely 
destroyed. 

* Complete neighborhoods were destroyed. 

* Many communities face protracted recovery timelines, with the 
likelihood that temporary housing may be required in some cases for 
extended periods. 

* A shortage of resources for reconstruction of homes, uncertainty with 
respect to community and neighborhood recovery, and labor shortages 
(among other things) have limited the pace of recovery. 

* Communities and individuals are resistant to the extended use of 
FEMA's travel trailers for temporary housing. 

Section 2403 of the Fiscal Year 2006 Emergency Supplemental 
Appropriations Act for Defense, the Global War on Terror, and Hurricane 
Recovery authorizes "alternative housing pilot programs in the areas 
hardest hit by Hurricane Katrina and the other hurricanes of the 2005 
season" under the IHP. According to FEMA, the AHPP represents a onetime 
exception to the limitations on its authority under the Stafford Act to 
provide nontemporary housing solutions and enables FEMA to explore, 
implement, and evaluate innovative approaches to both short-and 
intermediate-term housing solutions that may be worthy of future 
consideration. 

FEMA established four objectives for the AHPP: 

evaluate the efficacy of nontraditional short-and intermediate-term 
housing alternatives for potential future use in a catastrophic 
disaster environment; 

* identify, develop, and evaluate alternatives to and alternative forms 
of FEMA disaster housing to assist victims of the 2005 hurricanes in 
the Gulf Coast; 

* consider the feasibility of these options as part of the standard 
package of housing assistance that could be made available by federal 
government agencies or state agencies for other disasters of various 
sizes, locations, and impacts; and: 

* ensure that pilot projects address the needs of a variety of 
populations, such as persons with disabilities and the elderly, 
historically underserved populations as well as renters, homeowners, 
single-family dwelling occupants, and multifamily dwelling occupants. 

FEMA designated its Gulf Coast Recovery Office, located in New Orleans, 
to be responsible for carrying out the AHPP. 

FEMA Developed Processes for Soliciting and Evaluating Proposed 
Projects, while Selecting Official Made Final Selections and Determined 
Funding Amounts: 

Overall, FEMA elected to award grants through a competitive process, 
which it outlined in the AHPP Guidance and Application Kit published on 
September 15, 2006, inviting the five Gulf Coast states--Alabama, 
Florida, Louisiana, Mississippi, and Texas--to submit applications for 
the funding available under the pilot program.[Footnote 8] According to 
FEMA officials, the agency's Gulf Coast Recovery Office developed the 
AHPP guidance in consultation with agency staff that had disaster 
housing expertise. FEMA also received assistance from HUD staff in 
developing the AHPP guidance. HUD officials told us that their agency's 
staff assisted FEMA in developing various aspects of the AHPP guidance, 
such as the appropriate building code requirements for projects and the 
rating criteria for evaluating proposals. In addition, HUD provided 
FEMA with copies of funding announcements for certain HUD competitive 
grant programs that the department had previously implemented. HUD 
staff also worked with FEMA to develop the evaluation component of the 
AHPP, under which the projects selected for funding will be evaluated 
after the housing has been in place for 24 months or more.[Footnote 9] 

FEMA officials told us that the agency designed the AHPP guidance to be 
consistent with its understanding of the legislation authorizing the 
pilot program, restricting the eligible applicants to the five Gulf 
Coast states to comply with the requirement that the pilot program be 
implemented in the areas hardest hit by Hurricane Katrina and the other 
hurricanes of the 2005 season. (Each state designated a state agency as 
the applicant under the program.) FEMA also stipulated that individuals 
placed in the housing should be those displaced by the 2005 hurricanes 
with continuous posthurricane housing needs not adequately met by 
traditional forms of temporary housing. According to FEMA, the 
authorizing legislation did not define any other requirements for the 
pilot program, giving the agency substantial discretion in deciding the 
terms and conditions under which it would make AHPP grant awards. As 
such, after consultation with HUD, FEMA published the guidance. In 
addition to providing information on, among other things, how states 
should apply and the deadlines for submitting applications, the 
guidance went on to explain the criteria against which FEMA would judge 
the applications, and how FEMA would ultimately make project 
selections. More specifically, the guidance provided the following: 

* Award information--FEMA instructed state agencies to submit 
applications for an allocation of the $400 million appropriated for the 
pilot program, and encouraged state agencies to propose multiple 
projects as part of their applications. The guidance stipulated that 
specific funding levels would not be predetermined or allocated to 
specific states, and that one or multiple awards might be made based on 
the quality of the proposals. While the guidance required information 
on each project's life cycle cost, it did not specify any minimum or 
maximum amount that state agencies could request for each project. 

* Rating criteria--FEMA established five rating criteria to evaluate 
proposed projects: (1) the manner and extent to which the project 
improved upon the conditions characteristic of existing temporary 
housing and improved long-term recovery; (2) the extent to which the 
project could provide ready-for-occupancy housing within time frames 
and in quantities sufficient to meet disaster-related needs under a 
range of scenarios, including sudden onset catastrophic disasters; (3) 
estimated life cycle cost, including the cost to acquire, transport, 
install/construct/repair, and maintain the housing during the period of 
occupancy by disaster victims; (4) the capacity of the proposed project 
to be utilized in and adapt to a variety of site conditions and 
locations; and, (5) the extent to which local officials, local 
neighborhood associations, and other community organizations were part 
of or support the project in the community in which it was to be 
placed. The guidance provided no indication of the relative importance 
of any of the rating criteria. 

According to FEMA, the AHPP guidance also adhered closely to the 
agency's draft standard operating procedures for competitive 
grants.[Footnote 10] For example, these procedures state that FEMA's 
basic policy is to seek maximum open and free competition for 
competitive grants. To meet this basic policy for the AHPP grants, FEMA 
officials chose not to predetermine or allocate specific funding levels 
to the eligible states. In addition, these procedures stated that FEMA 
would conduct a preliminary technical review of applications; an 
independent panel would review applications against established 
criteria; and the approving official would consider the ranking, any 
comments and recommendations from the independent reviewers, and any 
other available advice or information before deciding which 
applications to approve--and document any deviation from the ranking. 
As discussed later in this report, FEMA followed these procedures in 
implementing the AHPP. 

As with any new grant program, FEMA's Grants Management Office reviewed 
the AHPP guidance prior to its release. The purpose of the Grants 
Management Office's review is to ensure compliance with overall agency 
policies as well as those of the Office of Management and Budget (OMB), 
and advise the program office (in this case, the Gulf Coast Recovery 
Office) of any suggestions or concerns that may affect the conduct of 
the proposed competitive grant program. According to the Grants 
Management Office official who reviewed the draft AHPP guidance, the 
office raised two issues, one of which resulted in a change in the 
final guidance and one that did not. The first issue was the biweekly 
reporting proposed to be required of grantees, a reporting frequency 
greater than OMB's prescribed quarterly or semiannual reporting for 
federal agencies. To require more frequent reporting, FEMA would have 
had to obtain an exception from OMB, which, the FEMA Grants Management 
Office official believed, would likely have delayed the issuance of the 
AHPP guidance. The Gulf Coast Recovery Office subsequently revised the 
draft guidance and specified a quarterly reporting requirement in the 
final AHPP guidance. 

The second issue was the proposed time frame for states to submit 
applications. FEMA proposed to require the state-designated agencies to 
submit applications within 35 days following the release of the AHPP 
guidance. The Grants Management Office, noting that this represented a 
very tight deadline, recommended that the Gulf Coast Recovery Office 
provide the states with 90 days to submit applications. The Grants 
Management Office official told us that a longer time frame would have 
been beneficial because, for example, it would have enabled the agency 
to conduct "town hall" meetings with the states to answer any questions 
they might have had regarding the application process. The Deputy 
Director for Gulf Coast Recovery told us that he did not recall 
receiving this advice. Further, he reiterated his belief that, at the 
time during which the guidance was being developed, the states were 
sufficiently aware of the program and of alternative housing concepts 
and that this, coupled with the agency's interpretation of 
congressional intent to award the grants quickly, justified the 35-day 
application deadline. 

FEMA Convened a National Evaluation Panel to Review AHPP Project 
Proposals: 

The AHPP guidance stated that FEMA would chair a national evaluation 
panel composed of representatives from DHS, HUD, the private sector, 
and not-for-profit organizations, and that the selection panel would 
evaluate and rate all proposals and make recommendations to the FEMA 
senior manager about which proposals, or portions of a proposal, to 
fund. While developing the AHPP program guidance, FEMA's Gulf Coast 
Recovery Office also identified candidates to serve on the national 
evaluation panel. According to FEMA officials, the agency sought 
individuals within DHS, and specifically within FEMA, with various 
types of experience that, collectively, could allow them to assess 
project proposals relative to the purposes of the AHPP--including 
individuals with expertise in mitigation, flood plain management, 
building science, engineering, environmental requirements, and 
historical preservation requirements. In addition, FEMA sought 
expertise from officials with pertinent private and nonfederal public 
sector expertise, including those with architectural, construction, and 
emergency management backgrounds. Ultimately, FEMA's Deputy 
Administrator and Chief Operating Officer selected 11 individuals to 
participate on the national evaluation panel, including representatives 
from the American Institute of Architects, National Emergency 
Management Association, and a private sector construction/engineering 
firm, and staff from the Office of Federal Coordinator for Gulf Coast 
Rebuilding, HUD, FEMA, and DHS Preparedness.[Footnote 11] 

FEMA convened the national evaluation panel in November 2006. According 
to FEMA, each panelist reviewed all 29 project proposals submitted by 
the five states. In addition, FEMA assigned each panelist two to four 
projects as the primary reviewer and an additional two to four projects 
as the secondary reviewer. The primary reviewer presented the details 
of the project to the other members of the review panel, with the 
secondary reviewer providing any additional observations regarding the 
project. After the review panel members discussed any questions 
regarding the project, each of the panelists individually recorded a 
score of one (unsatisfactory) to five (excellent) for each of the five 
rating criteria described in the AHPP guidance. Panelists shared their 
initial scores for the project with the review panel as a whole, and 
were provided time for further discussion. Finally, each panel member 
recorded a final score for the project independent of the other 
panelists. FEMA computed an aggregate score for each of the 29 
projects, based on the panelists' individual scores. According to FEMA, 
the average score was about 120, and FEMA considered the 19 projects 
with a score over 120 as competitive. Table 1 shows the 19 projects in 
national evaluation panel rank order that FEMA considered as 
competitive. 

Table 1: Competitive AHPP Projects in National Evaluation Panel Rank 
Order. 

Rank: 1; 
State: Mississippi; 
Project name: Green Mobile[A]; 
Score: 184. 

Rank: 2; 
State: Mississippi; 
Project name: Park Model and Mississippi Cottage; 
Score: 182. 

Rank: 3; 
State: Louisiana; 
Project name: Cypress Cottage Partners; 
Score: 176. 

Rank: 4; 
State: Texas; 
Project name: Heston; 
Score: 159. 

Rank: 5; 
State: Mississippi; 
Project name: Modular Town Home; 
Score: 157. 

Rank: 6; 
State: Alabama; 
Project name: City of Bayou La Batre; 
Score: 155. 

Rank: 7; 
State: Alabama; 
Project name: Mobile County Proposal B; 
Score: 146. 

Rank: 8; 
State: Texas; 
Project name: Palm Harbor Homes; 
Score: 145. 

Rank: 9; 
State: Alabama; 
Project name: Baldwin County; 
Score: 141. 

Rank: 10; 
State: Louisiana; 
Project name: Home at Last; 
Score: 135. 

Rank: 11; 
State: Louisiana; 
Project name: Phoenix Systems Built Home; 
Score: 135. 

Rank: 12; 
State: Texas; 
Project name: Centera; 
Score: 133. 

Rank: 13; 
State: Alabama; 
Project name: Mobile County Proposal A; 
Score: 129. 

Rank: 14; 
State: Louisiana; 
Project name: Palm Harbor; 
Score: 129. 

Rank: 15; 
State: Texas; 
Project name: Octogon; 
Score: 128. 

Rank: 16; 
State: Alabama; 
Project name: City of Greensboro; 
Score: 126. 

Rank: 17; 
State: Alabama; 
Project name: City of Thomasville; 
Score: 125. 

Rank: 18; 
State: Alabama; 
Project name: City of Andalusia; 
Score: 121. 

Rank: 19; 
State: Louisiana; 
Project name: Homes Now; 
Score: 121. 

Source: FEMA. 

[A] According to a Mississippi state agency official, the Green Mobile 
project is currently referred to as the Mississippi Eco Cottage. 

[End of table] 

The AHPP guidance stated that the national evaluation panel would make 
recommendations to the FEMA senior manager about which proposals or 
portions of a proposal to fund. However, FEMA officials told us that 
they did not intend for the panel to reach a consensus on projects to 
fund; rather, they considered the panelists to be making individual 
recommendations about the merits of each project. As discussed 
subsequently in this report, several panelists individually recommended 
that certain of the projects they reviewed receive funding, but 
commented that the funding should be less than that requested by the 
applicant. 

FEMA Selected Projects and Determined Related Funding Amounts Based on 
the National Evaluation Panel Results and Other Considerations: 

The AHPP guidance stated that the approving federal official (the 
selecting official) at FEMA would consider the national evaluation 
score, the comments and recommendations from independent panelists, and 
any other pertinent information in determining which projects to 
select, up to the amount of funds available for the program. FEMA's 
Deputy Director for Gulf Coast Recovery chose to summarize the results 
of the national evaluation panel in a December 2006 memorandum to the 
AHPP selecting official. Specifically, this memo included an overview 
of the AHPP, a list of the 29 project proposals in national evaluation 
panel rank order, a summary of the panelists' comments for each project 
proposal, and three possible funding options. Specifically: 

* Option 1: Fully fund the highest scoring projects until money is 
exhausted. FEMA would fund the top scoring project from Mississippi at 
100 percent of the requested funding and the second highest scoring 
project (also from Mississippi) at 95 percent of the requested funding. 

* Option 2: Optimize the number of housing alternatives funded within 
the competitive range. FEMA would fund 10 of the top scoring projects 
in a manner allowing for a variety of housing solutions to be tested. 
However, some of the larger and most competitive projects would be 
substantially reduced. 

* Option 3: Maximize the number of competitive states that receive 
awards. FEMA would fund the top project from each state (excluding 
Florida because the panel scored none of its projects as competitive-- 
i.e., with a score of 120 or greater) at 85 percent of requested 
funding. FEMA would allocate the remaining funding to the Park Model 
and Mississippi Cottage project, the next highest scoring project 
proposal. 

According to the Deputy Director for Gulf Coast Recovery, the intent of 
this memorandum was to summarize the results of the national evaluation 
panel for the selecting official and distill options for dealing with 
the results of the panel's deliberations. The Deputy Director told us 
that no one requested that he develop the three options, and that his 
intent was to best reflect the competitive process and to secure 
funding for the most competitive projects. The Deputy Director also 
told us that, in developing the three funding options, he considered 
the rank order of projects--that is, the aggregate score for each 
project as determined by the panelists' individual scores--and the 
amounts requested for each project, but did not factor the individual 
comments made by the panelists into the options. He acknowledged that 
any number of options could have been developed, and also commented 
that the three funding options were not binding--that is, the AHPP 
selecting official did not have to select or fund projects in 
accordance with any of the options. 

The AHPP selecting official chose option 3 proposed by the Deputy 
Director for Gulf Coast Recovery, which was characterized as maximizing 
the number of competitive states that receive awards and resulted in 
five projects receiving funding (see table 2). Specifically, FEMA (1) 
selected for AHPP grant awards 5 of the 29 project proposals submitted 
by the states based on the selecting official's review of the project 
proposals and consideration of the recommendations from the national 
evaluation panel and (2) funded them at reduced amounts (i.e., less 
than the amounts requested in their applications), based on these 
factors, further analysis of the amounts requested, and the funding 
FEMA had available for the program. This resulted in FEMA funding the 
top scoring project proposal from Alabama, Louisiana, Mississippi, and 
Texas at 85 percent of requested funding and allocating the remaining 
available funding to the next highest scoring project (the Park Model 
and Mississippi Cottage), which had been proposed by Mississippi. 

Table 2: Summary of AHPP Selecting Official's Recommended Project 
Selections and Funding Allocations. 

Project name: Green Mobile; 
State: Mississippi; 
Requested funding: $6,930,450; 
Recommended funding amount: $5,890,882; 
Percentage of requested funding: 85.0; 
National evaluation panel ranking: 1. 

Project name: Park Model and Mississippi Cottage; 
State: Mississippi; 
Requested funding: $400,000,000; 
Recommended funding amount: $275,427,730; 
Percentage of requested funding: 68.9; 
National evaluation panel ranking: 2. 

Project name: Cypress Cottage Partners; 
State: Louisiana; 
Requested funding: $87,696,906; 
Recommended funding amount: $74,542,370; 
Percentage of requested funding: 85.0; 
National evaluation panel ranking: 3. 

Project name: Heston Group; 
State: Texas; 
Requested funding: $19,378,500; 
Recommended funding amount: $16,471,725; 
Percentage of requested funding: 85.0; 
National evaluation panel ranking: 4. 

Project name: City of Bayou La Bartre; 
State: Alabama; 
Requested funding: $18,432,110; 
Recommended funding amount: $15,667,293; 
Percentage of requested funding: 85.0; 
National evaluation panel ranking: 6. 

Total; [Empty]; 
State: [Empty]; 
Recommended funding amount: $388,000,000; 
Percentage of requested funding: [Empty]; 
National evaluation panel ranking: [Empty]. 

Source: FEMA. 

[End of table] 

In commenting on the recommendations, the AHPP selecting official 
stated that the selections reflected choosing the strongest project 
from each of the competitive states and a second project from 
Mississippi that met the AHPP rating criteria exceedingly well and 
received the second highest score from the national evaluation panel. 
How this option, as well as possible others, compares with the 
program's goal of exploring alternative forms of disaster housing is 
discussed later in this report. 

While Generally Similar to Competitive Grants Processes of Education, 
EPA, and HUD, FEMA's Processes Differed in Time Frames, Maximum Award 
Amounts, and Application Rating Criteria: 

FEMA's AHPP grant processes were generally similar to the competitive 
grant processes of Education, EPA, and HUD. For example, program 
officials at each agency identify individuals with relevant skills, 
knowledge, or expertise as candidates for their panels that review 
applications. In addition, these agencies generally select at least 
three individuals to participate on their review panels, although the 
level of the official making the final selections varied among the 
agencies. FEMA's Gulf Coast Recovery Office followed a similar process 
in identifying candidates for the AHPP national evaluation panel, and 
the agency ultimately selected 11 individuals to participate on the 
panel. Each agency also requires that the panelists independently 
review applications in accordance with the criteria stated in its 
respective program guidance. Further, each agency requires the 
selecting official to base project selections and funding decisions on 
the review panel's ranking and recommendations, and to document any 
deviation from the ranking. Table 3 summarizes these and other 
similarities between FEMA's AHPP grant processes and the competitive 
grant processes of Education, EPA, and HUD. 

Table 3: Similar Features among Selected Agencies Competitive Grants 
Processes. 

* Applications are subject to initial eligibility determination. 

* Program officials identify individuals with specific relevant skills, 
knowledge, or expertise as candidates for review panels. 

* Three or more individuals are selected to participate on review 
panels. 

* Panelists must independently review applications based on established 
criteria. 

* A rank-order list of applications is developed based on panel 
evaluation. 

* Selecting official is obligated to consider the results of panel 
evaluation when determining which applications will be awarded grants. 

Source: GAO analysis. 

[End of table] 

FEMA's AHPP processes also complied with relevant OMB grant guidance 
that applies governmentwide. For example, FEMA had grant applicants 
submit standardized applicant forms, in accordance with OMB Circular A- 
102, Grants and Cooperative Agreements with State and Local 
Governments. Furthermore, FEMA directed state grantees to require that 
sub-grantees comply with the audit requirements of OMB Circular A-133, 
Audits of States, Local Governments, and Non-Profit Organizations. 

Differences in FEMA's Processes May Have Affected the AHPP Results: 

We identified differences between the processes FEMA followed for 
awarding AHPP grants and the competitive grant processes of Education, 
EPA, and HUD. While the differences do not represent a lack of 
compliance with applicable law or regulations, they may have affected 
the quality and thoroughness of the proposals FEMA received, reduced 
the amount of time it had to answer questions from potential 
applicants, and potentially reduced the number of alternative proposals 
the evaluation panel ultimately had to consider in its deliberations. 
More specifically: 

* Application deadline--FEMA provided the five eligible states 35 days 
to submit their applications under the AHPP. Education, EPA, and HUD 
program offices generally provide applicants with longer time frames to 
submit applications for new or complex grant programs. For example, 
Education's competitive grant procedures require program officials to 
provide applicants a minimum of 60 days to submit applications for 
funding under new programs, compared with 45 days for existing 
programs. In addition, EPA's competitive grants procedures, for open 
competitions, generally require program officials to provide applicants 
at least 45 days to submit applications. The director of HUD's Office 
of Departmental Grants Management and Oversight told us that, depending 
on the complexity of the program, the time frame for submitting 
applications for HUD grants can be as little as 45 days and as much as 
180 days. According to FEMA officials, the agency determined that time 
frames for implementing the AHPP needed to be short in order to assist 
victims affected by the 2005 hurricanes in the fastest amount of time. 
FEMA officials also told us that the agency established a shorter time 
frame for submitting applications because the concept of alternative 
housing options was not new when the agency released the AHPP guidance, 
as FEMA and state officials had discussed various alternatives to the 
FEMA travel trailer and manufactured home and some concepts had been 
presented. For example, Mississippi sponsored a forum in October 2005 
where architects, engineers, and community planners discussed 
rebuilding options, including one concept presented as an alternative 
to the FEMA travel trailer. For this reason, FEMA officials contended 
that the 35-day time frame did not have an effect on the quality of the 
AHPP project proposals that the agency received. 

However, officials from each of the five state agencies told us that it 
was difficult to prepare the application and project proposals within 
the 35-day time frame and they would have benefited by having 
additional time. For example, some state agency officials told us that 
they did not have enough time to secure title to the sites for proposed 
projects; one state official noted that this process can take up to 6 
months. In other cases, state agency officials told us that they did 
not have enough time to follow their normal procurement practices for 
soliciting ideas for alternative housing solutions. Furthermore, some 
state agency officials also told us that a longer time frame would have 
provided additional time to ask FEMA questions regarding the AHPP 
guidance and application process. Similarly, in its April 2007 report 
on the AHPP, the DHS OIG reported that FEMA might have been able to 
solicit and fund more innovative and creative disaster housing 
solutions had the agency allowed applicants more time.[Footnote 12] 
Finally, the three AHPP review panelists we interviewed also told us 
that they did not believe 35 days was a sufficient amount of time for 
states to develop proposals. 

* Minimum/maximum award amounts--The AHPP guidance did not specify a 
minimum or maximum amount that the states could request for each 
project, and the funding requests for the 29 projects submitted ranged 
from $600,000 to $400 million. Officials of Education, EPA, and HUD 
told us that, when they have discretion in designing competitive grant 
programs because the authorizing statutes for the programs have not 
prescribed certain provisions, such as minimum or maximum amounts that 
applicants may request, they typically choose to establish them. 
According to FEMA officials, the agency placed no limitations on the 
amounts that the states could request for each project because it 
sought to obtain the best ideas from the marketplace and felt that any 
limitations would constrain this process. In addition, FEMA was not 
certain how many eligible states might submit AHPP applications or how 
many project proposals the agency might receive, and did not want to 
place constraints on the amount it might award to any one proposal. 

A senior official in EPA's Office of Grants and Debarment told us that 
award limitations help to ensure that program offices will fund 
multiple projects--as in the case of a pilot program--without having to 
partially fund a project. In addition, the director of HUD's Office of 
Departmental Grants Management and Oversight told us that it can be 
more difficult to judge applications under a competitive grant program 
without award limitations, because the budget amounts may vary widely. 
The DHS OIG also noted in its April 2007 report that it would have been 
easier to compare the costs of each project had the AHPP guidance 
requested that each project include a budget that showed the minimum 
amounts required to implement each concept (with some adequate-for- 
testing-and-evaluation number of units, such as 25 or 50), rather than 
allowing the applicants to submit a "wish-list" budget for each 
project.[Footnote 13] Furthermore, one AHPP review panelist we 
interviewed told us that it was more difficult to evaluate and make 
comparisons among the project proposals because the funding requests 
varied greatly. 

* Rating criteria--The AHPP guidance provided no indication of the 
relative importance of any of the five rating criteria, and in fact 
FEMA did not assign weights but rather treated each criterion equally. 
In contrast, Education, EPA, and HUD program offices disclose in the 
program guidance information regarding the relative importance of 
rating criteria that will be used to evaluate applications. According 
to FEMA officials, the AHPP guidance could have more clearly stated 
that the rating criteria would be weighted equally. These officials 
also told us that, in retrospect, the agency could have given more 
consideration to which of the five rating criteria were more important 
than others. Similarly, the DHS OIG's April 2007 report noted that it 
was unusual when some evaluation factors are not considered to be more 
important than other factors, and concluded that the project 
assessments were possibly unbalanced in that every factor was given the 
same weight as all of the other factors.[Footnote 14] 

Selected Projects Will Provide Housing Alternatives, but FEMA Could 
Have Funded More Projects: 

According to FEMA, the five projects selected for AHPP funding to help 
identify alternative forms of disaster housing for evaluation were 
chosen to maximize the number of competitive states that receive grant 
awards. FEMA officials indicated to us that this option, among all of 
those the selecting official considered, best balances the competitive 
nature of the AHPP, which was intended to solicit ideas from the 
marketplace and secure funding for only the most competitively rated 
projects. As a result, FEMA elected to fund the top rated projects from 
the four states that submitted competitive proposals (excluding 
Florida) at 85 percent of requested funding and allocate the remaining 
funding to the next highest rated project, which was from Mississippi. 
(The latter, while a single "project" for purposes of the competition, 
consists of proposals to construct two types of units.) 

The five projects FEMA chose for funding offer a number of housing 
options, including single family modular homes that can be 
deconstructed, one-story multifamily units that offer varying layouts, 
modular units placed on an undercarriage and frame, and prefabricated 
panelized housing. In addition, the group of projects is intended to 
improve upon FEMA's traditional housing options in areas such as 
innovative design, energy efficiency, ease of construction, and 
community support. For example, Mississippi's Green Mobile project is 
intended to provide an improved emergency housing alternative by 
emphasizing innovative design features that are durable and energy 
efficient and can be adapted to varied family needs. In addition, 
Louisiana's Cypress Cottage Partners project is intended to provide 
semipermanent and permanent housing solutions that can be built 
relatively quickly. Figure 2 describes the five projects selected for 
AHPP funding. 

Figure 2: Projects Funded under the AHPP: 

This figure shows seven images. The first image is a picture of a 
Mississippi cottage, which is an alternative to the FEMA manufactured 
home. It is a modular two or three bedroom unit that can be installed 
on a permanent foundation, making it convertible to permanent housing. 
The second image is a picture of a park model, which is an alternative 
to the FEMA travel trailer. It is similiar to the travel trailer with 
several enhancements, including an air conditioned attic for additional 
storage, rot/mold/moisture resistant materials, and a front porch. 
State requested $400 million for 7, 261 park model units, 1, 279 two 
bedroom Mississippi cottages, and 654 three-bedrooms. 

The third image is an artist's rendering a structure in City of Bayou 
La Batre (Alabama), which serves as an alternative to the FEMA 
manufactured home. It is single-family modular housing unit built using 
cement fiber materials. Units feature a front porch and exterior design 
and materials that compliment surrounding area. State requested $18.4 
million for 194 units on two sites. 

The fourth image is a picture of a Heston Group (Texas) home, which is 
an alternative to the FEMA trailer and manufactured home. It is single-
family prefabricated, panalized housing unit that can be constructed in 
as little as 8 hours. Unit can be broken down, stored flat, and reused. 
State requested $19.4 million for 50 one-bedroom units, 50 two-bedroom 
units, and 100 three-bedroom units.  

The fifth image is an artist's rendering of an alternative to the FEMA 
travel trailer and manufactured home in Green Mobile (Mississippi). It 
features open interior design that can be adapted to various family 
needs. It emphasizes green building technologies that should result in 
reduced energry consumtion. State requested $6.9 million for 80 one-
bedroom units, 20 two-bedroom units. 

The sixth, seventh, and eighth images are of of two artist's renderings 
of a sample Katrina Cottage, and a picture of a Carpet Cottage, all 
from Cypress Cottage Partners (Katrina Cottage and Carpet Cottage, 
Louisiana). The Katrina cottage is an alternative to FEMA manufactured 
homes. It is a single-family unit that offers two-and three-bedroom 
layouts for a diverse population. The Carpet Cottage is a one-story 
multi-family unit that offers one-, two-, and four-bedroom layouts for 
a diverse population. State requested $87.7 million for 475 of the two 
types of units. 

[See PDF for image] 

Source: Mississippi Emergency Management Agency (Park Model and 
Mississippi Cottage, Green Mobile/Mississippi Eco Cottage); Galbraith & 
Associates, LLC/The Mitchell Company Inc./Palm Harbor Homes, Inc. (City 
of Bayou La Batre); Texas Department of Housing and Community Affairs 
(Heston Group); Cypress Realty Partners, Duany Plater-Zyberk & Company 
(Cypress Cottage Partners); and FEMA. 

[End of figure] 

FEMA Could Have Funded More Alternative Housing Projects Using a 
Different Funding Allocation: 

FEMA could also have increased the number of projects to evaluate under 
other funding options. As previously noted, the Gulf Coast Recovery 
Office developed three possible options for allocating the funding 
available under the AHPP. Under one of these options, FEMA would have 
funded 10 competitively ranked projects (worthy of consideration) in 
four states (Alabama, Louisiana, Mississippi, and Texas, the same 
states that ultimately received AHPP grant awards) by scaling down some 
of the funding allocations of the top five projects and using the 
remaining funding for five additional competitive projects. 
Specifically, FEMA would have partially or fully funded three projects 
in Louisiana, three projects in Mississippi, two projects in Alabama, 
and two projects in Texas. Table 4 provides details on the projects and 
the recommended funding amounts they would have received had the FEMA 
selecting official chosen this option. 

Table 4: Option FEMA Considered to Fund More Projects under the AHPP. 

Project name (state): Green Mobile (Mississippi); 
Requested funding: $6,930,450; 
Recommended funding under this option: $6,930,450; 
Percentage of requested funding: 100; 
Rank based on score of national evaluation panelists: 1. 

Project name (state): Park Model and Mississippi Cottage (Mississippi); 
Requested funding: 400,000,000; 
Recommended funding under this option: 99,283,657; 
Percentage of requested funding: 24.8; 
Rank based on score of national evaluation panelists: 2. 

Project name (state): Cypress Cottage Partners (Louisiana); 
Requested funding: 87,696,906; 
Recommended funding under this option: 87,696,906; 
Percentage of requested funding: 100; 
Rank based on score of national evaluation panelists: 3. 

Project name (state): Heston Group (Texas); 
Requested funding: 19,378,500; 
Recommended funding under this option: 16,972,906; 
Percentage of requested funding: 87.6; 
Rank based on score of national evaluation panelists: 4. 

Project name (state): Modular Town Home (Mississippi); 
Requested funding: 88,800,000; 
Recommended funding under this option: 46,336,731; 
Percentage of requested funding: 52.2; 
Rank based on score of national evaluation panelists: 5. 

Project name (state): City of Bayou La Batre (Alabama); 
Requested funding: 18,432,110; 
Recommended funding under this option: 18,432,110; 
Percentage of requested funding: 100; 
Rank based on score of national evaluation panelists: 6. 

Project name (state): Mobile Country Proposal B (Alabama); 
Requested funding: 32,500,650; 
Recommended funding under this option: 32,500,650; 
Percentage of requested funding: 100; 
Rank based on score of national evaluation panelists: 7. 

Project name (state): Palm Harbor Homes (Texas); 
Requested funding: 25,212,300; 
Recommended funding under this option: 25,212,300; 
Percentage of requested funding: 100; 
Rank based on score of national evaluation panelists: 8. 

Project name (state): Home at Last (Louisiana); 
Requested funding: 13,540,513; 
Recommended funding under this option: 13,540,513; 
Percentage of requested funding: 100; 
Rank based on score of national evaluation panelists: 10 (tied). 

Project name (state): Phoenix Systems-Built Home (Louisiana); 
Requested funding: 91,455,038; 
Recommended funding under this option: 41,093,770; 
Percentage of requested funding: 44.9; 
Rank based on score of national evaluation panelists: 10 (tied). 

Total; 
Requested funding: [Empty]; 
Recommended funding under this option: $387,999,993; 
Percentage of requested funding: [Empty]; 
Rank based on score of national evaluation panelists: [Empty]. 

Source: FEMA. 

Note: According to FEMA, the ninth ranked project (Alabama Baldwin 
County) was not recommended for funding under this option because it 
proposed the same housing solution as the eighth ranked project (Texas 
Palm Harbor Homes). 

[End of table] 

According to FEMA's Deputy Director for Gulf Coast Recovery, this 
option of funding 10 projects represented one of many options that the 
AHPP selecting official could have recommended to allocate funding 
under the pilot program. In developing this option, the Deputy Director 
indicated that it would enable FEMA to fund the top projects in a 
manner that allowed for a variety of housing solutions to be tested. 
However, the Deputy Director remarked that this option would not have 
been the best choice because it "penalized" some of the most 
competitive proposals by significantly reducing the requested funding 
amount. Similarly, FEMA indicated that another funding option it 
considered but did not choose had drawbacks as well. That option, under 
which FEMA would have funded only the highest scoring projects until it 
exhausted its available funding, would have resulted in the agency 
awarding all of the AHPP funds to two projects (both in Mississippi)-- 
assuming that the projects were funded up to the amount requested for 
each, rather than at some lesser amount as recommended by some 
individual panel members. According to the Deputy Director and the 
selecting official, choosing this option would have quickly exhausted 
the available funding and precluded it from funding excellent, 
competitive projects from the other states and increasing the 
alternative housing options it would develop under the AHPP. As a 
result, the Deputy Director believed that the selection of five 
projects for AHPP funding represented the best funding solution 
consistent with the competitive process. 

In its review of FEMA's implementation of the AHPP, the DHS Inspector 
General raised a concern about the effect of FEMA's choice to award 
AHPP funds in the manner it did. Specifically, the OIG reported that, 
had the selecting official chosen the option under which FEMA would 
have maximized the number of competitive projects receiving awards (the 
option funding 10 projects), the AHPP grant funds would be much more 
effective in exploring and testing "innovative and creative" 
alternative solutions to disaster housing.[Footnote 15] Furthermore, 
the OIG stated that FEMA did not fund an optimum number of "innovate 
and creative" disaster housing solutions because, by selecting and 
funding the 5 projects it did rather than the 10 under this option, 
FEMA awarded the vast majority of the available funds (about 71 
percent) to one project in one state (Park Model and Mississippi 
Cottage). 

Our analysis of the evaluation panel member's comments on the project 
proposals showed similar concerns with awarding to 1 project such a 
substantial portion of available AHPP funding and the effect this might 
have on the goal of developing housing alternatives to evaluate. We 
found that 10 out of 11 panelists recommended partially funding the 
$400 million requested for this large project--some at significantly 
lower levels. For example, 1 panelist strongly recommended that the 
project be funded at a maximum of 10 percent of the proposed level, 
noting that the intention of the program is to test different forms of 
housing as a pilot; another panelist suggested the funding level be at 
20 percent. 

Although the AHPP selecting official ultimately recommended funding 
this project (the Park Model and Mississippi Cottage) at 69 percent of 
requested funding (or $275.4 million), in doing so he stated that there 
were issues requiring resolution, one of which may have reflected the 
concerns the panelists raised. Specifically, the official noted that 
this project should "address the proposed balance between the Park 
Model and Mississippi Cottage to provide for a better evaluation of the 
efficiency of one option versus the other." As a result, FEMA officials 
stated that, in subsequent postaward negotiations with Mississippi, 
they were working to adjust the mix of these two types of housing for 
which the state would ultimately receive grant funds in order to reduce 
the number of Park Model units to be built. The selecting official also 
noted a concern with the similarity between the Park Model units and 
some of the existing manufactured homes through which FEMA currently 
provides disaster housing (also named Park Model), writing in his 
recommendation to fund the project that consideration should be given 
to "expanding the available square footage of the Park Model to 
demonstrate more contrast to the existing Park Model options." 

Conclusions: 

The legislation creating the AHPP did not specify in detail how FEMA 
was to design and implement the program and award the grant funds. 
FEMA's choice of a competitive grant program, to be implemented 
expeditiously, was intended to be consistent with the authorizing 
legislation. In designing the program, FEMA planned for the AHPP to not 
only address continuing housing needs, but also to generate ideas for 
how to do so in better ways in future disasters. FEMA's choices will 
likely meet these goals. However, the experience of implementing the 
AHPP, as well as insights from other agencies' competitive grants' 
processes, provide useful lessons that may be worth exploring as part 
of any future attempt on FEMA's part to identify alternative, new, or 
innovative forms of disaster housing. Specifically: 

* Allowing applicants more time could increase the quantity and quality 
of proposals. Perceiving some urgency to quickly implement the program, 
FEMA gave applicants 35 days to prepare and submit their applications 
for AHPP grants, even though the program was new and intended to elicit 
innovation. The other federal agencies whose competitive grants 
processes we examined--Education, EPA, and HUD--advised that giving 
applicants more time to apply, particularly for a new program, makes it 
more likely the agency will receive more proposals to evaluate. 

* Establishing minimum and/or maximum grant award amounts could help 
ensure comparability among proposals and ultimately lead to funding a 
greater number of innovative proposals. In the absence of such limits, 
FEMA received applications for individual projects ranging from 
$600,000 to $400 million. When they can, officials at Education, EPA, 
and HUD typically establish minimum or maximum amounts, which help to 
ensure that they will fund multiple projects. 

* Determining the relative weight of each rating criterion, and 
explicitly stating these weights in program guidance, would also help 
promote comparability among proposals. The other agencies we consulted 
disclose this information. FEMA's failure to do so, according to the 
DHS Inspector General, created the possibility that panel members' 
reviews of grant applications could have been unbalanced. FEMA 
officials acknowledged that they could have more clearly stated that 
they weighted all of the criteria equally. 

Recommendations for Executive Action: 

In the event that FEMA conducts future competitive grant processes for 
the purpose of identifying alternative, new, or innovative forms of 
disaster housing, the Secretary of DHS should direct FEMA to consider: 

* longer time frames for applicants to prepare and submit applications, 

* minimum and/or maximum funding amounts for grant awards, and: 

* stating explicitly the relative importance of the rating criteria 
that the agency will use to evaluate applications. 

Agency Comments and Our Evaluation: 

We provided DHS and HUD with a draft of this report for review and 
comment. In an e-mail from its Audit Liaison Office, DHS concurred with 
the recommendations in the draft report and offered no other comments. 
HUD officials indicated that they had no comments on the draft report. 

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 30 days from the date of this letter. We will then send copies to 
the Secretary of Homeland Security, the Secretary of Housing and Urban 
Development, and interested congressional committees. We will also make 
copies available to others upon request. In addition, the report will 
be available at no charge on the GAO Website at [hyperlink, 
http://www.gao.gov]. 

If you have any questions concerning this report, please contact me at 
(202) 512-8678 or woodd@gao.gov. Contact points for our Office of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. Key contributors for this assignment were Bill 
MacBlane, Assistant Director; Marshall Hamlett; Simin Ho; and John 
McGrail. 

Signed by: 

David G. Wood: 

Director, Financial Markets: 

and Community Investment: 

List of Congressional Requesters: 

The Honorable Mary L. Landrieu: 
Chair: 
Subcommittee on Disaster Recovery: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable David Vitter: 
United States Senate: 
The Honorable Rodney Alexander: 
House of Representatives: 

The Honorable Richard Baker: 
House of Representatives: 
The Honorable Charles W. Boustany, Jr. 
House of Representatives: 

The Honorable William J. Jefferson: 
House of Representatives: 
The Honorable Bobby Jindal: 
House of Representatives: 

The Honorable Jim McCrery: 
House of Representatives: 
The Honorable Charlie Melancon: 
House of Representatives: 

[End of section]  

Footnotes: 

[1] FEMA has used travel trailers primarily for short-term housing 
needs and placed the units on private sites while the homeowner's 
permanent residence is under repair or in group configurations to 
support displaced renters. FEMA has used manufactured homes for both 
short-and long-term disaster housing needs and placed the units on 
commercial pads or in group sites. 

[2] P.L. 109-234, 120 STAT. 418. 

[3] Department of Homeland Security, Office of the Inspector General, 
Evaluation of the Federal Emergency Management Agency's Alternative 
Housing Pilot Program, OIG-07-39 (Washington, D.C.: April 20, 2007). 

[4] FEMA awarded grants totaling $388 million, as 3 percent, or $12 
million, of the $400 million appropriated for the AHPP was allocated 
for administrative costs, management costs, pilot project evaluations, 
and amendments as needed. 

[5] The Stafford Act is codified as amended at 42 U.S.C.  5121 et seq. 

[6] Direct assistance is one of the five types of housing assistance 
authorized under section 408 of the Stafford Act. The other four types 
include financial assistance to (1) rent alternate housing 
accommodations; (2) repair owner-occupied private residences, 
utilities, and residential infrastructure; (3) replace owner-occupied 
private residences; and (4) construct permanent or semipermanent 
housing in insular and other areas where no alternative housing 
resources are available and other forms of authorized temporary housing 
assistance are unavailable, infeasible, or not cost-effective. 

[7] After the 18-month period, FEMA may charge fair market rent for 
each temporary housing unit provided unless the President extends the 
18- month free-of-charge period due to extraordinary circumstances. 
According to FEMA, the temporary housing assistance programs for Gulf 
Coast hurricane victims have been extended until March 1, 2009. As of 
May 25, 2007, FEMA data showed that the agency was providing direct 
temporary housing assistance to 76,187 households as a result of 
Hurricanes Katrina and Rita. 

[8] Specifically, "agencies designated by the Governors" of these five 
states. 

[9] According to the guidance, HUD is to conduct two interrelated 
evaluations of the AHPP--a short-term evaluation to address factors 
associated with the type, codes, cost, time frames, and acceptability 
of the projects selected, and a concurrent evaluation to address the 
longer-term energy and maintenance costs, durability, consumer 
perceptions, and effect of the housing on individual and long-term 
community recovery and well-being. 

[10] According to a FEMA Grants Management Office official, the agency 
refers to the procedures as "draft" because it has not yet incorporated 
them into its Grants Handbook, which spells out policies and procedures 
for all of its grants management activities (that is, including those 
that take place after grants are awarded). According to this official, 
FEMA has followed the procedures outlined in the draft since 2004, and 
the officials who designed the AHPP were required to adhere to them. 

[11] The American Institute of Architects represents the professional 
interests of architects and promotes excellence in design and 
livability in buildings and communities; the National Emergency 
Management Association is the professional association for state 
emergency management directors. 

[12] OIG-07-39. 

[13] OIG-07-39. 

[14] OIG-07-39. 

[15] OIG-07-39. 

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