Disaster Contracting: FEMA and the Corps of Engineers Have Opportunities to Improve Local Vendor Use

What GAO Found

The Federal Emergency Management Agency (FEMA) and the Army Corps of Engineers have key responsibilities for disaster response and recovery activities. Contracting with local businesses—those that reside or primarily do business in declared major disaster areas—is one way to fulfill their responsibilities. Both have policies and guidance to promote local vendor use, but they do not monitor associated data on this use. As a result, they do not know the extent to which they are using local vendors or helping jump-start the local economy.

Further, the contracting officers that GAO interviewed were not always aware of how to identify the local disaster area. Under federal regulations, a major disaster area is generally defined in the official presidential disaster declaration. However, some contracting officers identified the local area incorrectly or did not understand how to do so. For example:

• FEMA. One contracting officer stated that they identified the entire state of Tennessee as the local area instead of staying within the declared disaster area in anticipation that other parts of the state might be added later.
• Corps. One contracting officer responsible for four contracts for the Maui Wildfires stated that there was not an official way to identify a local area.

Example of a Contracting Officer Incorrectly Identifying the Local Disaster Area

The Corps has taken efforts to ensure that its contracting officers correctly identify the local area, but FEMA has yet to fully address the issue. For example, its three contracting officers who identified the local area incorrectly had received training on local vendor use. This indicates a need for additional action. Until FEMA takes additional steps to ensure that its contracting officers correctly identify the local area, it could miss opportunities to both award contracts to local vendors and help communities jump-start economic recovery after a disaster.

Additionally, all the selected Corps’s contracts were missing documents related to the use of local vendors. Federal regulations require contracting officers who award a post-disaster contract to a nonlocal vendor to document their justification in the contract file. Without these justifications, the Corps lacks assurance its contracting officers are making an effort to use local vendors as appropriate. Ensuring that contracting officers fully comply with federal regulations can provide the Corps with greater certainty that it is succeeding in its efforts to contract with local vendors and assist with the economic recovery of a local area.

Why GAO Did This Study

U.S. communities devastated by natural disasters often rely on federal aid for their recovery. To meet their disaster response and recovery responsibilities, FEMA and the Corps contract with businesses to obtain some of the goods and services needed for these recovery activities. Under federal law, they are required to provide a preference for contracting with businesses defined by regulation as local—relative to the declared disaster area—to the extent feasible and practicable. This preference may help jump-start the local economy.

The American Relief Act of 2025 includes a provision for GAO to conduct work related to certain natural disasters. GAO’s report assesses the extent to which (1) FEMA and the Corps promote and monitor the use of local vendors for disaster response, and (2) contracting officers followed requirements for local vendor use for selected contracts.

GAO selected three major disasters: Hurricane Helene, the Maui wildfires, and Hurricane Ian; collected, analyzed, and confirmed the reliability of relevant data; reviewed laws, regulations, policies, and guidance; interviewed agency officials and contracting officers; and assessed a nongeneralizable sample of contracts from the three selected disasters.