2017 Disaster Contracting:

Action Needed to Better Ensure More Effective Use and Management of Advance Contracts

GAO-19-93: Published: Dec 6, 2018. Publicly Released: Dec 6, 2018.

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Following Hurricane Katrina, Congress required FEMA to establish contracts for goods and services in advance to enable quick and effective mobilization of resources in the aftermath of a disaster. FEMA and the Army Corps of Engineers used "advance contracts" for $4.5 billion in goods and services after Hurricanes Harvey, Irma, and Maria, and the California fires of 2017.

We found FEMA's guidance on the use of these types of contracts was unclear, and that inconsistent information from FEMA could impair its efforts to help state and local governments use advance contracts.

We made 9 recommendations, including that FEMA clarify its guidance.

Damage from Hurricane Maria in Puerto Rico

This photo shows roof damage to buildings in Puerto Rico following Hurricane Maria.

This photo shows roof damage to buildings in Puerto Rico following Hurricane Maria.

Additional Materials:

Contact:

Marie A. Mak
(202) 512-4841
makm@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

In response to Hurricanes Harvey, Irma, and Maria, as well as the 2017 California wildfires, the Federal Emergency Management Agency (FEMA) and U.S. Army Corps of Engineers (USACE) relied heavily on advance contracts. As of May 31, 2018, FEMA and USACE obligated about $4.5 billion for various goods and services through these contracts, see figure below.

Advance Contract Obligations and Examples of Goods and Services the Federal Emergency Management Agency and U.S. Army Corps of Engineers Used to Respond to the 2017 Disasters

Advance Contract Obligations and Examples of Goods and Services the Federal Emergency Management Agency and U.S. Army Corps of Engineers Used to Respond to the 2017 Disasters

Note: Obligations are nominal 2017 and 2018 dollars.

GAO found limitations in FEMA's use of some advance contracts that provided critical goods and services to survivors, including

  • an outdated strategy and unclear guidance on how contracting officers should use advance contracts during a disaster, and
  • challenges performing acquisition planning.

FEMA also did not always provide complete information in its reports to congressional committees. Specifically, GAO found 29 advance contract actions that were not included in recent reports due to shortcomings in FEMA's reporting methodology, limiting visibility into its disaster contract spending.

FEMA identified challenges with advance contracts in 2017, including federal coordination with states and localities on their use. FEMA is required to coordinate with states and localities and encourage them to establish their own advance contracts with vendors. However, GAO found inconsistencies in that coordination and the information FEMA uses to coordinate with states and localities on advance contracts. Without consistent information and coordination with FEMA, states and localities may not have the tools needed to establish their own advance contracts for critical goods and services and quickly respond to future disasters.

Why GAO Did This Study

Following Hurricane Katrina, Congress required FEMA to establish advance contracts for goods and services to enable the government to quickly and effectively mobilize resources in the aftermath of a disaster, like those that affected the United States in 2017.

GAO was asked to review the federal government's response to the three 2017 hurricanes and California wildfires. This report assesses, among other things, (1) FEMA and USACE's use of advance contracts, (2) FEMA's planning and reporting of selected advance contracts, and (3) challenges, if any, with FEMA's use of these contracts.

GAO analyzed data from the Federal Procurement Data System-Next Generation through May 31, 2018; selected a non-generalizable sample of 14 FEMA and USACE advance contracts that were competed and obligated over $50 million, or non-competed and obligated over $10 million, in response to the 2017 disasters; and interviewed FEMA and USACE officials.

What GAO Recommends

GAO is making nine recommendations to FEMA, including that it update its strategy and guidance to clarify the use of advance contracts, improve the timeliness of its acquisition planning activities, revise its methodology for reporting disaster contracting actions to congressional committees, and provide more consistent guidance and information to contracting officers to coordinate with and encourage states and localities to establish advance contracts. FEMA concurred with our recommendations.

For more information, contact Marie A. Mak at (202) 512-4841 or makm@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: FEMA agreed with this recommendation and stated in July 2019 that it plans to develop a FEMA Acquisition Manual that will provide clear definitions, objectives, and instructions to properly plan, award, and administer current and future advance contracts. In addition, FEMA intends for the Acquisition Manual to include information on the use of advance contracts in relation to the establishment of post-disaster contracts. FEMA also plans to update its Disaster Contracting Desk Guide, which will provide more operational direction based on the guidance identified in the FEMA Acquisition Manual. According to FEMA officials, they anticipate that the FEMA Acquisition Manual will be completed by the end of calendar year 2019, followed by an update to the Disaster Contracting Desk Guide before the start of the 2020 disaster season.

    Recommendation: FEMA's Administrator should update the strategy identified in its 2007 Advance Contracting of Goods and Services Report to Congress to clearly define the objectives of advance contracts, how they contribute to FEMA's disaster response operations, and whether and how they should be prioritized in relation to new post-disaster contract awards. (Recommendation 1)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  2. Status: Open

    Comments: FEMA agreed with this recommendation and stated in July 2019 that it plans to develop a FEMA Acquisition Manual that will provide clear guidance on prioritizing existing advance contracts over new-post-disaster contracts. In addition, FEMA officials stated that the Acquisition Manual will include definitions, objectives, and instructions to properly plan, award, and administer current and future advance contracts. FEMA also plans to update its Disaster Contracting Desk Guide, which will provide more operational direction based on the guidance identified in the FEMA Acquisition Manual. According to FEMA officials, they anticipate that the FEMA Acquisition Manual will be completed by the end of calendar year 2019, followed by an update to the Disaster Contracting Desk Guide before the start of the 2020 disaster season.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity updates the Disaster Contracting Desk Guide to include guidance for whether and under what circumstances contracting officers should consider using existing advance contracts prior to making new post-disaster contract awards, and include this guidance in existing semi-annual training given to contracting officers. (Recommendation 2)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  3. Status: Open

    Comments: FEMA agreed with this recommendation and provided documentation in July 2019 of steps it has taken to communicate the purpose and use of the 5-Year Master Acquisition Planning Schedule. These steps include updating fiscal year 2019 training slides, sending initiation memos to senior leaders within FEMA's directorates requesting their participation in the Integrated Project Team process, and identifying the date acquisition packages should be completed to allow for new contracts to be awarded on time. However, FEMA has not yet updated guidance for program and contracting officer personnel to identify acquisition planning timeframes and considerations across the entire acquisition process. Specifically, FEMA's Procurement Acquisition Lead Time guidance, distributed annually to all FEMA managers, continues to include recommended lead times for awarding contracts once the acquisition package is completed, but does not include comparable recommended timeframes for the completion of the acquisition package to inform the full acquisition planning process conducted by program and contracting officer personnel.

    Recommendation: FEMA's Administrator should update and implement existing guidance for program office and contracting officer personnel to identify acquisition planning timeframes and considerations across the entire acquisition planning process, and clearly communicate the purpose and use of a Master Acquisition Planning Schedule (MAPS). (Recommendation 3)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  4. Status: Closed - Implemented

    Comments: FEMA agreed with this recommendation and in July 2019 provided documentation that they have standardized language and incorporated performance goals for managing hard copy contract files into performance plans for acquisition personnel. For example, these performance goals state that personnel should reduce the number of findings related to missing documents during audits of FEMA's contract files, and require that at least 70 to 79 percent of contract files have been reviewed and are complete in accordance with established audit checklists for personnel to achieve expectations. FEMA also provided documentation that they have developed a contract file verification check list to identify items that should be included when executing contracts during a disaster. According to FEMA officials, the contract file check list was distributed to all section chiefs for use by contracting staff in the 2019 disaster season. These actions address our recommendation by ensuring acquisition personnel are held accountable for maintaining completed and up to date contract files.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity adheres to current hard copy contract file management requirements to ensure advance contract files are complete and up to date, whether they will be transferred into the new Electronic Contract Filing System or remain in hard copy format. (Recommendation 4)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  5. Status: Open

    Comments: FEMA agreed with this recommendation and stated in July 2019 that it included training on Notice to Proceed reporting requirements in their April 2019 Mission Rehearsal Training, provided to headquarters and regional contracting staff. FEMA officials also stated they plan to develop a FEMA Acquisition Manual that will incorporate Notice to Proceed procedures. FEMA anticipates completing its FEMA Acquisition Manual by the end of calendar year 2019.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity reminds contracting officers of the three day timeframe for entering completed award documentation into the contract writing system when executing notice to proceed documentation. (Recommendation 5)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  6. Status: Closed - Implemented

    Comments: FEMA agreed with this recommendation and in July 2019 provided documentation that it has updated its quarterly reports to Congress with an additional appendix that will include any disaster actions awarded in the previous quarter that were not reported in the previous quarter's report. The addition of the appendix will help to ensure that all contracts are accounted for in the quarterly reports, addressing our recommendation.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity revises its reporting methodology to ensure that all disaster contracts are included in its quarterly reports to congressional committees on disaster contract actions. (Recommendation 6)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  7. Status: Open

    Comments: FEMA agreed with this recommendation and stated in July 2019 that it is establishing an external website, or toolkit that will provide specific guidance to state and local governments on the use and establishment of advance contracts. According to FEMA officials they also plan to update the Disaster Contracting Desk Guide with instructions to contracting officers to direct state and local governments to the toolkit, and make states and localities aware of the use and establishment of advance contracts. FEMA expects the update to the Disaster Contracting Desk Guide will be completed before the start of the 2020 disaster season but does not have an estimate at this point for when the toolkit will be finalized.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity revises the Disaster Contracting Officer Desk guide to provide specific guidance for contracting officers to perform outreach to state and local governments on the use and establishment of advance contracts. (Recommendation 7)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  8. Status: Open

    Comments: FEMA agreed with this recommendation and stated in July 2019 that it had initiated bi-weekly Procurement Disaster Strategy meetings with leadership from OCPO and the program offices, branch chiefs, and contracting officers from headquarters and the regions to, among other things, review advance contracts to ensure needed commodities are available in support of disasters. FEMA also stated that it intends for its advance contracts list, updated monthly, to be the centralized resource used to communicate advance contracts internally within FEMA and externally to state and local governments. However, our review of FEMA's July 2019 advance contract list and semi-annual training documentation provided in May 2019 continued to find differences in the advance contracts listed, including contracts that were identified in the May 2019 training that were not reflected on the July 2019 advance contract list. We maintain that FEMA needs to ensure it has a resource that includes all available advance contracts for there to be visibility and awareness of what contracts are available for FEMA's use, and the types of contracts states and localities could consider establishing themselves.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity identifies a single centralized resource listing its advance contracts and ensure that source is updated regularly to include all available advance contracts. (Recommendation 8)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

  9. Status: Open

    Comments: FEMA agreed with this recommendation and stated in July 2019 that it is updating information to communicate with state and local government on its toolkit, and that it will provide the advance contract list, along with other acquisition templates and information, for states and localities to reference. FEMA officials also stated they will help states and localities to establish their own advance contracts to support disaster response efforts. FEMA officials did not have an estimate at this point for when the toolkit will be finalized.

    Recommendation: FEMA's Administrator should ensure the Head of the Contracting Activity communicates information on available advance contracts through the centralized resource to states and localities to inform their advance contracting efforts. (Recommendation 9)

    Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency

 

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