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Panels question response to Katrina

FEMA to rebid recovery pacts

WASHINGTON -- Lawmakers from both parties yesterday sharply questioned nearly every aspect of the Bush administration's response to Hurricane Katrina, focusing on suspect contracts and eliciting a pledge that hundreds of millions of dollars in deals awarded with no competition would soon be put up for bid.

Nine House and Senate panels held hearings on hurricane relief, with a sense of frustration frequently bursting to the surface. Several members chastised administration officials, citing tales of Gulf State small businesses losing work to giants such as Halliburton Co. Others challenged administration stances on tax breaks and healthcare for the displaced.

Under questioning about the agency's reliance on contracts that lacked full and open bidding, R. David Paulison, the acting director of the Federal Emergency Management Agency, said, ''I've been in public service a long time, and I've never been a fan of no-bid contracts."

Asked by Senator Joseph Lieberman, Democrat of Connecticut, why the agency did not hold competitions before Katrina struck, Paulison replied that ''all of those no-bid contracts, we are going to go back and rebid. We're in the process of rebidding them already."

A FEMA spokeswoman later said the new bidding process affects only the four largest no-bid deals. Those are $100 million contracts awarded to the Shaw Group, Bechtel Corp., CH2M Hill Inc., and Fluor Corp. to find and engineer sites for temporary housing for displaced residents.

Paulison told the panels that his agency had delivered nearly 85 million liters of water, more than 4 million meals and nearly 176 million pounds of ice by Oct. 3, while registering more than 1.7 million victims for disaster assistance. He also announced a higher estimate of Katrina homeless, from 300,000 to ''between 400,000 and 600,000 households."

Senator Susan Collins, a Maine Republican who chairs the Senate Homeland Security and Governmental Affairs Committee, decried ''a trail of missteps that calls into question what has been done during the last four years and that continues to plague the recovery even today."

Paulison's pledge to rebid some Katrina contracts showed a willingness to reexamine some of those decisions, though the actual impact of the move could prove limited.

The agency said yesterday that it has no plans to compete numerous other deals signed in the aftermath of Katrina with little or no competition. Also, FEMA has already committed a large amount of money to the four firms doing the housing site work -- $49.2 million in the case of Bechtel. And there is no timeline for how quickly the competition will proceed. Each of the firms said yesterday that it will continue to work in the meantime.

The day's events indicated that the administration has yet to regain its footing since its slow response to the hurricane's initial onslaught more than a month ago.

In a House Appropriations subcommittee hearing, Representative David Obey, Democrat of Wisconsin, called the Department of Homeland Security ''dysfunctional" and suggested that Congress should rescind half the more than $60 billion it has provided for the relief effort unless FEMA can better document how it is being spent.

Homeland Security Deputy Secretary Michael Jackson responded that the department will be watching the money closely. ''The opportunity to go awry here is large, and we must be extremely diligent in preventing fraud and waste," he said.

Members of both parties raised doubts that President Bush's proposed business tax breaks would lure employers and employees back to the battered Gulf Coast. Meanwhile, a continuing dispute over healthcare for Katrina evacuees led Senate Finance Committee chairman Charles Grassley, Republican of Iowa, to sharply rebuke Treasury Secretary John Snow. For weeks, the administration has blocked legislation that would temporarily expand Medicaid eligibility rules and raise federal healthcare reimbursement rates to states affected by the hurricane.

''Tell the White House to back off our bill," Grassley told Snow. ''There are people hurting down there, and we want to get them help."

Lawmakers indicated they would also challenge Bush's proposal to create a vast, tax-favored Gulf Opportunity Zone, stretching from Louisiana to parts of Florida.

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