Wednesday, November 4, 2015

Wilson: FEMA wants a Katrina refund from Gulfport

[]Steve Wilson - Mississippi Watchdog

The Federal Emergency Management Agency gave the city of Gulfport, Miss., more than $248 million to help it recover from Hurricane Katrina. Now the Department of Homeland Security’s inspector general wants some of that back, asking for more than $4.2 million to be returned to the Treasury because the city did not comply with federal procurement guidelines.
According to Arlen Morales, a spokesman for the DHS Office of the Inspector General, the city can choose to appeal the decision before FEMA officials or go before an arbitration board.
City spokesman Chris Vignes said the city has responded to the inspector general’s report and awaits a reply from FEMA.

The IG report says city officials awarded more than $10 million in contracts for repair to the city’s water and sewer systems damaged by the 2005 storm solely on qualifications, without regard to price. Homeland Security wants $3.8 million of that money back because the amount paid to the contractor for project management was 9.3 percent of construction costs, which is nearly double what is allowed under federal regulations, which specify that firms can charge no more than 5 percent of construction costs for “non A/E [architectural/engineering] professional services such as project management.”
Originally, the firm that handled the job quoted a project management price that was 5.1 percent of the construction costs. But while construction costs jumped from $78 million to $88 million (an increase of 12.8 percent), project management costs more than doubled, from $4 million to more than $8.2 million. FEMA defines project management as work-site inspection, review and approval of materials, shop drawings and change orders, review of contractors’ request for payment and representation of the client.

In addition, the report says $400,800 spent on repairing the city’s small-craft harbor and lighthouse was an overcharge as well, with the contractor charging 6.1 percent of construction costs on project management.
The city mentioned a similar amount as far back as its 2013 budget, when it cited $4 million in “FEMA ineligible funded projects” that would have to be paid from the city’s general fund or with the issuance of additional debt.
This isn’t the first time FEMA has asked for some of its money back with Gulfport. In 2013, the city had to pay back $8.5 million for issues with contracts for emergency cleanup after Katrina.

 Morales said that while the inspector general’s office is still looking into several Gulf Coast grant recipients, the agency had no more audits planned for Gulfport or any other city in the region on disaster relief funds.