Thursday, May 9, 2019

Contractor Couldn't Deliver under $30 Million Contract - Update

This is an update to our post from December 7, 2017 wherein we described how FEMA (Federal Emergency Management Agency) awarded $30 million in contracts for tarps and plastic sheeting needed for recovery efforts after Hurricane Maria damaged large parts of Puerto Rico to a company who couldn't deliver. The contract was terminated for default and re-solicited but in the meantime, precious time was lost in the Puerto Rico recovery efforts (see Contractor Couldn't Deliver under $30 million Contract).

Seven U.S. Senators asked the DHS (Department of Homeland Security) Office of Inspector General to look into the matter - to determine whether FEMA followed procurement laws, regulations, and procedures when awarding these contracts to Bronze Star LLC, a newly-formed company operating out of a private residence in a Florida subdivision. The Inspector General issued it's findings and recommendations in a report yesterday whose title says it all: FEMA Should Not Have Awarded Two Contracts to Bronze Star LLC.

The OIG found that FEMA did not follow procurement laws, regulations, and procedures when awarding more than $30 million in contracts to Bronze Star for tarps and plastic sheeting. Specifically, FEMA

  • did not fully determine Bronze Star's or its supplier's compliance with the contract terms because it did not verify that Bronze Star could meet either contract's delivery schedule. It also did not perform steps necessary to determine whether Bronze Star's supplier could provide the necessary roof coverings withing contractually specified timelines;
  • Performed inaccurate technical reviews of the Bronze Star proposals;
  • used incorrect FAR clauses and did not reissue the original solicitations because FEMA personnel believed that a 5-hour response window for the tarp modification was sufficient, and the plastic sheeting solicitation had already closed; and
  • did not consult the Disaster Response Registry, as required, because it lacked guidance and procedures.

FEMA's failure to comply with procurement regulations delayed delivery of crucial supplies and impeded Puerto Rican residents' efforts to protect their homes and prevent further damage. Overall, FEMA wasted personnel resources, time, and taxpayer money by issuing, cancelling, and reissuing contracts for tarps.

The full OIG report that includes details on inadequate technical evaluations and the use of incorrect FAR clauses can be found here.

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