2017 Disaster Contracting: Action Needed to Better Ensure More Effective Use and Management of Advance Contracts
Fast Facts
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.
Highlights
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
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- an outdated strategy and unclear guidance on how contracting officers should use advance contracts during a disaster, and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.
Recommendations
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.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Federal Emergency Management Agency | 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) |
FEMA agreed with this recommendation and in May 2021, finalized a directive on its Advance Contract Strategy. The directive identifies the objectives of advance contracts. Further, it identifies responsibilities for FEMA offices with regards to advance contracts, including: reviewing existing advance contracts; identifying and analyzing gaps in goods and services that could be met through advance contracts; and awarding and administering advance contracts to support FEMA's emergency planning and provision of goods and services in response to a disaster. The directive also identifies how advance contracts contribute more broadly to FEMA's recurring disaster response requirements and establishes a process for evaluating the viability of their use during an emergency or disaster prior to awarding any new post-disaster contracts. The directive should help FEMA ensure that it is maximizing the use of its advance contracts, to the extent practical and cost-effective, to quickly provide goods and services following a disaster.
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| Federal Emergency Management Agency | 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) |
FEMA agreed with this recommendation and in February 2020 it updated its Disaster Contracting Desk Guide to include additional guidance to contracting officers on what advance contracts are, and that when available, advance contracts should be used first when responding to and recovering from a disaster. FEMA also developed a disaster contract file verification toolkit to assist contracting officers in properly documenting that they have verified whether an advance contract exists, and requiring contracting officers to provide justification in the contract file when an advance contract is not used during a disaster and a new contract is awarded instead. These actions address the intent of our recommendation by ensuring contracting officers have guidance available related to whether and under what circumstances to use existing advance contracts.
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| Federal Emergency Management Agency | 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) |
FEMA agreed with this recommendation. In February 2020, FEMA provided documentation that it completed steps to update and implement guidance identifying acquisition planning timeframes across the entirety of the acquisition planning process . Specifically, in February 2020 FEMA released updated procurement guidance that includes information and average estimated timeframes for completing activities-such as market research, independent government cost estimates, and requirements documents-in advance of an acquisition package being submitted to the contracting office. Further, in July 2019 FEMA provided documentation of steps it had taken to clearly communicate the purpose and use of the 5-Year Master Acquisition Planning Schedule. These steps included updating fiscal year 2019 training slides, sending 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. These actions address our recommendation by ensuring that program and contracting officials have the information needed to inform their acquisition planning efforts and effectively utilize the Master Acquisition Planning Schedule to help meet FEMA's goal of reducing the number of non-competitively awarded bridge contracts.
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| Federal Emergency Management Agency | 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) |
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.
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| Federal Emergency Management Agency | 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) |
FEMA agreed with this recommendation and in August 2020 provided documentation that it included guidance on the use of notice and authorization to proceed flexibilities in its July 2020 semiannual training to contracting officers. The July 2020 training includes details on the circumstances under which notice and authorization to proceed flexibilities may be used, and the requirement to complete and finalize the contract in the contract writing system within three days.
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| Federal Emergency Management Agency | 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) |
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.
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| Federal Emergency Management Agency | 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) |
FEMA agreed with this recommendation and provided documentation in March 2020 that it had updated its Disaster Contracting Officer Desk Guide to provide guidance to contracting officers on performing outreach to state and local governments on the use and establishment of advance contracts. The updated Desk Guide encourages contracting officers to establish relationships with state and local officials in disaster affected communities and to provide them with awareness on the use and establishment of their own advance contracts. The Desk Guide also encourages contracting personnel to direct state and local officials to an external website established by FEMA that provides tools and templates on advance contracts, and to assist state and local procurement officials as needed. These actions address our recommendation by ensuring that contracting personnel are aware of the need to perform outreach with state and local governments related to their use and establishment of advance contracts.
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| Federal Emergency Management Agency | 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) |
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. In August 2020, FEMA officials identified the Advanced Contracting of Goods and Services Report as the master list of advance contracts, and stated that the list is updated to include new advance contracts when they are awarded . According to FEMA officials, the list is sent out to contracting officers on a monthly basis and posted on the FEMA Office of the Chief Procurement Officer's sharepoint site. The list of contracts identified in the Advanced Contracting of Goods and Services Report also aligns with the list of advance contracts provided on FEMA's recently launched Procurement Disaster Assistance Team website, which is used to coordinate with states and localities over the use and establishment of advance contracts.
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| Federal Emergency Management Agency | 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) |
FEMA agreed with this recommendation and in August 2020 began including its centralized list of advance contracts on the Procurement Disaster Assistance Team (PDAT) website, which provides states and localities with information on federal disaster grants and contracting. The PDAT website includes a list of FEMA's advance contracts, including a description and vendors, and provides states and localities with guidance on entering into advance contracts prior to a disaster occurring.
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