Monday, September 12, 2005

Lord Fartquad manages his crisis

From today's Wall Street Journal:
FEMA, meanwhile, has announced four major contracts with firms charged with providing emergency housing relief in storm-battered areas of Louisiana, Alabama and Mississippi. The $100 million contracts with Bechtel, Fluor, Shaw Group and Denver-based CH2M Hill Cos. were awarded after what FEMA described as "limited competition." ...

FEMA has been given primary responsibility for spending the more than $50 billion in aid approved by lawmakers last week, which means it will be the lead contracting agency for months to come. That gives it a responsibility well beyond its normal role in past disasters. The agency has never before been asked to disburse money at the level that it will for Katrina. ...

All the deals include cost-plus language, which means the companies can pass along all their costs -- plus a predetermined profit -- to the government. Similar provisions were routinely used in Iraq. Critics said they encouraged waste by removing any incentive to control costs


Blogger Tom Matrullo said...

Not sure whether you are suggesting rebuilding the sf homes in the same place, or somewhere safer from the sea-god's wrath. Also, replacement costs will be higher, as we continue to find in FL every time a hurricane comes through. Builders and suppliers jack up every cost. Plywood suddenly is platinum. Schedules for rebuilding are elongated. Where put people in the meantime? Oh.

There is no clear idea of what FEMA is supposed to do. They used to conceive of themselves as a quick fix and then a loan. Now?

But all that aside, thanks for an analysis that I've not yet seen in, say, journalism.

9/12/2005 8:04 PM  
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