[StBernard] FEMA Office of Intergovernmental Affairs: Correcting the Record: Contractor Payments

[Westley Annis]

Correcting the Record

 

July 20, 2007

LA-1603-07-07-664

News Desk: 504-762-2477

 

CONTRACTOR PAYMENTS

 

In recent news reports, FEMA has been criticized for delayed payments to
contractors for their work in assisting Louisiana recover, specifically in
parishes in and around the city of New Orleans. 

 

FEMA does not pay contractors directly. Instead, local parishes are the
entities that hire and ultimately pay contractors for their work. Local
governments that hire contractors and are seeking federal funds must follow
all federal, state and local procurement practices. FEMA obligates funding
to the Louisiana Governor's Office of Homeland Security and Emergency
Preparedness (GOHSEP). In turn, local parishes must work with GOHSEP to
ensure that documentation meets the state's requirements to draw down the
available funds or receive advancements of already obligated funds from
GOHSEP.  

 

One news article credits local officials saying a "big" reason for payment
delay is FEMA underestimating cleanup costs.  FEMA funds all fair and
reasonable costs associated with public assistance projects which includes
debris and demolition removal activities. The project worksheets that
capture the scope of work are living documents that are constantly revised
to reflect all actual and eligible costs. 

 

Slow payments often stem from incomplete documentation of work submitted by
the parishes to GOHSEP. Whenever possible, FEMA coordinates with local and
state officials to ensure proper documentation is maintained to expedite the
reimbursement process. Administrative fees obligated by FEMA are available
to local government agencies to hire staff to ensure documentation
requirements are being met.    

 

In St. Bernard Parish alone, FEMA has obligated more than $272 million for
demolition and debris cleanup. It must also be noted that, as of June 28,
2007, the parish had only drawn down $126 million of this obligated funding
to St. Bernard.

 

FEMA coordinates the federal government's role in preparing for, preventing,
mitigating the effects of, responding to, and recovering from all domestic
disasters, whether natural or man-made, including acts of terror.

 

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Editors: For more information on Louisiana disaster recovery, visit
www.fema.gov <http://www.fema.gov/> .