FEMA spent $30.17M on bottled water during Hurricane Harvey, exceeding benchmark by 99.5M%

Contract Overview

Contract Amount: $30,170,205 ($30.2M)

Contractor: Composite Analysis Group, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2017-08-31

End Date: 2018-06-30

Contract Duration: 303 days

Daily Burn Rate: $99.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BOTTLED WATER FOR HURRICANE HARVEY DR-4332

Place of Performance

Location: JUNIOR, BARBOUR County, WEST VIRGINIA, 26275

State: West Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $30.2 million to COMPOSITE ANALYSIS GROUP, INC. for work described as: BOTTLED WATER FOR HURRICANE HARVEY DR-4332 Key points: 1. The contract value significantly surpassed its benchmark, indicating potential overspending or a highly volatile market. 2. Competition was full and open, suggesting a robust bidding process despite the emergency context. 3. The fixed-price contract type offers cost certainty but may not fully capture market fluctuations. 4. Performance occurred over a 10-month period, aligning with the immediate aftermath and recovery phases of a major disaster. 5. The contract falls within the 'Soft Drink Manufacturing' NAICS code, though its primary purpose was emergency relief. 6. The significant deviation from the benchmark warrants further investigation into pricing and market conditions at the time.

Value Assessment

Rating: concerning

The contract's total award of $30.17 million is substantially higher than its benchmark of $99,572, representing a concerning deviation. This massive difference suggests either a severe underestimation of the benchmark, an inflated price for the goods, or extreme market conditions during the disaster. Without further context on the quantity of water procured and prevailing market rates during Hurricane Harvey, it is difficult to definitively assess value for money. However, the nearly 100 million percent difference from the benchmark is a significant red flag.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' While this indicates that the government sought competition, the 'after exclusion of sources' clause suggests that certain potential bidders may have been excluded for specific reasons, which are not detailed here. The fact that it was competed at all is positive, but the exclusion clause warrants a closer look to ensure fairness and prevent potential limitations on competitive pricing.

Taxpayer Impact: A full and open competition generally benefits taxpayers by encouraging multiple bidders to offer competitive prices. However, the exclusion of sources could potentially limit this benefit if not properly justified.

Public Impact

Beneficiaries include residents and emergency responders in areas affected by Hurricane Harvey, providing essential hydration. The service delivered is the provision of bottled water, a critical necessity during and after natural disasters. The geographic impact is primarily the Texas Gulf Coast region, where Hurricane Harvey made landfall and caused widespread damage. Workforce implications are minimal for the contracting agency, but the contract supported distribution efforts which may have involved temporary labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extreme variance between the award amount and the benchmark raises significant concerns about cost control and potential overpayment.
The 'after exclusion of sources' clause in the competition type needs further clarification to ensure no viable competitors were unfairly barred.
Lack of detailed per-unit cost data makes it challenging to benchmark the price of water against market rates during the emergency.
The contract's primary purpose was emergency relief, which can sometimes lead to higher prices due to urgency, but the magnitude of the difference is still alarming.

Positive Signals

The contract was competed under a full and open process, indicating an effort to solicit multiple bids.
The firm fixed-price contract type provides cost certainty for the government, assuming the quantity was accurately estimated.
The contract was awarded to Composite Analysis Group, Inc., suggesting a known entity was involved in the procurement.
The contract duration of 303 days aligns with the extended needs during a major disaster recovery.

Sector Analysis

This contract falls under the broader category of emergency preparedness and disaster relief spending. The market for bottled water is generally stable, but prices can surge dramatically during widespread emergencies due to increased demand and logistical challenges. FEMA's spending in this area is reactive, triggered by natural disasters. Comparable spending benchmarks for emergency water procurement are difficult to establish due to the highly variable nature of disaster-related needs and market conditions.

Small Business Impact

There is no indication that this contract involved small business set-asides, nor is there information on subcontracting plans. Given the nature of the procurement (emergency supply of a commodity), it is possible that larger distributors or manufacturers were the primary focus, potentially limiting direct opportunities for small businesses unless they were part of a larger supply chain.

Oversight & Accountability

Oversight for this contract would fall under the Federal Emergency Management Agency (FEMA), a component of the Department of Homeland Security. Accountability measures would typically involve contract performance monitoring, delivery verification, and financial audits. Transparency is generally expected for federal contracts, though specific details of the procurement process and performance metrics may be subject to release under FOIA or other disclosure rules. The Inspector General for DHS would likely have jurisdiction for oversight.

Related Government Programs

Hurricane Harvey Disaster Relief Fund
Emergency Water Procurement Contracts
FEMA Disaster Assistance Programs
Department of Homeland Security Emergency Supplies

Risk Flags

Significant deviation from benchmark price
Potential for inflated pricing due to emergency conditions
Lack of detailed cost breakdown for unit pricing
Ambiguity in 'after exclusion of sources' clause

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $30.2 million to COMPOSITE ANALYSIS GROUP, INC.. BOTTLED WATER FOR HURRICANE HARVEY DR-4332

Who is the contractor on this award?

The obligated recipient is COMPOSITE ANALYSIS GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $30.2 million.

What is the period of performance?

Start: 2017-08-31. End: 2018-06-30.

What was the specific quantity of bottled water procured under this contract, and how does the per-unit cost compare to market rates during Hurricane Harvey?

The provided data does not specify the exact quantity of bottled water procured. The total award was $30,170,205.42. Without the quantity, calculating a precise per-unit cost is impossible. However, the benchmark of $99,572 is drastically lower than the award, suggesting that even if the benchmark was for a substantial quantity, the actual price paid per unit was likely significantly inflated compared to normal market conditions or even a reasonable emergency premium. Typical retail prices for a 24-pack of bottled water range from $5-$10. During a disaster, prices can increase due to scarcity and logistical costs, but a price that would result in a $30 million award from a $99k benchmark implies an extraordinary cost per unit, potentially hundreds or thousands of times the normal rate, depending on the quantity.

What factors contributed to the 'after exclusion of sources' clause in the contract's competition type?

The data provided does not detail the specific reasons for excluding certain sources in this 'Full and Open Competition After Exclusion of Sources' award. Typically, such exclusions might occur if specific technical requirements, past performance issues with certain vendors, national security concerns, or unique logistical capabilities were deemed essential and only met by a limited number of vendors. Alternatively, it could relate to specific emergency procurement authorities that allow for streamlined processes but may have pre-qualification criteria. Without further documentation from FEMA regarding this specific procurement, the exact rationale remains unclear, but it suggests that not all potential suppliers were considered.

How does the $30.17 million spending on bottled water for Hurricane Harvey compare to other disaster relief efforts for similar-sized events?

Comparing this $30.17 million expenditure requires context on the scale of Hurricane Harvey's impact (e.g., number of people affected, duration of need) and the specific goods procured. FEMA's spending varies greatly by disaster. For instance, Hurricane Katrina response involved billions in overall aid, while smaller events require less. Bottled water is a critical but relatively low-cost item per unit compared to temporary housing or infrastructure repair. A $30 million outlay for water suggests either an immense need over an extended period, exceptionally high unit costs, or a combination. Benchmarking requires data on quantities and unit prices from comparable events, which is not readily available in this dataset but would be crucial for a thorough comparison.

What is the track record of Composite Analysis Group, Inc. in providing emergency supplies or disaster relief services to the federal government?

The provided data identifies 'COMPOSITE ANALYSIS GROUP, INC.' as the contractor but offers no details regarding their specific track record, particularly in emergency supplies or disaster relief. To assess their performance and reliability for this contract, one would need to consult federal procurement databases (like SAM.gov or FPDS) for historical contract awards, performance reviews (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. Without this additional information, it's impossible to evaluate their past performance in this specific domain.

Were there any Inspector General reports or audits related to the procurement or expenditure of funds for this specific bottled water contract?

The provided data does not contain information on whether Inspector General reports or audits were conducted specifically for this bottled water contract (DR-4332). The Department of Homeland Security's Office of Inspector General (DHS OIG) is responsible for overseeing FEMA's operations. It is plausible that a contract of this magnitude, especially given the concerning benchmark variance, could have been subject to audit or review. Accessing DHS OIG reports or conducting targeted searches within their public records would be necessary to determine if such oversight occurred.

What were the logistical challenges and associated costs that might justify the significant difference between the contract award and the benchmark?

Logistical challenges during Hurricane Harvey were immense, including damaged infrastructure (roads, bridges), power outages, and widespread displacement of the population. Transporting large quantities of bottled water to affected areas, ensuring safe storage, and distributing it efficiently under such conditions incurs significant costs beyond the product price itself. These costs can include fuel, vehicle maintenance, personnel, security, and potential delays. While these factors can inflate prices during emergencies, the benchmark of $99,572 being so vastly exceeded by the $30.17 million award suggests that either the benchmark was unrealistically low for the scale of the disaster, or the actual costs incurred (including profit margins) were extraordinarily high, potentially indicating inefficiencies or market exploitation.

Industry Classification

NAICS: Manufacturing › Beverage Manufacturing › Soft Drink Manufacturing

Product/Service Code: OFFICE SUPPLIES AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1701 OAKBROOK DR STE D, NORCROSS, GA, 30093

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $30,170,205

Exercised Options: $30,170,205

Current Obligation: $30,170,205

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSFE7013D0115

IDV Type: IDC

Timeline