FEMA's $60.9M contract for Katrina temporary housing solutions in Louisiana awarded to Shaw Environmental, Inc

Contract Overview

Contract Amount: $60,882,408 ($60.9M)

Contractor: Shaw Environmental, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2005-09-26

End Date: 2006-09-30

Contract Duration: 369 days

Daily Burn Rate: $165.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IA ATC SUPPORT - IDENTIFY POTENTIAL TEMPORARY HOUSING SOLUTIONS, RESOURCES, AND REQUIREMENT IN LOUISANA FOR PEOPLE DISPLACED AS A RESULT OF HURRICANE KATRINA (LA) - GROUP SITE DESIGN, CONSTRUCTION, INSTALLATION, AND MAINTENANCE

Place of Performance

Location: BATON ROUGE, EAST BATON ROUGE County, LOUISIANA, 70821

State: Louisiana Government Spending

Plain-Language Summary

Department of Homeland Security obligated $60.9 million to SHAW ENVIRONMENTAL, INC. for work described as: IA ATC SUPPORT - IDENTIFY POTENTIAL TEMPORARY HOUSING SOLUTIONS, RESOURCES, AND REQUIREMENT IN LOUISANA FOR PEOPLE DISPLACED AS A RESULT OF HURRICANE KATRINA (LA) - GROUP SITE DESIGN, CONSTRUCTION, INSTALLATION, AND MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies and market competition. 2. Significant duration of over a year for a disaster response effort suggests complex logistical challenges. 3. The contract's focus on identifying and providing temporary housing highlights critical post-disaster needs. 4. Awarded to a single vendor, limiting opportunities for broader industry engagement and innovation. 5. The cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 6. Geographic focus on Louisiana underscores the localized impact and response requirements of Hurricane Katrina.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging due to its specific disaster-response nature and sole-source award. The total obligation of over $60 million for identifying, designing, constructing, installing, and maintaining temporary housing solutions in Louisiana following Hurricane Katrina indicates a substantial investment. Without competitive bids or comparable sole-source contracts for similar large-scale disaster housing efforts, it's difficult to definitively assess if the pricing was optimal. The cost-plus-fixed-fee (CPFF) contract type, while common in complex projects, carries inherent risks of cost escalation if not managed with rigorous oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations where competition is not feasible. The lack of competition means there was no opportunity for price discovery through bidding, and taxpayers did not benefit from potential cost savings that could arise from a competitive environment.

Taxpayer Impact: The absence of competition for this significant contract means taxpayers may have paid a premium compared to what might have been achieved through a competitive bidding process. This also limits the government's ability to leverage a wider range of solutions and innovations from the market.

Public Impact

Displaced residents of Louisiana affected by Hurricane Katrina are the primary beneficiaries, receiving essential temporary housing. The contract facilitated the design, construction, installation, and maintenance of temporary housing sites. The geographic impact is concentrated in Louisiana, specifically addressing the needs of those displaced within the state. The contract likely involved significant workforce mobilization, including construction, logistics, and support personnel, impacting local and potentially national employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential for innovation.
Cost-plus-fixed-fee structure can lead to cost overruns without strict oversight.
Urgency of disaster response may have bypassed standard procurement safeguards.
Long-term maintenance component adds to the overall cost and complexity.
Limited transparency due to non-competitive nature of the award.

Positive Signals

Addressed a critical and urgent need for housing post-disaster.
Shaw Environmental, Inc. likely possessed specialized capabilities for disaster response.
Contract provided essential services to a large number of displaced individuals.
Focused on a specific, high-impact geographic area requiring immediate attention.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to disaster recovery and emergency management support. The market for such services is often characterized by a need for rapid deployment, specialized expertise, and the ability to scale operations quickly in response to unforeseen events. While general construction and environmental services have established benchmarks, disaster-specific temporary housing solutions are a niche market, often dominated by a few key players capable of handling the scale and urgency required.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. Given the sole-source nature and the scale of the operation, it is possible that the prime contractor, Shaw Environmental, Inc., handled the majority of the work internally or with pre-selected partners, potentially limiting opportunities for small businesses to participate in this specific contract.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of Homeland Security (FEMA). Given the CPFF structure and the disaster context, rigorous oversight would be crucial to manage costs, ensure timely delivery, and verify the quality of services. Transparency might be limited due to the sole-source award, but contract performance reports and financial audits would be key accountability measures. Inspector General involvement would be expected for any potential fraud, waste, or abuse.

Related Government Programs

Hurricane Katrina Disaster Relief Efforts
Temporary Housing Programs
Emergency Management Services
Federal Disaster Assistance

Risk Flags

Sole-source award
Cost-plus contract type
Disaster response urgency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $60.9 million to SHAW ENVIRONMENTAL, INC.. IA ATC SUPPORT - IDENTIFY POTENTIAL TEMPORARY HOUSING SOLUTIONS, RESOURCES, AND REQUIREMENT IN LOUISANA FOR PEOPLE DISPLACED AS A RESULT OF HURRICANE KATRINA (LA) - GROUP SITE DESIGN, CONSTRUCTION, INSTALLATION, AND MAINTENANCE

Who is the contractor on this award?

The obligated recipient is SHAW ENVIRONMENTAL, 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 $60.9 million.

What is the period of performance?

Start: 2005-09-26. End: 2006-09-30.

What was the specific expertise Shaw Environmental, Inc. brought to this contract that justified a sole-source award?

While the provided data does not detail the specific justification for the sole-source award to Shaw Environmental, Inc., such awards are typically granted when a single entity possesses unique capabilities, specialized knowledge, or critical resources essential for the requirement. In the context of Hurricane Katrina, this could have included pre-existing contracts, specialized disaster response infrastructure, proven experience in large-scale temporary housing deployment, or immediate availability of personnel and equipment that no other vendor could match within the urgent timeframe. FEMA would have had to document why competition was not feasible or not in the best interest of the government, often citing urgency, lack of alternatives, or national security implications, though the latter is less likely here.

How did the Cost Plus Fixed Fee (CPFF) structure impact the final cost of this contract?

The Cost Plus Fixed Fee (CPFF) contract structure means that Shaw Environmental, Inc. was reimbursed for all allowable costs incurred in performing the contract, plus a predetermined fixed fee representing profit. This structure is often used for complex projects where the scope or costs are uncertain at the outset. For taxpayers, the risk with CPFF is that the contractor has less incentive to control costs, as their profit (the fixed fee) remains constant regardless of the actual expenses. The total cost of $60.9 million reflects the sum of all incurred costs plus the fixed fee. Effective oversight by FEMA was critical to ensure that all costs were reasonable, allocable, and allowable, and that the fixed fee represented fair compensation for the services rendered.

What were the primary challenges in identifying and providing temporary housing solutions in Louisiana post-Katrina?

Identifying and providing temporary housing in Louisiana post-Hurricane Katrina presented immense challenges. The sheer scale of displacement, affecting hundreds of thousands of people, overwhelmed existing infrastructure and resources. Key challenges included: finding suitable land for group sites, dealing with damaged or destroyed infrastructure (roads, utilities), logistical complexities of transporting and installing housing units rapidly, ensuring basic services like water, sanitation, and security at temporary sites, and addressing the diverse needs of different populations (families, individuals, vulnerable groups). The urgency of the situation often meant that solutions had to be implemented quickly, sometimes with compromises on long-term suitability or location.

Were there any performance issues or disputes reported during the execution of this contract?

The provided data does not contain information regarding specific performance issues, disputes, or contract modifications for this particular contract. However, given the scale, complexity, and urgency of disaster response operations following Hurricane Katrina, it is not uncommon for such contracts to encounter challenges. These could range from logistical delays and unforeseen site conditions to disagreements over cost allowability or performance standards. Without access to contract performance reports, modification histories, or official dispute records, it is impossible to assess whether any such issues arose during the contract's term.

How does this contract's spending compare to other federal disaster housing initiatives?

Comparing this $60.9 million contract for temporary housing solutions in Louisiana to other federal disaster housing initiatives is complex, as spending varies significantly based on the scale of the disaster, geographic area, duration of need, and the types of housing provided (e.g., temporary units, rental assistance, permanent repairs). Hurricane Katrina was one of the most costly natural disasters in U.S. history, leading to massive federal spending across multiple agencies. FEMA's overall spending on Katrina recovery exceeded $120 billion. While $60.9 million for temporary housing is substantial, it represents a portion of the total federal response. Benchmarking requires comparing contracts with similar scopes (e.g., providing physical temporary structures) and durations, which are often unique to each disaster event.

What was the duration of the contract and was it extended?

The contract had a duration of 369 days, spanning from September 26, 2005, to September 30, 2006. This duration indicates a significant commitment to addressing the temporary housing needs arising from Hurricane Katrina, extending well beyond the immediate aftermath of the storm. The data does not indicate any formal extensions beyond this initial period, suggesting that the primary objectives were intended to be met within this approximately one-year timeframe. The end date aligns with the ongoing recovery efforts in the region.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSFEHQ05R0046

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chicago Bridge & Iron Company N.V. (UEI: 386491765)

Address: 1725 DUKE STREET, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $60,882,408

Exercised Options: $60,882,408

Current Obligation: $60,882,408

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSFEHQ05D0573

IDV Type: IDC

Timeline