DHS FEMA Spent $79.6M on Katrina Temporary Housing Construction, Awarded Sole-Source

Contract Overview

Contract Amount: $79,551,961 ($79.6M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2005-10-11

End Date: 2011-09-25

Contract Duration: 2,175 days

Daily Burn Rate: $36.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: IDENTIFY AND PROVIDE TEMPORARY (UP TO 18 MONTHS) HOUSING SOLUTIONS FOR ALL PEOPLE DISPLACED BY HURRICANE KATRINA. HAUL TRAVEL TRAILERS/MOBILE HOMES/TEMPORARY STRUCTURES TO THEIR INTENDED DESTINATION(S) FOR INSTALLATION. INCLUDES ELECTRICAL DROPS TO TRAVEL TRAILERS, MANUFACTURED HOMES AND ALTERNATIVE HOUSING STRUCTURES.

Place of Performance

Location: ENGLEWOOD, DENVER County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Homeland Security obligated $79.6 million to CH2M HILL CONSTRUCTORS, INC. for work described as: IDENTIFY AND PROVIDE TEMPORARY (UP TO 18 MONTHS) HOUSING SOLUTIONS FOR ALL PEOPLE DISPLACED BY HURRICANE KATRINA. HAUL TRAVEL TRAILERS/MOBILE HOMES/TEMPORARY STRUCTURES TO THEIR INTENDED DESTINATION(S) FOR INSTALLATION. INCLUDES ELECTRICAL DROPS TO TRAVEL TRAILERS, MANUFACTURED H… Key points: 1. Significant expenditure of $79.6 million for emergency housing post-Katrina. 2. Sole-source award to CH2M HILL CONSTRUCTORS, INC. raises questions about competition. 3. Contract duration of 2175 days indicates a prolonged, complex recovery effort. 4. Focus on construction and installation of temporary housing solutions.

Value Assessment

Rating: questionable

The contract was awarded on a Cost Plus Fixed Fee basis, which can lead to cost overruns if not managed tightly. The total award of $79.6 million for temporary housing construction and installation is substantial, but a direct comparison is difficult due to the unique, emergency nature of the requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This likely occurred due to the urgent need for disaster relief following Hurricane Katrina, bypassing standard competitive procurement processes. The lack of competition may have limited price discovery and potentially led to higher costs.

Taxpayer Impact: Taxpayer funds were used to address a critical national disaster. While necessary, the sole-source nature of the award warrants scrutiny to ensure funds were used efficiently.

Public Impact

Provided essential temporary shelter for thousands displaced by Hurricane Katrina. Facilitated the installation and connection of critical utilities to temporary housing. Demonstrated government's capacity to respond to large-scale natural disasters. The long duration highlights the challenges of long-term disaster recovery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a large contract
Cost-plus contract type can incentivize spending
Long contract duration

Positive Signals

Addressed critical need for housing post-disaster
Provided essential services during a crisis

Sector Analysis

This contract falls under Commercial and Institutional Building Construction, a sector often characterized by project-specific needs and varying levels of competition. Emergency response contracts, however, operate under different pressures, often prioritizing speed over traditional procurement.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source award to a large constructor likely precluded opportunities for small business participation.

Oversight & Accountability

The contract was awarded by the Department of Homeland Security (FEMA), a primary agency for disaster response. Oversight would have been crucial given the cost-plus nature and the urgency, but specific oversight mechanisms are not detailed in the provided data.

Related Government Programs

Commercial and Institutional Building Construction
Department of Homeland Security Contracting
Federal Emergency Management Agency Programs

Risk Flags

Sole-source award lacks transparency and competition.
Cost-plus contract type carries inherent cost escalation risks.
Long contract duration suggests potential inefficiencies or scope creep.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $79.6 million to CH2M HILL CONSTRUCTORS, INC.. IDENTIFY AND PROVIDE TEMPORARY (UP TO 18 MONTHS) HOUSING SOLUTIONS FOR ALL PEOPLE DISPLACED BY HURRICANE KATRINA. HAUL TRAVEL TRAILERS/MOBILE HOMES/TEMPORARY STRUCTURES TO THEIR INTENDED DESTINATION(S) FOR INSTALLATION. INCLUDES ELECTRICAL DROPS TO TRAVEL TRAILERS, MANUFACTURED HOMES AND ALTERNATIVE HOUSING STRUCTURES.

Who is the contractor on this award?

The obligated recipient is CH2M HILL CONSTRUCTORS, 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 $79.6 million.

What is the period of performance?

Start: 2005-10-11. End: 2011-09-25.

What was the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award in this context was likely the extreme urgency following Hurricane Katrina. FEMA needed immediate solutions for displaced populations. While competitive strategies are standard, emergency declarations often allow for non-competitive awards to expedite critical services. A review of FEMA's emergency procurement regulations and the specific justification documented at the time would clarify the decision.

How did the final costs compare to initial estimates, and were there significant cost overruns?

Given the Cost Plus Fixed Fee (CPFF) contract type and the chaotic post-disaster environment, tracking cost overruns is complex. CPFF contracts reimburse actual costs plus a fixed fee, meaning the government bears the cost risk. Without detailed financial reports or audits, it's difficult to assess if the $79.6 million was an efficient use of funds compared to potential initial estimates or if significant overruns occurred due to unforeseen challenges.

What lessons were learned from this contract regarding temporary housing solutions and emergency procurement?

This contract likely provided valuable, albeit costly, lessons for FEMA and DHS regarding the logistical challenges of providing mass temporary housing, utility connections, and the complexities of emergency procurement. Key takeaways might include the need for pre-negotiated contracts with disaster response firms, improved methods for rapid deployment and installation, and clearer protocols for sole-source awards during crises to ensure accountability and value.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)

Address: 9191 SOUTH JAMAICA STREET, ENGLEWOOD, CO, 06

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $79,551,961

Exercised Options: $79,551,961

Current Obligation: $79,551,961

Parent Contract

Parent Award PIID: HSFEHQ05D0592

IDV Type: IDC

Timeline