EMERGENCY CONTRACTING AND HURRICANE KATRINA Thomas H. Gourlay, Jr. Chief Trial Attorney U.S. Army Corps of Engineers

Themes Authorities Application The “New Paradigm”

Authorities Stafford Act (Disaster Relief Act of 1974), P.L , 42 U.S.C. §5121 Flood and Coastal Storm Emergencies Act, P. L , 33 U.S.C. §701n

Stafford Act Four bases for invocation –“Major Disaster”: Presidential declaration of any natural catastrophe, with Governor input –“Emergency”: Supplement to state efforts; limited to $5 million –“Interim” Assistance: Work in immediate aftermath; work only authorized for 10 days –“Exclusive Responsibility”: Federal Government exercises exclusive or preeminent responsibility

Stafford Act Coverage USACE mission: Public Works & Engineering (ESF#3) –Debris removal –Construct temporary emergency access routes –Emergency restoration of public services/utilities –Emergency demolition/stabilization of damaged structures –Technical assistance & damage assessment Administered by FEMA; funding levels established through negotiations –Work performed under the auspices of the Economy Act (31 U.S.C. §1535)

Flood and Coastal Storm Emergencies Act Establishes emergency fund for the following: – Disaster preparedness (any natural disaster) – Emergency Operations (flood-fighting/rescue operations) – Rehabilitation of flood control and hurricane protection structures –Emergency Water Supplies & Drought Assistance –Advance Measures Used when preparation measures are beyond capability of local interests and State to perform in a timely manner

Application: AshBritt, Inc., B ; B AshBritt had Advance Contract Initiative contract (ACI) –Pre-placed contract Maximum capacity - $500 million USACE determined that this instrument was inadequate in light of the magnitude of the disaster; capacity would be exhausted before completion of mission

AshBritt, Inc. (cont). Acquisition Plan for additional demolition and debris removal. Capacity - $300 million Competition limited to firms residing or doing business primarily in Mississippi Solicitation included 8 non-exclusive factors for geographic eligibility –State of incorporation; MS permanent office –MS licenses; membership in state organizations –Past work in MS; % of gross revenues attributable to MS work –Permanent employees in MS Three contracts – each contact would be confined to designated counties –Unrestricted on business size –HubZone firms –8(a) firms Objectives: structural demolition, debris removal & site clean-up –6,000 structures –2.1 million cubic yards of material

AshBritt, Inc., (cont). AshBritt Protested proposed acquisition Bases included: –Solicitation violated CICA and the Stafford Act –Agency issued Solicitation in response to political pressure –Stafford Act and FAR implementation ambiguous –Guidance on what constitutes a firm residing/primarily doing business in MS defective, inconsistent, arbitrary, unreasonable & irrational

CICA and the Stafford Act CICA mandates full and open competitive procedures, with seven exceptions. The fifth exception applies when “authorized or required by statute.” Stafford Act provides that “preference shall be given, to the extent feasible and practicable to [firms] residing or doing business primarily in the area affected” by the disaster. 42 U.S.C. §5150. Legislative history – “One outstanding feature of the aftermath of a great disaster is lack of ready cash. A Federal assistance program should be designed to revitalize the community by infusions of cash through the use of local people and business firms.” FAR § (a)(5), “Authorized or required by statute,” specifically invokes Stafford Act.

Set-Asides and the Stafford Act HAP Construction, Inc., B , 98-2 CPD ¶76 – USACE contract for debris removal and related services in Puerto Rico and USVI after storm –Agency used local contractor evaluation preference, as opposed to local firm set-aside GAO will not disturb Agency’s implementation of statutory procurement unless inconsistent with Congressional intent

The “New Paradigm” Traditional Congressional interest/oversight –Constituent service –Oversight Post-Iraq and Katrina climate Potential impact on relationship between contractors and Government