Posted November 24, 2006
Sean Reilly, The Press Register (Washington D.C.)
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In awarding a west Mobile company a $6.2 million hurricane-related contract for boxed lunches last year, the Federal Emergency Management Agency paid a stiff price and laid down almost no requirements, according to a copy of the agreement that the firm, Clearbrook L.L.C., fought to keep secret.
Under the three-page deal, signed in late September 2005 and obtained by the Press-Register last week, FEMA agreed to pay Clearbrook $14.85 per lunch, but did not spell out what the firm was supposed to supply by way of food and drink.
The only listed requirement was that the lunches be "non-perishable."
And while the contract specified that the meals were to be delivered to southwestern Louisiana parishes in support "of disaster relief efforts for Hurricane Rita," Clearbrook President Bruce Wagner said the food was actually distributed in the New Orleans area, which had been devastated by Hurricane Katrina a few weeks earlier.
"We were just trying to respond to an opportunity to serve those people there," he said in an interview last week.
FEMA released the contract about 13 months after the Press-Register requested it under the federal Freedom of Information Act.
Earlier this fall, Wagner sued FEMA in federal court in Mobile to keep the agreement -- as well as two other hurricane-related contracts sought by the newspaper -- from becoming public on the grounds that release of pricing details would help competitors in future contract bids.
He dropped the fight earlier this month after Chief U.S. District Judge Ginny Granade denied Clearbrook's request for a preliminary injunction.
Wagner later told the Press-Register that he is more concerned about the release of pricing information contained in the other contracts.
The newspaper is still reviewing those other two contracts, which were to provide sewage treatment to displaced storm victims. It is also still waiting for FEMA to turn over remaining paperwork that might shed light on how the contracts were awarded and how Clearbrook performed.
Headquartered on Azalea Road, the small water services firm has been the lead player in a consortium of companies that has won more than $192 million in FEMA business since Katrina struck in August 2005, according to an agency report submitted to Congress last month.
While the boxed lunch contract is a small part of the package, the agreement's wording appears to typify complaints from Congress that FEMA committed billions of taxpayer dollars on vaguely written, limited-competition contracts. Watchdog groups have been equally critical of what they see as the agency's refusal to open up about how it made some of those decisions.
"There's no way to determine if the government is getting the best value for its money, which unfortunately tends to mean that the government isn't getting the best value for its money," said Jennifer Porter Gore, a spokeswoman for the Project on Government Oversight, based in Washington, D.C.
FEMA officials have blamed problems on the chaos and overwhelming demands that followed the storms. They have since highlighted efforts to line up suppliers and contractors in advance of future disasters.
In e-mailed responses to questions posed by the Press-Register last week, FEMA spokesman James McIntyre said Tuesday that the agency ordered boxed lunches because supplies of pre-packaged -- and much cheaper -- Meals Ready to Eat were running short. Clearbrook provided 415,000 lunches under the contract, he said.
The agency has yet to respond to all of the questions submitted by the newspaper. For example, McIntyre did not explain why Clearbrook ended up serving residents in New Orleans instead of southwestern Louisiana or how FEMA settled on the final price per lunch.
But the cost seemed high to several Mobile-area businessmen also involved in post-Katrina catering.
"That's an awfully expensive lunch," said Banana Docks Cafe owner Chris Raley, who said he provided 350 lunches a day for employees of a Maryland company doing restoration work in Mississippi at a cost of less than $10 per meal, including a drink and delivery charge.
"Wish I could get it," was the off-the-cuff response of Alec Naman, president of Naman's Catering, which provided meals to first responders and victims in New Orleans and Gulfport following Katrina. But Naman quickly added that any assessment of the price would hinge on "what was required in the boxed lunch."
At least on paper, FEMA appears to have left that up to Clearbrook after awarding the contract on the basis of an oral quote with less than full competition, according to agency records. Wagner said he was actually the second-lowest bidder, but was called back after the original contractor proved unable to handle the job, which had a five-day turnaround time.
"I gave FEMA the price based on what my costs were, given the circumstances," he said. Those included leasing seven Baton Rouge restaurants to make the sandwiches, trucking them to the New Orleans area in refrigerated 18-wheelers and a surcharge on diesel fuel, he said.
Despite the contract's requirement that the food be non-perishable, Wagner said that on word-of-mouth instructions from the government, each lunch contained two ham or roast beef sandwiches with eight ounces of meat each, fruit, candy, a bag of chips and a drink, he said.
"The press and the papers just hammered the government for not getting food to these people. ..." Wagner said. "It was just a desperate situation."
Last November, FEMA suspended payments to Clearbrook after auditors found more than $3 million in suspected overcharges on a separate contract to provide food and housing for emergency responders. Wagner, who adamantly denied wrongdoing, blamed the glitch on an accountant who Wagner said was later fired.
In his responses this week, McIntyre did not address a question about whether FEMA investigated further or took any other action. But the company has since gotten more government business and Wagner said that he's been notified informally that the company has been cleared. On Tuesday, an auditor who reviewed the initial findings said he found no evidence of criminal wrongdoing.
"We found a lot of problems, but the problems went both ways," said John Carnahan, who was then senior auditor in charge at the Department of Homeland Security's Inspector General office, which has been monitoring FEMA contracts.
"Not only did we find some over billing, but we found some under billing."
Carnahan, who now works for the U.S. Department of Veterans Affairs, attributed the problems to Clearbrook's rapid growth.
"I would write it up to inexperience," he said.