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OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Audit Report
New Housing Contract for
Hurricane Katrina Command Post
Reduced Costs but Limited Competition
Report No. 2007-P-00015
March 29, 2007

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Report Contributors:
Michael Petscavage
Andres Calderon
Jean Bloom
Abbreviations
EPA	U.S. Environmental Protection Agency
OIG	Office of Inspector General
SOW	Statement of Work
Cover photo: EPA's incident command post in Metairie, Louisiana, for dealing with the
aftermath of Hurricane Katrina. Trailers are in the foreground. (EPA photo)

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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2007-P-00015
March 29, 2007
Why We Did This Review
The objective of our audit was
to determine whether the
requirements for Contract
EP-R6-06-03, for providing
office space and housing at the
Hurricane Katrina incident
command post, were well-
supported and justifiable, and
whether the contract was
awarded fairly using full and
open competition.
Background
On August 29, 2005,
Hurricane Katrina caused
catastrophic damage in the
Gulf Coast area. In October
2005, the U.S. Environmental
Protection Agency (EPA)
Region 6 established a
command post in Metairie,
Louisiana, for emergency
response operations. Through
several contracts, EPA
obtained office space and
trailers for housing staff.
After the contracts expired,
EPA competitively awarded a
new contract in March 2006
at an estimated value of
$980,765.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.qov/oiq/reports/2007/
20070329-2007-P-00015.pdf
Catalyst for Improving the Environment
New Housing Contract for Hurricane Katrina Command
Post Reduced Costs but Limited Competition
What We Found
Contract EP-R6-06-03 contained several improvements over the previous housing
contracts for the Metairie incident command post. The new contract terms were
more flexible, allowing for various options regarding the numbers of trailers to be
leased. It also resulted in a price reduction for each trailer (including some
services) to $95 per day per trailer compared to over $300 under the prior
contracts. We found that both EPA Office of Administration and Resources
Management personnel and Region 6 procurement staff worked together diligently
to attempt to refine the statement of work and make sure that the requirements did
not limit competition. These personnel performed admirably and deserve much of
the credit for reducing costs.
However, the contract's statement of work could have been improved to ensure
that it did not contain unnecessary and ambiguous requirements that limited
competition. Full and open competition is required by Federal Acquisition
Regulations and EPA's Contracts Management Manual. Specifically, EPA:
•	Overstated the need for land
•	Sought unneeded kitchen space, refrigerators, and microwaves
•	Did not consider multi-story office space
•	Unnecessarily required a 6-foot fence
•	Did not clearly indicate whether private rooms per person were needed
The contract requirements made it difficult for hotels and apartment complexes to
compete for EPA's business. EPA largely based its requirements on what it
already had as opposed to future requirements, making it difficult for anyone but
the incumbents to win the contract. Also, contract requirements were often
undocumented and unverifiable. As a result, EPA had limited assurance that it
received the best value for its money because similar or better facilities may have
been available at a lower price.
Because EPA plans to award two national blanket purchasing agreements to
provide emergency technical support and logistical services as a result of one of
our prior reports, no recommendations are being made. We are providing this
report to ensure similar occurrences are avoided in the future. Region 6 did not
agree that its contract requirements limited competition and asked that the report
reflect that contract requirements may have limited competition.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
March 29, 2007
MEMORANDUM
SUBJECT:
New Housing Contract for Hurricane Katrina Command Post
Reduced Costs but Limited Competition
Report No. 2007-P-00015
TO:
Richard Greene
Regional Administrator, EPA Region 6
This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). This report contains findings that describe the
problems the OIG has identified and corrective actions the OIG recommends. This report
represents the opinion of the OIG and does not necessarily represent the final EPA position.
Final determinations on matters in this report will be made by EPA managers in accordance with
established resolution procedures.
The estimated cost of this report - calculated by multiplying the project's staff days by the
applicable daily full cost billing rates in effect at the time - is $108,420.
Action Required
Because this report contains no recommendations, you are not required to respond to this report.
We have thus closed this report in our audit tracking system. We have no objections to the
further release of this report to the public. This report will be available at
http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact Melissa Heist, the
Assistant Inspector General for Audit, at (202) 566-0899 or heist.melissa@epa.gov; or Carl
Jannetti, Director of Contract Audits, at (215) 814-5800 or iannetti.carl@epa.gov.
Bill A. Roderick
Acting Inspector General

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New Housing Contract for Hurricane Katrina Command Post
Reduced Costs but Limited Competition
Table of C
Purpose		1
Background 		1
Noteworthy Achievements		2
Scope and Methodology		2
New Housing Contract Reduced Costs but Limited Competition 		2
Need for 6 Acres of Level Land Overstated		3
Unneeded Kitchen Space Sought		3
Unnecessary Small Refrigerator and Microwave Required		3
Multi-Story Office Space under One Roof Not Considered		4
Alternatives to 6-Foot Metal Fence Not Considered		4
Need for Private Rooms Not Clear		4
Conclusion 		5
EPA Region 6 Comments		5
OIG Evaluation of Comments		6
Status of Recommendations and Potential Monetary Benefits		8
Appendices
A Agency Response to Draft Report	 9
B Distribution 	 15

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Purpose
The objective of our audit was to determine whether the requirements for Contract EP-R6-06-03,
for providing office space and housing at the Hurricane Katrina incident command post, were
well-supported and justifiable, and whether the contract was awarded fairly using full and open
competition.
Background
On August 29, 2005, Hurricane Katrina made landfall in southeast Louisiana, causing
catastrophic damage along the coastlines of Louisiana, Mississippi, and Alabama. The U.S.
Environmental Protection Agency (EPA) quickly deployed emergency response personnel.
These personnel, along with the Federal Emergency Management Agency and others, assessed
the damage and initiated cleanup operations.
Initially, EPA Region 6 established an incident command post in Baton Rouge, Louisiana. In
October 2005, EPA relocated the incident command post to Metairie, Louisiana. The Metairie
post was established on the grounds of the Louisiana Technical College and used part of one
building and some of the surrounding grounds. The command post included 78 trailers for
housing up to 130 EPA personnel.
EPA procured the 78 trailers via two sole source purchase orders. EPA leased 66 trailers from
one vendor at $325 per trailer per day ($125 per trailer per day, plus $200 per trailer per day for
related services). Another vendor provided the other 12 trailers at a cost to EPA of $350 per
trailer per day ($150 per trailer per day, plus $200 per trailer per day for related services). EPA
leased the office space, parking area, and the land that the trailers sat on from the Louisiana
Technical College under a separate sole source purchase order.
Both EPA's acquisition staff and the Office of Inspector General (OIG) had concerns with the
initial contracts awarded for office space and trailers (plus related services). These contracts,
awarded under catastrophic conditions in the aftermath of Hurricane Katrina, were allowed to
expire on April 11, 2006 (office space) and March 31, 2006 (trailers). In January 2006, the
Region 6 Superfund program office told us they intended to extend these contracts or award a
sole source follow-on contract. At that time, we convinced EPA officials to competitively award
new contracts. On March 17, 2006, EPA awarded Contract EP-R6-06-03 to obtain 35,000
square feet of office space in the same building at the Louisiana Technical College and
77 trailers for housing from the contractor that had provided the original 66 trailers. In the new
contract, the incumbent who had provided the original office space and the other incumbent who
had provided the majority of the trailers under the prior contract joined together in bidding on the
new contract. The initial estimated value of the contract was listed as $980,765.
Federal Acquisition Regulation, Part 6, describes Government policy on competition. It states
contracting officers shall promote and provide for full and open competition in soliciting offers
and awarding Government contracts. The EPA Contracts Management Manual, Chapter 11,
states that any statement of work (SOW) "must contain only those requirements necessary to
meet the Agency's needs and not be unduly restrictive of competition."
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Noteworthy Achievements
Contract EP-R6-06-03 contained several improvements over the previous housing contracts for
the Metairie incident command post. The new contract terms were more flexible, allowing for
various options regarding the numbers of trailers to be leased. It also resulted in a price
reduction for each trailer (including some services) to $95 per trailer per day compared to over
$300 under the prior contracts. We found that both EPA Office of Administration and Resources
Management personnel and Region 6 procurement staff worked together diligently to attempt to
refine the SOW and make sure that the requirements did not limit competition. These personnel
performed admirably and deserve much of the credit for reducing costs.
Scope and Methodology
We performed this audit from March 2006 to October 2006 in accordance with Government
Auditing Standards, issued by the Comptroller General of the United States. We visited EPA
Headquarters in Washington, DC, and the EPA Region 6 office in Dallas, Texas. We reviewed
our working papers related to Hurricane Katrina procurements, since these working papers
contained data related to the EPA Region 6 command post in Metairie, Louisiana, including
correspondence and procurement data. We had previously reviewed EPA procurements in
Metairie and noted concerns regarding the original procurement of trailers, as discussed in prior
Report No. 2006-P-00038, Existing Contracts Enabled EPA to Quickly Respond to Hurricane
Katrina, Future Improvement Opportunities Exist, issued September 27, 2006.
We interviewed EPA officials in the Office of Solid Waste and Emergency Response and Office
of Administration and Resources Management, as well as Region 6 contracting office and
facilities personnel involved in awarding Contract EP-R6-06-03. We also reviewed the contract
file and other correspondence related to award of the contract.
In planning and performing our audit, we reviewed management controls related to our
objectives. We examined the Agency's stewardship plan issued on September 26, 2005. This
plan outlined EPA's controls and monitoring procedures that would be used to review costs
incurred related to Hurricane Katrina. Additionally, we interviewed employees involved in
weekly meetings between EPA Headquarters and Region 6. These meetings discussed
procurement and program related issues, one of which was awarding Contract EP-R6-06-03.
New Housing Contract Reduced Costs but Limited Competition
Contract EP-R6-06-03 substantially reduced costs over the previous housing contracts to $95 per
trailer per day compared to over $300 under the prior contracts. However, the contract's SOW
could have been improved to ensure that it did not contain unnecessary and ambiguous
requirements that limited competition. Full and open competition is required by Federal
Acquisition Regulations and EPA Contracts Management Manual. The SOW requirements
made it difficult for hotels and apartment complexes to compete for EPA's business. EPA
largely based its requirements on what it already had as opposed to future requirements, making
it difficult for anyone but the incumbents to win the contract. Also, contract requirements were
often undocumented and unverifiable. As a result, EPA had limited assurance that it received the
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best value for its money because similar or better facilities may have been available at a lower
price. Details on the various concerns that limited competition follow.
Need for 6 Acres of Level Land Overstated
The SOW required a contractor to provide 6 acres of level land surrounded by a security
fence with a single point of entry. In a written response to the OIG dated May 18, 2006,
Region 6 explained that it needed 6 acres of land, even if a hotel/apartment had been
selected, to store equipment and park vehicles. Region 6 also indicated the land for the
trailers was not included in this acreage. The executed contract and EPA's contract files
did not contain any drawings, blueprints, measurements, or descriptions of the 6 acres of
land that EPA was to use.
When we requested additional information to identify the 6 acres, Region 6 personnel
could not initially provide it. Several weeks later, Region 6 provided us drawings
obtained from the Louisiana Technical College that identified the land provided under the
contract. Using these drawings, we calculated the acreage provided, excluding the land
on which the trailers sat, to be approximately 4.1 acres. During subsequent discussions,
Region 6 identified land that increased the acreage being used to over 6 acres. However,
one added section of land, the west side parking lot, was shared with the college and was
not for the exclusive use of the Federal government. Moreover, that parking lot had to be
accessed through a second entrance. As a result, the additional land provided by the
contractor did not meet the contract requirement for 6 acres, although this requirement
was used to disqualify other bidders that could not provide 6 acres.
Unneeded Kitchen Space Sought
In early January 2006, the kitchen at the Metairie facility discontinued meal service, and
EPA indicated it had no future plans to provide food service. EPA personnel said that
after they discontinued meals the kitchen area was only used to provide ice. However,
they wanted the new contract to provide kitchen space to keep their options open. The
SOW did not specify the size of the space and the number of people the space needed to
accommodate. Also, ice could be obtained from other sources. While food service was
initially needed at Metairie immediately after Hurricane Katrina struck because
restaurants and other eateries were closed, local conditions had improved substantially by
the time the new contract was awarded, and EPA personnel were receiving per diem to
eat at restaurants.
Unnecessary Small Refrigerator and Microwave Required
The SOW required each housing unit to include a small refrigerator and microwave.
While some hotels do provide such amenities, many do not. Requiring a small
refrigerator and microwave in each unit eliminated many hotels that could not provide
this amenity. Travel regulations do not require accommodations to provide a refrigerator
and microwave during Federal Government travel. As noted, the travelers were on per
diem.
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Multi-Story Office Space under One Roof Not Considered
The SOW required all 35,000 square feet of office space to be on one floor and under one
roof. EPA personnel told us they needed this because of the information technology
equipment being used. However, the contract file did not contain any data regarding the
different options, what additional technology equipment was needed, or cost. While
multiple story office space may have required additional technology expense, EPA
eliminated that option without knowing whether additional technology expense would
have been offset by a less expensive multiple story office space. Further, additional costs
and/or other layouts could have been considered as part of the best value determination.
Alternatives to 6-Foot Metal Fence Not Considered
The SOW required a 6-foot-high metal fence with a single point of access around the
office space, housing facility, and parking lot. EPA personnel said the fence was needed
for security purposes. However, other forms of security, such as more security guards,
were not provided as an option to bidders. In a written response, Region 6 personnel
contended that a no-fence option was rejected as being more costly and inefficient,
although they did not provide data to support their contention. The inflexibility of this
requirement likely eliminated or discouraged most hotels and apartment complexes from
bidding. A fence would have been costly for a hotel or apartment complex to erect, and
also would have likely interfered with the facility's normal operations and obligations.
Need for Private Rooms Not Clear
The SOW required "housing to accommodate a maximum of 132 personnel with one
person per private bedroom area." The term "private bedroom area" was not further
defined. Hotels that bid on the solicitation apparently interpreted this to mean that they
needed to provide 132 separate rooms, since that is what they bid. However, the
incumbent (and ultimate winner of the contract) only bid and provided 77 trailers. People
would have to share trailers to accommodate 132 people, with some people sleeping in a
bunk (see photo). We are not sure how non-incumbents would know that it was
permissible for people to share trailers, but the trailer contractor was allowed to interpret
the private bedroom requirement as allowing people to share trailers. OIG personnel
stayed in the trailers during November 2005, and the trailers' bedrooms provided two or
three beds in different parts of the trailer and one bath. Hotel rooms give each person a
private room and bath. Regional personnel held hotels to higher standards. The cost
analysis included in the contract file reflected a ratio of between 1.5 and 2 people per
trailer, while hotel rooms were calculated based on 1 person per room.
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At left, several trailers used at Metairie; at right, a trailer bunk area. (EPA OIG photos)
Conclusion
Many of the conditions noted occurred because the Region 6 Superfund program office and
Region 6 facilities group developed requirements based on the incumbent's facilities in Metairie
instead of what the future needs would be. They did not adequately document the requirements
with verifiable data. Despite the restrictive requirements, EPA's cost per trailer was reduced
from over $300 to $95 per trailer per day (for trailer costs and various services). We believe that
this reduction was due largely to the contract being competed. However, because of the
restrictive nature of the SOW requirements, EPA cannot be certain it achieved the lowest
possible price or received the best value. Other facilities could not compete for the contract
because they could not meet all the restrictive requirements. It appears that Region 6 personnel
created requirements based largely on the incident command facility that EPA already occupied.
Because of other concerns discussed in our prior report on Katrina procurements
(2006-P-00038), EPA planned to award two national blanket purchasing agreements to provide
emergency response technical support and logistical services (food, housing and facilities, etc.)
for responding to future disasters. This arrangement should prevent the reoccurrence of the
issues discussed in this report. Therefore, no recommendations are being made at this time. We
believe this report will assist the EPA contracting community in promoting competition in future
contract actions.
EPA Region 6 Comments
Region 6 maintains that the OIG reached a somewhat ambiguous conclusion that, "EPA cannot
be certain it achieved the lowest possible price or received the best value." The region
maintained its efforts yielded substantial savings in lodging costs. Region 6 noted that its efforts,
such as advertising in a Sources Sought Notice and issuing a request for quotes, resulted in
Region 6 receiving proposals from several hotels. Considering that one hotel offered lodging at
slightly over $2 million, the awardee's (trailers) price of $660,000 represents a savings of almost
$1.4 million. Moreover, this savings was only for the initial 3-month period. The savings over
the potential life of the contract would be more than $2.5 million. Region 6 also concluded that
the hotels' proposals were non-responsive because they did not address all requirements of the
SOW, such as the need for 6 acres of land. Region 6 stated that at no time, under any
circumstance, did a comparison between the trailers and hotels support a decision to structure the
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housing contract differently. Lastly, market research on Hotels.com by the Region's Contracting
Officer found no comparable pricing to that proposed by the awardee. Region 6 also stated that:
•	EPA had unlimited use of all of the property provided by the Louisiana Technical
College and used the entire 6 plus acres;
•	Kitchen facilities were needed for coffee breaks, lunch breaks, informal gatherings, and
ad hoc meetings to ensure the morale of employees;
•	Refrigerators and microwaves were essential for the comfort and convenience of its staff;
•	A multi-story building may have required installing a second Information Technology/
Communication system at increased cost;
•	Security fencing was required to provide for the security of personnel and equipment and
would be less costly than paying for security guards; and
•	Offerors could have proposed alternatives to the fencing requirement, but no offeror
raised fencing as a problem or offered alternatives.
As a result, Region 6 believes that the OIG should not conclude that the Region's actions limited
competition, only that competition may have been limited. Accordingly, Region 6 believes the
OIG should revise the report's title and references to limiting competition in the body of the
report.
The complete Region 6 response is included in Appendix A. However, contractor names have
been redacted by the OIG.
OIG Evaluation of Comments
Region 6 maintains it could not find housing at prices comparable to the awardee. While six
different hotels submitted bids (several hotels were combined into one bid), Region 6 eliminated
all six hotels before fully evaluating their proposals because they did not meet contract
requirements. Our evaluation found comparable pricing was available. For example, one hotel
proposed providing free office space if EPA maintained a certain level of occupancy and paid for
parking. When we compared this bid to the awardee's bid for a 6-month period, the cost of the
hotel was $20,000 less. Our comparison was based on using 77 trailers and 77 hotels rooms
because the average occupancy for the trailers during February 2006 was 74 people. Occupancy
in March 2006 was similar. We also note that the Region's $1.4 million estimate of savings for
lodging is based on the highest bid received.
We do agree that the recompeted contract saved substantial amounts over the previous contract.
The cost of trailers went from more than $300 per trailer/day to $95 per trailer/day. However,
we continue to believe that the contract terms limited competition because only one bidder, the
incumbent, was considered. Region 6 based its requirements largely on what it already had
instead of considering other options that may have saved additional funds and still met mission
needs. Region 6 recognizes in its response that the contract requirements could have been
improved. The Region suggested we revise our report to read, "the contract. . . could have been
improved to ensure that it did not contain unnecessary and ambiguous requirement that may
have limited competition." We cannot agree that competition may have been limited when
only one bidder (the incumbent) qualified for the contract and other bids were disqualified.
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More competition would have increased EPA assurance that it received the best value and
realized all of the savings possible.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
No recommendations
Claimed
Amount
Agreed To
Amount
1 0 = recommendation is open with agreed-to corrective actions pending;
C = recommendation is closed with all agreed-to actions completed;
U = recommendation is undecided with resolution efforts in progress
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Appendix A
Agency Response to Draft Report
March 9, 2007
MEMORANDUM
SUBJECT: EPA Region 6 Comments on the Draft OIG Report for Assignment No. 2005-
001721
FROM: Lynda R. Carroll
Assistant Regional Administrator for Management
EPA Region 6
TO:
Carl Jannetti
Director of Contract Audits
EPA Region 3
Attached hereto are EPA Region 6 Comments on the Draft OIG Report for Assignment
No. 2005-001721.
If you have any questions about this case, you may call me at (214) 665-2100 or
David Gillespie at (213) 665-7467.
Attachment
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March 8, 2007
EPA Region 6 Comments on the Draft OIG Report for Assignment No. 2005-001721
General Comment
Having undertaken a deep and comprehensive review of the Region 6 contract for office space
and housing, reviewed numerous documents and conducted many interviews, the report
ultimately reaches a somewhat ambiguous conclusion: "EPA cannot be certain it achieved the
lowest possible price or received the best value" (page 5, emphasis added).
Indeed, as we detail at length below, the efforts of our contracting officer yielded a very
substantial savings in lodging costs. With one hotel offering us lodging at $2,032,311 (and
another hotel also bidding high), the awardee (^^|, Inc.) priced its lodging at $658,350 — a
savings of $1,373,961 over^^^^|. Moreover, this $1.3 million difference was just for the
initial three month period. The potential savings over the potential life of the contract —
considering just the lodging in trailers over the hotel's proposed price — was $2,527,436. Lastly,
our contracting officer undertook market research on Hotels.com, and found no comparable
pricing to that proposed by	Inc.
Region 6 thus, asks that the Title of the report, and the "At a Glance" section, merely reflect the
uncertainty that the report itself explicitly concedes. We believe that the following language
does so, and suggest that it be used:
Title
The title of the report should be revised to say: New Housing Contract Reduced Costs and Did
Attract Competition. If, however, this language is not acceptable to the OIG, Region 6 would
accept the alternative title: New Contract for Hurricane Katrina Reduced Costs, but Less
Restrictive Requirements May Have Potentially Increased Competition.
"At a Glance" (and page 2)
Region 6 suggests that the "At a Glance" section, and page two, first sentence of the last
paragraph read: "However, the contract's statement of work could have been improved to ensure
that it did not contain unnecessary and ambiguous requirements that may have limited
competition" (emphasis added).
Competition (page 2)
The report should reflect the following information: A Sources Sought Notice was issued for the
Hurricane Katrina Command Post and Lodging requirement. The Statement of Work advertised
in the Sources Sought Notice was similar to that advertised in Fedbizopps. Four responses were
received from the Sources Sought Notice with questions received from other sources. No source
submitted concerns that the requirements were too limiting. With the responses and questions
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received from the Sources Sought Notice, it was firmly believed there would be competition for
the requirements.
The Request for Quote subsequently advertised in Fedbizopps was also sent to the New Orleans
Chamber of Commerce and the New Orleans Metropolitan Association of Realtors in an attempt
to try and reach as many sources as possible. No information was received during the
advertisement period stating the requirements were too limiting. Additionally, two hotels did
submit quotes, however, the hotel quotes did not address all requirements of the Statement of
Work and were therefore deemed non-responsive by the Contracting Officer. For informational
purposes, the hotel costs were used to support the fair and reasonable price determination of the
ultimate awardee as those proposed by the hotels were significantly higher than the per person
rate of the awardee.
Under the first housing contract, pricing for the 66 trailers was $3,915,600 or $21,450 per day,
which equated to $325.00 per trailer. This cost included ancillary services. This rate was
$224.17 less than the FEMA allowable per diem of $332.50. It should be noted the FEMA
allowable per diem represented 250% of the typical $133.00 per day allowance for lodging.
This FEMA allowable increase was directly attributed to the costs being charged for hotels,
motels and apartments during this time. Using 2 persons per trailer, the lodging rate equated to
$162.50 per person per day. Even using this rate, it was still $170.00 less than the FEMA
allowable per diem of $332.50. The point we wish to illustrate with this comparison is, although
EPA was limited in its ability to build flexibility into the initial emergency housing contract, it
did not deter EPA from ensuring the price paid per person represented the best value to the
Government.
As market conditions changed and flexibility could be built into the solicitation, the contracts
were re-competed. At the time of the competitive bidding for the second combined command
post and housing contract, FEMA per diem rate was still at the high rate of $299.25. Although
more availability of hotels, motels and apartments existed at this time, there was absolutely no
justification for moving personnel from housing trailers when the re-negotiated price per trailer
was reduced to $95.00 including ancillary services. With only 1 person assigned to a trailer at
this point in the response, this rate still equated to $204.25 less than the FEMA allowable per
diem of $299.25. It should be noted the FEMA allowable per diem represented 225% of the
typical $133.00 per day allowance for lodging. This FEMA allowable increase was directly
attributed to the costs being charged for hotels, motels and apartments during this time.
At no time, under any circumstance, would a comparison between trailers and hotels/motels
illustrate and/or support a decision other than the one that was made to structure the housing
contract as it was.
Offers were received from	Inc. (the awardee) and two other local area hotels —
and^^^|. The Katrina Contracting Officer reviewed the three proposals and excluded the
hotels from award consideration because their proposals failed to meet the
salient requirements cited in Part II, Section 1, Paragraph E, of the SOW ("Statement of Work
for Louisiana Unified Hurricane Response Incident Facility"). The requirement is: "The
contractor must provide, at a minimum, six acres of level land that must support a facility, with a
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minimum of 35,000 square feet of office space." The Contracting Officer sent a letter to each of
the offerors excluded from further award consideration notifying each offeror of its exclusion.
The Contracting Officer performed an evaluation of	Inc.'s proposal in accordance with
the solicitation provision FAR 52.212-2, "Commercial Items", and found that the price proposed
by	Inc. was fair and reasonable. For example, the pricing provided by
reflected a three-month price for lodging — totalling $2,032,311.60. The pricing proposed by
Inc. totalled $658,350.00 for housing. Thus, the Government realized a housing cost-
savings of $1,373,961.60 by awarding the contract to	Inc.
Moreover, this $1.3 million difference was just for the initial 3-month period. The potential
savings over the potential life of the contract — considering just the lodging in trailers over the
hotel's proposed price — was $2,527,436.10.	proposed price for housing was also higher
than the price proposed by	Inc.
Lastly, the Katrina Contracting Officer also performed a market research on Hotels.com for other
hotel prices and did not find any pricing comparable to the housing price proposed by Inc.
Need for 6 Acres of Land (page 3)
In order to be more accurate, the heading for this issue should be revised to the following: Need
for 6 Acres of Level Land Demonstrated
The OIG report uses the heading: Need for 6 Acres of Level Land Overstated
Further, the report should reflect the following information: EPA had unlimited use of all of the
property provided by the Louisiana Technical College and made use of the entire 6 plus acres.
Need for Kitchen Space (page 3)
In order to be more accurate, the heading for this issue should be revised to the following:
Kitchen Space Was Desirable to Support Staff and Morale
The OIG report uses the heading: Unneeded Kitchen Space Sought
Further, the report should reflect the following information: EPA staff assigned to the IMT had
developed a base of knowledge of operational efficiencies and needs to meet the Agency's
mission. These needs included providing for the welfare and morale of the staff. The Incident
Command requested that kitchen facilities be maintained for coffee breaks, lunch breaks,
informal gatherings as well as for ad hoc meetings.
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Need for Refrigerator (page 3)
In order to be more accurate, the heading for this issue should be revised to the following: Small
Refrigerator and Microwave Were Necessary Support Given Long Hours
The OIG report uses the heading: Unnecessary Small Refrigerator and Microwave Required
Further, the report should reflect the following information: EPA's Incident Commanders, in
consideration of the welfare and morale of the staff, requested that the housing accommodations
include facilities for storing food and for warming food. Restaurant facilities were limited and
staff worked long hours, most of the time arriving back at the facility long after restaurants
closed. These accommodations were needed and essential for the comfort and convenience of
the field staff.
Office Space (page 4)
In order to be more accurate, the heading for this issue should be revised to the following: Multi-
Story Office Space Not Considered to Save IT/Communication System Costs and to Avoid
an Unacceptable Delay to the Mission
The OIG report uses the heading: Multi-Story Office Space under One Roof Not Considered
Further, the report should reflect the following information: FEMA had already purchased one
IT/Communication System for the Incident Command Post and there was no indication that they
would reimburse the cost of installing a second system. Further, substantial IT/Communication
downtime would have occurred had it been necessary to install another system. Assuming that
the necessary vendors, equipment and supplies were readily available; a downtime of seven to 21
days was very probable. ICP operations could not have tolerated even a seven day period of
compromised or non existent IT/Communications resources.
Need for Fence (page 4)
In order to be more accurate, the heading for this issue should be revised to the following: Metal
Fence Sought by Region 6 as Important to Security
The OIG report uses the heading: Alternatives to 6-Foot Metal Fence Not Considered
Further, the report should reflect the following information: Security of staff and equipment was
of significant importance. Therefore, fencing was required in the Statement of Work to provide
for the security of personnel and equipment as it was believed to be the most cost effective
guarantee of security. The temporary fencing market rate was approximately $22.00 per foot and
was a one-time cost. Security Guard support services ranged from an hourly rate of
approximately $20.00 to $31.00. The number of security guards would have been dependent on
the size of the area to be secured. The number of guards required would have to be enough to
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visually inspect entrances, perimeters, and areas of lodging and the command post. The market
hourly rate of $20 per hour for 24 hours per day equated to $480 per day per security guard. A
minimum of two security guards was required, but more would be needed if there were no
fencing to secure vehicles and government property. The period of performance for the
Statement of Work was approximately a minimum of three months with options for an additional
three months. Therefore the costs of $480.00 per day for each security guard (with multiple
security guards needed) far exceeded the one-time cost of a fence. Additionally, it was possible
some offerors may already have had fencing and these additional costs may not have been
needed. Finally, the requirements listed in the Statement of Work could be addressed by an
offeror if the offeror chose to propose an alternative to the fencing requirement. Discussions
could have been held with offerors proposing an alternative, however, no offeror raised fencing
as a problem and no one offered alternatives.
Privacy (page 4)
In order to be more accurate, the heading for this issue should be revised to the following:
Region 6 Sought One Person Per "Private Bedroom Area" in Order to Ensure Privacy.
The OIG report uses the heading: Need for Private Rooms Not Clear
Further, the report should reflect the following information: If private rooms were needed, the
Statement of Work would have used the word "rooms." Instead, the statement of work used the
term "area" so that alternatives to one room per person were possible. Of the 77 trailers, 70 of
them had separate, private sleeping areas with a shared common area. The smaller trailers (7)
that did not have separate, private sleeping areas had only one person staying in them at a time.
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Appendix B
Distribution
Office of the Administrator
Regional Administrator, Region 6
Assistant Regional Administrator for Management, Region 6
Assistant Administrator for Administration and Resources Management
Acting Director, Office of Acquisition Management
Audit Followup Coordinator, Region 6
Audit Followup Coordinator, Office of Administration and Resources Management
Agency Followup Official (the CFO)
Agency Followup Coordinator
Office of General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Acting Inspector General
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