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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2006-P-00038
September 27, 2006
Why We Did This Review
We sought to determine
whether the U.S.
Environmental Protection
Agency (EPA), in its response
efforts related to Hurricane
Katrina, adequately designed
and effectively implemented
controls for expenditures,
paid a reasonable price for
products and services
obtained, and adequately
safeguarded purchased assets.
Background
On August 29, 2005,
Hurricane Katrina devastated
parts of Louisiana,
Mississippi, and Alabama.
EPA had existing emergency
response contracts in place at
the time Hurricane Katrina hit,
and used these contracts
extensively to support its
response efforts. The
response efforts involved
sending numerous personnel
to the area and purchasing
equipment and services to
support them.
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/2006/
20060927-2006-P-00038.pdf
Catalyst for Improving the Environment
Existing Contracts Enabled EPA to Quickly Respond to
Hurricane Katrina; Future Improvement Opportunities Exist
What We Found
EPA's existing contracts awarded for responding to natural disasters worked as
intended and allowed EPA to quickly respond to Hurricane Katrina. While
opportunities for future improvement exist, EPA's ability to operate under
catastrophic conditions was commendable. Almost immediately after Katrina,
EPA officials were in affected areas, assessing damage and formulating action
plans. As a result, EPA quickly began protecting human health and the
environment. Further, existing contracts limited cost risks, because EPA did not
have to quickly award a large number of noncompetitive sole source contracts.
EPA still needed to award some noncompetitive contracts valued at about
$9 million during its Katrina response efforts, and we noted areas where EPA can
make improvements for future disasters. Contracts need to be flexible, provide
sufficient detail on what is being obtained, avoid unnecessarily long periods of
performance, adequately support price reasonableness determinations, and ensure
procurements are used to address the disaster.
EPA needed to improve its review of contractor invoices to help prevent payment
of duplicate, unallowable, and/or unreasonable costs. Our review of a limited
number of invoices found that contractors overcharged EPA $18,298 in duplicate
payments, $54,734 by using inappropriate indirect cost and labor rates, and
$110,843 in inappropriate boat rental costs. During the course of our audit, EPA
initiated actions to have contractors repay those amounts. At our urging, EPA
placed greater emphasis on reviewing invoices, and its prompt actions eliminated
our concerns in this area.
EPA needs to improve plans for property management during catastrophic
emergencies. Almost 4 months after Katrina, EPA had in most cases not properly
placed decals on equipment and/or recorded equipment in its property system.
While this understandably happened because of the emergency situation, EPA
should attempt to improve controls for handling future disasters.
What We Recommend
Recognizing that EPA has begun a process to improve its response efforts for
future catastrophic events based on its Katrina experience, we made various
recommendations to help it prepare for such future events. EPA agreed to take
sufficient actions on all recommendations.

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