FEMA To Be Investigated for Botched Contract with Questionable Supplier

Under a new law, FEMA must explain how it awarded emergency contracts last year to a company new to government contracts and with no experience with the products it was supposed to deliver.

A hurricane-damaged house in Loiza, Puerto Rico. Note the blue emergency tarps which FEMA supplied. Photo taken in March 2018. Photo: Lorie Shaull, CC

In 2017, Hurricane Maria virtually destroyed the island of Puerto Rico. FEMA, which it is now understood was understaffed and poorly organized at the time, had to respond fast to an emergency of epic proportions.

It failed.

The island was left in a state of disrepair, with no power to many locations, polluted or completely non-functional water supplies, telecommunications down, damaged roadways, and a lack of food for months.

One of its failures was a contract award for emergency tarps to cover housing, to a company called Bronze Star LLC. In this kind of crisis, and in consideration that these sorts of disasters happen every year in the U.S., one might assume FEMA would reach out to one of its existing, proven “go to” suppliers to help out.

They didn’t.

Bronze Star LLC, a St. Cloud, Florida company, was hired by FEMA immediately after Hurricane Maria had passed. They were to deliver hundreds of thousands of tarps and protective plastic sheeting to cover critically damaged homes. Prior to this order, the company had never had a single government contract before. It also had not experience – for anyone else – for the delivery of tarps and plastic sheets. Yet they won the contract anyway.

The company failed to deliver the first shipments on time, and instead announced they would be delivering four weeks late. They blamed a subcontractor of their based in Houston. That subcontractor blamed Hurricane Harvey, which hit the Houston area only a short time earlier. The company then reportedly then recommended a tarp materials subcontract to a Chinese supplier, which FEMA refused.

FEMA cancelled the contract with Bronze Star for not meeting its first delivery commitment.

One might imagine the next step was for FEMA to re-issue the contract for tarps and plastic to the next best qualified supplier who had bid for the order. While that makes sense to probably almost everyone, FEMA did not do that either.

Instead, they went back to Bronze Star again, reopening the order even though they had messed up the first delivery and somehow could not find any other raw materials subcontractor in the U.S. to help them out, and despite the company still having no government contract experience or experience delivering tarps and plastic sheeting. Eventually, Bronze Star delivered 500,000 tarps and 60,000 rolls of plastic sheeting to FEMA.

Bronze Star’s total contract business with FEMA in late 2017 was over $30 million.

Under new legislation first proposed by Representative Sean Maloney, D-New York, the Federal Emergency Management Agency is going to have to explain itself on all things related to Bronze Star. The issue first came up formally during a congressional oversight hearing in April about what happened in FEMA’s fatal and irresponsible mismanagement of the post-Maria Puerto Rico crisis. It became clear during those sessions that FEMA had not properly investigated the professional qualifications of several prospective suppliers, one of which was Bronze Star.

FEMA responded at the time that it had received approximately 6 competitive bids for the tarp and plastic sheeting contracts which were eventually awarded to Bronze Star. When asked to supply the competitive bid information to the House so it could understand why such an odd choice was made for the ultimate order, FEMA refused. It has to date not supplied even the names of the bidders, let alone the details of the competitive bids. One could logically assume there was something FEMA did not want anyone to see in the competitive bids.

The House bill, now passed, is now forcing FEMA’s hands on the matter. It will be required to report back to the House with full back-up information as to how it eventually chose Bronze Star LLC for the eventual contract. The Inspector General at the Department of Homeland Security is also going to begin to audit FEMA’s ‘books’ on the matter in 30 days or less.

The law which covers this was included in the reauthorization bill for the Federal Aviation Administration. It was signed into law on October 5.