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Contracts Under Storm

Two years later, Hurricane Katrina continues to swirl in controversy. Under fire are the hoards of dollars of federal procurement contracts that were allocated for response and recovery efforts in the Gulf region. Many those contracts were awarded without having to go through a competitive bidding process, some have been tied to powerful lobbying groups or influential political connections in Washington and others under accusations of fraud and mismanagement.

According to a report recently released by Representative Henry Waxman, the problem of wasteful and fraudulent federal procurement contracting extends well beyond the case of Katrina. The dollars awarded without competitive bidding has more than tripled during the Bush Adminstration. What’s more alarming is that just last year, 187 contracts summing to approximately 1 trillion dollars were flagged by auditors as being fraudulent or mismanaged.

On the Other Hand

There is another side of federal procurement that some believe cannot be overlooked. Government contracting pumps money into local economies; in some cases, contributing quite significantly to the growth trajectory of a region. Federal procurement has been identified as a major impetus for economic growth in the National Capital Region and a driving force behind its emergent technology corridor, as one example.

Tracking Katrina Dollars

So, where did all of the Katrina money go and which communities benefited? To explore this question, all of the Katrina contracts in the Federal Procurement Data System were geocoded to the city level and mapped. There are 18,174 contracts in the database, totalling about 16.5 billion dollars. The first map below shows where the contracts were awarded by city of vendor. It highlights that many of the contracts landed in the hands of firms and organizations in the Gulf Coast region, although other parts of the country, particularly in cities along the east coast and in the south east, were also recipients of multiple awards.

Contracts Awarded for Katrina by Vendor City

What’s more illuminating perhaps, is where the actual dollars went; not just the number of contracts. The map below shows where Katrina awards are concentrated by dollars obligated. What’s clear is that when viewed in this light, the geographic distribution of money is quite localized and limited to a few metro areas around the country. Some of the communities that show up prominently included Nappanee, Indiana, Los Angeles, San Francisco, Detroit, and Dallas(Pan around the map to see these hotspots). This raises some probing questions concerning the regional economic impact of federal procurement and which communities are most favorable to recieve such awards — particularly, following a natural disaster like Katrina.

Dollars Obligated for Hurricane Katrina by City

And the largest contract in the database in terms of dollars obligated? The award went to Circle B Enterprises Inc., a company based in Ocilla, Georgia, to produce housing structures for the victims of Katrina. The firm is currently under investigation for fraud and operating without a license to build manufactured homes in certain states.

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