Inspector General reports do not usually get attention in Puerto Rico, but one released on September 25, 2020 ‑‑ three years after Hurricane María ‑‑ by the Department of Homeland Security (DHS) Office of Inspector General (OIG) made headlines on the island. The report details FEMA’s mismanagement of commodities distribution, finding that FEMA lost track of more than one-third of its shipments, worth an estimated $257 million. Almost all of the shipments consisted of meals and water. According to estimates from FEMA and the DHS IG, between 1,000 and 1,500 containers never even shipped to the island. Indeed, between September 2017 and April 2018, 63 percent of the water and 55 percent of the meals shipped to Puerto Rico either “remained in FEMA’s custody, were in contractor facilities, or had unknown destinations.” All of this happened at a time when Puerto Ricans were in dire need of potable water. Many of the meal boxes were actually full of junk food like cookies, candy, cereal bars, and other nutritionally deficient items. According to Puerto Rico officials, there was one meal for every 12 snack boxes distributed.
According to the report, FEMA’s gross mishandling was the result of inadequate oversight and multiple violations of the Federal Acquisition Regulation (FAR), which requires effective management practices to prevent fraud, waste, and abuse when awarding contracts. In 2016, FEMA awarded an advanced contract[1] to Crowley Maritime Corporation for commodity prepositioning in the US Virgin Islands. After Hurricane María, FEMA verbally directed Crowley to perform services that exceeded the scope of that contract, modified its terms without authorization, and did not ensure prices were reasonable. Consequently, Crowley performed services with no contract in place and then submitted an invoice with a cost overrun of $155 million, $45 million of which were questioned by FEMA. In addition to the FAR violations and policy contraventions, FEMA also “had potential Anti-Deficiency Act violations.”[2]
On top of these failures in contracting, OIG found that FEMA did not follow established policies and procedures to keep track of the shipments and ensure they got to the people in need. FEMA did not attach GPS transponders to trailers or containers, “one of the most critical control components in the commodity distribution process.” In fact, FEMA only had data for 3.4 percent of the commodity shipments within Puerto Rico. In addition, FEMA allowed Crowley to break inventory seals with unique numbers and create cargo manifests (shipping documents) that lacked any useful details of the shipments and vaguely described them as “relief supplies.” This precluded FEMA from verifying the arrival of the shipments. Making matters worse, FEMA did not require Crowley to return proof of delivery for commodities delivered throughout Puerto Rico. The IG found that FEMA was not able to provide supporting documentation for 96 percent of the sample of shipments reviewed.
Concurrent hurricanes in 2017 and the unprecedented destruction of Hurricane María present unique challenges. Nevertheless, they do not excuse FEMA’s drastic failure to follow regulations or comply with policies designed to ensure proper delivery of essential aid to American citizens. According to the report, the agency needs to improve asset tracking, management reporting, and data gathering; establish robust transportation logistics contracts, develop internal controls over contract administration to ensure they comply with the FAR and internal procedures; adequately review invoices and verify costs; and investigate transportation contracts for potential Anti-Deficiency Act violations. One question still lingers. What happened to all the water and meals Puerto Ricans so desperately needed, and which were lost by FEMA? For many on the island, this report brought back the images of the millions of bottles of water that were found untouched, expired, and useless a year after the hurricane. To ensure a better response the next time ‑‑ and climate change means there will be a next time ‑‑ FEMA must improve compliance with existing regulations, procedures and best practices. Who knows how many lives could have been saved if the proper aid had arrived in time?
[1] The Post-Katrina Emergency Management Reform Act 2006 requires FEMA to establish advance contracts (prior to an event) to quickly provide life-sustaining goods and services in the immediate aftermath of a disaster. Post-disaster contracts may be awarded, following certain requirements, if advance contracts reach their capacity.
[2] The Anti-Deficiency Act prohibits the US government from making or authorizing an expenditure or obligation that exceeds an amount available in an appropriation or fund for that expenditure or obligation; as well as involving the government in a contract or obligation for the payment of money before an appropriation is made. 31 U.S.C. § 1341 (a)(1)(A) & (B)