Douglas County-based CH2M Hill could collect up to $530 million for Hurricane Katrina disaster work that was originally supposed to cost $100 million under a contract that has come under scrutiny by federal auditors.
The contract is among four no-bid contracts granted by the Federal Emergency Management Agency to house Katrina evacuees last fall that have ballooned in value from $400 million to about $3.4 billion.
Auditors are looking into the way all the contracts were awarded, their documentation and any cost overruns, said Marta Metelko, a spokeswoman for the Department of Homeland Security’s Inspector General Richard L. Skinner.
None of the companies is accused of wrongdoing.
“A lot of times we do these because we know we are going to get a lot of questions about them, and when (contracts) are this large they are more open for abuse,” she said.
Auditors have yet to contact CH2M Hill, company spokesman John Corsi said Wednesday.
“We have been operating under the highest accounting standards in a very transparent manner. If they have questions, we are happy to work with them,” he said.
FEMA has paid CH2M Hill $309.8 million of the $433.6 million the company is so far owed for the work. Much of that money has gone to small, local contractors, Corsi said.
FEMA granted the contracts for housing Katrina evacuees to engineering and construction giant CH2M Hill, Bechtel Corp., Fluor Corp. and the Shaw Group Inc. without opening them to bid. The lack of bidding has drawn criticism from members of Congress and others since the contracts were announced shortly after the hurricane struck Aug. 29.
FEMA has defended the decision, saying the agency had to hire companies large and experienced enough to get right to work in the emergency.
Skinner’s office and congressional auditors have criticized the contracts for poor controls and wasteful spending.
Each contract was originally worth up to $100 million, said FEMA spokesman James McIntyre. That limit was later raised to $500 million.
“They gave us a $100 million estimate based on the work, but this was such a catastrophic disaster that as we continued with the process we found more work to be done,” McIntyre said.
FEMA expects to raise the contract ceiling for CH2M Hill to $530 million and already has raised ceilings on the other companies’ contracts.
“Our question is, Why do they keep raising the ceiling on these contingency contracts rather than open up bidding to all government contractors in competition that will result in more value to the taxpayer?” said Scott Amey, general counsel for the Project on Government Oversight, a watchdog group.
The agency did rebid some parts of the work and has awarded it to other companies, said McIntyre. But thousands of families along the Gulf Coast are still without homes, and opening a bidding process for all the work would take too long.
“While we are waiting for other companies to come up to speed, these companies could have these contracts done,” McIntyre said.
FEMA also has awarded new disaster-relief contracts worth up to $250 million each to CH2M Hill, Bechtel, Fluor, Shaw and two other companies, the agency said Wednesday. The two-year contracts were awarded after a competitive bidding process.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
