WASHINGTON – United States Senator Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, held a hearing to examine the federal government’s procurement process following disasters. Testifying before the Committee on the first panel included officials from the Federal Emergency Management Agency (FEMA), the U.S. Army Corps of Engineers, and U.S. Government Accountability Office (GAO), and on the second panel, small business community members from the Gulf Coast and Joplin, Missouri.
“Rebuilding after disasters moves swiftly and efficiently when the workers behind the effort have a stake in its progress and can easily navigate the procurement process,” Senator Landrieu said. “Today, we heard the good, the bad, and the ugly. I was pleased to hear we are making strides with some of the improvements we made after Hurricanes Katrina and Rita, but, I am disappointed to hear about some contractors not receiving pay for an honest day’s work. Small businesses can’t afford late payments, and most certainly can’t afford to never receive a payment. It is a tragedy.
“After today’s hearing, I am going to do my part to improve the vetting process for contractors. I will look into what legal actions can be taken against prime contractors that refuse to pay their subcontractors. And, I will continue my pledge to find ways to utilize one of our nation’s top resources post disaster, America’s small businesses.”
Following each disaster, Federal agencies carry out emergency response activities through contracts with private businesses, including debris removal, reconstruction, and the provision of supplies. According to GAO, who testified before the committee today, Gulf Coast small businesses directly received almost $2.7 billion or around 13% of the total $20.5 billion in total Federal contracts awarded for Katrina/Rita-related recovery projects between 2005 and 2009. Post-Joplin tornado, the Army Corps of Engineers has awarded approximately 45% of total dollars in support of recovery directly to small businesses of which 70% are small businesses from the local geographic area according to their testimony.
In addition, the committee heard disturbing testimony from Dale Rentrop, the Berwick, Louisiana small business owner of Tiger Tugz, LLC. Rentrop testified that his company is still owed nearly $1.5 million from their Prime contractor and has an outstanding debt of around $650,000 owed to 13 companies. In the hearing, Senator Landrieu pledged to work with her colleagues to help this business as well as other businesses facing similar problems with the disaster contracting process.
To see a copy of Senator Landrieu’s opening statement, click here.
To see a copy of the complete list of witnesses, as well as copies of their testimonies, click here.