WASHINGTON - The government overpaid by 20 percent on a $39.5 million, no-bid Hurricane Katrina contract for portable classrooms because the Army Corps of Engineers passed up chances to negotiate a lower price, a federal audit says.
The draft Government Accountability Office report on the contract with Akima Site Operations LLC, a subsidiary of an Alaskan Native-owned firm, said the government wasted at least $7.8 million. It's the latest in a series of audits detailing waste of hundreds of millions of taxpayer dollars in the hurricane recovery effort.
It comes as several congressional panels plan hearings to examine fraud and waste in federal contracting, including the Katrina effort. On Friday, the Senate Homeland Security Committee is to examine FEMA housing waste in Hope, Ark., where auditors determined that 10,777 manufactured homes costing $301.7 million were sitting unused in runways and open fields.
"The Corps accepted Akima's proposed price of $39.5 million although they had information that the cost for the classrooms was significantly less than what Akima was charging," the report stated. "We believe the Corps could have, but failed to, negotiate a lower price."
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