3). Local businesses, or businesses of all sizes located in the states primarily  affected by Hurricane Katrina—Alabama, Louisiana, and Mississippi— received 18 percent, or $1.9 billion, of the $11 billion in contracting dollars  that the four agencies directly awarded between August 1, 2005, and June  30, 2006. Small businesses in these states received 66 percent of the $1.9 billion in  Katrina-related contracting dollars awarded to local businesses by the four  agencies we reviewed. Also, key information about small business  subcontracting plans was not consistently available in official  procurement data systems even though federal contracting rules state that  the information should be documented there. Together,  these 10 contractors accounted for 60 percent of these agencies’ prime  contracting dollars. First, the official  procurement data system, primarily for DHS and GSA, had no information  at all on whether or not they required subcontracting plans for 70 percent  or more of their contracting funds. DBEs Received About 10 Percent of the FAA Dollars Awarded for Katrina- Related Contracts

DBEs were awarded about $2.4 million of the nearly $24 million in Katrina- related contracts that airports in Alabama, Louisiana, and Mississippi  awarded with FAA funds for Katrina-related contracts during the period of  our analysis (table 7). Recommendations for Executive Action

To ensure compliance with federal contracting regulations and to more  transparently disclose the extent to which subcontracting opportunities  are available to small businesses, we recommend that the Secretaries of  Homeland Security and Defense and the Administrator of General Services  take the following two actions:  Issue guidance to the appropriate procurement offices and personnel  reinforcing (1) the reasons for subcontracting plan requirements and the  importance of complying with them; (2) the necessity for documenting in  publicly available sources the agencies’ decisions, particularly in instances  when they determine not to require subcontracting plans; and (3) where  subcontracting plans are in place, the need to adhere to the requirement  for all prime contractors to report on their small business subcontracting  accomplishments. This analysis showed that the Department of Homeland  Security (DHS), DOD, and the U.S. Army Corps of Engineers (Corps) had  received the largest supplemental appropriations and that these three  agencies plus the General Services Administration (GSA) had awarded 86  percent of all funds for Katrina-related contracts as of May 2006. These 4  contractors were all large, and received a total of eight contracts. To obtain information on the extent to which Disadvantaged Business  Enterprises (DBEs) received federal funds for transportation projects that  relate to reconstruction or recovery from Hurricane Katrina, we analyzed  data on contracts awarded between August 1, 2005, and June 30, 2006,  with Department of Transportation funds in the states of Alabama,  Louisiana, and Mississippi.
Why GAO Did This Study

In response to Hurricane Katrina, the Departments of Homeland Security (DHS) and Defense (DOD), the General Services Administration (GSA), and the U.S. Army Corps of Engineers (Corps) were responsible for 94 percent of the federal funds awarded for relief efforts via contracting as of May 2006. This report, which GAO conducted under the Comptroller General's Authority, describes (1) the amounts that small businesses received from prime contracts with these agencies, (2) the extent of subcontracting, (3) and the extent to which Disadvantaged Business Enterprises (DBEs) received Department of Transportation funds for Katrina-related projects. In conducting this study, GAO analyzed agency contract data, reviewed federal acquisition regulations, and interviewed agency procurement officials.

What GAO Found

Small businesses received a total of 28 percent of the $11 billion in contracting dollars that DHS, GSA, DOD, and the Corps directly awarded in response to Hurricane Katrina. Local businesses of all sizes in Alabama, Louisiana, and Mississippi received 18 percent, or $1.9 billion of these funds. Small businesses received 66 percent of the $1.9 billion awarded in these states. Required information on small business subcontracting is not consistently available in official procurement data systems for the four agencies. The systems had no information on whether DHS or GSA required subcontracting plans for 70 percent or more of their contracting funds. In addition, when data showed agencies determined that the plans were not required, the four agencies often did not document a reason for their determinations, even though federal rules require such documentation when prime contracts meet criteria for having these plans. Incomplete information about subcontracting limits determining the extent to which agencies complied with contracting rules and gave small businesses maximum opportunities to win subcontracts. DBEs were awarded about 4 percent, or about $53 million, of the almost $1.3 billion the Department of Transportation's Federal Highway Administration funded for Katrina-related contracts in Alabama, Louisiana, and Mississippi between August 1, 2005, and June 30, 2006. These contracts were awarded by the three state departments of transportation. DBEs also received about 10 percent of $24 million that airports in the three states awarded using Federal Aviation Administration funds for Katrina-related contracts.