Good Afternoon. I would like to thank the Subcommittee’s Chairman, Senator Thune, for inviting me to this hearing and for his leadership on this very important issue. I would also like to thank all of the witnesses for agreeing to testify before the Subcommittee, especially those from Louisiana. I also look forward to hearing from Major General Riley from the Army Corps of Engineers, and I hope that he is able to assure me that the Corps is making a concerted effort to give preference to local contractors.
In the past few months, the State of Louisiana has suffered record devastation from two major hurricanes. Just over two months have passed since Hurricane Katrina left an entire major metropolitan area evacuated, flooded and completely closed for weeks. Only a few weeks later, Louisiana was struck by another major storm, Hurricane Rita.
Contractors play a vital role in relief efforts following a natural disaster. The Federal Government relies on contractors to quickly address dangerous conditions that threaten life and property, to restore basic public services, and to protect public safety and health. The Army Corps of Engineers and FEMA have relied on contractors to pump water out of New Orleans and repair the breached levees, many of which began work without a contract. Without the help of the private contractors, the City of New Orleans would still be under water.
However, many contractors need assurances that if they aid in disaster recovery efforts they will not be subject to the same class actions filed against those contractors who helped in the rescue, recovery, and clean up at the World Trade Center following the September 11, 2001 terrorist attacks. The Gulf Coast region desperately needs contractors to restore the 90,000 square miles of damaged by Hurricane Katrina and Hurricane Rita. The Federal Government simply lacks the resources and the expertise needed to clean up and restore the Gulf Coast region in an efficient and effective manner.
Shortly after Hurricane Katrina made landfall in Louisiana, Senator Thune introduced S. 1761, The Gulf Coast Recovery Act, to limit the liability that private contractors face as they aid in rescue, recovery, clean up, and reconstruction efforts in the devastated regions. I am proud to say that I am an original co-sponsor of this very important legislation. The Gulf Coast Recovery Act limits the tort liability of those contractors who the Army Corps of Engineers deems necessary for recovery efforts associated with Hurricane Katrina and other major disasters. It does not apply to new construction. So, for example, a contractor charged with plugging the breaches in the levees in New Orleans would be covered by the bill, whereas, a contractor charged with building the levees to a Category-5 level of protection would not.
The Gulf Coast Recovery Act does not limit any public agency’s authority to take whatever steps it deems necessary to ensure full compliance with its rules or regulations, or to punish noncompliance. Thus, contrary to the assertions made by many of the bill’s opponents, the Gulf Coast Recovery Act does not relieve contractors from their legal obligation to comply with environmental laws. If this bill is enacted, the EPA and its state and local counterparts will retain their full enforcement powers to bring an action against a contractor for noncompliance with rules and regulations.
My interest in government contracting post-Hurricane Katrina and Hurricane Rita also goes to how the contracts are awarded. First, I am concerned with the award of no-bid mega contracts. While I understand that emergency situations sometimes call for faster action than the Federal Acquisition Regulation’s (FAR) full and open competition process allows, I believe that it is in the best interests of the parties involved, including the businesses and the people of the Gulf Coast States, to use full and open competition for all but a very limited number of contracts. Currently, the Federal Acquisition Regulation requires full and open competition except in specific instances. However, I believe that these exceptions should be narrowed only for those activities related to relief and recovery from Hurricane Katrina and Hurricane Rita. In an effort to address this concern, I introduced “The Hurricane Katrina and Hurricane Rita Fairness in Contracting Act”, which limits the number of exceptions to the Federal Acquisition Regulation’s full and open competition requirement and it requires advance notice to Congress of any non-competitive contracts.
Second, I am concerned that companies from Louisiana and other Gulf Coast States are not being awarded recovery and reconstruction contracts. Although the Stafford Act (42 U.S.C. §5150) contains local preference language, it only requires that agencies give preference to local contractors “to the extent feasible and practicable”. I do not believe that the Stafford Act’s language is strong enough. Therefore, I am working with the Senate Small Business Committee to draft stronger local preference language. Since the need for emergency action has for the most part subsided, I encourage Federal agencies to make more of an effort to hire local contractors.
The Gulf Coast region cannot achieve full economic recovery unless the businesses located within that region are given the chance to play a leading role in the recovery and reconstruction effort, and Senator Thune’s common sense legislation is an important part of that process.
Once again, I would like to thank Chairman Thune for inviting me to speak at this hearing and for taking a leading role on this very important issue. I look forward to hearing what each of the witnesses has to say.