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Katrina Relief Bill: Contractors at the Pig Trough

September 8, 2005 


Included in the House bill (click here to view the bill) that has just passed, is a provision that encourages federal agencies to waive taxpayer protections on Katrina-related contracting.

"The insertion of the provision is the result of callous contractors and their allies in Congress taking advantage of the country's desperate desire to help the survivors of Katrina. This provision opens up the possibility for much more waste, fraud and abuse and offers no improvement in the government's ability to quickly assist the people who need it," said Danielle Brian, Executive Director of the POGO.

POGO supports bi-partisan efforts in the Senate to strip this provision from the Katrina relief bill.

According to the bill: "This proposal would allow all Federal agencies to use the emergency procurement authorities specified in the Office of Federal Procurement Policy Act for Hurricane Katrina relief efforts and would increase the micro-purchase threshold to $250,000."

EMERGENCY PROCUREMENT AUTHORITIES - The government already has the flexibility to enter into contracts under an expedited process. Requirements for when this is used are outlined in federal contracting regulations.

MICROPURCHASE THRESHOLD - The micro-purchase threshold, where purchase cards (i.e. government credit cards) are the usual method for making such purchases, is generally $2,500.  That amount can be raised to $15,000 or $25,000 in certain emergency circumstances pursuant to FAR 13.201. The House bill increases the limit to $250,000. The result of that increase is that competition requirements are waived for any purchases up to that limit. Government purchase cards have been used to buy escort services (click here to learn more) as well as a much-publicized breast implant operation for a Hooters waitress. The Congress has held numerous hearings documenting extensive government purchase card abuses.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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