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America's Debate > Archive > Policy Debate Archive > [A] Domestic Policy
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Eeyore
In this article the contract between FEMA and Carnival Cruise lines is roundly criticized.
QUOTE
The hasty appeal yielded one of the most controversial contracts of the Hurricane Katrina relief operation, a $236 million agreement with Carnival Cruise Lines for three ships that now bob more than half empty in the Mississippi River and Mobile Bay. The six-month contract -- staunchly defended by Carnival but castigated by politicians from both parties -- has come to exemplify the cost of haste that followed Katrina's strike and FEMA's lack of preparation.

QUOTE
To critics, the price is exorbitant. If the ships were at capacity, with 7,116 evacuees, for six months, the price per evacuee would total $1,275 a week, according to calculations by aides to Sen. Tom Coburn (R-Okla.). A seven-day western Caribbean cruise out of Galveston can be had for $599 a person -- and that would include entertainment and the cost of actually making the ship move.


and a graphic

Questions for debate:

Is the criticism of this contract unjustified nitpicking of a reasonably contracted contract?

Or is it an example of poor FEMA planning and absurd government waste?

Or is it something more in between?
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Julian
Is the criticism of this contract unjustified nitpicking of a reasonably contracted contract?
I think criticism is justified on this (and many other) goverment contracts with the private sector. (Especially where, as in the UK, many such exempted from Freedom of Information laws - i.e. kept secret - on the grounds of "commercial confidentiality".)

It appears that, in the urgency of the situation, FEMA didn't question Carnival's pricing. The assumption appears to have been that they would have been fully booked, at advertised brochure prices (i.e. no last minutre discounts to fill berths) for the whole of the requisition period, which seems at the very least to be questionable.

Or is it an example of poor FEMA planning and absurd government waste?
Yes to both.

Clearly FEMA overestimated wildly how many berths they would need on these ships - adequate planning would have realised that nobody who wanted to rebuild their life would want to be stuck on a ship in the Gulf for six months, and revised down the estimated number of evacuees and how long they would need to be housed afloat.

About the biggest part of planning any big project is the anticipation of risk, and designing ways to avoid or mitigate it. Paying the going rate to live with the results of it is the last resort, not the first.

But then, that's what happens when you contract out the planning for this exact risk to the lowest bidder. (The reason the pre-planning for a disaster such as Katrina was so rubbish is because that's exactly what FEMA did - as I posted here, to little response crying.gif .)

Or is it something more in between?
Poor awareness of government's emergency powers, or their resources, perhaps?

I would have thought that, in a declared emergency such as this, the government would have the power to requisition whatever resources they felt necessary, and make necessary reparations afterwards (at the minimum level that is still fair recompense - e.g. at $599 per passenger). Rather than having to go through ANY king of bid process, which would necessarily delay the response to the emergency. (Though maybe it's me that has the poor awareness.)

Also, I find it hard to believe that the Navy didn't have at least some of the capacity to accomodate evacuees. Surely there are hospital ships that would have been at least partway appropriate, with no stockholder to enrich along the way? Or are they all contracted out too?
loreng59
Is the criticism of this contract unjustified nitpicking of a reasonably contracted contract?
Far from it. This is just one more example of the level of top FEMA management. The entire situation is one of uncontrolled spending spree by the current adminstration. Congress allotted somewhere upwards of 60,000 dollars per person evacuated from Katrina.

Or is it an example of poor FEMA planning and absurd government waste?
Clearly FEMA had no plans and are scrambling to show the American people that they are somehow useful, no matter the cost to the taxpayers.

Julian the two US Navy hospital ships are laid up in Baltimore and will take several weeks to be made operational. They also can only handle a total of 2,000 people. Not a realistic solution when it would be easier to set up field hospitals, and tent cities.

I think one solution is that we have a very large percentage of our active military in Iraq and most of the bases in the South have a large number of barracks that are currently empty. Each of those bases have the infrastructure to handle large numbers of people including schools, hospitals, and housing. So why are those not being used more?
Amlord
Is the criticism of this contract unjustified nitpicking of a reasonably contracted contract? Or is it an example of poor FEMA planning and absurd government waste? Or is it something more in between?

I think what we have here is the results of the high-pitch shrill call of "FEMA isn't doing enough".

FEMA felt it needed to react and show people that it was doing something, not because it was doing nothing, but because the perception was that it wasn't. So, they did something and of course are roundly criticized for it.

Haste leads to bad decisions being made. Think about it: who gets the better deal, the guy who goes to buy a car, compares various models and dealers and then makes a choice or the guy who goes into the dealer and NEEDS a car today or simply WANTS a car today? Obviously the guy who takes his time will get a better deal.

From the article:
QUOTE
On Sept. 1, as tens of thousands of desperate Louisianans packed the New Orleans Superdome and convention center, the Federal Emergency Management Agency pleaded with the U.S. Military Sealift Command: The government needed 10,000 berths on full-service cruise ships, FEMA said, and it needed the deal done by noon the next day.

The hasty appeal yielded one of the most controversial contracts of the Hurricane Katrina relief operation, a $236 million agreement with Carnival Cruise Lines for three ships that now bob more than half empty in the Mississippi River and Mobile Bay.


FEMA had no chance to "comparison shop" in this situation. There was story after story in the media of how these evacuees had no where to go. That there was no planning for an evacuation of this size and duration. In this case, FEMA overplanned. Although these ships were substantially full immediately following Katrina (according to the article), most people have moved on from there, preferring to go where there are jobs rather than sit around. The six-month contract was not needed, but the doom-and-gloom predictions during the New Orleans crisis surely contributed to making sure these rooms were available for the long-term.

So, the nitpicking about the wastefulness of this deal is justified, but there is an explanation other than incompetence or cronyism.
Julian
loreng59
Thanks for the clarification. It certainly seems as if there were cheaper options available that were not used.

Amlord
QUOTE(Amlord @ Oct 5 2005, 01:56 PM)
FEMA had no chance to "comparison shop" in this situation.  There was story after story in the media of how these evacuees had no where to go.  That there was no planning for an evacuation of this size and duration.  In this case, FEMA overplanned.  Although these ships were substantially full immediately following Katrina (according to the article), most people have moved on from there, preferring to go where there are jobs rather than sit around.  The six-month contract was not needed, but the doom-and-gloom predictions during the New Orleans crisis surely contributed to making sure these rooms were available for the long-term.

(Emphasis mine)

FEMA over-planned? They over-planned??

blink.gif blink.gif

They certainly over-reacted, probably to avoid creating perceptions that would further antagonise the media and the public - I agree with every syllable of your first answer - but I think you're being excessively charitable when you say they overplanned.

Planning implies some kind of forward thinking. In this context, planning for the response to any hurricane damage would have taken place before the storm hit, not in weeks afterwards, and not just to make FEMA look productive. That isn't a product of planning, that's a product of failing to do so.

In fact, FEMA themselves didn't plan at all. As I showed in my linked post - and as you blithely accepted at the time; "FEMA contracted IEM to provide training and planning. I think some people see "privatized" and think "AHA!!". I don't. The fact that the contract ended at some point does not surprise me. It would be interesting to see what was proposed in December '04. Otherwise, I don't see anything controversial in this." FEMA contracted out the hurricane preparedness planning to IEM at great (public) expense.

QUOTE
So, the nitpicking about the wastefulness of this deal is justified, but there is an explanation other than incompetence or cronyism.

You're quite right. The explanation is incompetence and cronyism, with a healthy injection of unwillingness to veer from the fashionable but hit-and-miss dogma that private provision is invariably better than public.

So I wonder did IEM come up with the brilliant idea of using Carnival Cruises? If so, maybe they should pay for it. Or was it just a last minute reflex response by an agency that had been made to look bad by relying on someone else to do their job for them?
quarkhead
Is the criticism of this contract unjustified nitpicking of a reasonably contracted contract?

Or is it an example of poor FEMA planning and absurd government waste?

Or is it something more in between?


I'd say it's an example of business as usual.

The Halliburton/KBR contracts in Iraq (and now New Orleans); paying roofing contractors $3000 per roof to put tarps over them (other companies were complaining they would have done it for as low as $500 a roof); creating new 'enterprise zones' (which don't really work) in the region that not only give tax incentives to businesses, but suspend almost all worker protections, suspend minority contractor incentives, get rid of environmental regulations, and suspend even health and safety regulations for workers.

Just like war, disasters are a bonanza for big business. And forget the 'mom and pop's, they're not big enough to take advantage of this stuff.

The deal with Carnival is ridiculous, but unsurprising. This is all part of an ongoing strategy of transferring wealth to the huge corporations. Rah freakin' rah.

It's amazing to me. In a disaster, we can send the military in, we can do all this unusual stuff, we can waive the 'prevailing wage' requirements for the lowest paid people in this chain, but we can't tell these mega-corporations, whose CEOs make tens of millions, whose profits are in the 100s of millions, if not billions, that they have to do this contract at a low rate, because the country needs them? Isn't that completely insane? And for the most part, we just accept it.

I think if Bush can lift worker protections, he should also at least be able to tell these companies, "this is what we will pay you, now you will get in there and start working!"
Amlord
QUOTE(Julian @ Oct 5 2005, 10:46 AM)

FEMA over-planned? They over-planned??

blink.gif  blink.gif

They certainly over-reacted, probably to avoid creating perceptions that would further antagonise the media and the public - I agree with every syllable of your first answer - but I think you're being excessively charitable when you say they overplanned.

Planning implies some kind of forward thinking. In this context, planning for the response to any hurricane damage would have taken place before the storm hit, not in weeks afterwards, and not just to make FEMA look productive. That isn't a product of planning, that's a product of failing to do so.


Thanks for focussing on one word...very productive there.

FEMA tried to plan ahead at the time this contract was issued. It was for six months. However, now it looks like (1 month later) that they only needed a 1 or 2 month contract. I'd call that overplanning. They planned for a six month time frame and only needed it for one.

I think that contracting cruise ships definitely was "thinking outside the box", which is lost in this analysis.

Again, the burden of planning is on local officials. FEMA is simply a money clearing house. It is the state and local officials burden to take the federal money and develop a plan.

Your example about "privatization" was ludicrous when you first brought it up and is completely a red herring here.

I found a very interesting article which was from late 2004, explaining how difficult evacuating New Orleans would be: What if Hurricane Ivan Had Not Missed New Orleans

QUOTE
Regional and national rescue resources would have to respond as rapidly as possible and would require augmentation by local private vessels (assuming some survived). And, even with this help, federal and state governments have estimated that it would take 10 days to rescue all those stranded within the city. No shelters within the city would be free of risk from rising water. Because of this threat, the American Red Cross will not open shelters in New Orleans during hurricanes greater than category 2; staffing them would put employees and volunteers at risk. For Ivan, only the Superdome was made available as a refuge of last resort for the medically challenged and the homeless.

<snip>

In this hypothetical storm scenario, it is estimated that it would take nine weeks to pump the water out of the city, and only then could assessments begin to determine what buildings were habitable or salvageable. Sewer, water, and the extensive forced drainage pumping systems would be damaged. National authorities would be scrambling to build tent cities to house the hundreds of thousands of refugees unable to return to their homes and without other relocation options. In the aftermath of such a disaster, New Orleans would be dramatically different, and likely extremely diminished, from what it is today. Unlike the posthurricane development surges that have occurred in coastal beach communities, the cost of rebuilding the city of New Orleans’ dramatically damaged infrastructure would reduce the likelihood of a similar economic recovery. And, the unique culture of this American original that contributed jazz and so much more to the American culture would be lost.


That article is prescient. It accounts for all the problems that we have seen here. However, nobody seems to have taken it seriously, including those who would be directly affected by just such an eventuality.

The thing we need to keep in mind is that FEMA is involved in the immediate management of the aftermath of a disaster as they find it. They don't have time for shoulda woulda coulda's. They need to fix the problems as they come up and dole out money to those that require it.

That is where they screwed up: they figured they needed these beds (on Carnival) for six months. They were wrong on that estimate and paid extra for it.
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