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Katrina-Hit City Wasted $21 Million On ‘Improper’ Contract

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Federal Emergency Management Agency executives should demand repayment of the more than $21 million Biloxi, Mississippi, officials wasted on a no-bid contract for post-Hurricane Katrina repairs, according to a federal watchdog.

The disaster recovery agency has awarded Biloxi $526.7 million since Katrina’s 22-foot storm surge severely damaged the coastal city in August 2005. City officials skirted federal  bidding requirements when they offered an “improper” $21.7 million contract to an unnamed firm, the Department of Homeland Security Office of Inspector General said in a recent report. The firm was responsible for rebuilding infrastructure resources like the city’s water, sewer and drain pipes.

“Because of the city’s procurement actions, FEMA has no assurances that the city paid a fair and reasonable price for the contract work,” the report said.

Mississippi state government officials failed to oversee Biloxi’s contract. Effectively monitoring the contract would “decrease the risk of losing additional FEMA funds.”

Biloxi officials, who refused to provide a formal response in the report, otherwise insisted they acted properly, federal investigators said. City officials said they followed state procurement guidelines, but the report noted that only federal requirements apply for FEMA grants.

Biloxi didn’t begin most infrastructure repairs until 2011, six years after the storm hit the U.S. Gulf Coast.

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