Good News and Bad News for Hurricane Victims — FEMA’s Outsourcing Emergency Relief

One of the hallmarks of the Bush administration has been its willingness to outsource everything from IRS tax collections to intelligence agency functions to Social Security to the Iraq War. Now we find out that the Federal Emergency Management Agency is skipping down the outsourcing path as well.

The state of Texas has already given up on FEMA and has instead arranged for Home Depot and Wal-Mart to provide water, ice and other supplies in case of an emergency. And FEMA is OK with that, as it fits perfectly with the agency’s new approach to emergency management:

So, if it’s no longer handling disaster logistics or disaster planning, what do we need FEMA for?

The most salient change is an increased reliance on the private sector — the outsourcing of much of the agency’s logistics to a contractor or contractors that will be in charge of acquiring, storing and moving emergency supplies. This arrangement, known as third-party logistics, is common in many industries and should make FEMA’s supply lines shorter and quicker, says Marco Bourne, FEMA’s director of policy and program analysis. Companies that specialize in third-party logistics are very good at what they do.

Well in that respect — being good at what they do — third-party logistics firms have a leg up on the feds. But wait, what is the recurring challenge with subcontractors? Oversight. Right, and FEMA has proven none too swift about that, too.

“It doesn’t make sense for FEMA to store commodities when [Defense Logistics Agency] does it and in quantities far greater than what we’d ever need,” Bourne says. “They do in a month what FEMA might do in a couple of years.”

The same could be said for large retailers. Bourne says FEMA always has encouraged state and local governments and emergency responders to work out agreements with the private sector, as Texas has done. But he admits that Hurricane Katrina — during which Wal-Mart, Home Depot and other companies contributed supplies — highlighted that need.

So, if it’s no longer handling disaster logistics or disaster planning, what do we need FEMA for?

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