Government agencies rely heavily on the private sector to carry out their mission of preparing for and managing through various types of disasters, such as the major hurricanes that have been facing Texas and the Gulf region. This is important work that deserves to be prioritized higher than many other functions of government. Hundreds, even thousands, of lives hang in the balance each year – people who depend on public agencies to operate with peak effectiveness when it comes to disasters, led by government officials who must make wise decisions in the heat of the moment, and using impersonal rules and systems that are designed to facilitate rather than frustrate the process of recovery. Problems or mistakes at any of these levels can have major, and unacceptable impacts. Of all of the systems government relies on, perhaps none is more critical than those related to procurement policy for disasters, or the ways that a government agency hires and manages their network of vendors and contractors providing disaster related services.
Proactive Disaster Cleanup Contracting by Design
Governments are generally known for using caution in their approaches to problems or new initiatives, waiting until a majority approves and a compelling case can be made before committing funds. However, when it comes to disasters, a fully reactive approach would mean failing to protect and save lives at the very moment when help is most needed. Because of the recurring seasonality of many types of disasters, such as the June-November annual “hurricane season,” or major forest fires happening most often during the hottest, driest part of the year, these events can be anticipated ahead of time – even if their exact timing or magnitude is not known in advance.
Agencies ideally will have a way to line up resources and tools in advance so that when “the big one” hits the boots are already on the ground, so to speak. This is where businesses come in, to help scale the work far beyond what government employees could do if it was just up to them to mount an effective response. Rather than having to wait several months for a traditional competitive bid or RFP to be issued and the right business selected to begin helping, an agency will need other tools at their disposal. To follow a more proactive path, an agency will procure disaster cleanup contracting products or services in different, more flexible ways – ways that place them in the “driver’s seat” in terms of timing.
Option 1: Buy it Ahead of Time
If we go back to the last two full years of contracting data for hurricanes in the Gulf States and Carolinas, we see that a large part of the purchasing was taking place prior to the actual hurricane season. In fact, for both years combined, there were more bids issued for disaster related services in these states from January to May (259) than during the active months of June to November when a hurricane was likely to happen (249). Many of these contracts awarded before a hurricane arrived are written to have “as needed” or “on call” terms, where the supplier is ready and waiting to be deployed as soon as the need arises over the entire term of the contract. The award value may have a “not to exceed” limit during that fixed period of time (i.e. 1-5 hurricane seasons worth). If more is needed, and additional funds are available, a contract extension can keep the business working on the important mission of recovery.
One example of a large fixed term contract for disaster services awarded prior to the beginning of hurricane season was by Miami-Dade County in 2016. Valued at $90 million, the fixed term was to last four years, to 2020, which means an average of $22.5 million annually could be purchased off it using task orders. The scope included a variety of areas including debris removal, disaster cleanup, and disaster debris monitoring.
In another example, the State of South Carolina issued a $20 million award with a five-year term (to 2021) for “Disaster and Technical Support Services.” In an average year that supplier will theoretically have around $4 million of work to perform for the state. Under the $20 million amount listed, the award notice clarifies: “Actual amount will vary. The number and type of emergency events are variables which cannot be predicted with any degree of certainty.” The acceptance of this kind of uncertainty on the part of the contractors through these types of “fixed term, variable scope” contracts allows government the flexibility to respond to disasters in almost real-time rather than waiting up to several months for a response once the event begins. With the contracts already in hand, all an agency manager needs to do is call up that awarded vendor and get them scheduled to deploy their staff.
Option 2: Buy in the Moment Without a New Bid
Even if an agency fails to have a supplier locked into contract before a major disaster hits, they are not without other options. The next tool that can be used is co-op buying. Cooperative purchasing has revolutionized the world of government procurement over the last 3-5 years - our research suggests 14% of all contracting dollars flows through it – and one of the most intriguing applications is for disaster services.
A public sector manager can select from essentially an online catalogue of available multi-use contracts to buy from, each representing deals that have already been negotiated using a fair competitive process. Need to quickly buy special equipment or debris removal labor from a respected supplier at a reasonable price? You just have to get your agency to sign off and you’re on your way without having to come up with the bid specs, advertise and wait for responses, and select a vendor. State and local agencies can buy from the federal GSA disaster multi-use contracts, from other national co-ops, or from regional co-op associations. For example, the HGACBuy is a Houston-based regional co-op offering among its major categories “Emergency Preparedness & Disaster Recovery” and even a disaster/emergency letter of intent designed to expedite the procurement of products or services needed to facilitate recovery from a major disaster.
Co-op purchasing related to disasters can range from stocking up on portable message signs, to crisis response vehicles, to debris cleanup, to assistance with reimbursement costs, to construction and rebuilding. Purchase amounts can range from $50,000 to $500,000 or more and may be limited to a single one-time purchase or involve a services contract over a certain period of time. While a co-op purchase is not necessarily “immediate,” it can result in services that are far more timely than those purchased through a traditional bid process.
Option 3: Buy it After the Fact
Just because disaster purchasing tends to favor a proactive approach doesn’t mean that purchases aren't made after the fact. It’s just used more selectively and is not necessarily a default option when timing is critical. The truth is that when major disasters like Category 3-5 hurricanes strike, there will certainly be an immediate need for proactive responses, but there will also be a demand for things to happen at a slower pace, or after a certain delay has occurred. Particularly when the damage is catastrophic, the cleanup and recovery efforts will not happen overnight but may take months to years before they are completed. Certain high profile tasks, such as clean-up and removal of downed trees across roads and highways that are keeping emergency vehicles from moving, may deserve special attention, while other tasks may be able to proceed at a more even or sustainable pace.
One example of reactive or slower-paced contracting came in 2016 from Dare County in North Carolina. They issued a bid for “stream debris removal” related to the 2011 Hurricane Irene, involving cleanup of debris and the removal of distressed trees. This project – initiated years after the actual disaster event – was evidently not considered high priority during the initial recovery period, but was still needed. Another example of delayed contracting is Harris County, TX, which in June 2017 awarded a vendor $150,000 for “county-wide geotechnical support services associated with the federally declared disaster of 2016.” So midway through the current 2017 hurricane season, this agency was purchasing services dealing with the previous hurricane season – which were not needed at the time the storm first hit but became necessary to address at some point in the aftermath. This doesn't factor in the larger, and long-term infrastructure re-building work that may stretch on for many years after a major hurricane.
As convenient as co-op and proactive contract purchasing is for government, there are certain advantages to buying disaster services in a reactive way (assuming the timing is not as critical). One is the fact that co-op and longer-term contracts tend to restrict competition and limit the participation of smaller, local suppliers. To the extent that diversity, local economic stimulus or greater participation is of value to an agency, this can be a powerful motivator to use traditional bids, even though they take more agency staff time to put out each year. The other factor, which is normally more an issue with co-ops, is that the less you (as an agency manager) are able to specify or customize what you are getting, the more likely you are to run into problems with overall effectiveness or satisfying your various stakeholders. Standardized co-op contracts are designed to appeal to the broadest spectrum of agencies but may not be customized enough to meet an agency’s individual needs.
It takes partnership and timely responses from contractors, large and small, to support government in their mission to protect and save lives, while providing for the recovery process following a major disaster. In terms of hurricanes, 2017 may be somewhat worse in severity than normal, but the Gulf States have been at this a long time and that’s given government a chance to learn from mistakes and become more efficient. The innovations in proactive disaster cleanup contracting described here are helping to meet needs more effectively than would otherwise be the case if traditional short-term, fixed-scope competitive bids were the only option.