OMB issues streamlined emergency procurement guidelines

OMB Guidance

The Office of Management and Budget issued guidelines today designed to speed purchases for hurricane relief efforts. The guidance was called for in the recent hurricane relief supplemental appropriations act passed by Congress to help in recovery efforts on the Gulf Coast.

Congress raised the threshold for micropurchases from $25,000 to $250,000 for procurements of property and services that an agency leader determines to be in support of rescue and relief operations related to Hurricane Katrina. The guidance issued today covers the use of government purchase cards under the new spending limits.

“By cutting the red tape on contracts less than $250,000, we can help get food, water and housing to victims as soon as possible,” said David Safavian, administrator of OMB’s Office of Federal Procurement Policy. “At the same time, this guidance helps make sure that adequate management controls are in place to ensure that taxpayers’ dollars are spent efficiently and responsibly in support of disaster victims. Businesses throughout the private sector – particularly ones in the affected region – will play a critical role in the disaster relief effort. After the immediate crisis has subsided, we will re-evaluate the need for this provision.”

Procurement watchdogs are concerned that relaxed procurement rules will allow contractors to reap rewards from Katrina at the expense of taxpayers. In a statement opposing the congressional action, Danielle Brian, executive director of the Project on Government Oversight, raised one such alarm.

"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," she said in a written statement. "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."

The OMB guidance requires agency leaders to identify specific individuals authorized to take advantage of the higher limits and to establish policies to determine whether a transaction is legitimately in support of Katrina-related rescue and relief operations. It also requires follow-up reviews of transactions to guard against abuse.