Below is the Orlando Sentinel's story about how the Florida legislature approved $151-million to buy large generators, build a disaster center warehouse in Orlando, but bungled and mis-spent the money.
I was in Iraq for 23 months, and this situation reminds me of what we encountered with the way the Iraqis work.
Read the article, then return to this list of "lessons learned". If the article makes you mad about Florida government waste, then contact your Florida legislator or Senator. The "responsible" department is the Florida State Dept. of Emergency Management (i.e. FDEMA, like FEMA), run by Craig Fugate.
Even the article writer, Aaron Deslatte, said "The generators, however, have been a first-class foul-up."
I have emailed requests for responses to Florida State Senatory Carey Baker and State Rep. Alan Hays, and will post their comments here when received.
Below is the Fiscal Ranger's list of FDEMA Lessons to be Learned, based upon our analysis of the facts in the article:
- This was a new program, and the legislature should have had an oversight specialist participating in the program to ensure it was set up right, but they didn't. In some businesses, internal auditors will participate in planning sessions for large, new projects to ensure rational business and management controls are in place, but this didn't happen here, apparently.
- FDEMA got conned by the generator producers into placing orders for all generators at once, rather than buying them over a period of time, as initially planned. Thus, they got stuck with ALL the generators when it turned out they couldn't install or use all of them. It is like buying tires for a fleet of buses without checking to see if you were going to change bus purchases, and that not all the buses used the ordered tire size. FDEMA apparently estimated installation costs WITHOUT site visits that would have detected problems that greatly increased expected installation costs. Somebody in their procurement office needs to be demoted. They should review their method of estimating installation costs for capital equipment, and they must be making the same mistake in other capital projects. The article says they bought 52 generators, but lack the $51-million to install them.
- Based upon my Iraq experience, I bet they didn't include funding for preventative and warranty maintenance, thus the equipment won't be maintained and will fail earlier than planned. (Iraq's electrical system purchases, funded by the US State Dept., had NO plans for maintenance contracts or staffing or budgets, thus the US Government later had to run around and find hundreds of millions of dollars for maintenance by canceling other capital projects to maintain existing equipment that was already failing).
- FDEMA needs a public monitoring program showing the expected life of the generators, budgeted maintenance, and tracking of equipment life to ensure it lasts as long as expected.
- FDEMA exceeded legislator funding levels for offices by a huge amount, $300,000. In most businesses, and in the Federal government, you can't cut a PO without a budget line check - are Florida budget controls so poor that they let orders be cut without controls to ensure line item totals won't be exceeded? How did FDEMA spend $417,000 when only $117,000 was authorized by the Legislature?
- FDEMA apparently expected local governments to help pay for installing generators, but didn't check with them BEFORE buying the generators. Thus, many generators are sitting in an Ocala warehouse because the local governments won't help pay for installation. FDEMA should have NEVER ordered the generators without locking down in written agreements with each local government how much they would pay. Would you buy a house without a roof and NO contract citing whether the developer would finish the roof and at what price?
- Funds apparently were allocated to refitting many local government disaster facilities, but they used "pollyanna" estimates with lowball figures on materials, without reserves for possible higher prices, and not based on new, tougher construction standards. Actual construction prices were higher, thus refits were not done. AGAIN, the estimating and procurement departments need to be analyzed why they provided such poor estimates, and why Florida State estimating standards did not ensure realistic estimates were not used? Six year olds will minimize the estimate for a new TV, but the adults in FDEMA and the state should have professional estimating systems that include reserves for possible increased prices.
- FDEMA purchased generators for eight existing local shelters without consulting the local agencies. As a consequence, the shelter managers didn't want the generators that were purchased. Again, money spent on items for local agencies without consulting with them.
- It is clear that Florida and FDEMA procurement procedures need an overhaul. In cases where purchases are for local agencies, they need a procedure to ensure that written agreement from the local agencies should exist approving both the equipment, timeframe, cost estimates and any shared costs before ordering the equipment.
- FDEMA needs to look at their management skills. How could their internal managers actually "lead" such a program without asking basic questions like "have we visited the installation sites to ensure the cost estimate is accurate", and "have we called the local agencies and received written concurrence on costs, timeline, materials, etc. before ordering any equipment". How come they didn't walk through the details of the procurement orders to ensure estimates were realistic. Why didn't they ensure that cost estimates reflected new building standards?
- Finally, the article didn't discuss funding and responsibility for maintenance for the equipment and the new warehouse - are they actually funded on a realistic basis?
- As taxpayers, we would like to see that actual sanctions take place against the FDEMA management allowing this bungle. At the minimum they should be demoted and re-assigned for allowing this to happen. Government managers need to be held accountable for using proper management processes for projects. Taxpayers alone should not bear the cost of such bungles.
vj
=======================================================
from:
orlandosentinel.com/news/weather/orl-canes1407dec14,0,2131634.story
OrlandoSentinel.com
Senators question how $151M hurricane plan went wrong
Aaron Deslatte
Tallahassee Bureau
December 14, 2007
TALLAHASSEE
Florida's golden reputation for its sure-handed hurricane response in 2004 may be tarnished a bit.
In a rush to gird the state for future storms, the Legislature devoted $151 million in state and federal funds last year to buy giant generators for special-needs hurricane shelters, open a central warehouse in Orlando that could quickly ship out supplies and "harden" local emergency centers.
Nationally, it was an unprecedented feat for a state to attempt. But nearly 18 months later:
*Most of the 52 generators are sitting in an Ocala warehouse -- because the Florida Division of Emergency Management needs another $51.5 million to install them.
*Changing federal wind standards have led to higher costs and delays in retrofitting dozens of shelters and local emergency-operations centers.
*Some lawmakers say that instead of just opening a warehouse, the agency spent hundreds of thousands of dollars to equip a lavish "State Logistics Response Center" in Orlando with flat-panel televisions, communications equipment and a fleet of Segway scooters for workers to zip around the 200,000-square-foot facility.
*Finally, despite what lawmakers saw in 2006 as an urgent need to address weaknesses exposed by the 2004 and 2005 hurricane seasons, most of the $151 million hasn't even been spent and needs to be reauthorized by the Legislature.
"The expectations were not met, and I take full responsibility for that," said Craig Fugate, director of the state Division of Emergency Management, who won national praise for his no-nonsense handling of the 2004 and 2005 hurricanes. "But this has never been done before."
Fugate and his staff told stunned state senators Thursday that Florida ran into a succession of problems during the past 18 months -- from the rising costs of concrete, copper and insurance to the refusal of many local governments to chip in to help finish installing the generators.
Though some of the problems resulted from bureaucratic delays that haven't cost any money, they still mean that dozens of facilities won't be refitted by the June 1 start of next year's hurricane season.
And the senators who sponsored the money said it looked as if the agency had abused its spending authority in some cases.
"There has been a lot of money spent in areas that were never approved by the Legislature," said Senate Transportation and Economic Development Appropriations Chairman Mike Fasano, R-New Port Richey.
For example, Fasano's office alleges the agency spent $417,000 on TV and computer equipment at the Orlando warehouse, $300,000 more than authorized.
Gov. Charlie Crist came to Orlando in July for the ribbon-cutting on the state logistics center, where commodities such as bottled water and ready-to-eat meals are stockpiled for distribution after disasters.
Fugate said his agency went through bids to purchase the center, which had been a pharmacy with office space attached.
"It . . . had a lot of office space attached to the facility," Fugate said. "Our decision was to utilize that [office space]."
Fasano also took exception to the $16,000 the agency spent to buy motorized Segway scooters to whisk workers back and forth in the warehouse. Fugate said they were needed to efficiently move people around the giant facility, which can handle up to 100 flatbed trucks at a time, and that one was bought for an Orange County deputy sheriff to use while patrolling the site.
The generators, however, have been a first-class foul-up.
Fugate said that in the post-Katrina rush by governments and corporations such as Publix and Wal-Mart to buy generators, vendors told his agency it could face a longer backlog if the generator purchases were spread over several years.
So the agency bought them all -- at $300,000 apiece -- at once.
But once they tried to install them, their cost estimates proved wildly off the mark.
"Some sites, when we got there, we thought we would put up a 500-kilowatt generator; we realized it wouldn't power the entire school the way it was designed," said Ruben Almaguer, deputy director of the division. "So those costs escalated tenfold."
Currently, 16 shelters will be ready by February. Thirty-eight generators sit in a warehouse with no money to install them.
The state also has paid for other generators at eight locally managed shelters -- including ones at the University, Freedom and Olympia high schools in Orange County -- that are scheduled for completion next July. The shelters didn't want the warehoused generators.
"We're giving them the money to put a generator in, but not one of the generators in the warehouse?" an incredulous Fasano asked.
"Do you see the absurdity of this conversation?" said Sen. Alex Diaz de la Portilla, R-Miami, who co-sponsored the legislation.
Fugate told the panel Florida fell victim to its lofty ambitions.
"If we had not tried to do what is oftentimes the audacious," he said, "we could not have failed."
Lawmakers are planning another hearing on the problem next month.
Aaron Deslatte can be reached at adeslatte@orlandosentinel.com
Copyright © 2007, Orlando Sentinel
