"I am going to do everything humanly possible to make sure that we follow government procurement guidelines from here on out for the rest of the expenditures that we're going to do," Paulison told the Senate Homeland Security and Governmental Affairs Committee. "You have given us $60 billion to manage this disaster and we have to spend it in a fiscally sound manner, and that's what we want to do. I'm going to do everything I can do to make that happen."
Members of the committee railed against several contracts FEMA issued during the past month with limited or no competition.
"I have heard that contractors are receiving payments in excess of market rates and that FEMA doesn't appear to have sufficient contract officers to prevent overcharging," said committee ranking member Sen. Joe Lieberman, D-Conn.
"It sure looks, with hindsight, that FEMA would have been in a much better position if it had a lot of contracts in place that had been bid…to provide exactly the kind of services that FEMA rushed in to provide on a no-bid basis, and which we fear taxpayers may have ended up paying more money for than they should have," Lieberman added.
Paulison said FEMA will review and re-bid contracts that were signed last month. The former chief of the U.S. Fire Administration took over the embattled agency on Sept. 12 after former director Michael Brown resigned in the face of mounting public criticism over the initial response to Hurricane Katrina.
"I've been in public service a long time and I've never been a fan of no-bid contracts," Paulison said. "Sometimes you have to do them because of the expediency of getting things done."
He added: "We're going to look very carefully at some of these big projects ... to make sure that the contracts that we're putting out don't have some of the same taints that we did early on. I don't know if the contracts early on were right or wrong. That's something we're going to go back and look at very carefully … I just want to make sure that the ones we do from now on, under my tenure, are as fair and equitable and legal as they can possibly be."
Paulison said some legislative changes might be necessary to enact reforms at the agency.
Senators also expressed frustration with ongoing problems with FEMA's response to the hurricanes. They said FEMA is still moving too slowly to help victims get assistance, reunite children with their parents and move evacuees into longer-term housing.
Lieberman questioned whether FEMA had the capacity to oversee reconstruction efforts in the Gulf Coast region. Under the National Response Plan, FEMA is responsible for coordinating long-term recovery efforts between federal agencies.
"Many of us here are looking for an answer to how to best provide for the reconstruction of the Gulf Coast and … have concluded that it's too much to ask of FEMA to do this," Lieberman said. "I just don't see how you can continue the immediate response and relief to the hurricanes, be ready to respond to other natural disasters that may occur, and oversee the reconstruction of a major section of our country."
He said Congress is moving toward creating a czar or a Gulf Coast reconstruction corporation to oversee longer-term efforts.
Paulison said FEMA has established a new organization to handle recovery efforts, but acknowledged the agency may not be able to handle all of them. He said he has talked with Homeland Security Secretary Michael Chertoff about the issue.
"It is a concern," he said. "We've already had discussions with the secretary about how we're going to do this long-term recovery, because of the planning needed and the amount of devastation. … We're trying to come up with a solution for that."
Paulison also pledged to fully cooperate with the committee's investigation into what went wrong with preparations for and response to Hurricane Katrina.
"We need to find out what worked and what did not work and we need to find out before the next disaster," he said. "This has to be as open as it can be. If we're going to learn from the lessons, we have to do a full and open investigation from all angles."