The U.S. Government Accountability Office (GAO) has released its latest report, Disaster Contracting: Opportunities Exist for FEMA to Improve Oversight (GAO-25-107136), which examines the Federal Emergency Management Agency’s (FEMA) handling of disaster response contracts from 2018 to 2023. The report sheds light on FEMA’s contract obligations, oversight shortcomings, and staffing deficiencies, emphasizing the urgent need for enhanced monitoring and enforcement mechanisms.

According to the report, FEMA obligated more than $10 billion on contracts for disaster response and recovery over a five-year period, with a significant portion allocated to services like housing inspections, temporary lodging, and infrastructure repair. Notably, three major disasters—the Kentucky floods, Hurricane Ian, and the Maui wildfires—accounted for over $1 billion in contract obligations alone. While FEMA took various oversight steps, including site inspections and contractor reporting assessments, GAO found critical lapses in documentation and contractor performance tracking.

One of the most pressing issues identified was FEMA’s failure to document oversight activities adequately. In several instances, FEMA lacked records detailing whether contractors met deadlines or delivered the agreed-upon level of service. This lack of documentation creates significant risks for FEMA and its stakeholders, as it hinders the agency’s ability to evaluate contractor performance, hold vendors accountable, and ensure taxpayer dollars are effectively spent. Without clear oversight records, FEMA may not be able to justify payments or performance evaluations, potentially leading to waste, fraud, or abuse.

Additionally, GAO found that FEMA relied on unqualified personnel to oversee contractor performance. Some FEMA staff members lacked the required certification or authorization to conduct contract oversight duties, such as filling out contractor assessment forms and reviewing invoices. FEMA’s failure to ensure that only trained and certified personnel performed contract oversight violates Department of Homeland Security (DHS) policies and increases the likelihood of mismanagement. GAO warned that without addressing this issue, FEMA risks unqualified staff making critical procurement decisions, potentially compromising the effectiveness of disaster response efforts.

Another key issue highlighted in the report is FEMA’s use of a flawed staffing model to assess contract oversight needs. While FEMA relies on DHS’s staffing model to determine workforce requirements, GAO found that this model does not account for critical risk factors, such as employee attrition. FEMA has struggled to retain qualified staff, which has further strained its ability to manage and oversee disaster contracts effectively. A more robust staffing model that includes risk-adjusted factors could help FEMA ensure that it has the necessary personnel in place before disasters strike.

For federal contractors, this report has several important implications. Contractors doing business with FEMA should expect greater scrutiny in the future, as GAO’s findings may prompt policy changes that mandate stricter oversight requirements. Companies providing services to FEMA—especially in disaster relief and emergency response—must ensure that they have comprehensive documentation of their work, as FEMA may soon impose stricter performance tracking requirements. Additionally, businesses should be prepared for enhanced contractor certification and training expectations, particularly for firms providing personnel to assist FEMA in disaster recovery efforts.

GAO has issued seven key recommendations to FEMA, including:

• Improving documentation processes to ensure contract oversight activities are properly recorded.

• Ensuring only certified and authorized personnel conduct contract oversight.

• Enhancing FEMA’s staffing model to incorporate risk factors and improve workforce retention.

FEMA and DHS have concurred with GAO’s recommendations, which means changes to disaster contracting procedures are likely in the near future. Federal contractors should monitor policy updates closely, as these changes may impact how contracts are structured, executed, and overseen.

Disclaimer: This blog post summarizes the GAO-25-107136 report and its implications for federal contractors. While efforts have been made to ensure accuracy, this post does not provide legal or financial advice and should not be relied upon as an authoritative source. Readers should refer to the original GAO report for official details and consult legal professionals when making contracting decisions.