The Buzz

FEMA Flooded

More than 170,000 claims poured in under the National Flood Insurance Program after hurricanes Katrina and Rita struck the Gulf Coast in 2005. The storms destroyed or made uninhabitable more than 300,000 houses and damaged or ruined many businesses, prompting five times more claims-at 10 times the cost-than any other flood since the program began in 1968.

The Federal Emergency Management Agency pays 88 insurance companies

to sell and service flood insurance. About $2 billion a year in premium revenue from more than 5 million policies usually covers NFIP operating expenses and claims. The program can borrow from the Treasury Department to cover heavy loss years, and historically repays those funds.

But Katrina-Rita losses swamped the program with claims likely to total more than $20 billion, more than the $14.6 billion cumulative total paid between 1968 and August 2005. Congress in March 2006 boosted the program's borrowing authority from $1.5 billion to $20.8 billion, an amount NFIP is unlikely to be able to repay while also covering future claims, according to the Government Accountability Office.

Despite the unprecedented scope of Katrina-Rita damage, GAO in December 2006 (GAO-07-169) found that NFIP had successfully closed 92 percent of Katrina claims and 86 percent of those from Rita by March 2006.

The report quotes an NFIP contractor: "A month after Hurricane Katrina, our adjusters couldn't get to flooded properties because roadways were blocked and houses were contaminated by flood-waters. . . street signs were washed away and houses were piled on top of one another. . . . Contact with claimants was in some cases impossible because they were scattered across the country and relocating frequently. . . . Claimants' files at local insurance agencies, mortgage records and other documents were gone in the flood."

Virginia Merges Onto Tech Superhighway

Nearing completion, the Eastern Virginia LightWave Internetworking Technology Enterprise links to the National LambdaRail network, an 11,000-mile infrastructure housing many networks and enabling lightning-fast sharing of data for experimentation and production.

LightWave is a project of U.S. Joint Forces Command, NASA, the College of William and Mary, the Virginia Modeling and Simulation Center, Jefferson Labs, and Old Dominion University, which is managing the effort. Verizon is installing 150 miles of fiber-optic cable along with networking hardware at each sponsor's facilities in the state.

"With support at the local, state and federal level, southeastern Virginia is becoming the modeling and simulation capital," said Mark Williams, deputy chief of the command's joint technology and simulation division. "Having this high-speed network in this local area will draw these companies that make and sell products along these lines."

The command uses computer-generated battlefield models and simulations to allow troops to experiment and practice for missions without being located in one place.

Predicting Procurement

Respondents said that by 2012, most agencies would rely on tight relationships with select buyers for commodity purchases and that at least half of agencies would rely on strategic sourcing, or leveraged purchasing. If their predictions are correct, over the next five years, federal buying will start to more closely resemble commercial sector practices established in the 1990s.

In many ways, that's too late, says company president Bruce McConnell. By 2012, there will likely be newer best practices, he says.

Many of the changes already are in process-the Office of Management and Budget has launched lines of business centers that manage acquisition and other professional services for other agencies, for example-but they have spread only to a handful of innovative contracting offices, says McConnell.

"Pockets of excellence sit side by side with procurement shops where innovation is not rewarded," he says. Both industry and government leaders surveyed expressed a deep hunger for greater use of commercial practices.

The survey also revealed that most respondents believe the changes will reduce prices and improve the quality of goods and services.

- Kimberly Palmer