FEMA Explores Outsourcing Much of the $2.5B Program for Northern New Mexico Fire Victims

A week before Congress approved spending $2.5 billion to fully compensate victims of botched prescribed burns that grew into New Mexico’s biggest-ever wildfire, the agency in charge of the paying victims started to explore hiring private companies to do a lot of the work.

The “Request for Information” on Sept. 22 by the Federal Emergency Management Agency asks companies whether they would have the capacity to run major aspects of the Hermit’s Peak-Calf Canyon Fire Claims Office. The request calls for a contractor to help in “every step” of developing the claims office, plus creating a claims management website and call center — as well as investigating and recommending damages for victims. 

The request also includes more information than FEMA has released publicly about what agency officials predict it will take to stand up a unique office, including who might work there and how many folks they expect could file claims. This is only the second time that FEMA has been tasked with fully compensating victims of a fire or disaster like this. Normally, it pays victims only limited amounts to help them in the immediate aftermath of disasters. 

Part of building a brand-new program like this means relying on outsourcing, according to a FEMA spokesperson. The agency doesn’t have much experience with claims processing, apart from its flood insurance program, said Angela Gladwell, a FEMA official and director of the Hermit’s Peak-Calf Canyon Claims Office. 

“We’re still working through the details of that. But again, our office is going to be a mix of federal staff, as much hired locally as possible, and contracting staff…” Gladwell told Source New Mexico. “So we’re going to be looking to bring in a lot of the experts that we need to help us, especially with valuation of these different types of losses that you don’t find in a lot of other places.”

The first time FEMA was tasked with fully compensating victims was the Cerro Grande Fire in 2000 in Los Alamos, and much of the new claims office is modeled after that one.

However, FEMA did not outsource much or all of duties under the Cerro Grande Fire Assistance Act, according to a review of federal contract records. 

Gladwell said FEMA is anticipating a mix of FEMA employees and contractors to oversee various aspects of the program, though officials said they don’t know exactly what the mix will be yet. 

The agency has not yet put any of the claims office contracts out to bid. It’s not clear from government records how much contractors would earn if they win a bid for the claims office.

The Hermits Peak-Calf Canyon Fire emerged from two escaped prescribed burns started by the federal Forest Service earlier this year. It burned more than 530 square miles, mostly in San Miguel and Mora Counties, along with 1,000 structures. After that, floods over scorched soil caused additional, widespread damage. 

On Sept. 29, Congress agreed to give FEMA $2.5 billion to spend to make victims whole after the fire, including to replace destroyed homes, pay for lost business revenue, rebuild burned landscape and pay for myriad other losses during the months-long disaster.

According to the “request for information,” FEMA intends to ask a private company to provide up to 70 staff members for two offices the agency will open to help handle claims. That includes 15 claims examiners, 10 customer support specialists, five site inspectors and a team to build and oversee a website. It would also seek two economists, ecologists, data scientists and civil engineers, among other jobs.

Notably, it does not appear to be looking to hire anyone to serve as something like a “navigator,” which members of Congress have called for and said is a reason that fire victims should feel comfortable filing a claim without the help of a private attorney. A “navigator” would advocate on a claimant’s behalf during the process. 

FEMA spokesperson Angela Byrd said the agency is currently “mapping the claims process” and could update requirements for contractors before it starts accepting applications to hire them. 

“We …continue to gather input from stakeholders and communities to inform that process, as well as final regulations,” she said. “An example of the feedback received is the importance of having navigators and providing multilingual access to materials and services.”

The FEMA document says a contractor should expect that 25% of all calls require Spanish translation. In San Miguel County, where many fire victims live, about 23% of households speak English less than “very well,” according to Census figures. It’s about 13% in Mora County, which also suffered extensive fire damage. 

The “request for information” is a way to gauge whether private companies will have the capacity to handle the demands of the new claims office, Byrd said. The agency did not respond to a request for comment about how many companies responded.

FEMA is asking a contractor to develop a system that can hold 30,000 total registrations, including surges of up to 1,000 a day. The call center should be able to handle 50 calls an hour on the first day it’s live. Calls are expected to average 25 minutes, the document states. 

“The (Request for Information) was written as an estimate to gauge available contractor support capacity and is not indicative of final claims processing projections,” Byrd said.

The document also asks any contractor to enlist New Mexico firms and hire locals to the maximum extent possible, though it does not appear to require them to do so. The agency will hold events to hire local residents in the coming weeks, officials said. Having New Mexicans in key positions will help ensure the agency understands the particular needs of those recovering from the fire, Byrd said. 

FEMA did not respond to why it didn’t impose job requirements, saying only that the document was written to estimate contractor capacity, and that the agency “ understands the importance of integrating local voices and expertise into this office and ultimately the claims process to meet the unique needs of impacted communities.”

A spokesperson for U.S. Rep. Teresa Leger Fernandez, whose district includes the burn scar, referred comment to FEMA, as did U.S. Sen. Martin Heinrich’s office.

An aide for U.S. Sen. Ben Ray Lujan, who co-sponsored the act approving the $2.5 billion program, said his office is working with FEMA to understand the interim regulations the agency released last week and steps forward. 

“We are engaged to ensure that FEMA establishes and carries out the requirements of the bill,” a statement from his office reads. “The senator remains focused on delivering the $2.5 billion in relief he secured for Hermit’s Peak-Calf Canyon Fire victims.”

Source New Mexico is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Source New Mexico maintains editorial independence. Contact Editor Marisa Demarco for questions: info@sourcenm.com. Follow Source New Mexico on Facebook and Twitter.