The Federal Emergency Management Agency and the U.S. Army Corps of Engineers do not monitor data on how often they award disaster recovery contracts to local businesses, and as a result do not know the extent to which they are using local vendors, the Government Accountability Office said in a report released Sept. 3, 2026.
Under federal law, both agencies are required to give preference to contracting with businesses defined by regulation as local relative to a declared disaster area, to the extent feasible and practicable. GAO said both agencies have policies and guidance promoting local vendor use, but neither tracks the associated data.
What counts as local
Federal regulations generally define a major disaster area by reference to the official presidential disaster declaration. GAO said the contracting officers it interviewed were not always aware of how to identify that area, and that some identified it incorrectly or did not understand how to do so.
In one FEMA example cited in the report, a contracting officer said they had treated the entire state of Tennessee as the local area rather than staying within the declared disaster area, in anticipation that other parts of the state might later be added. At the Corps, a contracting officer responsible for four contracts tied to the Maui wildfires said there was no official way to identify a local area, according to the report.
Three FEMA contracting officers who identified the local area incorrectly had already received training on local vendor use, GAO said, which the office described as an indication that additional action is needed. GAO said the Corps has taken steps to ensure its contracting officers correctly identify the local area, but that FEMA has yet to fully address the issue.
Missing documentation at the Corps
All of the Corps contracts GAO selected for review were missing documents related to the use of local vendors, the report said. Federal regulations require a contracting officer who awards a post-disaster contract to a nonlocal vendor to document the justification in the contract file.
Without those justifications, GAO said, the Corps lacks assurance that its contracting officers are making an effort to use local vendors as appropriate.
Scope and recommendations
The review was mandated by a provision in the American Relief Act of 2025 directing GAO to conduct work related to certain natural disasters. GAO selected three major disasters — Hurricane Helene, the Maui wildfires and Hurricane Ian — and assessed what it described as a nongeneralizable sample of contracts from those events, meaning the findings cannot be projected to all disaster contracts.
GAO made four recommendations. It said FEMA’s Office of the Chief Component Procurement Officer should establish a process to monitor local vendor use, including assessing the reliability of any data used, and should take additional action to communicate existing Federal Acquisition Regulation requirements so contracting officers correctly identify the local area.
It recommended that the Assistant Secretary of the Army for Civil Works ensure the Corps establishes a process to collect data on and monitor local vendor use, and that the Assistant Secretary of the Army for Acquisition, Logistics and Technology ensure Corps contracting officials follow FAR documentation requirements when awarding disaster contracts to nonlocal vendors.
Both agencies concurred with the recommendations, GAO said. All four are listed as open, with GAO stating it will provide updated information once it confirms what actions the agencies have taken.
Source: U.S. Government Accountability Office, “Disaster Contracting: FEMA and the Corps of Engineers Have Opportunities to Improve Local Vendor Use” (GAO-26-108426), released Sept. 3, 2026. GAO assessed a nongeneralizable sample of contracts from three selected major disasters — Hurricane Helene, the Maui wildfires and Hurricane Ian — so the findings are not projectable to all disaster contracts.