The Federal Emergency Management Agency, bowing to local pressure, is transitioning its Hurricane Katrina emergency housing program away from four large contractors to 36 small and disadvantaged businesses. But large contractor executives note that they have had to cover project overhead on numerous occasions and question whether FEMA can effectively manage the work of so many smaller firms.

FEMA announced March 31 that it had awarded 36 five-year contracts, valued at up to $100 million each, for “temporary housing maintenance, support and deactivation” in the Gulf Coast area. FEMA says it worked with the U.S. Small Business Administration to confirm firms’ 8 (a) status and gave preferences to those based in Gulf Coast states. About 28 of the 36 contracts were awarded to local businesses, says FEMA.

Contracts for emergency housing originally were awarded after Katrina struck last August to four contractors—Bechtel Group Inc., CH2M Hill Cos., Fluor Corp. and Shaw Group. They have been criticized as “no bid.” FEMA prequalified the four firms before the storm, but the procurement process had not been completed when it hit and the firms were awarded emergency contracts. Since then, FEMA has been under local and congressional pressure to award more work to locally based firms.

A Fluor Corp. spokesman says it is still “moving full speed ahead” but expects a transition in 30 days. A CH2M Hill spokesman says the firm’s current contract expires July 15 and that it has received no new task orders. Fluor has installed about 42,000 new trailer units since Katrina hit and CH2M Hill has installed more than 18,000.