When the embattled Hector V. Barreto announced his resignation last month as administrator of the Small Business Administration, he did it in a press release.

How perfect.

During his tenure at SBA, and particularly in the months since Katrina, Barreto's public relations department at the agency kicked into high gear, flooding media e-mail boxes and fax machines with pat after pat on SBA's back.

The self-congratulatory flurry strengthened recently - the Sun Herald business department got about 30 press releases in March and April - and now, in 20-20 hindsight, that must have been the beginning of the end of Barreto's government job.

He was already under fire in Congress and in other quarters for SBA's slow response to last year's hurricanes. (Sound familiar?)

Back in February, Congresswoman Nydia M. Velazquez, ranking Democrat on the House Small Business Committee, railed, "A few weeks ago, SBA was claiming that everything was fine - when in reality the agency was on the brink of having to shut down its disaster loan program and has now asked to be bailed out. These types of erroneous miscalculations are just one more instance of mismanagement at the agency - all that come at the expense of innocent disaster victims and taxpayers."

So when Barreto said he was stepping down, his critics really got worked up.

Lloyd Chapman, president of the American Small Business League, sent out his own press release the day Barreto announced he would become national chairman of The Latino Coalition, a Hispanic advocacy organization.

"Barreto's resignation comes as no surprise - I've been waiting for this to happen. Inc. Magazine recently dubbed him 'The Big Disappointment,' and I couldn't agree more. It was obvious to me by his demeanor in congressional hearings and his flippant disregard for the truth that he did not intend to stay for long."

Chapman appears to be unhappy all around with the SBA situation. He also called Barreto's "unknown" replacement, Steven Preston, "another unqualified SBA administrator" who will continue the Bush administration's task of dismantling the SBA.

Right now it's not clear if Barreto's legacy will sink to the depths of "Brownie" status, but time will tell.

And keep checking your mailbox for that long-awaited SBA loan.

WASHINGTON -- Contractors working on hurricane recovery have overbilled the government in a $63 billion operation that only will get more expensive, according to a House report Thursday.

Mileage claims were overstated to get more fees, debris was mixed improperly to inflate prices and companies sent bills twice for removing the same loads, Democrats on the GOP-controlled House Government Reform Committee found.

In a Thursday hearing on the government's contracting procedures after Hurricane Katrina, AshBritt Inc. of Pompano Beach was among several companies whose representatives explained how their government contracts worked.

Rep. Henry Waxman, D-Calif., who compiled the report, complained about layers of subcontractors that drove up costs.

A major contractor would take a large cut and pay smaller amounts to the subcontractors, down to the company with the truck hauling debris to the dump.

Randall Perkins, president of Ashbritt Inc. said his company received $23 a cubic yard in a debris removal contract but paid a subcontractor $10 to haul the material.

"It seems you get more than half," Waxman told Perkins. "We outsource to companies like yours, and they go out and subcontract. It's a higher overhead."

Perkins said some cleanup contractors hired many subcontractors, but he hired only a few. He said the prices he charged were determined partially by U.S. Army Corps of Engineers rules he had to follow.

The committee chairman, Rep. Tom Davis, R-Va., said Congress approved more than $63 billion for disaster relief and that recovery expenses may top $200 billion.

Davis said many contracts were awarded without competition.

Government officials at the hearing said these contracts were being replaced with competitive awards.

Davis said the sole-source contracts allowed an "unprecedented opportunity for fraud and mismanagement."

Morning Edition, May 4, 2006 · Questions are being raised about new contracts that the Federal Emergency Management Agency (FEMA) is awarding for hurricane work along the Gulf Coast. The agency says it wants the money -- up to $3.6 billion -- to go to small and disadvantaged companies in the region. But some local firms have complained that too many winners are from out of state, and they question whether all of them are qualified. Federal investigators are reviewing some of the awards.

The 36 contracts are huge -- up to $100 million each -- to take care of thousands of trailers and mobile homes now housing hurricane victims on the Gulf Coast. FEMA decided to make the awards after it was criticized for giving no-bid contracts to four large national firms in the hectic days right after the storm. Acting FEMA director David Paulison told NPR in March that the new contracts would go to small, local companies.

"The quicker the businesses come back, the quicker jobs come back, the quicker people move back into the affected area. So we want to get that business and those dollars down to the local level," he said.

Tim White, of White Haul Transport, a manufactured-housing firm in Mississippi, was disappointed when FEMA rejected his bid. And he was angry when he saw the list of preliminary winners.

"Of the five, three of them were out of state," White said. "And I was surprised at that, because it was our understanding that out-of-state companies, their bid prices would be adjusted up 30 percent in order to allow Mississippi companies to be more competitive."

White decided to do some investigating, and what he found disturbed him even more. One winner was PRI/DJI, a joint venture of two California firms, Project Resources Inc. and Del-Jen Inc. It turns out that Del-Jen is a wholly owned subsidiary of Fluor, one of the four large firms that received the initial no-bid contracts. Project Resources also boasted on its Web site that it had recently received more than $500 million in government contracts.

"So that kind of threw up a red flag for us," White said.

He filed a complaint with the Small Business Administration. But the SBA said the joint venture met all the requirements. It noted that PRI/DJI is part of a special mentoring program that allows large firms to pair with small, minority-owned ones -- such as PRI -- to compete for contracts.

Shari Walden, CEO of Project Resources, told NPR that even though the company has federal contracts that could be worth hundreds of millions of dollars, its annual receipts still fall below $30 million, qualifying it as a small business. She also said many of those hired to do the trailer work will be from the Gulf Coast.

But some locals remain wary. PRI/DJI is the apparent winner of not one, but three of the 36 new contracts.

"None of the locals that we dealt with -- and we were about 30 companies -- won any of these bids," said Barbara Sonnier, who represents a Mississippi firm called DCMS, which sought some of the FEMA work. When the letter arrived listing preliminary winners, five of the eight were from out of state. Sonnier suspects some of the companies low-balled their estimates to be competitive. And she questions how they can do the work at those prices.

"This could be one of biggest, and I don't want to use the word loosely, frauds to make Louisiana look bad again. If local contractors fail, then shame on us. But shame on America if these out-of-state companies get these things and we get blamed for it because they failed," she said.

One firm being challenged is Doug Boyd Enterprises of Knightdale, N.C. Tim White and others note that the company was formed only a few months ago. But Boyd told NPR he's more than qualified to do the work. He says he handled emergency housing after Hurricane Floyd in 1999, when he was with the North Carolina Division of Emergency Management.

"I ran the entire temporary housing program for 30 months from start to finish. So when it comes to credentials, I am the best-qualified person for this particular contract." he said.

Still, one of the companies that lost out to Boyd has filed a protest with the Government Accountability Office, which has 100 days to review the award.

Questions have also been raised about one of the trailer contracts going to a minority-owned New Orleans accounting firm called Davis Professional Accounting Services. CEO Corinthia Davis would not comment on the dispute. Another contract winner, Rosemary Barbour -- the wife of Mississippi Gov. Haley Barbour's nephew -- has also raised some eyebrows.

FEMA spokesman Aaron Walker says politics had nothing to do with the awards. "Let me be completely clear, " Walker said. "In no uncertain terms does any political tie fall into any consideration. We look at the merits of the company."

He says all the awards met strict guidelines and were based on the lowest qualified bids. He adds that most of the 36 contracts will end up going to Gulf Coast firms, and that the program is on track.

"We've done everything we can in setting up that contract so that we are infusing money into the region," Walker said. "Even the companies who are outside of the state still have to contract locally. The subcontractors have to be local."