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Multiple Layers Of Contractors Drive Up Cost of Katrina Cleanup
(Joby Warrick, Washington Post, March 20, 2006)
How many contractors does it take to haul a pile of tree branches? If it's government work, at least four: a contractor, his subcontractor, the subcontractor's subcontractor, and finally, the local man with a truck and chainsaw. . . . If the job is patching a leaking roof, the answer may be five contractors, or even six. At the bottom tier is a Spanish-speaking crew earning less than 10 cents for every square foot of blue tarp installed. At the top, the prime contractor bills the government 15 times as much for the same job. . . . "If this is 'normal,' we have a serious problem in this country," said Benny Rousselle, president of Plaquemines Parish, a hurricane-ravaged district downriver from New Orleans. "The federal government ought to be embarrassed about what is happening. If local governments tried to run things this way, we'd be run out of town." . . .
Consider the task of cleaning up storm debris. Just after the hurricane, the Army Corps of Engineers awarded contracts for removing 62 million cubic yards of debris to four companies: Ashbritt Inc., Ceres Environmental Services Inc., Environmental Chemical Corp. and Phillips and Jordan Inc. . . . Each of the four contracts was authorized for a maximum of $500 million. Corps officials have declined to reveal specific payment rates, citing a court decision barring such disclosures. But local officials and businesspeople knowledgeable about the contracts say the companies are paid $28 to $30 a cubic yard. . . . Below the first tier, the arrangements vary. But in a typical case in Louisiana's Jefferson Parish, top contractor Ceres occupied the first rung, followed by three layers of smaller companies: Loupe Construction Co., then a company based in Reserve, La., which hired another subcontractor called McGee, which hired Troy Hebert, a hauler from New Iberia, La. Hebert, who is also a member of the state legislature, says his pay ranged from $10 to $6 for each cubic yard of debris. . . . "Every time it passes through another layer, $4 or $5 is taken off the top," Hebert said. "These others are taking out money, and some of them aren't doing anything." . . . Lower pay is hardly the worst problem subcontractors face. With many tiers to navigate, money trickles down slowly, delaying payment by weeks and months, and frequently imposing hardships on the smallest firms. . . . Several bus company owners said they were still owed tens of thousands of dollars for work they did in the fall. For some, the delays have been ruinous. . . . Thomas Paige, owner of Coast to Coast Bus Line of Dillon, S.C., laid off staff, and two of his four buses were repossessed by creditors after payment for his New Orleans work fell behind by three months. . . . "I went to New Orleans to help people -- and hopefully to help myself -- but now I feel like I've dug a ditch and fallen into it," Paige said. "If I would have known what I know now, I never would have gotten involved. It's just not worth it."
posted by Lorenzo 6:57 AM