Katrina Profiteering Begins

Fixing roofs on Gulf Coast proves costly for taxpayers

http://seattletimes.nwsource.com/htm...netarps30.html

By Aaron C. Davis, Jay Root and Seth Borenstein
9/30/2005

NEW ORLEANS — Across the hurricane ravaged Gulf Coast, thousands upon thousands of blue tarps are being nailed to wind-damaged roofs, a visible sign of government assistance.

The blue sheeting — a godsend to residents whose homes are threatened by rain — is rapidly becoming the largest roofing project in the nation's history.

It isn't coming cheap.

Knight Ridder has found that a lack of oversight, generous contracting deals and poor planning mean that government agencies are shelling out as much as 10 times what the temporary fix would normally cost.

The government is paying contractors an average of $2,480 for less than two hours of work to cover each damaged roof — even though it's also giving them endless supplies of blue sheeting for free.

"This is absolute highway robbery and it really does show that the agency doesn't have a clue in getting real value of contracts," said Keith Ashdown, vice president for Taxpayers for Common Sense.

As many as 300,000 homes in Louisiana may need roof repairs, and as the government attempts to cover every salvageable roof by the end of October, the bill could reach hundreds of millions of dollars.

The amount the government is paying to tack down blue tarps, which are designed to last three months, raises major questions about how little taxpayers may be getting for their money as contractors line up at the government trough for billions of dollars in repair and reconstruction contracts.

Steve Manser, president of Simon Roofing and Sheet Metal of Youngstown, Ohio, which was awarded an initial $10 million contract to begin "Operation Blue Roof" in New Orleans, acknowledged that the price his company is charging to install blue tarps could pay for shingling an entire roof.

But Manser defended his company's contract, saying Hurricane Katrina damaged so many homes and wiped out so much infrastructure in and around New Orleans that it would be impossible to install permanent roofs quickly. The rapid response to the crisis, Manser said, required contractors to mobilize hundreds of construction crews, truck supplies halfway across the country and house and feed armies of workers — at a tremendous set-up cost.

Simon Roofing, the Shaw Group of Baton Rouge, La., and LJC Construction Co. of Dothan, Ala. — the government's three prime blue-roof contractors in Louisiana — have spent millions to lease hotels, hire catering companies and set up computer databases to track and bill the government for their work.

"When you have 400 or 500 people staying out of town, you're paying a whole lot more overhead than you normally do," Manser said. "I couldn't imagine being paid any less, well, scratch that, I guess I could. People will do a lot to get work."

Jim Pogue, a spokesman for the Army Corps of Engineers, said the agency strictly followed government-contracting requirements and did all it could to get the best deal possible for the roofing work, given the magnitude of the task and the need to protect vulnerable homes as quickly as possible.

Pogue also said that the Federal Emergency Management Agency, which by statute is in charge of the program, asked the Corps to manage the program because FEMA's resources were spread thin.

Contractors watching from the sidelines, however, said they'd be happy to do the work for a fraction of what the government's paying.

Mike Lowery, an estimator with Pioneer Roof Systems in Austin, Texas, said that while he couldn't calculate how much it might be costing contractors to house and feed workers, even with astronomical overhead the companies would have plenty of room to make a profit.

In normal circumstances, Lowery said, his company would charge $300 to tarp a 2000-square-foot roof in Austin. For that same size job, the government is paying $2,980 to $3,500, or about 10 times as much, plus additional administrative fees that can't be readily calculated.

The government doesn't pay contractors per roof, but for every square foot of blue tarp its workers tack down, according to copies of the three contracts for the New Orleans area obtained by Knight Ridder.

The Shaw Group is getting paid the most for installing the tarps, $1.75 per square foot. Simon Roofing's contract calls for $1.72 per square foot, and LJC Construction gets $1.49 per square foot.