Katrina / Louisiana repair costs hit the roof.

Originally Posted By: jhagarty
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By Aaron C. Davis, Jay Root and Seth Borenstein
Knight Ridder News Service

NEW ORLEANS - Across the hurricane-ravaged Gulf Coast, thousands upon thousands of blue tarpaulins 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 generous contracting deals and poor planning mean 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 is also giving them free supplies of blue sheeting.

"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. "I've done the math in my head 100 times, and I don't know how they computed this cost."

As many as 300,000 homes in Louisiana alone 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.

Steve Manser, president of Simon Roofing & 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 was being paid 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 crisis, Manser said, required contractors to rapidly mobilize hundreds of construction crews, truck supplies halfway across the country, and house and feed armies of workers - at a large setup 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.

Contractors watching from the sidelines said they would be happy to do the work for a fraction of what the government was paying.

Mike Lowery, an estimator with Pioneer Roof Systems in Austin, Texas, said that while he could not 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 2,000-square-foot roof in Austin. For that same job, the government is paying $2,980 to $3,500, or about 10 times as much, plus additional administrative fees that cannot be readily calculated.

"It sounds to me like these people are probably making a stinking killing," Lowery said. "It's hard to imagine somebody asking that kind of money... . It sure seems to me like somebody is getting taken advantage" of.

The government does not 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.

Former government contract officials and private contracting experts charge that the Army Corps neglected to negotiate better rates when it had the chance before the hurricane season began.

Taylor of the Army Corps said the Shaw contract was one of many advance deals signed in July after the government was criticized for signing lucrative deals on the fly after hurricanes ravaged Florida last year.

But the advance deal the Corps negotiated with Shaw was for the same $1.75-per-square-foot rate that it was criticized for last year.

Angela Styles, a former Bush administration federal procurement policy chief, said higher-than-normal prices were to be expected in emergencies, but Shaw's prices for installing the blue tarps seemed excessive because the contract was negotiated before Katrina hit.

"The government should have gotten a much better deal negotiating when no storm was on the horizon," Styles said.

Contact reporter Seth Borenstein at 202-383-6102 or sborenstein@krwashington.com.

Joseph Hagarty

HouseMaster / Main Line, PA

Phone: 610-399-9864
Fax : 610-399-9865

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