[GreenYes] Hurricane Debris Removal Problems

[Debra Lombard <dlombard@no.address>]

>From The Times-Picayune  
Pickings slim for debris haulers
Layers of contractors siphon off earnings 
Monday, February 27, 2006 
By James Varney
and Gordon Russell%%par%%Staff writers 
On a recent morning on Nursery Avenue in Metairie, a crew of 10 workers 
from Iowa, freshly arrived from a stint picking up trash in Gulfport, 
Miss., was cleaning up the last few morsels of what had been a small pile 
of debris. 

Thanks to the logistical legwork of getting orders and stationing flagmen, 
it took about an hour to sweep the street clean of a mess that didn't go 
far toward the crew's goal of filling up three trucks that hold about 30 
cubic yards apiece. 
Leigh Bock, a Connecticut contractor who until recently was in the debris 
business, asked the foreman how long it took his men to load the pile. 
"Too long," the man said. 
And how many trips would his crew make to the landfill that day? 
"Not enough," the man said. 
The episode illustrated in miniature what Bock says are the untenable 
economics of the debris-removal business six months after Katrina. With 
much of the large, easy-to-pick-up trash gone, crews like the group from 
Iowa are being assigned to small piles that are time-consuming to pick up 
but financially unrewarding because the crews are paid by the load. 
Bock sketched out the realities: Ten men on the job, plus equipment worth 
several hundred thousand dollars. At $6.50 per yard, the crew's daily haul 
might be $1,200. The workers might bring in $1,800 if they were able to 
make three trips, or less if they got a flat tire. Not much when the 
salaries of 10 men and the costs of running three massive trucks are taken 
into account. 
Bock himself said he was fired several weeks ago after he refused to pay 
his crews to rake yards and pick up small scraps. 
"We're not down here to pick up cigarette butts," he said. "That 
absolutely kills you. I brought half a million dollars of equipment down 
here. I told them, 'If you want us to do that, you have to pay us by the 
hour.' " 
The irony, as Bock and other contractors describe it, is that there's 
plenty of money being pumped into the debris-removal effort -- about $1.5 
billion so far, according to the federal government, which is supervising 
the effort and paying for most of it. But most of that cash ends up not in 
the pockets of the crews on the street, but in the accounts of the three 
prime contractors handling the debris mission in Louisiana and an army of 
middlemen who serve no particular function, Bock and others say. Indeed, 
the contracting layers have such a draining effect on relief funds that 
top federal officials are searching for a way to eliminate them. 
While plenty of eager workers have descended on the region, lured by 
promises of big money, Bock said that once they get here and do the 
arithmetic they're going home -- some of them with debts they can't afford 
to pay. No matter that a big bonanza is promised by the primes once 
housing demolition kicks in with receipt at long last of federal housing 
money. The result, he said, is that much of the smaller debris that still 
lines the streets of southeast Louisiana might wind up being the problem 
of cash-strapped local governments and residents. 
Lawsuits filed 
The issue of subcontractor pay remains a knotty one, possibly involving 
malfeasance or worse. The Louisiana attorney general's office said it has 
forwarded 10 to 15 investigative leads to the Federal Emergency Management 
Agency, where they are under legal review. 
"It is a problem," said Isabelle Wingerter, who heads the attorney 
general's public protection division. "It might be time for us to revisit 
this, and maybe we need to look at trying to pass some stronger 
legislation against this in March." 
Indeed, some litigation has surfaced. Jed Cain, an attorney with Herman, 
Herman, Katz & Cotlar, has filed two lawsuits on behalf of laborers who 
allege they were cheated by primes or subcontractors on debris removal 
work in Louisiana. For its part, however, the Army Corps of Engineers said 
internal probes uncovered nothing untoward in the payment plans and 
schedules of the sprawling debris-removal effort. 
"To have an operation as long and as huge as we have going here, it's not 
atypical for a sub-sub-subcontractor to complain," said Jean Todd, the 
corps' lead contracting officer in Louisiana. "Our prime contractors are 
doing yeoman's work making sure no one is getting stiffed." 
Todd and several other corps officials said the matter is complicated by 
the sometimes ad-hoc nature of the arrangements far down the hauling 
chain. In some cases the invoices are never submitted by subcontractors, 
the corps said, while in others no formal contract is signed, making it 
more difficult for the sub to substantiate his claim. 
Those are thin shields for investigators to hide behind, said Wingerter, 
who characterized the no-written-contract defense as "a bit of a cop-out." 
Nevertheless, she said the relationships are often forged in such haste as 
to make a resolution impossible. 
Lengthy list of firms 
Such misty alliances create an environment in which payments become 
irregular, according to one corps contracting officer who discussed the 
matter on background. He corroborated the complaints of several 
subcontractors that the multiple layers of crews surrounding debris 
removal projects mean less cash reaches the street. 
"They're doing this one thing with no oversight, and that's when they're 
probably getting screwed," the official said of the low-level haulers. 
"The lesson learned here should be that the next time we do something like 
this, we limit it to a three-tiered deal, no more than that." 
At times, some subcontractors said, debris removal arrangements stretch 
five or six companies deep. The major players -- those that landed one of 
the four $500 million deals the corps let in September, in some cases 
without fully competitive bidding -- usually have one or two companies 
handling their logistics, delineating collection zones and staging areas 
in various parishes and dishing out the work orders. Under those two or 
three layers is a company that receives the work orders and either does 
the job itself or, more commonly, doles it out to street crews that 
perform the manual labor. At each stage, of course, someone expects 
payment. 
Just how much, particularly at the top, is hard to determine. The corps 
will not say how much it pays the prime contractors per cubic yard, citing 
federal court rulings that agreed with corporate interests who argued 
making such information public would erode their competitive edge. 
Regardless of how much the primes are paid, Washington bureaucrats appear 
to be losing patience with the layering effect. Earlier this month, 
Homeland Security Secretary Michael Chertoff testified to Congress about 
relief pies being cut into ever thinner slices by stacks of contractors, a 
process he labeled "needless bureaucratic churning." 
Not enough dough 
That top-level view meshes with the consensus on the street, according to 
hauling crews. Increasingly the story is one of empty pockets and growing 
dissatisfaction with the way debris removal -- a job that is, at once, one 
of the most important and least sexy on the post-storm agenda -- has been 
handled. 
Penury among debris haulers was nobody's expectation, given the money 
lavished on debris removal in Katrina's wake. It seemed unimaginable that 
$2 billion would be insufficient to complete the job within a year, the 
timetable set by the corps. 
"I've lost money," said Tony Lynn, who sold a small construction business 
in Arkansas, bought some expensive hauling equipment and came to Jefferson 
Parish last October hoping for big money. "It's unbelievable." 
State Rep. Troy Hebert, D-New Iberia, who worked as a debris hauler 
himself and put other teams in the field in Jefferson Parish, said he has 
asked the corps repeatedly how so much money could be earmarked for a job 
and yet lead to so many payroll complaints from laborers. He, Lynn and 
more than three other contractors from various states all blamed the 
layered contracts that sprouted around corps projects. With so many hands 
taking a cut, there is nothing left at the end of the day, according to 
this version. 
Hebert and others, including Bock, cited Loupe Construction, a top-tier 
sub under Ceres, as an example of a "pass-through" company that added 
little or no value to the work but left less money for the man with the 
Bobcat actually scooping up debris. Loupe has acknowledged he does not use 
his own equipment, but he argues his organizing skill, deep local 
knowledge and comprehensive insurance coverage make him an ideal field 
marshal for the prime contractors. 
Hebert, who worked at times as a subcontractor for Loupe, said many of 
those attributes can be found at other links in the chain. He and other 
subcontractors said taxpayers would reap huge savings, and the job would 
be performed with equal or greater speed, if the number of layers was 
trimmed. 
"When the little guy works for the middle guy he has no leg to stand on, 
and he has no choice if he wants to work," Hebert said. "It's a shame 
because a lot of people made a lot of money, and a lot of people worked 
really hard and lost." 
Money delays 
Others familiar with the contracting labyrinths that accrue to major, 
post-hurricane work chalked up some of the problems to an oversaturated 
market that has shrunk profits at the fringes, or to the subcontractors' 
relative inexperience. Both problems were evident from the outset in the 
lines of trucks that would snake around landfills in the first months 
after Katrina, queues that forced long waits for haulers and limited the 
number of trips they were able to make each day. 
Compounding the cash crunch are delays in disbursement. The impact is only 
more infuriating, given that the corps' early recourse to giant companies 
was justified on the grounds that they had the wherewithal to carry the 
operation forward during inevitable interruptions in the flow of federal 
dollars. 
"That hits the nail on the head," Hebert said. "I've been asking the corps 
from day one why aren't their people floating the money if we gave them 
these big contracts? Why can't the corps hold the primes responsible?" 
But even timely payment might not be enough to keep the little guys on the 
street much longer. Back when the metropolitan area was clotted with 
hurricane wreckage, the top contractors "cherry-picked" debris, scooping 
up big pile after big pile, making frequent runs to the landfills and 
oodles of money in the process, disgruntled subcontractors said. 
That's the thrust of a lawsuit filed by Matthew Lopez, who landed a 
$9-per-cubic-yard deal as a top tier sub to Ceres in Tangipahoa Parish. 
Lopez claims he was given exclusive rights to the debris in four sectors 
of the parish but constantly found out-of-state contractors on his turf 
picking up the low-hanging fruit. That left Lopez with the time-consuming, 
and less profitable, work of scooping up small scraps and chain-sawing 
trees too large to fit in his truck. 
Now, with debris only dusting some neighborhoods, it isn't profitable for 
a crew to spend hours sweeping it up and so it remains in place. 
"Right after the storm hit there was stuff everywhere, and everywhere you 
went you had a pile so the big contractors went where they wanted," Hebert 
said. "It wasn't worth it to go after the smaller piles so they skipped 
'em, and now you've got these smaller little piles out there not getting 
picked up." 
Lynn, who labored in a zone in which Ceres was the prime contractor, 
echoed that analysis. 
"Ceres gets all the sugar and we've got go scrounge around for scraps, and 
that ain't right," he said. 
Corps 'satisfied' 
The corps flatly disputes the argument that the cleanup was haphazardly 
supervised or that the prime contractors took the easy work and left 
scraps to the subcontractors. 
"That sounds like a bunch of crap there," said Charles Briggs, a corps 
officer who was active on debris removal contracts in the weeks after the 
storm. "The task orders issued don't reflect that." 
Briggs declared himself "extremely satisfied" with the cleanup to date. 
The most recent corps statistics show debris removal reaching the 
three-quarters mark. Of the combined 26-plus million cubic yards of debris 
left by Hurricanes Katrina and Rita, the corps said it has cleared 18.7 
million, or 72 percent. 
It's that last quarter of the job that may prove a challenge. "It's true 
there is not as much out there and now you've got to hustle more for it," 
said Robert Anderson, a corps spokesman in Baton Rouge. "And now some 
contractors are starting to pull up and leave because there is not enough 
work to sustain them." 
Herbert, wrapped up in the Legislature's second special session since 
Katrina, said he decided to withdraw from the debris-hauling game in the 
New Orleans area weeks ago. Lynn and Jackson said they would like to bolt, 
saying their experience has left them deeply in the red. Bock has stayed 
in town but plans to focus on building houses. 
Some of them are hoping that widespread demolition of houses will generate 
new heaps of debris and another chance at profitability. But no one knows 
when that might happen. Anderson said the corps' deadline for stopping 
debris removal is one year after the beginning of home demolitions, then 
conceded the deadline is fluid because the starting point is not fixed. 
And some subcontractors are so soured by their experience they don't trust 
the promise of future work. Lynn, for one, said he has had enough and is 
returning to Arkansas. 
"They kept holding this demolition carrot in front of you, and as the 
weeks went by and no demolitions started I finally realized that carrot 
was false," he said. 
. . . . . . . 
James Varney can be reached at jvarney@no.address or (504) 
826-3386. 

http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-5/1141023884150940.xml


Debra Lombard, LEED AP
Sustainable Design Specialist
The RETEC Group, Inc.
900 Chapel St., 2nd Fl - Box 9
New Haven, CT 06510
Tel: 203-868-0137
Fax: 203-773-3657
dlombard@no.address


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