NEW ORLEANS -- As many as 300,000 homes in Louisiana alone may need roof repairs, and as the government tries to cover every salvageable roof by the end of October the bill could reach hundreds of millions of dollars.
The government is paying contractors an average of $2,480 for less than two hours of work to cover each damaged roof -- and is giving them endless supplies of blue sheeting for free.
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.
"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, adding he recently paid $3,500 for a new permanent roof. "I've done the math in my head 100 times and I don't know how they computed this cost."
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 for billions of dollars in repair and reconstruction contracts.
A contractor's defense
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.
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 followed government contracting requirements and tried to get the best deal possible for the roofing work.
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 said that although he couldn't calculate how much it might cost 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 the 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.
A look at the contracts
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 receiving 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.
Dick Taylor, roofing mission manager for the corps, said the average repair to date has been about 1,500 square feet, meaning the companies have on average been getting $2,235 to $2,625 per house.
Under the square-foot rate, contractors provide the nails, tools and wood strips to hold down the blue sheeting, but they can also bill the government for plywood used at rates ranging from $2.26 to $3.50 per square foot.
Contractors are also billing the government different amounts for administrative costs and other types of work, such as minor asphalt roof repair, the contracts show.
For minor repairs on asphalt roofs, LJC gets $250 for each 50-square-foot job; Simon gets $600 for the same work. Shaw gets $350.
Former government contract officials and private contracting experts say the corps neglected to negotiate better rates when it had the chance before the hurricane season began. Once the storm hit and the vast amount of destruction became obvious, they say, the corps failed to negotiate a lower rate for contractors, which could still make decent profits because of the sheer amount of work to be done.
Taylor said the Shaw contract was one of many advance deals signed in July after the government was criticized for signing lucrative contracts 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 are to be expected in emergencies, but Shaw's prices for installing the blue tarps seem 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.
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