|Mississippi Steel. Casino barges used a lot of steel and contractors on private jobs are doing heavy recycling.|
Six months after the U.S. Army Corps of Engineers launched its debris removal mission in the Gulf Coast, much of the area still looks like a battlefield. Although the Corps says the work is on schedule, contractors say progress is gummed up by sporadic population return, uncertainty about future flood risk, politics, hesitant cash flow and miles of red tape.
Still, particularly for contractors in Louisiana, debris cleanup is about the only grease for the economy these days.
The size of the mission is awesome. Three contractors are working in LouisianaPhillips & Jordan Inc., Knoxville, Tenn.; Ceres Environmental Services Inc., Brooklyn Park, Minn.; and Environmental Chemical Corp., Burlingame, Calif. Ashbritt Inc., Pompano Beach, Fla., is working in Mississippi. They are equally splitting $2 billion dollars in ID/IQ (Indefinite Delivery/Indefinite Quantity) debris removal contracts. By comparison, the entire budget for 59 contracts to restore the federal levee protection system to pre-Katrina status by June 1, is $770 million.
The Corps began the Federal Emergency Management Agency-funded debris mission Sept. 6 with the goal of clearing non-flooded areas within five months and flooded areas within a year, says Chester Ashley, mission manager for Louisiana. He says crews so far have removed 17.7 million cu yd of an anticipated 26.5 million cu yd of non-demolition debris. Demolition is the next phase. No cost estimate is available.
With the exception of recylables, the debris is being disposed of locally, even in the greater New Orleans area where the landfills are groaning. Click here to view map
Jean Todd, chief of contracting for the Corps Memphis District and the Louisiana Recovery Field Office, says about $920 million of the $1.5 billion ID/IQ money for Louisiana has been obligated by task order to date. She says prime contractor reports indicate that two are subcontracting out over 90% of the value of their work, and one 70%.
Todd says tracking payments in the debris mission is a moving target. But as of the end of January, about $437 million had been paid to subs, of which $316 million went to local firms. My contractors are being paid and they are paying their first-tier subs, Todd says.
Still, many subs and even representatives of the three primes in Louisiana, grumble about the pace of payment.
|Debris Mountains. As population slowly returns to New Orleans, refuse piles are being replenished on curbs, requiring contractors to clear neighborhoods repeatedly. The amounts are huge, and that is even before demolition begins.|
Maj. Gen. Donald T. Riley, the Corps director of Civil Works, notes that prompt payment requirements call for invoices for service contracts, like debris removal, to be paid within 30 days, or the Corps must pay interest. Riley says internal audits show the Corps is paying an average of $50 in interest per $1 million spent on debris clean-up, well below its goal of keeping interest payments below $85 per $1 million paid.
Riley says most of the delays appear to come from snags in getting invoices to paymasters, and from missing signatures of Corps contract representatives. But he notes that there is a difference between subs and primes. We have heard a lot of complaints from some subs to particular primes that they are getting payments very late. He says that those complaints were more frequent last fall and he thinks the situation has improved.
According to Riley, the Corps only can affect the primes pace of payment to subs indirectly. Beyond funding the mission, FEMA has no role in processing payments and has not contributed delay, he adds.
Ashley claims that this clean-up differs from those after other storms in ways that could add time to the overall process. The upper-level management is different, he says. Local residentsparishes and municipalitiesgo to the state, which requests federal assistance through FEMA, which then assigns us the task. Before, a local municipality would go directly through the Corps.
BenTurner, Phillips & Jordan president, says there is a frustrating process in working with the Corps to get paid promptly, although he notes that the Corps is a group of humans on a challenging mission. There is a lot of turnover in employees, Turner says. By necessity they have to rotate their people....You lose continuity, but the alternative is to burn people out. Its not perfect, but its getting better.
The uncertainties have some firms avoiding federal work. D.H. Griffin Wrecking, Greensboro, N.C., is sticking with debris cleanup and demolition along the casino-heavy Gulf Coast. Weve done six of the eight major casinos, says David Griffin, vice president. Weve handled in excess of 100,000 cu yd of debris. He says the jobs are hard-money contracts, with few problems now in getting trucks and sending debris to secure landfills. Griffin notes that Mississippi has expedited landfill permitting to aid in restoring the casinos, a major economic force. Some permits used to take a year. Now, theyre done in weeks, says Griffin. He says there are no permitting problems, even with asbestos waste.
The demolition includes a lot of recycling because casino barges are up to 85% steel. We have processed and recycled about 15,000 tons, says Griffin. He says he is eyeing federal debris work in Louisiana, but is concerned about the unsettled plans for housing demolition, bureaucracy and possible rules favoring locally based contractors. Im hearing that a lot of things are bogged down. From a distance, Im not sure I want to get over there, Grifffin says.
Houston-based PRC Environmental Demolition also is sticking with private owners. It recently took on cleanup of three Gulf Coast casinos, including the Biloxi Grand, a barge/casino that PRC Vice President Edward Siebert says was blown 1,000 yd inland. We dont do FEMA work, he says. We go after work where they have the money or have already been paid by insurers. You have a lot of people who werent fully insured or are still armwrestling with insurers. They have been slow to pay, especially homeowners.
Aside from scale, this clean-up differs from others because the impact zone is a densely populated residential area, much of which was subjected to prolonged flooding, says Ashley. Even now, only a fraction of the population has returned, and those in a trickle. Uncertainty about future flood protection, property values, insurance and failing utilities has people hesitating. An enormous amount of the debris still has not been moved to the curb and the Corps may not enter properties to collect it unless local governments approve.
In the non-flooded areas, people returned to homes a lot quicker, Ashley says. In flooded areas, we recognize we may see slow return, or no return. At some point, if people arent back, you cant keep the contract mobilized, he says. The Corps will tell parish, local and state governments, youll have to take care of it yourself.
Eventually, homes will be condemned by processes still being argued in the courts and a special legislative session. The Corps estimates the structural debris of each home at 275 cu yd. Furnishings add 25 cu yd. With an estimated 26,601 structures to be torn down in Orleans Parish alone, the pending demolition phase will be the biggest chunk of the debris removal mission of all.
A schedule for widespread demolition has not been determined. Once they decide which structures will be demolished, weve got contractors ready to do that, Ashley says. Were poised and ready, but they havent said to move out yet. Ashley says he has a contract in place to remove 118 structures in the Lower 9th Ward that are in right of ways, but we are waiting on the city to give us a go-ahead.
|Teardown. The next gold mine is demolition, contractors say.|
Phillips & Jordans contract covers roughly half of Orleans Parish, an area identified by the Corps as the most severely impacted zone, Turner says. About 80 to 90% of it was underwater for weeks. We didnt get started until early October. When we got there, it was 100% void of people and we removed only readily accessible debris, says Turner. So far, only about 30% of the residents have returned, so debris is trickling out. What you see is a dollop of debris here and a dollop of debris there, he says.
Much of Turners labor is used for segregation of debris and he says he does not know how much longer he will be able to eat the cost of waiting for the demolition phase. So far, Phillips & Jordan has been tasked to tear down only four homes.
But when the day comes for demolition, Turner says he will be ready. I see tens of thousands of homes in my mind that are potential demolition candidates. You can look at houses and make an informed judgement. Wheres the next rich gold mine? Orleans Parish demolition.
(Photos by Michael Goodman for ENR)