Before reconstruction takes place in the Gulf Coast, demolition and debris removal must be completed. The bulk of the contracts granted to date have been for hauling away everything from bodies and felled trees to the remains of crumbled buildings and homes.
FEMA and the Army Corp of Engineers immediately called on the corporations they had dealt with before or who were on "active status"; local officials in some of the worst-hit parishes, on the other hand, were new to procurement, especially in the midst of a catastrophe.
St. Bernard Parish, where floodwaters raced through town at roof-level, put the call out immediately for contractors to help haul away the massive quantities of debris. The parish contracted directly with Unified Recovery Group (URG) five days after Katrina struck, without a competitive bid system.
Rival firms were furious and cried foul; with FEMA, the parish then opened the contract for bids, but awarded it to URG again, for $369.7 million. (40) But was URG's the lowest bid? Lamont "Whip" Murphy, owner of Murphy Construction, Inc., a local company that also bid on the job, filed a protest with the parish and later with the state claiming that URG's bid was over $137 million higher than Murphy's.
"It is criminal to allow FEMA and St. Bernard Parish to spend over $137 million more than is required to clean up the storm debris in St. Bernard Parish," Murphy wrote to Landrieu.
"With money being so tight in Washington, these millions could be a windfall for the residents of St. Bernard." (41) URG's work was stalled on March 11 when nearly $70 million in unpaid bills started piling up as FEMA quibbled about costs. The state of Louisiana jump-started the process by offering to pick up the tab on a portion of the work.
On a much larger scale, AshBritt's $500 million debris removal contract (which has since far exceeded that wishful number) has attracted attention from FEMA and Capitol Hill.
In May 2006, the House of Representatives' Committee on Government Reform took a special interest in AshBritt's contract and made it a centerpiece in its evaluation of the contracting system. AshBritt CEO Randall Perkins testified before the panel.
"They grilled AshBritt's president and he wasn't happy," said Bill Woods, a spokesman for the GAO. (42)
AshBritt has enjoyed meteoric growth since it won its first big debris removal subcontract from none other than Halliburton, to help clean up after Hurricane Andrew in 1992. (43) Its success in recent years may be, in part, thanks to having Mike Parker, former FEMA chief, as its top lobbyist.
AshBritt is an "active status," contractor, having won a competitively bid contract in 2002 through the Army Corps of Engineers to essentially remain "on call" in case of a natural disaster, terrorist attack, or other national emergency.
So far, over 20,000,000 cubic yards of debris have been removed, along with 19,000 tons of spoiled food by 1,230 subcontractors under AshBritt. But within weeks of AshBritt's arrival in Mississippi, the Corps was so disappointed in its performance it had issued a "cure notice" threatening to terminate the contract. (44) In his testimony before the House, Perkins testified that such letters are common when the magnitude of the work is so broad.
"Active status" contractors are scattered throughout the nation so that they can respond reliably to regions where local companies might be too incapacitated to get the job done.
Perkins noted that the fact AshBritt won the contract was in part because it was a non-local company.
But it has also tried to take advantage of federal rules ("setasides") that reserve a certain percentage of contracts for minority and women-owned businesses. As recently as October 2005, AshBritt described itself in the Small Business Association database in both categories, with Randall Perkins' wife, Cuban- American Saily Perkins, listed as the company president. (45) But on a list of campaign contributors compiled by the Federal Election Commission (FEC) for a 2004 donation, Saily Perkins' occupation is listed as "homemaker." (46) Randal Perkins has since claimed that the SBA listing was a "clerical error." (47)