Homeland Security Watch

News and analysis of critical issues in homeland security

March 20, 2006

WaPo on the costs of the Katrina cleanup

Filed under: Business of HLS,Preparedness and Response — by Christian Beckner on March 20, 2006

This is absolutely inexcusable:

How many contractors does it take to haul a pile of tree branches? If it’s government work, at least four: a contractor, his subcontractor, the subcontractor’s subcontractor, and finally, the local man with a truck and chainsaw.

If the job is patching a leaking roof, the answer may be five contractors, or even six. At the bottom tier is a Spanish-speaking crew earning less than 10 cents for every square foot of blue tarp installed. At the top, the prime contractor bills the government 15 times as much for the same job.

For the thousands of contractors in the Katrina recovery business, this is the way the system works — a system that federal officials say is the same after every major disaster but that local government officials, watchdog groups and the contractors themselves say is one reason that costs for the hurricane cleanup continue to swell….

The front-page story in Monday’s Washington Post goes on to chronicle the layered contracts for debris removal, roofing, transportation, etc. along the Gulf Coast, and the fiscal consequences of this setup. If I didn’t know better, I would think that I was reading about some corrupt tinpot nation where bribes are the normal way of doing business.* This is unacceptable, and it has real consequences. Every dollar wasted paying for goods and services at above-market prices is a dollar that could be used to make real contributions to key unmet homeland security needs, or to pay down the deficit.

*As the taxi cab driver at the Moscow airport told me in 2004, “You pay me $120, I give you receipt for $200, your company pays you $200….you win, I win.” I said no.

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