Hurricane Contracting

Hurricane Contracting

October 1, 2005

Banding Together

As I begin to write this, parts of New Orleans are still under water, thousands of souls are lost, tens of thousands are homeless and countless more are returning to a mess that is worse than nothing.

Thankfully, the people of Florida, Alabama Mississippi, Louisiana , and Texas are not alone. Citizens, state and federal agencies, the military, and private organizations across the United States have banded together supplying emergency aid and rescuing the survivors. Helping to deal with the aftermath of the destruction is where those of us in the construction industry can help. Our firm has been in communication with not only contractors wanting to get involved, but also the reconstruction program managers who need supplies, equipment, skilled craftsmen, and experienced supervision. As capable as our pubic agencies may be, the scope of this devastation is overwhelming. Their resources are spread as thin as the margin on the last bid you “had to cut”. In order to handle the magnitude of the reconstruction effort, they have called upon private industry to act as Program Managers on behalf of the government.

These Program Managers are some of the most experienced global contractors and are all too familiar with disaster recovery efforts. They worked in New York after 9/11, in Afghanistan and Iraq to restore infrastructure, and in the South Pacific after the Tsunami hit. To accomplish their mission, they will have to call upon the construction industry. We may be standing at the beginning of one of the largest multi-disciplined construction efforts in memory.

The goal of this paper is to bring reconstruction opportunities to members of the design and construction industry thereby assisting the national effort to help those devastated by the hurricane. We intend to make contact information and sources available through this paper and keep you updated as additional information becomes available to our firm.

 

The Opportunities

In nearly every imaginable sector, there are contracting opportunities to help. If your company can mobilize a piece of heavy equipment or a skilled crew in any trade, these Program Managers will most likely be happy to contract your team. Everything from houses to refineries will need services. To underscore the magnitude, we are aware of three contracts awarded to the relief effort Program Managers in just the past few weeks. The first was for $100 million to manage and provide housing construction, the second was for $100 million to aid the Army Corps of Engineers, and the third was for $29.8 million to rebuild Navy bases. Engineering News Record sources estimate the insured loss for Katrina to be in a range between $9-16 billion. In addition to the estimated multi-billion dollar public reconstruction, Fox News experts estimate damage from hurricane Rita to be in the $3-5 billion range. Louisiana Senators Landrieu and Vitter have introduced a bill they are calling the “Hurricane Katrina Disaster Relief and Economic Recovery Act (S. 1765 / 1766)” which has proposed $180 billion dollars in Federal spending and $70 billion dollars in tax breaks for the gulf coast region. Total expenditures will not be known for some time, but it will be well into the tens of billions of dollars. Most of this repair work will be sublet to professional design and construction firms.

Our sources at Bechtel Corporation have described most of the clean-up and demolition work as being let on a cost-plus basis. For those companies not structured to take on major public contracts on a cost-plus basis, there is money flowing to the private, commercial and residential markets. We have received word of insurance companies issuing advance payments to homeowners to cover emergency living expenses and to sign contracts with available contractors. As a contractor, it is important to work in concert with the property owner and avoid a premature commitment with an insurance adjuster who is eager to close a file before total damages and expenses can be assessed. Everyone wants to conclude the transactions, but property owners and contractors should protect their rights to recover unforeseen costs or damages that may not become apparent until later.

To rally the resources and capabilities of the industry, most of the governmental agencies, Program Managers, and prime contractors have vendor prequalification sections set up on their websites. We have included links to sites that our contacts have directed us to. In an effort to match the right opportunities with the correct contracting parties, they have asked that suppliers, contractors, and subcontractors visit these sites and register. The sites offer typical pre-qualification forms including a description of the goods and services you wish to offer. If you are interested in hurricane contracting, please take the time to visit each of these links and provide the required information. The research that we have done suggests that electronic prequalification is the best way for you to receive the Requests For Proposals. Of course, the information we are providing here is preliminary, but should get you connected into the relief effort. Follow-up calls, letters, and e-mails to the contacts might be helpful in expediting your involvement. We will issue an update if significant changes become apparent.

The Organization

The government agencies actively involved in reconstruction are the U.S. Navy, FEMA – Federal Emergency Management Agency, the Army Corps of Engineers, the Department of Homeland Security, and the GSA – General Services Administration. FEMA is supervising the effort and coordinating with other government agencies. Under FEMA there are 5 private Program Managers, the Army Corps of Engineers, and the Department of Homeland Security.

1.  FEMA

The FEMA general information site link is: www.fema.gov/index2.shtm HUD has joined FEMA in one of the most important efforts at this time which is to provide housing for the 163,000 displaced people. FEMA will be providing contracts to build some of this housing. These news releases can be found at: www.fema.gov/news/newsrelease.fema?id=18708 Contractors should register with FEMA at Central Contracting Registration to get your information in FEMA’s database. www.ccr.gov/

2.  Program Managers

The Program Managers are Bechtel Corp., Fluor Corp, Dewberry, Shaw Group, and CH2Mhill. The Program Managers will be hiring their own vendors and contractors, which is the opportunity we suggest you explore first.

a.  Bechtel Corporation is using http://supplier.bechtel.com as the procurement contact and the supplier registration portal. Be sure to click “FEMA Disaster Aid” at http://supplier.bechtel.com/fema.htm to see specific contracting needs and subcontracts. An e-mail procurement contact is available at procweb@bechtel.com

“Bechtel task forces are already on the ground in the Gulf States receiving detailed FEMA briefings to determine where and how we can best help,” said Thomas Hash, President of BNI (Bechtel National Inc.) “Our first task order calls for us to help provide short-term housing facilities in Mississippi ,” he said.

b.  Fluor Corporation heads up operations for the Housing Area Command and is now beginning construction of temporary housing units. Though its website lacks specific Katrina information beyond the labor recruitment site, you should call their procurement offices in Aliso Viejo , CA and register on their supplier website:www.fluor.com/about/supplier.asp or fema.ia.subcontract@fluor.com

Tel: (949) 349-2000 contact@fluor.com

c. Dewberry Corporation is specifically looking for home inspectors and can be reached at: www.parrinspections.com or www.dewberry.com For subcontracting opportunities e-mail:

disastersubcontractor@dewberry.com
Doug Frost dfrost@dewberry.com (703) 849-0656.

d.  The Shaw Group is providing transportation and facilities management including support to hospitals and other public buildings. Their subcontractor sign-up portal is at:

www.shawgrp.com/HurricaneRecovery/submitvendorinfo.aspx

e.  CH2Mhill has all the required information for material vendors and contractor pre-qualification at the web addresses found below. Should your products and services be matched with Katrina Program needs, you would then be sent a Request for Proposal. They are currently working on housing in Alabama .

https://webapps.ch2m.com/cqs/

http://projects.ch2m.com/FEMA%5FPublic/prequal.asp or contact John Corsi Phone: (720) 286-2087 Mobile : (303) 994-4318
John.Corsi@ch2m.com

katrinarelief@ch2m.com

3.  Army Corps of Engineers

www.mvd.usace.army.mil/hurricane/chr.php and www.mvk.usace.army.mil/contract is the Army Corp’s central place of contracting information out of their Vicksburg District office. You will find links to the contractors they have mobilized; and each of these contractors’ websites has a vendor portal with contact information or pre-qualification forms that can be filled out. The Army Corps of Engineers has divided up their responsibilities by state and type of work which they call U.S. Army Corps of Engineers Advanced Contracting Initiative (ACI). The ACI contractors have the following emergency contacts already in place. For subcontracting opportunities in these areas please contact the companies listed below

The ACI contractor for Mississippi is: Ashbritt, Inc. www.ashbritt.com/sub_conract.shtml The ACI contractors for Louisiana are: Ashbritt, Inc., Phillips and Jordan http://disaster.pandj.com/primaries/subcon.htm , Environmental Chemical Corporation www.ecc.net, and Ceres Environmental Services Inc www.ceresenvironmental.com The ACI contractor for Alabama and Florida is: Phillips and Jordan. The ACI Power contractor is IAP www.iapwws.com The ACI Roofing contractor in LA is Shaw Group www.shawgrp.com and the ACI Roofing contractors in MS are Carothers Construction, Inc. www.carothersconstruction.com and Ceres Environmental Services Inc.

The Army Corps is also needs QA/QC and other construction professionals to help supervise the effort. If you are interested in providing Hurricane Katrina support, please register by email at: cemvk-ct@usace.army.mil For additional information call (601) 631-5814 or (601) 631-7262.

In just the few days that we have been gathering information on this topic, new contracts have been awarded to: Thompson Engineering, Inc. subcontracting opportunities contact Tom Clinton Tel: (251) 666-2443 tclinton@thompsonengineering.com and W.G.Yates & Sons Construction Company. For subcontracting opportunities contact Jody Tidwell Tel: (601) 656-5411
byates@wgyates.com or jtidwell@wgyates.com

4.  U.S. Navy

Naval Facilities Engineering Command http://esol.navfac.navy.mil Currently, there are no RFQ’s related to the Hurricanes posted on the website. That is logical however, as NAVFAC is mobilizing their primary contractor, Halliburton-KBR. You should register to receive future RFQ’s on the NAVFAC site, as well as with KBR. The Navy will be spending money on reconstruction from the hurricanes for several years. You can accomplish your registration with KBR at the following sites: www.halliburton.com/about/supplier_rels.jsp

kbr_supplier_relations@halliburton.com Under a CONCAP contract, KBR is assessing pumps, dewatering New Orleans and constructing a disaster relief center.

5.  Department of Homeland Security

The DHS in conjunction with the U.S. Coast Guard has listed two links with portals to register as a contractor supplier at www.dhs.gov/dhspublic/interapp/editorial/editorial_0726.xml and www.fedbizopps.gov/katrina.html. The links take you to the Program Mangers listed above and have more contact information. They also have a link to the National Resource Registry where you can enter the database www.nerr.gov and the Southwest Emergency Response Network where you can choose to donate resources at www.swern.gov/privatesector.

6.  GSA

We could not access GSA procurement information as we cannot register as a contractor. For contractors not registered to work with the GSA, email the following information to Katrinasupport@gsa.gov:

Company Name
Company Address
Point of Contact
Business Phone, Home Phone, Cell Phone, Fax, E-mail
Company Website
Succinct Description of Offerings

For contractors registered to work with the GSA please send an email to gsa.advantage@gsa.gov or call 1-877-472-3777 www.gsaadvantage.gov

Market Impacts

It would be difficult to predict what impact these events will have on the construction markets. Can the required skilled labor be summoned and at what cost? If the labor force does migrate to the gulf coast, how will that affect other labor markets that do not have a surplus? What will the demand for reconstruction materials do to availability and pricing on a national scale? Common sense suggests a run on roofing materials, sheathing, and gypsum products. Will increased demand on labor and materials plus a reduced supply of refined petroleum drive more inflation in the construction markets? These are just a few of the factors that should be carefully considered when formulating your contractual obligations.

Legal Issues

On September 21, 2005 the ABC Associated Builders and Contractors in conjunction with the AGC Associated General Contractors issued a press release: “Together, ABC and AGC called on Congress to approve legislation introduced Sept. 8 in the U.S. House of Representatives that would grant limited immunity to construction firms and their employees when providing emergency construction assistance on a voluntary basis in response to a declared emergency or disaster. However, the legislation would not shield contractors from liability in cases of gross negligence or willful misconduct.” This legislation, called The Good Samaritan Protection for Construction Volunteers Act (H.R. 3717), to our knowledge has not yet been approved. In addition, the civil legal system in the afflicted areas has all but been temporarily shut down. We will be in contact with our local affiliates to stay abreast of the situation.

By proclamation, the White House has acted to lift labor restrictions on federally funded projects. President Bush suspended prevailing wage in the counties nearest the Katrina destruction on September 8, 2005 . The proclamation can be found at: www.whitehouse.gov/news/releases/2005/09/20050908-5.html Nevertheless, we believe that high demand will cause the wage rate for skilled and technical personnel to be set quite high.

Congress Barton of Texas, on September 26th, introduced a Bill (H.R. 3893) to the U.S. House of Representatives calling for the passage of the “Gasoline for American’s Security Act of 2005”. To quote the Congressional findings, “In the immediate aftermath of Katrina alone, United States refining capacity was reduced by more than 2,000,000 barrels per day” and “No new refinery has been constructed in the United States since 1976”. The intent of this bill is to remove barriers and to find practical ways to facilitate the construction of new refining capacity for the United States.

This discussion is generalized in nature and should not be considered a substitute for professional advice. © FWH&T

Fabyanske Westra Hart & Thomson
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