By Craig Guillot
New Orleans/December 15, 2006 —With estimates of more than 250,000 homes destroyed by Hurricane Katrina, New Orleans and the Mississippi Gulf Coast will experience a construction boom for years to come. There is a large need for contractors in the area, especially for roofers, drywall specialists and flooring installers. Most of the work consists of repairing flooded and gutted homes — homes that had as much as 12 feet of water in them and have been gutted to the studs and slabs. The region will also become a hotspot for new construction in coming years.
Federal contracts
Many companies have been drawn to the region with the hopes of working for a federal contractor such as the Shaw Group. With 22,000 employees and 174 offices around the world, the organization is the largest government contractor in the disaster zone. So far, the company has employed the services of more than 287 subcontractors. Shaw Group has mainly been involved with temporary housing projects including the transportation and set-up of travel trailers and of assistance offices.
William Croft, director of response and recovery for the Shaw Group, spoke at the Gulf Coast Reconstruction and Hurricane Preparedness Summit in New Orleans in August. He said that hiring Louisiana-based companies and contractors is a top priority. Louisiana businesses represent 78 percent or $619 million of the contracts that have been issued. Nevertheless, opportunities abound for contractors outside of the region who have the patience and persistence to pursue the contracts.
"Everybody knows that we're a long way from ending the recovery process in southeast Louisiana. There are some projects that haven't even started yet that we're going to need a lot of folks to help out with," Croft said.
Preferences for Louisiana businesses
Eugene Cornelius, district director of the U.S. Small Business Administration in New Orleans, said that the organization can help point businesses in the right direction, but he places priority on small businesses from within the state.
"I advocate for Louisiana. I'm not saying other people can't come in here and bid on contracts, but I'm not going to advocate on [their] behalf," said Cornelius.
He said that out-of-state contractors can gain preference through a side door by forming a joint venture with a Louisiana company. Many construction companies and contractors are even teaming up with accounting and law firms to gain more financial capacity and obtain performance bonds.
"Increase your odds," said Cornelius. "Link with a small business, link with a Louisiana firm, then go for the bid. You're not only helping in the rebuilding effort, you're helping in the rebuilding of our economy by helping small businesses."
Mae Stanley of American Indian Pride Construction and Mold Remediation, Inc., said that they came from Texas to go after thousands of homes that have been infected with mold. They are considering partnering with a Louisiana company but have been seeking out much of their own work in the meantime.
"We came here early, and we've been wading through the mud with a lot of the residents. We figure we're going to be helping out people here for years to come," said Stanley.
Unique challenges
One major problem for out-of-state workers who want to strike up work on their own is a lack of housing. Vacant apartments are few and far between, and, according to the Apartment Association of Greater New Orleans, rents have increased by as much as 30 percent. In order to house their own workers, some construction companies are even building their own apartments, or are purchasing or renting out flooded-and-gutted properties then doing the remodeling themselves.
"We found a duplex that had mold growing all over the walls, but that's what we do for a living. So we fixed it up and moved in," said Stanley.
Working for a federal contractor also comes with additional concerns: Subcontracting requirements often include bonding and a long reimbursement process.
"Federal requirements set bars that are pretty stringent," said Croft. "Anytime you're dealing with money that is reimbursed by the federal government, you have to follow a lot of rules and guidelines. It is difficult for small businesses to comply sometimes."
For more information on contracting, subcontracting and reconstruction opportunities in the region, visit the Hurricane Contracting Information Center.
Craig Guillot is a freelance writer who lives in New Orleans.
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