- The Washington Times - Thursday, July 19, 2007

NEW ORLEANS (AP) — Contractors hired to clean up after Hurricane Katrina are fuming over delays in getting paid by the Federal Emergency Management Agency, and some politicians fear the red tape will discourage companies from bidding on the big rebuilding projects that lie ahead for New Orleans.

One company claims it is owed about $150 million, and some contractors have walked off the job or gone to court to get the money they say should have been paid for demolition and debris removal completed as much as a year and a half ago.

“You better hope another storm doesn’t hit you. You guys will be under water for six months,” said Zach Johnson, a Kansas City, Mo.-area contractor who is suing for about $1.7 million for clearing trees in 2005. “Everybody got a bad taste in their mouth from Louisiana.”

Mr. Johnson called the situation “messed-up, frustrating, depressing” and said he will not pursue any more cleanup and recovery jobs in Louisiana.

In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding that FEMA would cover most of, if not all, the costs.

Contractors must submit their bills to the local governments that hired them. Then the bills have to be sent to the state for approval, after which they are forwarded to FEMA for review. FEMA is responsible for releasing the money back down the chain.

FEMA said slow payments often stem from incomplete paperwork submitted by the contractors and parishes. The agency said it is trying to protect taxpayers by making sure that the government is not overpaying and that the work was performed as promised.

“We’ve done our part,” spokesman Andrew Thomas said.

The agency said it could not put a total value on delayed payments in the New Orleans region.

In hard-hit St. Bernard Parish, local officials fear the slow-pay reputation will discourage contractors from bidding on the next major phase — the reconstruction projects involving roads, sewers, schools, and police and fire stations.

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