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Louisiana Firms Frustrated by Lack of FEMA Contracts

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

New Orleans needs a lot of things--temporary housing, trash pickup, new roofs for thousands of homes--and the city is full of businesses eager to provide them. But many local businesses are frustrated. They say they're not getting their fair share of disaster relief contracts from the federal government; that work is going to companies from outside the region. From New Orleans, NPR's Greg Allen reports.

GREG ALLEN reporting:

Darren Blysted(ph) used to live in New Orleans' Lakeview section and work in Harrihan in the suburbs. Now his home is just out the back door of his office.

Mr. DARREN BLYSTED (Business Owner): This is where I'm living right now. So I walk out of here into--you know, I gotta build some signs today. I work every day. So this is the camper where I live right now.

ALLEN: Blysted's home in Lakeview was flooded by 12 feet of water, but for now he's busy with his pest control and home inspection company. He has 35 employees and specializes in termite fumigation, which involves working on roofs and covering houses in blue plastic, something in great demand after a hurricane.

Mr. BLYSTED: When the hurricane hit, I thought, `Well, this is great. My fumigation department'--which is one of my biggest department--`these guys can go right into this. We work on roofs. I have a lot of customers that need this service.' So literally a day after the hurricane hit, I was already in front of FEMA, the Corps of Engineer, anybody and everybody.

ALLEN: But as Blysted says, it didn't quite work out. FEMA and the Army Corps referred him to the company that has the Blue Roof contract for the area, and since then he's been caught in a maze of phone calls and Web site applications that have led nowhere. Last week at a back-to-business conference organized by the city and FEMA, many local businessmen echoed Blysted's frustration, complaining about the difficulty of getting government contracts.

William Lott says despite the difficulty, he hasn't given up. His company based in Shreveport builds modular homes. He's a disabled service vet and African-American, two groups that are supposed to be given preference in contracting. And he's had government contracts in the past, putting up structures on military bases. But despite numerous contacts with FEMA, he says he's heard nothing.

Mr. WILLIAM LOTT (Business Owner): Perhaps we wasn't talking to the right people. We have since tried to use a different route, and we're trying to get ahold to some political people now, where these political people could perhaps get us an appointment with someone in FEMA that has the authority to talk about our product.

ALLEN: The problem, FEMA says, is that it's the large contractors, not the government, that decides which small businesses to hire after a disaster. After hearing from local businesses and Congress, the agency says it's making a greater effort to get work to small businesses in the areas hit by Hurricanes Katrina and Rita. FEMA says it's requiring that 40 percent of the work on contracts over $500,000 be awarded to small businesses, in part to help jump-start local economies. FEMA spokesperson Nicole Andrews says that's the purpose of back-to-business workshops the agency has been holding in Louisiana, Mississippi and Alabama. But she says after a disaster, contractors need to get to work fast, and local businesses that have lost their phone service and had their employees evacuated can't always respond quickly enough.

Ms. NICOLE ANDREWS (Spokesperson, FEMA): What you're seeing is, really, a function of the size and the scope of this disaster. I mean, I don't think that anyone is organized enough to be able to, straight out of the gate, get businesses back up off the ground after having gone through what they've gone through. But the key is--and what we're trying to really facilitate--is matching up the needs with the resources.

ALLEN: So far in the six weeks since Hurricane Katrina, FEMA has awarded $1.6 billion in contracts; that's nearly as much as the agency awarded over the whole of last year. And that's just for cleanup. Billions more will be spent as New Orleans and the rest of the Gulf Coast begins the lengthy rebuilding process. Andrews says businesses looking for a piece of the pie may just need some patience.

FEMA concedes, though, that there's plenty of room for improvement. An analysis of the first round of post-Katrina contracts by The Times-Picayune newspaper shows that of the $1.6 billion awarded so far, only two contracts--accounting for less than 1 percent of the total--went to Louisiana companies. Greg Allen, NPR News, New Orleans. Transcript provided by NPR, Copyright NPR.

As NPR's Miami correspondent, Greg Allen reports on the diverse issues and developments tied to the Southeast. He covers everything from breaking news to economic and political stories to arts and environmental stories. He moved into this role in 2006, after four years as NPR's Midwest correspondent.