Pay Rules Waived for Katrina Rebuilding Contracts

The Bush administration begins awarding contracts to rebuild the Gulf Coast. Several companies selected have done work in Iraq, as well. The administration has waived a requirement that firms receiving federal contracts pay the prevailing wage.

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After a slow start the Bush administration is now spending freely on hurricane recovery. The government has awarded contracts to a number of large private companies, some of which have also done extensive reconstruction work in Iraq. At the same time, President Bush announced he will waive federal wage rules he says would have added cost and complexity to the reconstruction process. NPR's Jack Speer reports.

JACK SPEER reporting:

Companies already have people working on the enormous task of providing emergency housing for victims of Katrina. Firms, like Bechtel and Fluor. Fluor, for example, has more than 400 people in Louisiana. Lee Tashjian, a spokesman with the company, is in Baton Rouge.

Mr. LEE TASHJIAN (Spokesman, Fluor): We're identifying everything from, you know, state parks to Boy Scout encampments to existing trailer park facilities to agricultural fields that are in ideal locations where we can quickly put infrastructure in and then place housing on those locations.

SPEER: Fluor's contract with the government is worth $100 million. It involves setting up pre-fabricated housing, basically furnished trailers for people to live in while their homes and neighborhoods are being rebuilt. CH2M Hill, a Colorado company that provided the large sand bags used to plug gaps in storm-damaged levees around New Orleans, also has a contract through the Federal Emergency Management Agency. Bob Bailey(ph) heads the Southeast region for the company.

Mr. BOB BAILEY (Southeast Region, Federal Emergency Management Agency): Our primary mission that was assigned by FEMA was to support their efforts to identify housing for about 7,000 displaced people in the state of Alabama. Most of those folks are from Alabama, but they might be coming from Mississippi or Louisiana as well.

SPEER: But while help is now flowing into the areas ravaged by Katrina, not everyone is happy with the way the administration is carrying out that aid. President Bush announced this week for areas hit by the hurricane, he's waiving a Depression-era rule known as Davis-Bacon. It ties the hourly wage paid for government contracts to prevailing local wage, which has had the effect of preventing the government from hiring non-union contractors. Congressman George Miller, the senior Democrat on the House committee that oversees federal labor law, says he is outraged by what he sees as an effort by the administration to erode worker rights.

Representative GEORGE MILLER (Democrat): Davis-Bacon protects people whether they're in unions or not in unions, and there's also a strong belief that that wage protection also helps you get quality people for these jobs and get quality work. And when you're spending the taxpayers' monies, that's one of the things you should be seeking.

SPEER: The administration's move is not without precedent. President Bush's father waived the Davis-Bacon Act for a brief period in 1992 following Hurricane Andrew. And in 1971, President Richard Nixon temporarily suspended the rule as he sought unsuccessfully to control wage inflation. White House spokesman Trent Duffy defended the presidential decree saying it will speed up reconstruction along the Gulf Coast.

Mr. TRENT DUFFY (Spokesman, White House): This particular waiver is authority that is provided to the president in the event of a national emergency and, certainly, Hurricane Katrina has been one of our worst national emergencies of all time. So the president decided to exercise his authority to waive these government requirements and to help accelerate the relief.

SPEER: Backers of the administration's plan say waiving the rule will also help cut down on delays and cut rebuilding costs after Katrina by as much as 38 percent. But critics say suspending the rule hurts those most in need after the hurricane, people without a job or a home who want to help in the rebuilding effort. Jack Speer, NPR News, Washington.

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