posted
When you get down to it, reconstruction can mean many things. An idea came up in conversation about this that I thought I'd throw out there.
Even before the hurricane, New Orleans had many problems, among them being that it was a very poor city. One of the silver linings of the enormous number of dark clouds that Katrina brought may be the opportunity to do something about this.
There's going to be a...I believe the technical term is buttload...of money spent on reconstruction projects. While a lot of these projects are going to require experience, sophisticated planning, and large companies with correspondingly large resources, a great many of them could be handled by smaller, locally owned companies that came into existence in order to fill the great demand caused by this devastation. Should we be directing efforts towards encouraging the development and growth of these sorts of companies so that when the flood waters finally recede, New Orleans will stand on firmer economic as well as physical ground?
I'm not a civic or even a mechanical engineer. The closest I come to knowing what I'm talking about here is volunteering for Habitat for Humanity and thinking "It's really not that hard to build houses." So I was wondering what other people thought.
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posted
Depends on the project, I think. A lot of people/companies could (and are) doing quite a bit of teh rebuilding, but some projects are too important to trust them to a company who has never done that style of work before. The shipyards and the the docks are two of them I can think of right off the bat.
Also, things need rebuilt fairly fast, of as fast as possible. Companies from all over the world, not just the USA, will be working balls to the walls to get things done as soon as possible, and realistically there isn't enough local experience or manpower to do all, or even most, of the work.
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quote: While a lot of these projects are going to require experience, sophisticated planning, and large companies with correspondingly large resources, a great many of them could be handled by smaller, locally owned companies
The more lucrative contracts have already been awarded to out-of-state companies...
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posted
I'm sure it's being run by bid. I'm not sure that the lowest bid is going to go to someone who needs to use it to start the business in the first place.
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quote:Should we be directing efforts towards encouraging the development and growth of these sorts of companies so that when the flood waters finally recede, New Orleans will stand on firmer economic as well as physical ground?
Yes, but I think the achievments of these efforts will be smaller than might first appear possible.
Running government contracts is hard. Even assuming they import talent where needed, it's still difficult to get up and running, even as a subcontractor.
BTW, most large contracts require a certain percentage go to small subcontractors, some minority owned. Those large contracts will benefit local companies who are able to bid on the subcontracting work.
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posted
at the risk of sounding like an ass, have you considered that a fair amount of those people who you're thinking could be employed by said companies aren't into the idea of manual labor when there's handouts to be had? I'm not just making this up - it's being proven day in and day out, even here in Houston. There's a complete lack of work ethic in some of the poorer sectors of society that's been passed on from parents to children. It's that sickening sense of Entitlement.
Posts: 262 | Registered: Jun 2004
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posted
A lot of it isn't being run by bid, but by no-bid sweetheart deals to Halliburton subsidareries. FEMA contracts (some of which fall under this heading) for New Orleans have been called into question and a promise was made (and quickly revoked) that they'd be reconsidering them all. As I said, while there is plenty of work that needs big, highly experienced firms, there is also a lot of work that can be done by new companies with either experienced employees or some outside assistance.
Reconstruction, in the house building, infrastructure repair and development, etc. is going to be going on for years and years. Bid situations have in many instances been set up so as to direct them more towards certain types of businesses (minority owned ones, for example). Likewise, the government has many programs designed specifically to encourage the starting and development of small businesses. The President has even repealed the minimum wage laws there, which would give a start-up company a huge boost. Also, lucrativity is in the eye of the beholder. A small business would jump at the chance that say Kellog, Brown, and Root would scoff at.
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posted
To expand, I found that getting work was less than half the challenge as a government contractor. Running the job profitably, managing cash flow, managing people, and adapting to changing circumstances are all skills that must be learned quickly if a company is to survive or grow.
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posted
It won't work that easily. How will those new companies sustain themselves once the construction boom is over?
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quote: BTW, most large contracts require a certain percentage go to small subcontractors, some minority owned. Those large contracts will benefit local companies who are able to bid on the subcontracting work.
The provision for using minority owned companies has been mostly ignored under the "emergency" no-bid contracts. In the cases where minority companies are required, they will generally already have a relationship with the prime.
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posted
The ones that can do work efficiently will survive. Some will fail. That's the way of things. But if they can bring some manufacturing there, they will be able to expand their markets beyond the storm area.
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quote: To expand, I found that getting work was less than half the challenge as a government contractor. Running the job profitably, managing cash flow, managing people, and adapting to changing circumstances are all skills that must be learned quickly if a company is to survive or grow.
Dags, I completely agree. The company that I'm currently with has a 23-course project managment program that caters directly to the special needs of managing federal projects. All PM's must complete the classes prior to running any federal project, even as a Deputy PM.
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posted
Of course it won't be easy. I'm not saying that this is a lollipop and gumdrop plan. But I am saying that I think it's possibly feasible and likely to result in a better situation.
The contruction boom in New Orleans won't be over for a while. During that time, the money that would have been going to outside of the New Orleans economy will instead be going to the employees and owners of these small businesses, who will in turn put it into the New Orleans economy, where it will foster the growth of other businesses as well increase the tax base. In 5 or so years, when the reconstruction is winding down, you'll have some companies that failed, some that suceeded and will be able to compete in the countrywide construction industry, and some that have diversified into other areas.
I don't know what the actual Cost Benefit Analysis would be here, which is one of the reason I started this topic, but as a general rule I tend to be in favor of local development.
Posts: 10177 | Registered: Apr 2001
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posted
A little late. It's like Dubya said in his post-Katrina NewOrleans speech: Let the looting begin. The smell of bloodmoney is in the air. Predators are already feeding off of taxpayers, and carrion eaters are already feasting on weakened hurricane survivors.
One of the reasons New Orleans is so poor is that there are so few major businesses involved in the city. The service industry is huge. A lot of college grads who want to stay in the city end up working at restaurants instead of the jobs they went to school to get because there are so few business opportunities (only one Fortune 500 company in the entire city, and that's filed for bankruptcy now). A friend of mine had a degree in and wanted to work in genetic research, but he ended up taking a job working at a college restaurant because it paid more than the ONLY job opportunity in town suited to his studies.
From what I understand, property costs are going to go way up in New Orleans. And in the area I lived in, they were already pretty high, compared to say, Florida. Rent will increase, as well. I wonder what schools are going to do about housing for students who don't have homes anymore or who will no longer be able to afford rent.
quote: The smell of bloodmoney is in the air. Predators are already feeding off of taxpayers, and carrion eaters are already feasting on weakened hurricane survivors.
That's a bit extreme, don't you think? Companies, who exist solely to make a profit, agreed to provide services and were taken up on their offers by the Federal government.
Also, just because a contract was a no-bid doesn't mean that the company was out to gouge the tax-payers. In most cases it just means that the scope of the project was too undefined to allow the field of candidates to be narrowed down enough to complete a true rfp.
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posted
Several architects I work with are going after projects in New Orleans, and they're all on a tight timeline.
They're putting together a proposal for the NO Arena (where the Hornets play) and it has to be designed in 30 days. The Superdome has to be designed in 60 days. Both of those numbers are fast. Very fast. Almost working around the clock fast. New construction companies would screw them up royally and blow the budget to outer space, while taking business from qualified and established contractors, the vast majority of which are local.
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quote:And in the area I lived in, they were already pretty high, compared to say, Florida
When is the last time you bothered to look at property values in most of FL? Costs are three times higher for houses than 2-3 years ago, at least.
I just moved here from New England, one of the most expensive places in the US to live overall, and I am paying more for rent now than I was in NE...and my new apartment is in a income-restricted apartment complex.
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posted
Kwea, I'm basing that on what my parents have told me, as they're into real estate and wanted to buy a small house in New Orleans. Recently. They sent me house hunting over the summer.
As for rent, I had a two-bedroom apartment in New Orleans for significantly more than a three-bedroom would have cost in Tampa.
quote:"It's really not that hard to build houses."
It's really not that hard to build habitat houses which are basically construction kits.
Most people who want homes built want custom homes and they're a tad, just a tad bit more difficult. Okay, honestly - try a lot more difficult. Requiring skilled craftspeople who spend years learning their trades. People who spend years learning the nuances of construction codes and inspection requirements.
One does not become a plumber or electrician overnight. At least, one does not become a plumber or electrician that can read home plans and do full rough-ins and setouts overnight. (Sure you could learn to clean drains really quickly, but plumbers that do new construction are a huge cut above the folks that normally work for Roto Rooter.)
Even framing, which might seem like it's easy (Hammer, meet nail) isn't really. They also need to know how to read plans, understand some basic structural engineering, and be able to make changes and not build a house that will fall down in three months. I had a friend who was a framing contractor who went through four assistants in one summer - couldn't get one that could cut well enough for him. Okay that may sound crazy to you, but the people who frame houses for a living need to be able to do math on the fly, work quickly and accurately and understand the construction vocabulary. That's not something your average high school dropout can do.
So I don't think it's as easy as "Hey, let's just get a bunch of people who've never built homes before and teach them how to build homes."
And we haven't even begun to discuss commercial buildings, which are an order of magnitude far above residential construction.
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