A big player for big debris
Phillips & Jordan Inc., a cleanup giant with local ties, snagged New Orleans work worth up to $1-billion.
By KRIS HUNDLEY
Published December 11, 2005
NEW ORLEANS - Seven days a week, hundreds of pickup trucks lumber through deserted neighborhoods here, picking up soggy drywall, mildewed carpeting and stinking refrigerators jettisoned from homes flooded by Hurricane Katrina.
Nearly three months after the storm, the nation's biggest cleanup continues with a determination fueled by billions of federal dollars. Orchestrating this huge street-by-street campaign through one hard-hit, 60-square-mile sector of the city - and supervising 650 trucks hauling an average of 54,000 cubic yards of debris daily - is Phillips & Jordan Inc.
P&J, one of two prime contractors overseeing trash detail in New Orleans, is a general and specialty contracting company based in Knoxville, Tenn., with division offices in Zephyrhills.
The company, whose top executives have homes in Pasco County, is a hidden giant in the huge cleanup industry. It's quietly racked up riches over the past few decades by tapping into two particularly lucrative and timely lines of business: development and disasters.
Among P&J's high-profile federal contracts are the task orders in New Orleans, which could be worth up to $1-billion, and an assignment after 9/11 to handle the final forensic sifting of debris from the World Trade Center.
On the commercial side, P&J has pushed dirt for private developers all over the Southeast, creating golf courses and entire towns from Celebration to Pasco County's Connerton.
P&J, owned by founder and chief executive William "Ted" Phillips, had revenues last year of nearly $400-million, about evenly divided between public and private work. And that was before the company landed its biggest disaster contract ever in New Orleans.
Phillips won his first government contract in 1949, earning $495 chopping down trees for the Tennessee Valley Authority. Now 74, he is still active in the business, while day-to-day operations are handled by P&J's president, Ben R. Turner.
Turner, 56, and Phillips share humble beginnings: Phillips was raised in Robbinsville, N.C . (population 747), where P&J has an office. Turner, a native of north Georgia who joined the company in 1977, started building roads when he was 14.
Phillips and Turner share a penchant for privacy, thinking no good comes from publicity, especially when it involves government contracts.
The men had their fill of the media in 1981 when they pleaded guilty to a bid-rigging scheme involving two North Carolina highway contracts. The company was fined $250,000 and Phillips and Turner were each sentenced to 60 days in prison.
Phillips said the incident more than two decades ago was a mistake that's been paid for. Turner said his term in a federal minimum security prison in Alabama was a life-altering experience.
"You realize what a good deal you've got when you're free and what a bad deal it is when you ain't," he said. "You don't want to go back."
P&J and its top two executives survived the setback, which barred them from bidding on government projects for a couple of years. By 1983, Turner had moved to the Tampa Bay area to run phosphate mine reclamation projects for the company. Phillips bought a 3,000-acre ranch in Pasco County in 1990 and Turner settled in a home in Dade City. Soon P&J built an office off U.S. Route 301 in Zephyrhills, surrounded by the trucks, tractors and tub grinders of P&J's trade.
With about 1,200 employees and projects around the nation, P&J's operations tend to emanate from wherever Turner happens to be: behind the wheel of his gold Lexus, aboard the company's Beechcraft prop jet or in an RV just south of Lake Pontchartrain, where he's supervising the Katrina contract.
With a cell phone in his pocket, a BlackBerr y tethered to his ear and a bulging spiral notebook in his hands, Turner keeps tabs on more than 100 P&J jobs and a raft of potential contracts.
There's a $150-million job in California removing beetle bark-infested trees for Southern California Edison. A FEMA contract to build mobile home parks for Wilma refugees in South Florida. Storm debris removal in Palm Beach County. And the mother of all postcatastrophe contracts in New Orleans.
P&J was one of four prime contractors selected by the U.S. Army Corps of Engineers from 22 bidders to clean up the mess along the Gulf Coast. Each company received a one-year award worth up to $500-million; if the Corps extends the contract into 2007, the amount awarded could reach $1-billion per company.
Turner said he has no idea how much P&J will ultimately earn working its heavily damaged sector of New Orleans, which encompasses the area south of Lake Pontchartrain and north of Interstate 10. And despite P&J's extensive experience with hurricanes - from Andrew in 1992 through Charley, Frances, Ivan and Jeanne last year - Turner won't guess how long the job might take.
"This is the most challenging debris mission this country has ever seen," he said of the estimated 77-million cubic yards of trash piled high by the storm. "This is flood debris, which is far different than windblown debris. And normally the residents are home. Here there are no residents."
Phillips said the waterlogged furniture and rotten lumber left by Katrina are five times more difficult to clean up than regular hurricane debris.
"We weren't necessarily enthusiastic about wading into this," Phillips said. "But we've done a lot of work for the Corps, so we'll do what we need to do. But you've got to do bac k flips to get all this done."
P&J's zone includes the residential Lakeview and Gentilly neighborhoods, where two levee breaches inundated homes with up to 6 feet of water. Three months after the storm, the area lacks power and drinkable water. Those residents who return come only for the day, leaving entire neighborhoods looking like ghost towns.
"It's mile after mile after mile of businesses, homes and industries that don't exist anymore," Turner said. "The shells are there but there's no commerce going on. The sheer absence of people is eerie."
P&J is supposed to pick up residential debris from right-of-ways and fronts of homes; sides and back yards have to wait until the Corps gets homeowners' okay. Plans for demolition - the expected fate of as many as 121,000 homes in Orleans Parish - are entangled in political and emotional issues, Turner said, and too far in the future to anticipate.
P&J has about 60 employees living in mobile homes in New Orleans, handling logistics. As independent haulers arrive at the staging area in Gentilly, P&J employees in lime green safety vests measure and inspect all trucks, verifying their capacity on stickers slapped on each vehicle's bed.
The cubic yard figure is critical since workers are paid based on the amount of debris delivered to the dump, as determined by a Corps employee who logs in each load.
Daily work assignments in P&J's zone are doled out by four main subcontractors, each handling a specific geographic area. The hauler who picks up crumbling wallboard may be five or six levels removed from P&J, with each layer taking a cut of the Corps' paycheck.
P&J refused to disclose how much the company is being paid per cubic yard by the Corps, despite reports that prime contractors can receive up to $27 a cubic yard, while the pay for street-level workers is about $5 a cubic yard . (A spokesman for the Corps declined to release information on how much contractors are paid, citing companies' allegation that such disclosure would cause "competitive harm.")
"We stay away from discussing rates because it's too distracting," Turner said. "You always hear subcontractors complaining about not getting paid, but you won't hear them complaining about us."
But haulers aren't necessarily finding the work as rewarding as expected. Turner said he loses between 5 and 10 percent of the freelancers each week. Fortunately, 50 to 100 new truckers turn up every morning at P&J's staging site looking for work.
"Drivers hear there's something better paying somewhere else, so they go," he said. "Everybody is always trying to better their hand. But we have no trouble replacing them."
Turner and Phillips are aware of the political minefield the company is treading as an outsider in New Orleans.
"We're fortunate not to have done anything to create any bad press," Phillips said. "But we've had some spongy balls to bounce."
All P&J's main subcontractors are local, though Turner freely admitted one sub was forced on the company because it had a previous contract with Orleans Parish.
"We had our startup blues," he said, referring to P&J's relationship with Omni Pinnacle of Slidell. "But they've responded to the requests we've made of them and they are performing for us." (Omni Pinnacle did not return calls seeking comment.)
P&J has had plenty of experience parachuting into highly politicized disasters. As a prepositioned contractor for the Corps in the Northeast (as well as Southeast and Southwest), P&J knew it would be needed after the 2001 attack on the World Trade Center. Turner and Phillips arrived on the scene Sept. 14. The company was given the delicate task of going through WTC debris after it had been shipped to the Fresh Kills Landfill, sifting through rubble for body parts, personal possessions and criminal evidence.
William Langewiesche, who wrote a series of prize-winning stories on the WTC's "unbuilding" process for the Atlantic Monthly, said P&J's operation was well-run, efficient and thorough.
"It seemed to find the right balance between sensitivity (to the victims' families) and the need to get the job done," Langewiesche said. "Phillips & Jordan ... acquitted itself well."
Turner boasted that while P&J's WTC contract was for $125-million, it completed the work for $63-million. The company was honored for its performance by being named the Corps' 2002 Contractor of the Year.
Turner and Phillips say that despite the potential billion-dollar payoff in New Orleans, disaster work is less profitable than other development projects.
It's also a niche with an expensive entry fee. P&J had to post a $100-million bond to bid on the Katrina job and then spend up to $60-million before it got its first reimbursement check from the government in early November.
And giant public contracts always raise suspicions that they were won through well-connected lobbyists or generous political contributions.
Turner said he makes no donations to politicians; Phillips said he's written occasional checks to local and national candidates of both parties. According to the Center for Responsive Politics, Phillips has given $1,000 donations to four federal candidates since 1998.
"I give within the limit if it's somebody I like," he said. "But I've never asked any politician to help us get a government contract."
Nor does P&J employ a lobbyist, making the company somewhat of an anomaly in the highly greased government contracting system.
Said Turner, "We believe that our performance, properly known, will be the ticket to our next job."
Times staff writer Molly Moorhead and Times researcher Angie Drobnic Holan contributed to this report. Kris Hundley can be reached at firstname.lastname@example.org or 727 892-2996.
PHILLIPS & JORDAN INC.
Chairman and owner: William T. Phillips
President: Ben R. Turner
Offices: Zephyrhills, Knoxville, Tenn., Robbinsville, N.C.
Employees: 1,200 (60 in Zephyrhills)
History: Phillips founded company in 1952 with Ted Jordan, who left the business in 1970
Early contracts: tree clearing for West Virginia turnpike and Utah's Flaming Gorge reservoir
Hurricane cleanup: Hugo, Andrew, Floyd, Charley, Frances, Ivan, Jeanne, Katrina, Rita, Wilma
Private development work: Robert Trent Jones golf courses in Alabama, infrastructure work on Celebration and Blizzard Beach in Orlando, Connerton in Pasco County
BY THE NUMBERS
$1-billion: potential value of P&J's Katrina cleanup contract
77-million cubic yards: Estimated amount of storm debris in New Orleans
1-million: Number of appliances destroyed by Katrina
150,000: Number of abandoned autos vehicles in New Orleans
54,000: cubic yards of debris removed daily in P&J's zone
2,000: Workers in P&J's zone daily
[Last modified December 10, 2005, 22:04:02]
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