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39–522 PDF 2008

S. HRG. 109–1007

THE IMPACT OF CERTAIN GOVERNMENTAL

CONTRACTOR LIABILITY PROPOSALS ON

ENVIRONMENTAL LAWS

HEARING

BEFORE THE

SUBCOMMITTEE ON 

SUPERFUND AND WASTE MANAGEMENT

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

NOVEMBER 8, 2005

Printed for the use of the Committee on Environment and Public Works

(
(II)

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

JAMES M. INHOFE, Oklahoma, Chairman 

JOHN W. WARNER, Virginia 

CHRISTOPHER S. BOND, Missouri 

GEORGE V. VOINOVICH, Ohio 

LINCOLN CHAFEE, Rhode Island 

LISA MURKOWSKI, Alaska 

JOHN THUNE, South Dakota 

JIM DEMINT, South Carolina 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

JAMES M. JEFFORDS, Vermont 

MAX BAUCUS, Montana 

JOSEPH I. LIEBERMAN, Connecticut 

BARBARA BOXER, California 

THOMAS R. CARPER, Delaware 

HILLARY RODHAM CLINTON, New York 

FRANK R. LAUTENBERG, New Jersey 

BARACK OBAMA, Illinois 

ANDREW WHEELER, Majority Staff Director 

KEN CONNOLLY, Minority Staff Director 

SUBCOMMITTEE ON SUPERFUND AND WASTE MANAGEMENT

JOHN THUNE, South Dakota Chairman 

JOHN W. WARNER, Virginia 

CHRISTOPHER S. BOND, Missouri 

JOHNNY ISAKSON, Georgia 

BARBARA BOXER, California 

MAX BAUCUS, Montana 

FRANK R. LAUTENBERG, New Jersey 
(III)

C O N T E N T S 

Page 

NOVEMBER 8, 2005

OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 7

Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New York ........ 9

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, prepared 

statement .............................................................................................................. 52

Jeffords, Hon. James M., U.S. Senator from the State of Vermont .................... 3

Thune, Hon. John., U.S. Senator from the State of South Dakota ..................... 1

Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................ 5

WITNESSES 

Becker, Paul, president, Willis North American Construction Practice ............. 45

Prepared statement .......................................................................................... 94

Responses to additional questions from: 

Senator Jeffords ......................................................................................... 96

Feigin, Michael, executive vice president, Bovis Lend Lease Holdings, Inc ....... 28

Prepared statement .......................................................................................... 69

Responses to additional questions from: 

Senator Boxer ............................................................................................ 71

Senator Jeffords ......................................................................................... 72

King, Craig S., Government contracts attorney .................................................... 40

Prepared statement .......................................................................................... 78

Responses to additional questions from: 

Senator Boxer ............................................................................................ 83

Senator Jeffords ......................................................................................... 84

Senator Thune ........................................................................................... 83

Perkins, Warren, vice president, Risk Management, BOH Brothers Construction Company ....................................................................................................... 20

Prepared statement .......................................................................................... 64

Responses to additional questions from: 

Senator Boxer ............................................................................................ 67

Senator Jeffords ......................................................................................... 69

Riley, Don T., Major General, Director of Civil Works, United States Army 

Corps of Engineers ............................................................................................... 12

Prepared statement .......................................................................................... 52

Responses to additional questions from: 

Senator Boxer ............................................................................................ 54

Senator Jeffords ......................................................................................... 54

Schooner, Steven L., co-director, government procurement law program, 

George Washington University Law School ....................................................... 43

Prepared statement .......................................................................................... 84

Responses to additional questions from: 

Senator Jeffords ......................................................................................... 90

Senator Thune ........................................................................................... 91

Shufro, Joel, executive director, New York Committee for Occupational Safety 

and Health ............................................................................................................ 30

Prepared statement .......................................................................................... 72

Responses to additional questions from: 

Senator Boxer ............................................................................................ 77

Senator Jeffords ......................................................................................... 75

Senator Thune ........................................................................................... 74
Page

IV

Wright, Beverly, Ph.D, director, Deep South Center for Environmental Justice 

and co-chair, National Black Environmental Justice Network ........................ 18

Prepared statement .......................................................................................... 57

Responses to additional questions from: 

Senator Boxer ............................................................................................ 63

Senator Jeffords ......................................................................................... 64

Senator Thune ........................................................................................... 64

Zelenka, Anthony, president, Bertucci Contracting Corporation ......................... 15

Prepared statement .......................................................................................... 55

Response to additional question from: 

Senator Boxer ............................................................................................ 56

Senator Jeffords ......................................................................................... 57

ADDITIONAL MATERIAL 

Article, The Associated Press: Hundreds Sue Over Health Effects of World 

Trade Center Clean-up ........................................................................................ 99

Statements: 

American Road and Transportation Builders Association ............................ 97

American Society of Civil Engineers ............................................................... 98
(1)

THE IMPACT OF CERTAIN GOVERNMENTAL 

CONTRACTOR LIABILITY PROPOSALS ON 

ENVIRONMENTAL LAWS 

TUESDAY, NOVEMBER 8, 2005

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

SUBCOMMITTEE ON SUPERFUND AND WASTE MANAGEMENT, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:30 p.m. in room 

406, Senate Dirksen Building, Hon. John Thune (chairman of the 

subcommittee) presiding. 

Present: Senators Thune, Vitter, Jeffords, Boxer, Clinton. 

Senator THUNE. Today’s hearing will come to order. 

OPENING STATEMENT OF HON. JOHN THUNE, U.S. SENATOR 

FROM THE STATE OF SOUTH DAKOTA 

Senator THUNE. We will allow the distinguished Senator from 

Vermont to make his statement in just a minute, but I want to say 

good afternoon and thank you to all of you for coming. We are here 

this afternoon to hear testimony from the U.S. Army Corps of Engineers and various other individuals regarding disaster cleanup efforts that are currently underway in the Gulf Coast region. 

Because we have a full hearing today, I will keep my opening remarks brief. As many of you know, roughly 4 weeks following the 

tremendous destruction that Hurricane Katrina caused the Gulf 

Coast region, I introduced legislation that seeks to assist in the 

cleanup and recovery of the most destructive natural disaster in 

our Nation’s history. 

Just as our Nation witnessed during the September 11th terrorist attacks, private contractors have stepped forward in the Gulf 

region to support the Federal Government in providing the resources that are necessary to assist in the recovery of both persons 

and property dislocated by Hurricane Katrina, to demolish, remove, 

repair and reconstruct both structures and utilities damaged by the 

hurricane and to cleanup property polluted by that hurricane and 

to remove vast amounts of debris, and finally, to de-water flooded 

areas. 

However, because of the ongoing multi-billion dollar class action 

cases filed against the contractors who assisted the Government in 

the cleanup of the World Trade Center, I have concerns that other 

major disaster cleanups, including Hurricane Katrina, may be stymied due to the potential for future lawsuits being brought against 
2

1The Corps of Engineers Estimates Katrina left 80 million cubic yards of debris that could 

take over a year to cleanup. In comparison, Hurricane Andrew left 17 million cubic yards of 

debris when it struck in 1992. 

contractors who carry out major disaster cleanups on behalf of the 

Government. 

Just last week, New Orleans’ Mayor Nagin testified before the 

full committee about the destruction the storm had caused. In his 

testimony, the Mayor noted: ‘‘This storm forced hundreds of thousands of people to flee, flooded thousands of homes and decimated 

many lives. The damage to homes, schools, businesses, hospitals, 

roads, water plants, communications facilities and electrical power 

infrastructure was unprecedented. The economic and social fabric 

of the area was damaged in its entirety.’’

Because large-scale disaster recovery in the Gulf Coast region 

doesn’t occur in a vacuum, I strongly believe that Congress should 

provide private contractors with a measurable level of liability protections due to the nature of the work they do and helping the Government restore the basic services the public expects and deserves. 

Contrary to some claims, my legislation, which is co-sponsored by 

eight Senators, including Senator Vitter and Senator Lott, does not 

weaken existing environmental protections; nor does it grant contractors protection from Federal, State or local enforcement actions. 

It does not limit any Agency’s authority or discretion to take whatever steps it may deem necessary to ensure full compliance with 

its rules or regulations or to punish non-compliance. Nor would the 

bill relax any duty or obligation that any employer owes to its employees. The bill would leave contractors fully accountable for any 

failure to protect the safety or health of their employees. 

Last but not least, the Gulf Coast Recovery Act would not in any 

way limit any contractor’s liability for recklessness or willful misconduct. There would be no limits on any punitive, non-economic 

or other damages otherwise recoverable for such recklessness or 

misconduct. Simply put, my bill would provide private disaster contractors a limited measure of protection comparable to but less 

than the protection that Federal officials enjoy when exercising 

their discretion. 

[The prepared statement of Senator Thune follows:]

STATEMENT HON. JOHN THUNE, U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA

Today’s hearing will come to order. Good afternoon and thank you all for coming. 

We are here this afternoon to hear testimony from the U.S. Army Corps of Engineers and various other individuals regarding disaster cleanup efforts that are currently underway in the Gulf Coast Region. Because we have a full hearing today, 

I will keep my opening remarks brief. 

As many of you know, roughly 4 weeks following the tremendous destruction that 

Hurricane Katrina caused the Gulf Coast Region,1 I introduced legislation that 

seeks to assist in the cleanup and recovery of the most destructive natural disaster 

in our Nation’s history. 

Just as our Nation witnessed during the September 11th terrorist attacks, private 

contractors have stepped forward in the Gulf Coast Region to assist the Federal 

Government in providing the resources necessary to assist in the recovery of both 

persons and property dislocated by Hurricane Katrina, to demolish, remove, repair 

and reconstruct both structures and utilities damaged by that hurricane, to cleanup 

property polluted by that hurricane, to remove vast amounts of debris, and to 

dewater flooded areas. 

However, because of the on-going multi-billion dollar class action cases filed 

against the contractors who assisted the Government in the cleanup of the World 
3

Trade Center, I have concerns that other major disaster cleanups (including Hurricane Katrina) may be stymied due to the potential for future lawsuits being brought 

against contractors who carry out major disaster cleanups on behalf of the Government. 

Just last week, New Orleans Mayor Ray Nagin testified before the full Committee 

about the destruction the storm caused. In his testimony, the mayor noted: 

‘‘This storm forced hundreds of thousands of people to flee, flooded thousands of 

homes and decimated many lives. The damage to homes, schools, businesses, hospitals, roads, water plants, communication facilities, and electrical power infrastructure was unprecedented and the economic and social fabric of the area was damaged 

in its entirety.’’

Because large-scale disaster recovery in the Gulf Coast Region doesn’t occur in a 

vacuum, I strongly believe that Congress should provide private contractors with a 

measurable level of liability protections due to the nature of the work they do in 

helping the Government restore the basic services the public expects and deserves. 

Contrary to some claims, my legislation, which is cosponsored by eight Senators 

(including Senator Vitter and Senator Lott), does not weaken existing environmental protections, nor does it grant contractors protection from Federal, State, or 

local enforcement actions. It does not limit any Agency’s authority or discretion to 

take whatever steps it may deem necessary to ensure full compliance with its rules 

or regulations, or to punish noncompliance. Nor would the bill relax any duty or obligation that any employer owes to its employees. The bill would leave contractors 

fully accountable for any failure to protect the safety or health of their employees. 

Last but not least, the Gulf Coast Recovery Act would not in any way limit any 

contractor’s liability for recklessness or willful misconduct. There would be no limits 

on any punitive, non-economic or other damages otherwise recoverable for such 

recklessness or misconduct. 

Simply put, my bill would provide private disaster contractors a limited measure 

of protection—comparable to but less than the protection that Federal officials enjoy 

when exercising their discretion. 

Before turning to our first panel, I would like to recognize Senator Boxer, the 

ranking member of this subcommittee for her opening statement.

Before turning to our first panel, I would like to recognize Senator Jeffords for any statement he may have as the Ranking Member of the full committee, then also I will turn to my colleague, 

Senator Vitter. Senator Jeffords. Oh, I’m sorry, Senator Boxer——

Senator BOXER. I am happy to wait. 

Senator THUNE. Well, let’s go to Senator Jeffords as the Ranking 

Member of the full committee, then we will come back. 

Senator BOXER. Absolutely right. I will go after David. 

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. 

SENATOR FROM THE STATE OF VERMONT 

Senator JEFFORDS. Thank you for holding this oversight hearing 

on Governmental Contractor Liability Proposals related to Hurricane Katrina. I am greatly concerned for the people who have been 

affected by our Nation’s largest natural disaster. I will do everything in my power to help them get back on their feet. 

As a Nation, our focus should be on rebuilding the Gulf Coast so 

that residents can safely return to their homes and get on with 

their lives. Last month, I joined the Democratic members of this 

committee to introduce S. 1836, the Gulf Coast Infrastructure Redevelopment and Recovery Act of 2005. This legislation would ensure a more coordinated rebuilding effort in the aftermath of Hurricane Katrina. The bill will set up a Federal task force to coordinate 

Katrina response efforts among the agencies. It establishes the National Preparedness Grants and would work to fix the needless and 

catastrophic problems we saw emerge in our Nation’s emergency 

response plans. 
4

Our bill also establishes the National Levee Safety Program and 

requires EPA to develop a comprehensive sampling plan for hazardous substances that may threaten human health or the environment. Recent press reports indicate that the levees in New Orleans 

may have failed because of faulty construction practices by Government contractors. We must ensure that the rebuilding of the levees 

in the Gulf Coast region is done by competent contractors who adhere to the law. 

Any legislation that would limit the liability of contractors who 

assist Federal or State Governments with relief and reconstruction 

efforts in this region is a bad idea. Now, more than ever, our Government’s role should be to ensure that citizens are protected from 

faulty cleanup efforts. 

With all that is going on in their lives, the people in the Gulf 

Coast should not have to worry about contaminated drinking 

water, hazardous waste exposure, destruction of property, personal 

injury or even death. These citizens have already suffered a tremendous loss that will take many years to get over. To limit their 

legal remedies at a time like this is unconscionable. 

Simply put, we must not provide corporations with liability 

shields and exempt them from environmental regulation at the expense of Gulf Coast residents. The rush to cleanup from Katrina 

is not a rationale for allowing contractor negligence. Given the 

same Katrina contractors are greatly benefiting from no-bid contracts, we should be extra vigilant to see that it is done right. 

These contractors and corporations do not deserve special treatment at the expense of those who have lost their family members 

and homes and jobs. 

Thank you, Mr. Chairman. 

[The prepared statement of Senator Jeffords follows:]

STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM THE

STATE OF VERMONT

Mr. Chairman, thank you for holding this oversight hearing on Governmental 

Contractor Liability Proposals related to Hurricane Katrina. 

I am greatly concerned for the people who have been affected by our Nation’s largest natural disaster, and I will do everything in my power to help them get back 

on their feet. As a Nation, our focus should be on rebuilding the Gulf Coast so that 

residents can safely return to their homes and get on with their lives. 

Last month, I joined with Democratic members of this committee to introduce S. 

1836, the ‘‘Gulf Coast Infrastructure Redevelopment and Recovery Act of 2005.’’ This 

legislation would ensure a more coordinated rebuilding effort in the aftermath of 

Hurricane Katrina. The bill sets up a Federal task force to coordinate Katrina response efforts among agencies. It establishes National Preparedness Grants, and 

would work to fix the needless and catastrophic problems we saw emerge in our Nation’s emergency response plans. Our bill also establishes a National Levee Safety 

Program, and requires the EPA to develop a comprehensive sampling plan for hazardous substances that may threaten human health or the environment. 

Recent press reports indicate that the levees in New Orleans may have failed because of faulty construction practices by Government contractors. We must ensure 

that the rebuilding of the levees, and the Gulf Coast Region, is done by competent 

contractors who adhere to the law. Any legislation that would limit the liability of 

contractors who assist Federal or State Governments with relief and construction 

efforts in this region is a bad idea. Now more than ever, our Government’s role 

should be to ensure that its citizens are protected from faulty cleanup efforts. With 

all that is going on in their lives, the people of the Gulf Coast should not have to 

worry about contaminated drinking water, hazardous waste exposure, destruction of 

property, personal injury or even death. These citizens have already suffered a tre-
5

mendous loss that will take many years to get over. To limit their legal remedies 

at a time like this is unconscionable. 

Simply put, we must not provide corporations with liability shields and exemption 

from environmental regulation at the expense of the Gulf Coast residents. The rush 

to cleanup from Katrina is not a rationale for allowing contractor negligence. Given 

that some Katrina contractors are greatly benefiting from no-bid contracts, we 

should be extra vigilant to see that it is done right. These contractors and corporations do not deserve special treatment at the expense of those who have lost their 

family members, homes, and jobs.

Senator THUNE. Thank you, Senator Jeffords. 

Senator Vitter. 

OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR 

FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you, Mr. Chairman. I will submit my full 

opening remarks for the record. I will be very brief summarizing 

them here. 

First of all, thank you for this hearing, and thank you for the legislation. As you noted, I am a co-sponsor and I strongly support it. 

I strongly support it for a real simple reason. I was on the ground 

virtually every day in the immediate aftermath of Katrina. I saw 

a lot of folks, including these contractors, at work. I realize that it 

was very much an emergency situation. Extraordinary emergency 

measures were being taken because people’s lives and property 

were at risk of further destruction. There was just a flurry of activity to close the levee breaches at the 17th Street Canal, at the Industrial Canal and other locations. That was very much emergency 

activity. 

We need to allow that to happen responsibly in true emergency 

situations. I believe this bill does that. 

It does not protect and shield when there are cases of reckless 

or willful misconduct. So it clearly doesn’t do that. It does not apply 

to new construction activity. It only applies to true emergency repair activities. 

So for instance, in the case of levee work in the New Orleans 

area, it would apply to that emergency activity, plugging the 

breaches that I described. It would not apply to new construction 

activity, for instances, to raise the system to category 5 protection. 

It is not a pass on Government regulations, environmental and 

other mandates. It does not affect that in any way. 

Finally, it is needed. This is not an academic discussion. We 

know from true, recent experience after 9/11 that there could well 

be a flurry of class action lawsuits to try to profit from the emergency measures that needed to be taken, the very quick decisions 

that needed to be made in a true emergency situation. So this is 

not some theoretical discussion. We know from a similar situation 

that it is a very real need. 

So again, I thank you for the legislation. I very much thank you 

for this hearing. I am proud to join you and many others, including 

Senator Lott, again, from the disaster area, in pushing forward the 

legislation. Thank you. 

[The prepared statement of Senator Vitter follows:]
6

STATEMENT OF HON. DAVID VITTER, U.S. SENATOR FROM THE STATE OF LOUISIANA

Good Afternoon. I would like to thank the subcommittee’s chairman, Senator 

Thune, for inviting me to this hearing and for his leadership on this very important 

issue. I would also like to thank all of the witnesses for agreeing to testify before 

the subcommittee, especially those from Louisiana. I also look forward to hearing 

from Major General Riley from the Army Corps of Engineers, and I hope that he 

is able to assure me that the Corps is making a concerted effort to give preference 

to local contractors. 

In the past few months, the State of Louisiana has suffered record devastation 

from two major hurricanes. Just over 2 months have passed since Hurricane 

Katrina left an entire major metropolitan area evacuated, flooded and completely 

closed for weeks. Only a few weeks later, Louisiana was struck by another major 

storm, Hurricane Rita. 

Contractors play a vital role in relief efforts following a natural disaster. The Federal Government relies on contractors to quickly address dangerous conditions that 

threaten life and property, to restore basic public services, and to protect public 

safety and health. The Army Corps of Engineers and FEMA have relied on contractors to pump water out of New Orleans and repair the breached levees, many of 

which began work without a contract. Without the help of the private contractors, 

the City of New Orleans would still be under water. 

However, many contractors need assurances that if they aid in disaster recovery 

efforts they will not be subject to the same class actions filed against those contractors who helped in the rescue, recovery, and cleanup at the World Trade Center following the September 11, 2001 terrorist attacks. The Gulf Coast region desperately 

needs contractors to restore the 90,000 square miles damaged by Hurricane Katrina 

and Hurricane Rita. The Federal Government simply lacks the resources and the 

expertise needed to cleanup and restore the Gulf Coast region in an efficient and 

effective manner. 

Shortly after Hurricane Katrina made landfall in Louisiana, Senator Thune introduced S. 1761, The Gulf Coast Recovery Act, to limit the liability that private contractors face as they aid in rescue, recovery, cleanup, and reconstruction efforts in 

the devastated regions. I am proud to say that I am an original co-sponsor of this 

very important legislation. The Gulf Coast Recovery Act limits the tort liability of 

those contractors who the Army Corps of Engineers deems necessary for recovery 

efforts associated with Hurricane Katrina and other major disasters. It does not 

apply to new construction. So, for example, a contractor charged with plugging the 

breaches in the levees in New Orleans would be covered by the bill, whereas, a contractor charged with building the levees to a Category-5 level of protection would 

not. 

The Gulf Coast Recovery Act does not limit any public agency’s authority to take 

whatever steps it deems necessary to ensure full compliance with its rules or regulations, or to punish noncompliance. Thus, contrary to the assertions made by many 

of the bill’s opponents, the Gulf Coast Recovery Act does not relieve contractors from 

their legal obligation to comply with environmental laws. If this bill is enacted, the 

EPA and its state and local counterparts will retain their full enforcement powers 

to bring an action against a contractor for noncompliance with rules and regulations. 

My interest in Government contracting post-Hurricane Katrina and Hurricane 

Rita also goes to how the contracts are awarded. First, I am concerned with the 

award of no-bid mega contracts. While I understand that emergency situations 

sometimes call for faster action than the Federal Acquisition Regulation’s (FAR) full 

and open competition process allows, I believe that it is in the best interests of the 

parties involved, including the businesses and the people of the Gulf Coast States, 

to use full and open competition for all but a very limited number of contracts. Currently, the Federal Acquisition Regulation requires full and open competition except 

in specific instances. However, I believe that these exceptions should be narrowed 

only for those activities related to relief and recovery from Hurricane Katrina and 

Hurricane Rita. In an effort to address this concern, I introduced ‘‘The Hurricane 

Katrina and Hurricane Rita Fairness in Contracting Act’’, which limits the number 

of exceptions to the Federal Acquisition Regulation’s full and open competition requirement and it requires advance notice to Congress of any non-competitive contracts. 

Second, I am concerned that companies from Louisiana and other Gulf Coast 

States are not being awarded recovery and reconstruction contracts. Although the 

Stafford Act (42 U.S.C. §5150) contains local preference language, it only requires 

that agencies give preference to local contractors ‘‘to the extent feasible and practicable’’. I do not believe that the Stafford Act’s language is strong enough. There-
7

fore, I am working with the Senate Small Business Committee to draft stronger 

local preference language. Since the need for emergency action has for the most part 

subsided, I encourage Federal agencies to make more of an effort to hire local contractors. 

The Gulf Coast region cannot achieve full economic recovery unless the businesses 

located within that region are given the chance to play a leading role in the recovery 

and reconstruction effort, and Senator Thune’s common sense legislation is an important part of that process. 

Once again, I would like to thank Chairman Thune for inviting me to speak at 

this hearing and for taking a leading role on this very important issue. I look forward to hearing what each of the witnesses has to say.

Senator THUNE. Thank you, Senator Vitter, and thank you for 

your leadership for the people that you represent who have been 

victimized by this great disaster, and thank you for your direction 

and guidance in helping us as we shape responses that are effective 

and that help get that area back on its feet. Thank you for everything that you are doing. 

Senator Boxer. 

OPENING STATEMENT OF HON. BARBARA BOXER, U.S. 

SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. Thank you so much. 

I just want to pick up on something Senator Vitter said, that in 

an emergency we need to waive these liabilities. The fact is this bill 

talks about way beyond emergencies. It talks about repair, cleanup, 

alteration, remediation, construction and the rest. So I do not agree 

with Senator Vitter’s analysis of it, but I am sure if this bill gets 

to markup we will have a chance to talk about that. 

Mr. Chairman, as your Ranking Member, I want to publicly state 

that I support very strongly your right to hold any hearing you 

want, and I know you would do that if I was in the chair instead 

of the Ranking Member. I just want to make sure that the record 

is clear: that as your Ranking Member this was not a hearing that 

I supported. I personally would prefer us to be looking at the ways 

to help the victims of Katrina. Even though I think you believe 

that this does help them, I think at the end of the day it hurts 

them. I am going to go through my brief opening statement. 

I think that this committee sometimes loses its charge. This is 

the Environment Committee. A couple of weeks ago we had a hearing on what I call the Oil Company Protection Act, which was a 

way to give big oil the ability to get free land to build refineries. 

Luckily, the committee stopped it in its tracks in a bipartisan vote. 

I have to say in all honesty, I think today we are looking at what 

I call the Halliburton Protection Act, not that it just applies to Halliburton, but it does apply to some of these big contractors. 

I think that for us, we should be on the side of the people that 

get hurt directly, and that we shouldn’t be in a situation where we 

are trying to make it more difficult for them to receive compensation. Government contractors should be held responsible for what 

they do. It is as simple as that. Otherwise, the burden falls on the 

victims, the injured workers, or those who live in the disaster-affected region or Federal taxpayers, for that matter. 

I think it is wrong, from a moral standpoint, if we are supposed 

to talk about community and responsibility, this bill flies in the 

face of that by eliminating the rights of victims. I think it sends 

a subtle message, or not so subtle, to the contractors, well, do your 
8

best, because if you make a mistake, if you burn toxics, if you do 

some other things, you know, you won’t be held responsible. I am 

glad the Senator from New York came in here, because later I am 

going to show you a picture from there, from the horrific experience 

we had before. 

I would ask unanimous consent to place in the record an article 

that appeared November 4th in the Los Angeles Times talking 

about the Katrina cough, where we see that mold and muck may 

be causing respiratory illnesses in people who have returned home. 

If I might get that into the record? 

Senator THUNE. Without objection. 

[The referenced information was not submitted at the time of 

print.] 

Senator BOXER. Thank you. 

So I wish, as an Environment Committee, we were looking at 

these victims and figuring out ways to help them and to work with 

the contractors to help them do the best they can do and to give 

them that sense of moral responsibility. I mean, what if a contractor exposes children to contamination or sends workers into 

water filled with waste and people get sick or die? Under S. 1761, 

a bill, by the way, that is outside this committee’s jurisdiction as 

I understand it, this should fall to Judiciary, the family is forced 

to bear not only the emotional burden of the injury but also the financial costs of caring for the injured. 

It is not hypothetical, and as I say, I am glad that the Senator 

from New York is here. Let’s look at the workers who have been 

cleaning up and rebuilding the World Trade Center site. We have 

a photograph, here they are. Sixty percent of all of them who participated in a health monitoring program had at least one respiratory illness. Eighty-five percent of those workers continue to 

have respiratory illness 4 years later. Only 21 percent of them had 

appropriate respiratory protection while working at Ground Zero. 

Only 21 percent of them. 

Thank you. I think we remember those faces. 

Now we have the Gulf Coast, and we have a bill that could let 

Government contractors off the hook. The potential is there. The 

areas hit by Hurricanes Katrina and Rita had 54 Superfund sites. 

Mr. Chairman, I know you and I have a lot of work to do in making 

sure we do proper oversight over those cleanups. As of the 1st of 

November, EPA had not yet completed assessments at 38 sites in 

the hurricane region. EPA has collected 680,000 household hazardous waste or orphaned containers. Eight million gallons of oil 

was spilled. 

Now, these facts are not the fault of the Government contractors, 

not one bit. If they are going to decide that they want to work and 

get paid for their work, they have to follow the rules to protect people, once they get involved in a cleanup. The people in New Orleans have suffered enough. Virtually eliminating their right to get 

compensation from negligent contractors only compounds their suffering. To me, the most important thing is it sends a terrible signal 

to the contractors: don’t worry about it, because you know, you are 

off the hook.’’

One of the reasons we have the safest products in the world, Mr. 

Chairman, and I can prove this, chapter and verse, is because we 
9

don’t let people off the hook when they endanger lives. It isn’t just 

the narrow meaning of reckless endangerment and negligence. We 

are talking about the way you approach a job, and I think higher 

of our contractors, I think more of them than they should have this 

get out of jail free pass. 

It isn’t right. It sends a wrong signal, and I am disappointed that 

we are moving forward with this. Mr. Chairman, again, it is your 

full right, and it is my full right to disagree. At the end of the day, 

you have the votes, you get a bill out, at the end of the day you 

don’t, you don’t get a bill out. 

I did want to say today that I have very strong feelings against 

this bill. I don’t think it is what we should be doing in the Environment Committee. This isn’t how it can be more gentle to the contractors committee. It really isn’t. It is how we can help the victims, that is really what we need to do, how we can help them and 

protect them from environmental damage. 

Thank you very much. 

Senator THUNE. Thank you, Senator Boxer. Senator Clinton has 

joined us as well. Senator Clinton, do you have an opening statement? 

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, 

U.S. SENATOR FROM THE STATE OF NEW YORK 

Senator CLINTON. Yes, thank you, Mr. Chairman. I appreciate 

your raising this issue, because it is a vitally important topic. I 

want to thank the witnesses for coming here today to testify, particularly those who have come from the Gulf Coast, given the circumstances that they are facing. 

Mr. Zelenka and Mr. Perkins are from New Orleans, representing companies that have been heavily involved in the response and recovery efforts since Katrina hit. Dr. Wright is also 

from New Orleans and working to ensure that the recovery and rebuilding is done in a safe and fair manner for all residents along 

the Gulf Coast. I really appreciate what you are trying to do under 

very difficult circumstances. 

As my colleague, Senator Boxer, said, we have some of the same 

kinds of challenges after 9/11. We know that there are many, many 

difficult issues that have to be sorted out. I appreciate and welcome 

Joel Shufro of the New York Committee on Occupational Safety 

and Health for being here. NYCOSH is an outstanding and wellrespected organization that I have worked with closely on a number of 9/11 issues. 

I also appreciate very much Michael Feigin from Bovis Lend 

Lease Holdings being here. Bovis was one of the four contractors 

that got the contracts for the cleanup on Ground Zero. They each 

did a quadrant, they came in ahead of time and below budget. They 

did a really superb job. 

I think we all share common goals about how we face these disasters, whether man-made in the case of New York or natural in 

the case of the Gulf Coast. How we respond and how we respond 

in an effective, cost-effective manner. When disaster hits, we obviously turn to those who know how to do the job, contractors and 

experienced employees. 
10

We do expect that the contractors who are called upon will comply with Environmental and Occupational Safety laws and take 

precautions to protect their employees. We expect that employees 

who are injured or who develop medical problems as a result of 

their recovery work should receive the care and compensation they 

deserve. 

Now, these are familiar problems, and there are lessons that can 

be learned from what happened on September 11th and in the 

months following. Unfortunately, with all due respect, Mr. Chairman, I think S. 1761 ignores and mis-applies the lessons of September 11th. 

When the World Trade Centers and the surrounding buildings 

collapsed, it created an unprecedented demolition and cleanup challenge. Literally, there were workers who were in mid-town or uptown or Brooklyn who dropped what they were doing at the construction sites they were working on and brought their equipment 

and were there by that evening ready to help. We really tried to 

set up a system that would be effective but also fair to everyone 

involved. 

I have been outspoken in my criticism of the Federal Government response, particularly in the first days after September 11th. 

We did have a lot of workers on the pile who didn’t have adequate 

equipment for personal protection. 

We know from an EPA IG report that there was interference 

from the highest levels of our Government, with EPA communications about the pollution hazards in lower Manhattan. That affected both the employers and the employees who were there at 

Ground Zero. It obviously affected more directly the people who 

were digging through the rubble and spending 16, 18 hour days on 

the pile. We now are living with the consequences that we have a 

lot of people who have chronic illnesses. 

Now, the Centers for Disease Control issued a study last September that found that the 3 days following September 11th when 

exposure was greatest and therefore the danger most acute, only 

21 percent of the study’s participants reported using respirators. 

For some, those were not available. For others, they were so anxious to work that they just plunged ahead and didn’t want to have 

the discomfort, in their opinion. There was a lot of confusion at the 

site about what kind of personal protection should have been available to them. 

The bottom line is that we have large numbers of participants 

who were at Ground Zero with persistent respiratory problems. The 

findings that we have is information collected by the Mt. Sinai’s 

World Trade Center Worker and Volunteer Medical Screening Program. We have documented these health problems and we know 

that we can learn from this. 

The lesson is not that we need to provide unprecedented and 

sweeping liability waivers. I understand why any contractor faced 

with the challenge of responding to these disasters obviously wants 

financial protection. There are other ways we can try to provide 

that. We need to be sure that our Government agencies do a better 

job advising contractors and workers about the hazards they face. 

We need to establish a system to track the health of first responders, something Senator Voinovich and I have worked closely 
11

on. We actually have a bill to provide Stafford Act authority to do 

this in disaster areas, and to follow up on the medical needs. 

What we did in New York was to have a captive fund. As you 

will hear in the testimony from Bovis, they couldn’t get insurance. 

Nobody would write a policy for them, because we didn’t know 

what the liabilities would be. 

I think that we need to come up with a more comprehensive solution, because otherwise, if we don’t plan ahead, the Government is 

going to pick up the cost, as we have found we are trying to do 

with all of these injured workers. We are going to have to continue 

to provide some kind of care and compensation and we want to do 

it in a way that doesn’t unduly burden the contractors, but also 

doesn’t throw out the window everything we have learned. 

So I think, Mr. Chairman, that your legislation in my view is not 

the answer but the problem you have identified is a real problem. 

So we need to figure out how we can address it together. 

[The prepared statement of Senator Clinton follows:]

STATEMENT OF HON. HILLARY RODHAM CLINTON, U.S. SENATOR FROM THE

STATE OF NEW YORK

Thank you, Mr. Chairman. This is a vitally important topic, and I appreciate the 

opportunity to discuss it here today. 

I want to thank all of our witnesses for coming to testify. 

Many of you have come a long way. I particularly want to thank the witnesses 

who came from the Gulf Coast. 

Mr. Zelenka and Mr. Perkins are from New Orleans representing companies that 

have been heavily involved in the response and recovery efforts since Katrina hit. 

Dr. Wright is also from New Orleans, and is working to ensure that recovery and 

rebuilding are done in a safe and fair manner for all residents of the Gulf Coast 

regions. 

I thank all of you for the work that you have done and are continuing to do under 

extremely trying personal and professional circumstances. 

I also particularly want to welcome Joel Shufro of the New York Committee on 

Occupational Safety and Health for being here to testify. NYCOSH is an outstanding and well-respected organization that I have worked with closely on a number of 9/11 issues. 

I think that we all share common goals. 

When disaster hits, we want our Government to respond. 

Our Government’s response has to rely on contractors and their employees. 

We also expect that in doing response work, contractors will comply with environmental and occupational safety laws and will take precautions to protect their employees. 

We expect that employees who are injured or who develop medical problems as 

a result of their recovery work should receive the care and compensation that they 

deserve. 

I think probably everyone here can agree on those goals. 

These are familiar problems to me, as we encountered them in the aftermath of 

September 11 in New York City. 

There are lessons learned from September 11 that should be applied in the Gulf. 

Unfortunately, S. 1761 ignores and misapplies the lessons of September 11. 

When the World Trade Center collapsed, it created an unprecedented demolition 

and cleanup challenge. 

Contractors and their employees responded swiftly, and worked tirelessly under 

difficult and dangerous conditions to remove debris from Ground Zero. 

Now, I have been outspoken in my criticism of the Government response—particularly in the first days after September 11. 

An August, 2003 EPA Inspector General Report concluded that the White House 

interfered with EPA communications about air pollution hazards in Lower Manhattan. 

I said it then, and I will say it again now: that is unacceptable. 

It is possible that the Government’s missteps contributed to the fact that proper 

precautions were not taken as much as they should have been. 
12

A Centers for Disease Control study issued last September found that in the three 

days after September 11, when exposure was greatest, only 21 percent of the study’s 

participants reported using respirators. 

The CDC study also found that half of the study’s participants had new and persistent respiratory problems and more than half had persistent psychological symptoms. 

These findings are reinforced by information collected by Mt. Sinai’s World Trade 

Center Worker and Volunteer Medical Screening Program. Dr. Steven Levin, who 

is the co-director of that program, has documented continuing health problems 

among first responders, contractor employees, and others who worked in lower Manhattan. 

There are lessons to be learned from all this. 

The lesson is not that we need to provide unprecedented and sweeping liability 

waivers for contractors. 

Instead, there are other lessons from September 11 that we need to apply. 

We need to be sure that our Government agencies—EPA and OSHA—do a better 

job advising contractors and workers about the hazards they face. 

We need to establish a system to track the health of first responders and recovery 

workers—this is something Senator Voinovich and I have worked closely together 

on since September 11. We have a bill to provide Stafford Act authority to do this 

in disaster areas, and we need to pass that legislation. 

We need to attend to the medical needs of those who develop health problems. 

I am fighting now to prevent the Administration from reneging on their pledge to 

provide $125 million for workers compensation and medical expenses of 9/11 first 

responders. 

I am sympathetic to the challenges that contractors face in getting liability insurance. That’s something we went through in New York. 

To the extent that contractors cannot obtain the liability insurance that they need 

to do the work, then Congress should consider stepping in. 

As Mr. Neigin points out, this is what we did in New York when the Ground Zero 

contractors were unable to purchase liability insurance in New York City. 

It’s not clear to me from reviewing the testimony whether that type of program 

is necessary for the Gulf Coast effort. 

Along with better monitoring and help for workers, that’s a proposal that we 

ought to consider, rather than the approach in S. 1761.

Senator THUNE. Thank you, Senator Clinton. 

We have a vote going on right now, Senator Boxer went to vote, 

and she will return. I think what we will try and do is continue 

to move forward with the hearing. Our first witness today is General Riley, with the Army Corps of Engineers. General, it is good 

to have you, and we welcome your participation today and look forward to an update about how the contracting process is going down 

in the Gulf Region. 

General Riley, please proceed with your testimony. 

STATEMENT OF MAJOR GENERAL DON T. RILEY, DIRECTOR 

OF CIVIL WORKS, UNITED STATES ARMY CORPS OF ENGINEERS 

General RILEY. Thank you, Mr. Chairman and members of the 

subcommittee. 

I am Major General Don Riley, Director of Civil Works, Army 

Corps of Engineers. Thank you for inviting me to testify today. 

Under the National Response Plan, the Corps has been assigned 

Emergency Support Function 3, public works and engineering. 

Under this ESF–3, the Corps assumes the lead in the procurement 

of water and ice, provision of temporary power, installation of temporary roofing and removal of debris. Prior to emergencies, under 

the 6-year old advance contracting initiative, or ACI program, we 

competitively award contracts for future use. We used our ACI contracts to support our response to the recent hurricanes. 
13

During the emergency, the FAR allowed us to shorten the standard time period of award. For example, we awarded the contract 

to unwater New Orleans under the urgency exception to the Competition in Contracting Act. In our other response missions, the 

Corps considered and used the entire suite of available contracting 

options authorized under the FAR, including verbal and letter contracts. 

Using these methods, the Corps found available local contractors 

and procured such critical items as sand bags to be used to stop 

the flow of water into New Orleans. Additionally, we made use of 

an existing Naval facilities contract to assist in the un-watering of 

the city. In addition, the Corps awarded debris and roofing contracts in excess of those contracts pre-placed under the ACI program. 

Also, within 2 days of the storm, I directed our internal review 

staff to team with the Defense Contracting Auditing Agency and 

the Army’s Criminal Investigation Division and deploy to the area 

of operations. Their mission, which is still ongoing, is to provide 

oversight of the operation, to include looking for instances of fraud, 

waste and abuse and to review contracts. 

We are now working to return to standard procurement operations. We are advertising our requirements for longer periods than 

we did under the urgent situation. We are attempting to give prospective contractors as much time as possible to prepare their proposals, and we are using the non-emergency provisions of the FAR 

to the maximum extent possible. 

Additionally, the Corps has made extensive use of standard authorities granted to us under the various small business set-aside 

programs, especially 8(a) firms. We have also held and will continue to hold 8(a) competitions. 

When we have awarded contracts to large businesses, we encourage the use of local business subcontractors. For these contracts, 

we have instituted goals for small business subcontracting and reporting. Contractors report their subcontracting efforts to us weekly for the first 90 days and monthly thereafter instead of every 6 

months, which is the typical reporting requirement. 

To help disaster-stricken communities, we have also inserted 

clauses citing our preference for use of local subcontractors. 

Mr. Chairman, thank you again for the opportunity to testify and 

I would be happy to answer any questions. 

Senator THUNE. Thank you, General. 

Let me just ask this question. From your testimony today, would 

it be accurate to say that the Corps of Engineers would be unable 

to address major disaster cleanups without assistance from the private sector? 

General RILEY. Yes, Mr. Chairman, it sure would. We don’t do 

anything alone. We contract 99 percent of our construction and 

over 50 percent of our architectural and engineering work is contracted. So we see ourselves as just being a piece of this partnership with the local community and private contracting firms. 

Senator THUNE. Do your contracts, when you do a contract with 

these private firms, do your contracts require that the contractors 

who perform on those comply with environmental, labor, safety 

laws, existing laws? 
14

General RILEY. Yes, sir. We comply with all the appropriate laws 

and all permitting requirements, and require the contractor to do 

that as well. 

Senator THUNE. What would be the risk of not expeditiously addressing the aftermath of major disasters? If you were to follow 

your normal procedures and the FAR and everything else, when it 

comes to issuing contracts, would you sort of explain why it is you 

do things the way you do? 

General RILEY. Mr. Chairman, there are emergency provisions 

under the FAR which we used quite substantially in the early days 

of this disaster, in addition to the ACI contract program. The danger, of course, is it is an emergency and we need to get contractors 

out there quickly. One contractor that you have on the next panel, 

we made a phone call to and he moved on a verbal order and then 

we followed that up with a letter contract and then we continued 

to refine the specifications and processes after that. 

That is all allowable within the FAR, but that is both a risk to 

the Government and to the contractor when you move in an emergency situation like that. 

Senator THUNE. Based on your experience, was the situation 

with Katrina different than other Federal procurement you have 

undertaken, and if so, what were some of those differences? 

General RILEY. Mr. Chairman, I think that the major difference 

was just simply in the magnitude of the problem. It was an unprecedented disaster, huge destruction to personnel and property from 

100 miles from Grand Isle to the Gulf Coast. So it was different 

in that sense, although we followed all the appropriate laws and 

the emergency authorities that we have as well as that the Government has. 

For instance, in the case of NEPA, the National Environmental 

Policy Act, there were authorities that reside with the oversight of 

CEQ, the Council of Environmental Quality in the White House, 

and they issued some emergency procedures under NEPA. It was 

all allowable within the law. 

Senator THUNE. But this one, in terms of the magnitude, obviously very different than any previous disaster you have dealt 

with. In terms of the contracting process, fairly similar in using 

and exercising these emergency powers that you have, at which 

time you can go out and just, if you have to, find somebody who 

can do the job, get them in there on the job immediately. Not doing 

that, I assume, of course means that you run great risk to the people who are involved. 

General RILEY. That is correct. The risk is, if you don’t act quickly there is a severe health and safety problem, if you don’t get the 

ice and water there quickly or if you don’t get the flood waters 

stopped quickly, or if you don’t get a roof on a house quickly, you 

dramatically increase the cost to FEMA in the long run if you don’t 

act quickly. 

Senator THUNE. Have you worked closely with the other agencies 

in this particular disaster and FEMA and others, their relationship 

and so forth as it has unfolded? I know there were a lot of early 

criticisms. It appears now from a distance that there is a unified 

front, so to speak. 
15

General RILEY. Yes, sir. We work essentially for FEMA in disaster operations. We do have authorities of our own in flood control 

and navigation, but all the other operations that I described were 

under the mission taskings from FEMA. 

Senator THUNE. I think what we will do, I assume Senator Boxer 

is going to have questions for you, General Riley. She will return 

from voting in just a moment. Those are all the questions I have 

for you. Since we don’t have other members here, I assume we are 

all over on the floor voting, we will take a temporary recess until 

she returns. I am going to have to go over and vote, too, or they 

are going to clank the gavel down on me. 

So we will recess for a moment, and as soon as Senator Boxer 

returns, we will commence and she can pose her questions of you. 

[Recess.] 

Senator THUNE. This hearing will come back to order. 

General, I think you lucked out. We are going to be able to release you, but if you could stay with us for just a minute, I talked 

to Senator Boxer on the floor, she does have at least one question 

for you. So I might bring you back up. 

I would like to bring up our second panel, if that’s OK, and then 

we will get them started with their testimony. Then when Senator 

Boxer returns, if she does have a question for you, I think she just 

had one question she wanted to pose. We will let you go and ask 

the second panel to come up. 

On the second panel, we have Mr. Tony Zelenka, who is President of Bertucci Contracting Corporation from Jefferson, LA; Dr. 

Beverly Wright, Deep South Center for Environmental Justice; 

Warren Perkins, who is Vice President for Risk Management at 

Boh Brothers Construction; Michael Feigin, Executive Vice President and Chief Administrative Officer of Bovis Lend Lease Holdings, Inc.; and finally, Dr. Joel Shufro, New York Committee for 

Occupational Health and Safety. 

I don’t know if he is with us here or not. Perhaps not. But we 

will just start, we will go from left to right, so Mr. Zelenka, if you 

would proceed. If you could, we are probably going to have another 

series of votes about an hour from now. So we are going to try and 

adhere, if we can, to the 5-minute rule when it comes to oral testimony. We will make sure that all your written testimony is made 

a part of the record. 

Thank you for being here. 

STATEMENT OF ANTHONY ZELENKA, PRESIDENT, BERTUCCI 

CONTRACTING CORPORATION 

Mr. ZELENKA. Thank you, Chairman Thune, Ranking Member 

Boxer and the distinguished members of the subcommittee, for this 

opportunity to testify on Louisiana’s struggle to recover from Hurricane Katrina and the great need for legislation along the lines of 

the Gulf Coast Recovery Act, which I support and urge Congress 

to enact. 

I am Tony Zelenka, I am President of Bertucci Contracting Corporation. My company is a small business that performs levee and 

coastal restoration work across the Gulf Coast. I was born and 

raised in New Orleans, and I have over 20 years of experience in 

the construction industry. 
16

My family’s firm traces its history back to 1875, when my greatgreat-grandfather founded the company in New Orleans. The morning after the hurricane hit the Gulf Coast, I waded through chestdeep water to reach the closest highway, carrying my bicycle over 

my head so I could ride to my truck and then drive to check on 

my family, which had evacuated to Jackson, MS. I had stayed behind to make sure our home and businesses survived the storm. 

While with my family, I learned that the levees in New Orleans 

had failed. I knew that the Army Corps of Engineers was going to 

need contractors to stop the flooding, so I headed to the Corps’ 

emergency response center in Vicksburg, MS. After meeting with 

Corps officials that first day, and with no more than an oral agreement to execute a written contract, I went to work hauling stone 

and rock to repair the breached levees that had flooded New Orleans. I was one of the first contractors to arrive on the scene. 

In a situation like this, contractors like me focus on protecting 

our employees and helping our communities as quickly as possible. 

Under the direction of the appropriate authorities, we help our 

Country recover from one disaster after another. We are the first 

entities, the first responders to arrive on the scene of a disaster 

with the goal of providing whatever support we can. 

In the case of Hurricane Katrina, we did everything we could to 

stop the water from pouring into New Orleans, and for the past 10 

weeks, we have been working 7 days a week. Personally, this disaster has touched many contractors in the area. While my home, 

thankfully, was spared from the devastation, many of my employees and their families’ lives have been ruined by this disaster. As 

we continue our efforts to cleanup the city, I have also sought to 

help my employees re-establish their lives and livelihoods. 

The cleanup process in New Orleans continues to move forward. 

Standing side by side with my employees, I have personally done 

a lot of the work, and I have done it under crisis conditions. From 

the beginning, we have worked with personal protective equipment 

and done our best to protect ourselves from the many hazards. Like 

it or not, we have had to wade through the flood waters and deal 

with the spray that the helicopters caused. We continue to deal 

with gas leaks, oil spills, downed electrical lines and backed up and 

overflowing sewer lines. 

While all of you have been watching the devastation on television, we have been living it. Many of my employees are still 

homeless and have had their families displaced. My city is uninhabitable. In fact, I am a little nervous about being away from 

the job site for the first time since this terrible tragedy first happened. 

Construction contractors have a critical role in providing disaster 

assistance to Federal, State and local officials. We are essential in 

the rescue of both persons and property. Our Country has never experienced a dislocation of the size and scope of Hurricane Katrina. 

Contractors like me stopped the flow of water into the city, and we 

will be busy for months on the demolition, removal, repair and reconstruction of both structures and utilities damaged by the hurricanes. We will cleanup property polluted by the hurricane, remove 

vast amounts of debris and de-water flooded areas. This is our city, 

and we want to bring it back. 
17

Unfortunately, there are people out there who want to capitalize 

on this tragedy and others like it. Lawsuits have been filed against 

contractors who have performed the types of rescue and recovery 

work my firm has been doing in New Orleans. Take a look at what 

happened in New York after the terrorists on 9/11. Hundreds of 

lawsuits were filed against contractors for the heroic work they did 

to cleanup Ground Zero in a short amount of time at the express 

direction of the Federal, State and local authorities. I have attached an AP story to this testimony that reports on the litigation. 

[The referenced AP Article can be found on page 99.] 

The madness has already started in Louisiana, where a contractor was named as a defendant in a class action only 3 weeks 

after the hurricane hit. The trial lawyer sued the contractors for 

building a faulty levee which the contractor did not build in the 

first case. The case was dismissed after a few days, but it is a 

prime example of the hunger out there, no matter how arbitrary 

the suit may be, to sue contractors. 

I worry that I may be sued for property damages as part of the 

cleanup. Recently I have been hired to work on the massive debris 

removal contract in New Orleans, which may include the demolition of private homes damaged by the hurricane. This is a very 

emotional situation, even though all levels of Government have determined that many of these homes are completely uninhabitable 

and beyond repair or restoration. The Government has decided that 

they must be torn down and completely rebuilt due to the flooding, 

hurricane winds and mold. 

I now fear legal risks for moving ahead and doing exactly and 

only what the Government hired me to do. Why am I worried? Because everyone has spent all this time looking for someone to 

blame instead of looking for a solution. Meanwhile, contractors are 

expected to continue the cleanup and do it as safely and quickly as 

possible, despite an uncertain legal and logistical environment. 

Remember, unlike many public officials and their agencies, contractors have no sovereign immunity. We look to the Government 

at all levels for guidance on the best way to do this work safely and 

efficiently. Ultimately, in emergency situations, we have to put our 

assets on the line if we want to help, which means I may be at risk 

of losing my company for simply doing what I have been hired by 

the Federal Government to do: trying to help save my city. 

I believe passing the Gulf Coast Recovery is necessary to ensure 

that contractors like me will be there to do the work in the future 

without fear of reprisals. The bill offers limited protection to Government contractors from any citizen suits that might result from 

their performance on a disaster recovery contracts, enabling them 

to focus on the work. This legislation would give my firm a reasonable measure of protection, allowing me to pass this fifth generation family business on to the sixth. 

Do not let the trial lawyers penalize the contractors like me who 

report for duty. We are a critical link in the restoration of our city. 

I ask you to pass this legislation. 

I also ask you to do something else. Listen to the experts, listen 

to the Army Corps of Engineers, listen to local levee districts. Do 

not shortchange the rebuilding and flood protection efforts underway. 
18

I have been asking for increased funding for the Southeast Louisiana Urban Flood Control project for years. Unfortunately, my 

calls for increased funding to rebuild the wetlands and coastlands 

and provide additional protection for New Orleans have consistently fallen on deaf ears. Please tell your colleagues to not only increase investment, but fully fund this national priority. 

Please approve the Gulf Coast Recovery Act, and please commit 

to rebuilding my city. Thank you for this opportunity to comment, 

and I look forward to working with the subcommittee, and I am 

happy to answer any questions. 

Senator THUNE. Thank you, Mr. Zelenka. 

Dr. Wright. 

STATEMENT OF BEVERLY WRIGHT, PH.D, DIRECTOR, DEEP 

SOUTH CENTER FOR ENVIRONMENTAL JUSTICE AND COCHAIR, NATIONAL BLACK ENVIRONMENTAL JUSTICE NETWORK 

Ms. WRIGHT. Good afternoon, Mr. Chairman. I am Dr. Beverly 

Wright, Director of the Deep South Center for Environmental Justice at Dillard University, formerly at Xavier University. Regrettably, both of these Historically Black Colleges are underwater now 

and temporarily closed due to Hurricane Katrina. I am also here 

today representing the National Black Environmental Justice Network. 

Thank you for the opportunity to testify before the Subcommittee 

on critical issues of concern in the aftermath of the hurricanes. My 

professional and personal experiences of growing up, living and 

working in the city of New Orleans greatly influenced my perspective and testimony. Just like Tony, I can trace my ancestry back 

seven generations in the city of New Orleans, extending from free 

coloreds in that city. So I am very much vested in the city of New 

Orleans. 

The Mississippi Gulf Coast region suffered severe environmental 

damage during Katrina, the extent of which has yet to be determined. Massive amounts of toxic chemicals were used and stored 

along the Gulf Coast before the storm. Literally thousands of sites 

in the storm’s path used or stored hazardous chemicals, from the 

local dry cleaner and auto repair shops to Superfund sites and oil 

refineries in Chalmette and Meraux, LA. 

Katrina displaced just under 350,000 school children in the Gulf 

Coast. An estimated 187,000 school children have been displaced in 

Louisiana, 160,000 in Mississippi, and 3,118 in Alabama. The powerful storm closed the entire New Orleans public school system. 

More than 110,000 of New Orleans’ 180,000 houses were flooded, 

including my own, and have set for days or weeks in more than six 

feet of water. As many as 30,000 to 50,000 homes city-wide may 

have to be demolished, while many others could be saved with extensive repairs. 

Katrina affected over 2,000 black-owned businesses in Mississippi. These firms generated over $126 million in sales and receipts in 2004. More than 20,000 black-owned businesses were affected in Louisiana. These firms generated sales and receipts of 

$886 million a year. It is likely that many of these businesses will 

not recover. 
19

Katrina could hurt over 60,000 black-owned businesses in the 

Gulf Coast region that generate $3.3 billion a year. Black-owned 

businesses have met roadblocks and have been virtually frozen out 

of the rebuilding of the Gulf Coast region. Complaints about being 

shut out of the Gulf Coast reconstruction are not limited to minority-owned firms. Many white Gulf Coast workers and businesses 

also rail about being left out, while they see out of State companies 

receiving the lion’s share of the contracts. 

The annual payroll alone in the metropolitan area hardest hit by 

Hurricane Katrina, those being New Orleans, Biloxi and Mobile, 

exceeded $11.7 billion in 2002. 

Short-term rebuilding objectives must not outweigh long-term 

public health protections for all Americans and the environment 

they depend upon. Some of the legislative proposals now under consideration in the aftermath of Katrina do not adhere to these principles. Congress must act now to protect our most vulnerable populations and preserve our most unique and irreplaceable resources. 

It is ironic that the tragedy of Hurricane Katrina is being used 

to justify sweeping waivers of public health, safety and environmental laws. The Gulf Coast Recovery Act would leave many citizens without a remedy against contractors that cause irreparable 

harm to the air and water. The bill gives unprecedented legal protection to contractors being paid for work related to Katrina in 

areas of rescue, recovery, repair and reconstruction. 

The bill is far-reaching in that these protections do not only 

apply to Katrina contractors. Under the bill, they will also apply 

to contractors in all future disasters that result in at least $15 billion of Federal assistance. 

The Gulf Coast Recovery Act, while designed to help victims of 

Katrina, could very well end up helping everyone but the victims 

in the long run. S. 1761 is particularly egregious to low income and 

minority communities in the Gulf Coast region. All of the limitations apply only to actions brought by private citizens. The Section 

4 limitation on filing a lawsuit is specifically limited to private parties and Section 5(e) specifically provides that nothing in that section limits an action that any Governmental entity may bring. 

I thought that the Government’s role was to protect the citizenry. 

This bill seems designed to do just the opposite. By eliminating the 

threat of liability for contractors, you in effect remove an essential 

protection for the public. Where there are no consequences there 

are higher risks and general disregard for the public safety. 

This bill seems not to be well thought out. The actions taken by 

this bill, in my opinion, aptly depicts the moral of the old adage 

of throwing out the baby with the bath water. We should remember 

that in this case, it is not the contractors who are the victims. Powerful corporations with huge Government contracts will make millions in profit from the Katrina tragedy. The payments will be 

made with our tax dollars. 

This bill should be rejected by the Senate. In essence, it will ultimately defeat the overall purpose of cleaning up the Gulf Coast 

and setting the road for its recovery. If contractors no longer fear 

legitimate legal liability, where is the incentive to do good work? 

When the dust settles, with possibly untold numbers of properties 
20

improperly cleaned up, debris inadequately disposed of with personal injury due to contractors’ negligence, who will pay that bill? 

The victims of Katrina have suffered immensely, first from an inadequate response that cost the lives of many citizens, the loss of 

property, family members and their communities. Now the Government will hold harmless contractors who may further injure the 

citizenry through neglect and irresponsibility without liability. 

These citizens of the United States and victims of the worst natural disaster every in North American have been placed in double 

jeopardy by this event. In each instance, the Government has 

played a major role, first with the slow and inadequate response 

to Katrina and now with the quick response that fails to adequately protect citizens in the aftermath of the storm. 

I believe that the most important question to ask when the Senate examines this bill is not who will this bill help, but who will 

this bill hurt. What segment of our society will be left unprotected 

and who will be denied a basic legal right in this Country to sue 

a party that has caused irreparable harm to your family and your 

property? 

A major reason cited by the proponents of this bill for its existence is that it is in the national interests to have private contractors assist public officials in times of disaster. What I disagree with 

is the statement that well-founded fears of future litigation and liability under existing law discourage contractors from assisting in 

times of disasters. From where I sit, this statement is a complete 

fabrication. 

Senator THUNE. Dr. Wright, if you could summarize. 

Ms.WRIGHT. I’m over time? 

Senator THUNE. Yes. You are considerably over. 

Ms. WRIGHT. In fact, for every contractor that you find who is 

hesitant to accept billions of dollars in contractors, I can find hundreds who will. In fact, there was nearly a riot at a recent meeting 

in Baton Rouge with all of the large companies who received nobid contracts for work after Katrina by local businessmen who have 

lost everything looking for work. 

In closing, what I want to say is that there are many contractors, 

particularly small businesses, minority businesses, who are willing 

and ready to take the charge of doing this work and they are also 

willing to take the responsibility of liability. 

Senator THUNE. Thank you, Dr. Wright. We will include your entire statement as part of the record, the parts you didn’t get to. 

Mr. Perkins. 

STATEMENT OF WARREN PERKINS, VICE PRESIDENT, RISK 

MANAGEMENT, BOH BROTHERS CONSTRUCTION COMPANY 

Mr. PERKINS. Thank you, Mr. Chairman, thank you for the opportunity to testify before the subcommittee. 

My name is Warren Perkins, I am vice president, Risk Management, for Boh Brothers Construction Company. I serve with the responsibilities for risk management and controlling and advising on 

being able to transfer risk in our company where we can and protect our company. I am here today to express the company’s views 

on matters before this subcommittee. 
21

My President, Mr. Robert Boh, intended to be here. He, like 

Tony, was nervous to be away from operations. We have 100 plus 

jobs that were pre-Katrina projects that we can’t get back to. He 

is meeting with agencies to try to get back to work, try to get our 

people back to work. So he sent me. This is kind of under my purview, and I am happy to have his confidence that I will represent 

the company well. 

Boh Brothers is a general construction contractor native to Louisiana and based in New Orleans. It is a closely held, 96 year old 

company. We are a civil contractor, Union contractor in Louisiana. 

We pursue and get work throughout the entire Gulf Coast region. 

Basically, we are a civil contractor that does bridge work, roads 

and sewer drainage, levee, flood protection system type work. 

Boh Brothers and its employees are among the many victims of 

Hurricane Katrina. The company lost equipment and its work was 

interrupted. The hurricane shut down all of its projects in the 

greater New Orleans area, and even today, only a handful of those 

projects have resumed. Many are in jeopardy of being canceled. 

Moreover, as the storm approached, all the employees in the 

greater New Orleans area had to evacuate to other locations. I had 

to move my family to an aunt’s house in Montgomery and work in 

an office that was set up for me in downtown Montgomery. When 

I finally returned, I learned that my house was flooded with a foot 

of water. I have been living in it and working on my home ever 

since and commuting to Baton Rouge, where we had to relocate our 

office, because we could not work out of our office in New Orleans. 

As soon as the storm passed, Boh Brothers started scrambling to 

locate its people to ensure that they were safe, to let them know 

that we were temporarily moving our headquarters to Baton 

Rouge. It took a week for us to locate 50 percent of them. It also 

took us several days to assess the condition of our main office, 

equipment yard and job sites and the damage done to the city as 

a whole. 

Before Katrina hit, Boh Brothers had over 180 piece of equipment worth over $60 million strewn out through the greater New 

Orleans area. It took us 2 weeks to recover some 50 percent of 

them. Many pieces were damaged, destroyed or lost. 

During that time, we also set up a command center where we received emergency calls for recovery operations, including emergency repairs to breached levees. We were asked to deploy personnel and equipment to the downtown area and to stop the flooding. By the end of the first week, we have received more than 10 

requests from Government agencies to fill breaches in the levees, 

to pump water out of flooded areas, to move barges out of blocking 

parts of the inland waterway and to repair bridges over waterways 

that needed to be repaired because of Katrina. 

To get to the areas that needed our help, we had to find access 

routes through flooded streets and around debris and power lines, 

all at the risk of our employees. We also had to do our very best 

to protect our people from environmental and other hazards. We 

made sure to comply with all OSHA and maritime regulations, but 

that was just the beginning. 

As soon as we could, we hired two engineering companies to do 

environmental testing of our work sites before we moved into any 
22

work site areas. We hired industrial hygienists to give us advice on 

what personal protection we should use. We had all of our people 

vaccinated with hepatitis A and B and gave tetanus and diphtheria 

shots. We even hired security guards to protect our people from the 

sniper activity encountered at some job sites in and around the 

areas where we worked. 

In the early days, we were ready to start on little more than a 

handshake. We did not demand the time we would normally take 

to scrutinize contractual terms and conditions, nor did we dwell on 

the risk of tort litigation. We knew that the trial lawyers were out 

there, but we simply could not take the time to imagine that someone would sue us for trying to save the city. The only risk in our 

minds was the risk that New Orleans would simply cease to exist. 

Now, however, we wonder. Do we risk tort litigation over the actions we have taken and continue to take? Will the trial lawyers 

really sue us simply for trying to put our community back together? Some people disagree with the contracting regulatory agencies and believe that the agencies are not doing enough. Would 

such people actually sue us simply for following the Agency’s instructions and relying on their conclusions? 

We understand that the contracting agencies have to guide and 

direct the recovery effort. If we fail to follow their instructions, we 

expect to have a problem. We also have to answer to the regulatory 

agencies if we fail to comply with their standards. We expect them 

to take some kind of enforcement action. The problem is that we 

cannot be sure that the agencies are in charge, that the problem 

is in the future tort litigation could rewrite the rules long after the 

fact. 

Boh Brothers has simply responded to the many requests that 

the Government agencies have made of our company. At their request, and as they instructed, we have for example made temporary repairs to New Orleans’ flood protection system. These temporary repairs are intended to protect the city only for a short time. 

As the Corps of Engineers and other Government agencies develop and implement permanent solutions to the many problems 

that Hurricane Katrina revealed, but we really do not know how 

much time the agencies will require, the time could stretch on into 

the 2006 hurricane season and beyond. If future hurricanes breach 

any one of these temporary repair locations, will the trial lawyers 

sue us, the Government Agency or both? 

The exposure is real. Even if we are confident our work meets 

all relevant standards, litigation takes an enormous toll on a company, any company. The cost of litigation is enormous. 

During the early stages of our recovery efforts, a lawsuit has already been filed, a meritless class action lawsuit was filed against 

us in the first few weeks of our recovery efforts. We were sued on 

a project we did not even do. We were sued allegedly for performing work on a bridge that was near the breach of the 17th 

Street Canal. We were not the contractor that did that. The attorney did not do his research, did not attempt to do any research. He 

sued the wrong company that was doing the work, wrong name, 

and he just assumed that Boh Brothers had to be involved in the 

construction of that contract, therefore he sued us in a class action 

suit. 
23

We immediately wrote him a letter demanding that he dismiss 

the lawsuit with consequences of defamation of character, defamation of reputation, rather, and sanctions under the law in Federal 

court and give an apology for going into the newspaper and the 

press, television station, and announcing that Boh Brothers was responsible and sued for the breach in the 17th Street Canal when 

we were there fixing the breach and fixing all the breaches and 

bringing the city back to recovery. 

I am not here to bash plaintiff attorneys. My wife works for 

plaintiff attorneys. We are still married, and I have been married 

to her for 35 years. So I am not here to bash plaintiff attorneys. 

When asked to do the right thing for New Orleans and its residents, Boh Brothers responded. Now it is time for Congress to do 

the same. Now it is time for Congress to give the contractors working hard to revive New Orleans and the remainder of the Gulf 

Coast some reasonable measure of protection from unlimited tort 

liability, simply for being there to meet the need. Congress should 

quickly enact S. 1761. 

Boh Brothers is a member of the Associated General Contractors 

of America. I can assure you that responsible contractors throughout the Country are paying close attention. They are aware of what 

has happened to the contractors who responded to the terrorists attacks in New York. They are aware of the litigation that followed. 

They are responsible corporate citizens, but they are deeply concerned. 

In closing, let me just add that the greater New Orleans area requires your particular attention. It heavily depends, for its very 

survival, on the design and construction of the flood protection system. For itself, its employees and its community, Boh Brothers also 

urges you to quickly provide enough funding to design and construct a flood protection system that will protect the city from future hurricanes. 

In our opinion, if proper funding is not quickly provided, many 

of the city’s residents will never return or rebuild, if they do not 

have the confidence that this won’t happen again. Thank you for 

allowing me to provide Boh Brothers’ opinion. 

Senator THUNE. Thank you, Mr. Perkins. I appreciate it. I have 

been fairly lenient with the gavel, because I think all your testimony is very pertinent and obviously deeply felt, based on what 

many of you have experienced there. 

I do want, if you can, your entire statements will be included as 

part of the record. If you can keep them down to the 5 or 6 minute 

level, it will be very helpful, because we are going to run out of 

time for our last panel. 

Senator Boxer has a commitment at 4 o’clock. So what I would 

like to do at this point before I ask Mr. Feigin to offer his testimony is, she has a question that she would like to direct, one, I 

think to General Riley, and then perhaps to those of you who have 

already testified on this panel. Then she will have to duck in and 

out. 

Senator BOXER. Mr. Chairman, thank you. It is such a tough day 

and the panel has been so very respectful of our situation. We are 

very respectful of yours, and we are just not in control of the voting 

today. 
24

I want to say that I heard just two witnesses here today and I 

think they are both very eloquent. I missed the Army Corps, and 

I did have a question, sir. 

We have been in touch with you—staff to staff contacts have 

been made—because when the Senator introduced this bill, we 

said, is there a problem? Are you having problems getting the contractors to sign up? Dr. Wright points out that, she said there was 

a near riot for people trying to get these contracts. Are we having 

a problem? Are contractors staying away because they are so nervous about their liability issues, in your opinion? 

General RILEY. Ma’am, that is sort of a mixed bag. If you look 

at the history of our contracting during Katrina, early on we went 

to contractors, like Mr. Zelenka who sits here, with a call and a letter contract. We knew he was there and available, then we also 

looked for a contractor to do un-watering. We called four different 

large contractors that could do that quickly. One was available and 

responded. 

For the largest debris contractors, we advertised and we got 22 

respondents for those 4 contractors. However, just in the last few 

weeks, we had a contract out for levee repair, five different contracts; on one contract we had four bidders, on another contract, we 

had two bidders, and on three of them, we only had one bidder. I 

don’t know the reasons, you would have to ask the contractors. It 

could be their crews had homes damaged or they just weren’t available, they were too far away, or they considered the risks. I just 

don’t know. I think the contractors would be better to answer that. 

Senator BOXER. We talked to Colonel Doyle. Colonel Doyle told 

us that he never, he didn’t see any problem whatsoever. We will 

have to work further with you, maybe get some more—I mean, 

there are certain areas where you are looking for some specific 

skill, I would assume, right away, your universe is smaller. 

Everything I hear is the opposite, that the contractors who were 

displaced and, unlike Mr. Perkins, who worked in the area of, and 

I am sure Mr. Zelenka, are you from the area as well, sir? 

Mr. ZELENKA. Yes. 

Senator BOXER. For many years, since the 1800’s or something. 

I mean, there are still a lot of folks that are complaining that they 

are not getting the contracts. 

So I will keep on evaluating this, we will get something in writing. The question, Mr. Perkins, I think it is so funny that you are 

married to someone who works for a trial lawyer. Because you 

mentioned trial lawyers are at least five times. You said trial lawyers are coming around and looking to sue. The last I knew, trial 

lawyers represent injured parties. That’s OK, I mean, I didn’t think 

they can come around unless they have injured parties. But that’s 

OK. 

I am married to a lawyer, my son is a lawyer, my father was a 

lawyer. I am not. So I could be wrong on that. I don’t think trial 

lawyers can get a case brought unless they have a party. No. 1, did 

you ever see the movie Erin Brockovich? 

Mr. PERKINS. Yes, ma’am. 

Senator BOXER. I think, from what I hear from you, you say that 

some foolish attorney brought suit against the wrong company, 

right? 
25

Mr. PERKINS. Right. 

Senator BOXER. That’s outrageous, and of course, that suit isn’t 

going forward against you, is it? 

Mr. PERKINS. Not after we made the demand that we were going 

to come after him for sanctions and he realized that we were not 

the contractor. The point is that it was a distraction and a wrongly 

filed distraction. He didn’t do his homework. That’s the kind of 

things we get faced with. We are doing temporary repairs here. We 

are not hearing anything about what the permanent repairs are 

going to be. How long those temporary repairs are going to stay 

there. So we are exposed to hurricanes. 

Senator BOXER. Would you rather not—I mean, if you were faced 

with this, suppose this committee decides, and the Senate decides, 

that we are not changing the rules, that we really think that having laws that are reasonable are a deterrent to some of the bad actors? I am assuming those of you here are good actors, you are good 

actors, you have been in the community, the last thing you would 

ever want to do is hurt anybody. 

All you have to do is be alive through our history and see what 

people do to other people. I’m saying, if you play by the rules, 

somebody makes a mistake and comes after you, you have every 

right to be upset about it. Why the heck would we change the laws 

of this Country to let the bad actors off the hook? Because you’re 

going to be taken care of. 

Mr. PERKINS. Senator, with respect to the Corps of Engineers, 

they have immunity. We are asking for some protection ourselves. 

In my opinion, there is just as much of a likelihood, and perhaps 

more, that the Corps of Engineers and the design that they provide 

and the supervision that they provide as well on the job site is potentially the problem. Yet we get to be the scapegoat and we get 

the suits, and we have to spend the costs on attorneys and expert 

witnesses and all the things that——

Senator BOXER. Well, wait a minute. Who is suing you now? 

Mr. PERKINS. Nobody is suing me now. I am concerned that I am 

doing temporary repairs and we are out there responding on a 

handshake and a prayer. Those temporary repairs are not meant 

to withstand hurricanes of the nature of Katrina or probably well 

below Katrina. 

If the temporary band-aid is not permanently fixed, who are they 

going to sue? If the breach occurs at the temporary location——

Senator BOXER. Well, I’m assuming—sir, I’m assuming, because 

I’ve read all about this, that there is a clear understanding with 

the Corps that we are doing these temporary repairs. Everybody 

knows we are not doing permanent repairs, sir. So I would assume 

that you would have a good lawyer who is going to look over the 

contract and you are going to be just fine. That’s how the system 

works. 

My understanding is that you were involved, your company, in 

writing this legislation, is that correct? 

Mr. PERKINS. Our company? 

Senator BOXER. Your organization, the trade association, was involved in putting together, drafting this legislation? 

Mr. PERKINS. The AGC, yes. 
26

Senator BOXER. Who was at the table? Was Dr. Wright at the 

table to speak up for the victims who might have a problem in the 

end? 

Mr. PERKINS. I don’t——

Senator BOXER. Do you think your company would have a problem meeting a negligence standard? 

Mr. FEIGIN. Senator Boxer, may I say something? 

Senator BOXER. Just a minute. I just want an answer. Do you 

think that your company would have a problem meeting the current negligence standard? 

Mr. PERKINS. The problem is that the work that was asked of us 

had no specifications, had nothing to rely on, no design specifications, no specifications whatsoever. We were called out to respond 

and through our efforts, we recovered the city, stopped the 

breaches. We did it in record time. 

Senator BOXER. OK, well, you know, Mr. Chairman, maybe what 

we should be doing is looking at the contracts the Corps get for 

these temporary repairs and if we’ve got a problem with the temporary repairs, and people are fearful they are going to be sued for 

the temporary repairs, that is one set of circumstances. I think everyone is willing to look at that. 

But this legislation goes far, far, far beyond that, way, way, way 

beyond that. It looks to me, you know, call me old-fashioned, but 

I’ve been around here long enough to see that when there is an excuse to change a law you don’t like, you go far beyond it. Not you 

personally, sir. We just keep seeing this again and again. We have 

an issue, we have an issue with oil prices. So now we’re faced with, 

oh, well, let’s give land to the oil companies. The oil companies are 

making record profits. 

This is not the way to respond to Katrina. I just look at this and 

I say, this goes far, far beyond any reasonable fear that you may 

have as a solid company. I think the protections that are granted 

in this go way beyond the circumstances you are describing. If my 

chairman wants to talk about narrowing the scope of this bill to 

these areas where you may well have a legitimate point, I’m very 

open to that. 

What I’m not open to is changing the law, not only for this situa- tion, but every other ‘‘emergency’’ situation where there’s $15 billion or more in Federal expenditure. This thing is way beyond just 

protecting you from a band-aid type of situation, which I agree 

with you, that’s what we’re begging you to do and help us to do to 

give us a modicum of protection now until we get our act together 

and figure out what’s the long-term solution. 

So maybe there’s something here, Mr. Chairman, where we can 

focus on a legitimate issue without, you know, trial lawyers this 

and trial lawyers that, and trial lawyers are working, you know. 

Give me a break. You say you’re not bashing trial lawyers. Read 

back what you said. Because at the end of the day, that’s what this 

comes down to, another excuse to weaken the laws, and as far as 

I’m concerned, it’s wrong. 

You want to do something narrow, but when a group of contractors get together, help write a bill, and we don’t have anybody from 

the public—excuse me, the victims, the public sector who care 

about environmental justice, who care about victims, not at the 
27

table, seems to me you’re presenting a one-sided deal here. It’s sad. 

Because if you had called Dr. Wright or other people to the table 

or maybe the folks from New York who went through this situation, maybe you’d have something here that we could do together 

instead of always having to battle it out. 

Mr. FEIGIN. Senator Boxer, may I say something? 

Senator BOXER. I think I’ve spoken long enough. I would be delighted to hear from you, sir. 

Mr. FEIGIN. You haven’t heard my testimony, but I would just 

like to respond quickly. 

Senator THUNE. Yes, hold on, just before you do that, I want to 

take you up on that offer. If you want to provide some protections 

for temporary repairs we would be happy to work on that. 

Senator BOXER. Yes, absolutely. I’m happy to look at that. 

Senator THUNE. I do, in fairness, too, the bill is narrow in scope, 

it is narrowly drawn. I think it’s unfair to characterize—a lot of the 

people at this table are also victims. These are people who I think 

care passionately about their fellow Louisianans and Mississippians and others who were victims of this disaster. 

So I don’t think characterizing them as somehow not sympathetic 

to the needs of the people that they live with——

Senator BOXER. Well, let the record be clear here, OK? I love everyone at this table, it’s nothing about that. It’s about what we’re 

doing when we write laws that are too broad. Mr. Chairman, I 

have legal experts who have read this who tell me that you are 

protecting people from negligence. It’s not your intent. You said 

that. But there’s interpretations that would go that way. 

For example, if somebody came in to clean out, to haul away a 

big bunch of barrels that are sitting out there and they don’t look 

at what’s inside, they think one thing’s inside but they don’t test. 

Turns out a barrel is punctured, some of the most toxic liquid gets 

into the water supply, off the hook, according to the legal people 

that I have talked to. So let’s try to find some common ground. 

I’d love to hear from you, sir, if my chairman would allow it, then 

I’ve got to—I’m like really behind, so I’ve got to——

Senator THUNE. Mr. Feigin. 

Mr. FEIGIN. I know you have to run, but I didn’t want you to 

leave without hearing a couple of things from the contractors that 

have actually been through it. 

Senator BOXER. Yes. 

Mr. FEIGIN. Right now, currently pending against the contractors 

who were down at the World Trade Center site, there are 5,000 

claims. The problem isn’t that we don’t believe that we can sustain 

a standard of negligence. We believe that we’ve done nothing 

wrong. We are actually very proud of our safety record down at 

Ground Zero. Nobody got hurt while we were down there, there 

were no deaths when we were down there in one of the most difficult circumstances that anyone in the construction industry has 

ever faced. 

But we are facing 5,000 claimants. The legal fees alone to defend——

Senator BOXER. Against how many companies? 

Mr. FEIGIN. Against 140 companies. 

Senator BOXER. These are individual suits? 
28

Mr. FEIGIN. They are all individual suits. It has not been certified as a class action. 

Senator BOXER. OK, well, fine. I think Dr. Shufro has some information on that. I’m aware of his testimony. 

The point I want to make is 5,000 people have sued. It’s not a 

class action. 

Mr. FEIGIN. It has not been certified as a class action. 

Senator BOXER. Right. Well, I understand that. 

Mr. FEIGIN. The legal fees alone in defending our position, we 

feel we will be exonerated in the end, because we don’t feel we did 

anything wrong. The legal fees alone could put a company like 

ours, as big as we might be, out of business. Then the plaintiffs are 

left with nothing. There’s nobody to sue, there’s no money to get 

anywhere. 

So I’m not sure—I support this bill because I think it provides 

some kind of relief for the contractors. I would just like some acknowledgement that the contractors need some kind of relief in situations like this, and all you are really talking about are details. 

Senator THUNE. I think it was recognized in the aftermath of 9/

11 that there was a need for that, because a pool was created to 

provide some help. 

Mr. FEIGIN. Well, we tried to get the legislation that Senator 

Boxer refers to, legislation that would help us, and we couldn’t get 

any legislation. So what we ended up with was a billion dollars to 

start an insurance company. The experts say now that maybe a billion dollars won’t be enough. Then we will be right back where we 

started right after 9/11. 

Senator THUNE. Well, let’s—Senator Boxer had to leave us for a 

while. But let’s move on, Mr. Feigin, with your testimony and Mr. 

Shufro, with your testimony. Then I have a couple of questions I 

would like to ask as well. 

STATEMENT OF MICHAEL FEIGIN, EXECUTIVE VICE 

PRESIDENT, BOVIS LEND LEASE HOLDINGS, INC. 

Mr. FEIGIN. If I have to keep it under 5 minutes, I am going to 

read my testimony, but it might be a little repetitive of what I just 

said. 

Mr. Chairman, I would like to thank you, I would like to thank 

Senator Boxer and the committee for inviting me to participate on 

today’s panel and allowing me to discuss my company’s experience 

after the terrorist attacks on 9/11. 

The proposed legislation, S. 1761, addresses some of the problems following Hurricane Katrina. I hope to use the knowledge we 

gained through our 9/11 experience to draw parallels to Katrina 

and future disasters and encourage the committee to take into consideration the role private business has played in helping Government with disaster relief. 

At 1 o’clock p.m. on September 11, 2001, hours after the first attack, Bovis received a call from the city of New York. The city 

wanted Bovis to come to what was being called Ground Zero to 

help manage the daunting task of making sense of the chaos in an 

effort to save lives. Without a moment’s hesitation, Bovis went to 

help. 
29

The initial Government estimates were that the recovery efforts, 

debris removal and site stabilization would take 2 years and cost 

over a billion dollars. The work was actually finished in 265 continuous days, working 24 hours a day at a total cost of somewhere 

around $500 million. Bovis was particularly proud that we had no 

fatalities and only 36 reportable accidents with over 3.2 million 

manhours worked. 

No consideration was given by any of the contractors to liability 

issues or potential claims or lawsuits before beginning work after 

September 11th. When asked to perform work on any other project, 

any one of these contractors would have been given the time to 

properly analyze the situation, the risks associated with the assignment and the methods to manage those risks. The contractors also 

would have determined how to insure whatever potential liability 

might arise. 

There was no time to do this before starting work at Ground 

Zero. It soon became apparent that the liability issues would have 

to be addressed. However, given the dangerous conditions, the retroactive nature and the unknown aspects of this unprecedented effort, commercial insurance companies would not provide the coverage needed, and ultimately only limited liability coverage was obtained. 

After many months of work we received a commitment from Congress to fund a captive insurance program. This WTC captive provides coverage for the city of New York as the named insured and 

all the contractors, subcontractors, architects and engineers working at Ground Zero as additional named insurers. The policy currently has approximately 140 additional named insurers. 

The captive was funded at a billion dollars because this was the 

quickest agreeable amount to get a program in place. Some now 

claim that even the billion dollars may not be enough. 

Today there are claims against the contractors from over 5,000 

individual claimants. These lawsuits claim existing respiratory and 

related injuries, or fear of such injuries in the future arising from 

or related to the debris removal work. The captive is vigorously defending these lawsuits. 

Bovis did receive compensation for its work at Ground Zero. For 

the WTC captive, however, expenses for lawyers and consultants 

would have exceeded any fees made in a matter of months. As a 

result of these ongoing expenses and potential liabilities, we would 

probably lose our bonding lines, our banking support and our current insurance coverages. In short, absent the captive, responding 

to a disaster when called would have taken a thriving business employing over 2,500 people in 20 States and Latin America and put 

us out of business. We put our business, our livelihood and our 

families’ prosperity on the line to help people and do the right 

thing. 

If asked again, we owe it to our company and our employees to 

think very hard about what our response should be. While we 

think existing law offers a shield in this area, the current World 

Trade Center related litigation demonstrates the need for additional clarity, not only to protect contractors from liability, but also 

to eliminate or discourage the costly and time consuming process 

of the litigation itself, except in appropriate circumstances. Protec-
30

tion from liability needs to be put in place to eliminate any question of response and to avoid penalizing companies that come when 

called and do the right thing. 

S. 1761 does this and should be supported by this Committee. 

Mr. Chairman and members of the committee, thank you for the 

opportunity to speak about our experiences down at Ground Zero. 

You have our written testimony and I will answer any questions 

you might have. 

Senator THUNE. Thank you, Mr. Feigin. 

Dr. Shufro. 

STATEMENT OF JOEL SHUFRO, EXECUTIVE DIRECTOR, NEW 

YORK COMMITTEE FOR OCCUPATIONAL SAFETY AND HEALTH 

Mr. SHUFRO. Thank you. My name is Joel Shufro. I am the Executive Director of the New York Committee for Occupational Safety 

and Health, NYCOSH, a non-profit educational organization dedicated to every worker’s right to a safe and healthful workplace. 

We have a 26 year history of providing quality safety and health 

training and technical assistance to working people, unions, employers, Government agencies and community based organizations 

about how to recognize and eliminate workplace health hazards. 

Since the attack on the World Trade Center, NYCOSH has had extensive involvement with workers who participated in the rescue, 

recovery and cleanup operations at the World Trade Center site, 

workers in offices surrounding Ground Zero, immigrant workers 

who cleaned offices and residents, utility workers who restored essential services to the area and residents living in or returning to 

contaminated homes around Ground Zero. 

To those involved in the rescue and recovery and cleanup, working at the World Trade Center was more than a job. Those who responded to the disaster did so for many reason: patriotism, altruism and humanitarianism, among other motives. They responded 

to the needs of their Country, many working 12 hours a day, 7 

days a week for months. They assumed that if they were harmed 

as a result of working at the site, their medical needs would be 

taken care of and their families would not be driven into poverty. 

They believed that they would not be forced to give up their homes 

and that their children would not have to drop out of college so 

medical bills could be paid. 

Unfortunately, 4 years following the devastating attacks on the 

World Trade Center, respiratory illness, psychological distress and 

financial devastation have become a new way of life for many of 

the responders, office workers and residents in lower Manhattan. 

According to the Centers for Disease Control, workers and volunteers who worked at the World Trade Center site continue to experience high rates of respiratory problems, sinusitis, laryngitis and 

higher rates of lower respiratory problems, asthma, bronchitis, 

chest tightness, coughing and wheezing. 

Many of the workers are disabled by chronic pulmonary problems. Some are unable to work. Many have also suffered substantial economic disruption of their lives because of World Trade Center related problems and do not have health insurance and are unable to pay for treatment or needed medicine. As Dr. Robin Herbert, co-director of the World Trade Center Worker and Volunteer 
31

Medical Screening Program at Mt. Sinai, testified in front of Congress, there are grave concerns about the potential for workers developing slower starting diseases, such as cancer, in the future. 

For many coming through the screening program, the World 

Trade Center screening program, the fears of future catastrophic 

diseases like cancer, which can take as long as 20 to 30 years to 

show up, loom as large or larger than their acute ailments. These 

concerns have been heightened by the recent passing of two New 

York City emergency technicians whose deaths have been related 

to illnesses resulting from exposure to toxic substances at the 

World Trade Center. 

Rather than make a stronger commitment to protect workers and 

residents from environmental and occupational hazards in future 

disasters, S. 1761 would free contractors from most liability for personal injury claims when engaged in responding to a major disaster, such as Katrina, as well as from citizen suits under Federal 

environmental laws. We believe that such legislation would undercut any incentives contractors have to comply with safety and 

health environmental regulations. 

Federal contractors who are paid by the taxpayer for the work 

that they do should be held fully accountable to the public if they 

behave carelessly or cause harm to people or the environment. No 

public policy reason justifies a taxpayer subsidy for negligence or 

illegal activity. What S. 1761 does is to shift the costs of personal 

injuries and property damage from the Government contractors to 

the workers and/or the residents in the disaster areas. 

It is imperative that workers know that if they come to the aid 

of their Country, as the contractors, and are injured or contract an 

illness in the process, their medical needs will be taken care of and 

that their families will be secure. They need the guarantee that 

contractors who do not act responsibly will be held liable. 

Responsible Government contractors should have no need of the 

sweeping immunity this bill would provide. We urge you to oppose 

the legislation which would provide a windfall to irresponsible contractors at the expense of public health and the environment. 

Senator THUNE. Thank you, Mr. Shufro. 

Let me just ask a couple of questions, if I might. Just incidentally, for the record, too, the legislation does not exempt any contractor from labor, environmental or safety laws. They have to 

apply to those. It is a narrowly drafted bill which provides some 

protection so that we are able to get, as the Corps mentioned, when 

they need on short notice someone to come in and do the kind of 

work that assists in the recovery, assists in the debris removal, and 

again, there are five criteria here or five conditions under which 

this bill would apply. It is narrow in scope. 

Having said that, you raised some questions about people who 

are injured, and I guess I would ask the question of some of the 

contractors who are here, do you all carry workers comp insurance 

for your employees? 

Mr. PERKINS. Absolutely. It is required by law. 

Mr. ZELENKA. We carry it, too. If I could, for a second, in listening to Dr. Shufro’s testimony, we are not trying to get away from 

liability caused by our own negligence. In listening to what he was 

saying, it appears that the terrorist acts of attacking the World 
32

Trade Center and all of the respiratory illnesses that it caused to 

everybody in Manhattan now should become the contractors’ liability. Because we are the only person in there that can be sued. 

There is no Government Agency to sue for that attack, so everybody who got exposed to something now needs to be able to sue the 

contractor who was working on the job site. 

We shouldn’t have to assume the liability of the terrorist activity. 

We shouldn’t have to assume the liability of what happened with 

Katrina just because we are the only people or the only entity involved in there that can be sued. 

Mr. SHUFRO. I believe for the record that the city of New York 

is also being sued. 

Mr. FEIGIN. The city of New York has a cap on its liability under 

the Airline Security Bill of $350 million. 

Senator THUNE. That is, I think, a fair question, and Dr. Shufro, 

the implication that somehow the contractors caused the 9/11 contamination, I think you have to ask the fundamental question of 

who caused it, the contractors or the terrorists. I think most people 

know the answer to that. 

Mr. FEIGIN. May I answer the question, Senator Thune? We have 

workers compensation insurance as well, but we also spend a lot 

of money on an annual basis providing additional medical coverages for our employees so that they don’t have to worry about 

these things. So it is not an issue for us of being negligent on the 

job site. The issue for us is really, like I said before, trying to defend 5,000 different claims. The legal fees alone would put a company under. It’s not a matter of worrying about being responsible 

or not. 

Senator THUNE. Mr. Perkins 

Mr. PERKINS. We’re not afraid of negligence, either. The point is, 

he’s not afraid of it, we’re not afraid of it, he’s not afraid of it, the 

point is the cost. He is talking about the cost. We go to trial all 

the time and we protect ourselves and we win cases on negligence. 

It’s not about that. It’s about the fact that you have to go through 

this long, drawn-out process before you are able to prove yourself 

not to be negligent. 

The fact that a Corps of Engineers job is designed, supervised 

and accepted by the Corps you would think would indicate that 

there is no negligence. If we get sued, we have to go to court and 

prove it. We have to spend the money to prove it, when we already 

have a stamp of approval by the Corps of Engineers who accepted 

the job. That’s the point. 

Ms. WRIGHT. May I speak? 

Senator THUNE. Dr. Wright. 

Ms. WRIGHT. I think that our concern is based on something that 

we are already seeing in New Orleans, and that is that contractors 

are hiring people and giving them a 20-minute class in the proper 

gear to wear when they are doing the kind of work, like debris removal and things of that sort. Twenty minutes, and then telling 

them where they are going, they don’t need any equipment. So people are being exposed every day, workers are being exposed every 

day. 

As it relates to the hassle of dealing with the legal system in this 

Country, I think that the average citizen would tell you that it is 
33

a hassle for us, if you are trying to buy a house, for example, is 

what happened to me, and someone with a similar name ends up 

on your report. So when you go to closing, you can’t close, first you 

have to prove that it’s not you. By the time you finish all of that, 

the interest rates have gone up. I mean, it’s not just the companies 

that have hassles dealing with our legal system. 

I can’t go and say credit bureaus need to be destroyed because 

they actually caused me to lose a house that my family wanted, because this is the way the system is. There are lots of things that 

need to be fixed, and maybe there are some ways that companies 

can be helped. 

I’m really a bit disturbed by the fact that companies want the 

Federal Government to give them some special leniencies or special 

protections. The average citizen on a daily basis, all of the people 

dealing with the insurance companies right now and the things 

that we are having to go through to get the insurance that we deserve for paying premiums for all of these years, what should I 

say? Well, you know, insurance companies shouldn’t have a right 

to closely examine the damage that occurred by Katrina, they 

should give me all the money that’s in my policy. Now I have to 

sit and wait and go through the process. 

My understanding is that companies generally pass on the costs 

of whatever their legal fees are to the consumers. I expect that will 

happen with these companies. I also believe that if a company ends 

up going out of business because of 9/11, they will very quickly 

open under a different name, at least that’s been my experience, 

startup shop, they already have all of the relationships with the 

Army Corps, and that business is up and running very quickly. 

I don’t think we should throw the baby out with the basket. Try 

to fix the problem, but this law is wrong. 

Senator THUNE. Dr. Wright, are you aware, though, of any Louisiana workers that aren’t covered by workers comp? 

Ms. WRIGHT. I can’t speak to that. I don’t know. I believe that 

some of these laborers that are just being picked up to do debris 

work by these contractors are not covered. They have no coverage 

at all. 

They are also doing things like group hire, where the person who 

has the crew to go in and do the work is in fact paid a particular 

amount of money. We have undocumented workers like you 

wouldn’t believe in the city of New Orleans. You don’t see white or 

black workers. All we see are Mexican workers. Many of them are 

undocumented. 

This is not a slap in the face to the poor Mexican workers who 

are also being extremely exploited. I am concerned about their 

health, too. They are not wearing any kind of protective gear doing 

the kind of debris removal that we see going on in the city. 

I invite you to come down and just observe what’s happening in 

the city as it relates to that. 

Mr. SHUFRO. In New York City the workers who were cleaning 

up the office buildings surrounding Ground Zero were for the most 

part immigrant workers. My organization placed a screening van 

about a block away from the Ground Zero. We saw 410 workers. 

Four hundred ten of them had respiratory problems. Four hundred 

ten of them, if they were lucky, got a paper mask, which was not 
34

sufficient to protect their health. Most of these were, all of them 

were immigrant workers. While they are eligible for workers compensation in New York State, because most of them are what are 

called medical only cases, there is no wage loss in many of these 

cases, they can’t get legal representation, and going through the 

system is virtually impossible without a lawyer. 

We have examples of people in New York City who are today, 

years after filing their case, still haven’t received a dime from 

workers compensation. The cases are contested, fought through, 

and people who worked on the pile are being denied their compensation. I can go through people who have lost their houses, kids 

who have dropped out of college because their parents can’t—their 

father or mother, actually, have not been able to pay medical bills. 

The system hasn’t worked, and all the workers are asking, the 

same thing that the contractors are asking here, but in reverse. 

They want to know that if they go out and cleanup and come to 

the aid of their Country in a disaster situation that they are going 

to be taken care of. That’s what this bill will not allow. 

Senator THUNE. One final question, and I guess it relates to the 

complaint that’s leveled that this legislation would eliminate any 

incentive for contractors to do good work. How do you respond to 

that? 

Mr. FEIGIN. Can I answer that? This is no insult to the plaintiffs 

bar, and I am an attorney. We don’t sit in our offices worrying 

about lawsuits being brought by the plaintiffs bar against us, because we are doing our work. We don’t worry about the nuisance 

of being in court all the time, and we successfully defend those lawsuits. 

This is a unique situation, unprecedented in the history of America, that required some unprecedented results. From my perspective, our company doesn’t think about any—we go beyond what 

OSHA requires us to do to keep our contractors safe on our job 

sites. We do that because we are in the business of keeping people 

safe. 

So we are not going to sit here and say that because somebody 

passed a bill that may apply twice a decade to a job that’s so big 

and so unprecedented that it requires that kind of—we hope we 

never have to ask for the help that this bill gives us. Having gone 

through this, something like this really is necessary. It may not be 

this, maybe it’s something else. 

Some kind of relief is necessary to make sure that contractors respond, qualified contractors who are interested in their workers’ 

safety, who have the kind of high standards for worker safety that 

companies like ours and Boh Brothers and the subcontractors who 

are here today have. We want to make sure those are the companies that go to ground zero and go to these disasters, but if these 

companies are out of business, the companies that are going to be 

going are the ones that may not care so much about this. 

From our perspective, safety is our No. 1 concern. It is a core 

value of our company. We actually go beyond many OSHA requirements for the safety of our people on job sites. 

Mr. ZELENKA. As a small business, we don’t have much ability 

to fight claims. It wouldn’t take much to put us in an uninsurable 
35

position, in that insurance costs could get so high that it wouldn’t 

be feasible for us, we could not maintain our business. 

But you don’t work to different levels as you go to different jobs. 

We perform at the best level we absolutely can perform at on every 

job, not just on the quality of the work we do, but also the way we 

approach safety. Our employees are the single biggest asset we 

have. I assign a senior, a junior and a third check. We are a family 

business. We have been involved for generations, our employees 

have been involved for generations. We are not going to do anything to put anybody at risk just because we may perceive the law 

is more lax. Everything is going to be done to the same level. 

Senator THUNE. I’ll tell you what. Senator Boxer has a question 

she wants to ask. I have more than used my time under this round. 

Hopefully I will have a chance to——

Senator BOXER. Maybe we can hear the next panel before we 

vote. 

Senator THUNE. If we could ask the third panel to come up, what 

we may do, if you all could hang here for just a minute, is we will 

get a chance to ask questions. 

Senator BOXER. Then the third panel can jump in and we can 

hear you before we run to the floor for a series of votes. 

Let me just say, because I have a lot of questions, I am not going 

to ask them now because of the timeframe, but I would like to submit them if that’s OK with you, Mr. Chairman. 

Senator THUNE. Without objection. 

Senator BOXER. For me, the issue is, what is the problem? We 

need to document what is the problem. That means looking at the 

whole picture. At the end of the day, what’s the best thing to do 

for the community, for the people of the community, and what’s the 

fair thing to do. 

Now, my understanding of life is that if you do the right thing, 

we have a court system that at the end of the day is fair. It is true 

that when you are sued, it’s an awful experience, it’s awful for 

every party, because they all put money on the line, they may 

never recover it. Depending on your point of view. If you are a big 

company and you keep a full-time legal staff, it’s a heck of a lot 

cheaper than if you’re a plaintiff’s lawyer who is representing a 

bunch of poor people and they may never get their case certified. 

So don’t try to pull the wool over anybody’s eyes. We know 

there’s frivolous lawsuits. There are laws against that to get the 

suit thrown out. Then there are the cases, and I go back to Erin 

Brockovich, who I happen to know, where chromium 6 got into the 

water, no one did anything about it, and people died. Children died, 

people died. 

Finally, these people were held to account and thank God for 

that. In a lot of these cases, people don’t act. They are not good actors. They are bad actors. They are bad actors, whether, you can 

go back to the Edsel car, you can just do a lot of things where people knew. It wasn’t the Edsel. What was the car that had the—the 

Pinto, where they knew that, they wrote into the cost of doing business, as Dr. Wright said—X number of lawsuits a year. Because 

they made so much money. It came out at discovery. 

You can shake your head all you want. You’re a good actor. 

Hopefully you would never do that. 
36

Mr. FEIGIN. That’s not the point, Senator. It’s not the point. 

Senator BOXER. I’m not asking you a question. I’m talking. 

The fact is, there are bad actors. You have to be very sure when 

you write legislation like this, and you said it’s only for big disasters, $15 billion, I don’t want to say anything, is in my State not 

a big disaster. It happens, sad to say, very often. Earthquakes, 

floods, fires, drought, and all of a sudden, you want to do a narrow 

bill, and all of a sudden you are finding out you’re changing the 

law for certain people and not for other people? 

How is that equal protection under the law? How is a person who 

is victimized by a bad actor in the case of Katrina, none of you at 

this table, some bad actor who comes in and victimizes people, and 

how does that victim feel? Are they getting equal protection where 

they may get cancer or some awful thing because some contractor 

didn’t do the proper testing that was required? At the end of the 

day, that’s not right. 

So if there’s a problem, Mr. Chairman, let’s narrow it down. 

I have one question for Dr. Shufro. I just want you to tell me in 

human terms, if you can, in your experience, because we have to 

say, although this was a natural disaster compared to a terrorist 

attack, do you, could you describe the kinds of injuries that you 

have seen and what might have been prevented if the contractors 

had done the right thing there? Can you give us a couple of examples? 

Mr. SHUFRO. The most prevalent disease seen by the Mt. Sinai 

Worker and Volunteer Screening Program is respiratory problems. 

This could be prevented through respiratory protection. 

On a good day, and you can correct me if I am wrong, according 

to OSHA statistics, workers on the site at Ground Zero, it was 

never more than 50 percent, never more than 50 percent. That 

meant at least 50 percent of the workers were working among toxic 

substances unknown, and a lot know, but also unknown, without 

appropriate protection. 

Mr. FEIGIN. May I correct you now? 

Mr. SHUFRO. Let me finish. 

So all of that could have been protected, and on——

Senator BOXER. Are you saying on a good day half the people 

working on the site were not properly protected? Is that what 

you’re saying? 

Mr. SHUFRO. That’s what I’m saying. Fifty percent were not 

wearing respiratory protection at any given time. There were days 

that it was below that, very few above that. At a different site, at 

the landfill, you had 85 percent respiratory protection. So you have 

clearly a management problem, it seems to me. If you are able to 

enforce 85 percent at one site and 50 percent at another, there is 

something that’s going on at these two sites that’s different. 

Had you had workers who were wearing their protection, we 

would not have seen the high rates, and we’re talking about thousands of workers who are sick today as a result of exposure. 

Senator BOXER. I think Mr. Feigin wanted to say something. 

Mr. FEIGIN. Yes, if you don’t mind. 

It is interesting, were you down at the site ever? 

Mr. SHUFRO. Yes, I was down at the site. 
37

Mr. FEIGIN. Then you know that on the site there was a perimeter set up by OSHA on the site. Nobody was allowed inside that 

perimeter without the appropriate respiratory protection, and there 

was appropriate training and fitting and baseline testing of everybody who went within that protected area. 

So everybody had the appropriate respiratory protection. Also, 

there were not just construction workers on that site, but there 

were many police, fire workers on that site over whom the contractors really had no control. So it would be interesting to kind of look 

at the detail of what that 50 percent number is, whether they had 

it and simply refused to wear it, or whether they didn’t have it at 

all. 

The other thing, too, over at Freshkills, which is where we 

brought the debris, I think if you look at percentages, it is interesting, but you’ve got to look at what the total number of people 

were, because you had 1,000, you may have had 1,000 workers at 

Ground Zero, you may have had 30 people over there. So it’s not 

a lack of supervision or management, it’s a lot easier to manage 80 

people and require them to do something than have 1,000 people 

and require them to do something. 

Senator BOXER. Dr. Shufro, did you want to respond? 

Mr. SHUFRO. You know, it well may be that people were provided 

with protection and weren’t wearing it. That is a management 

problem. If people are doing the job improperly and not wearing 

their protection, then there is something the matter with the management of that site. 

Senator BOXER. Mr. Chairman, others may like to comment on 

this. 

Mr. PERKINS. I just wanted to comment on a couple of examples 

related to Erin Brockovich and the other example you used. I don’t 

think this bill protects us from that type of——

Senator BOXER. I know. We have a disagreement. My lawyers 

tell me it’s broad, sweeping. The Chairman says it’s not. It’s very 

narrow. 

Mr. PERKINS. Those two examples were reckless——

Senator BOXER. So we need to talk. We need to sit down. 

Mr. PERKINS [continuing]. willful misconduct types of situations. 

Senator BOXER. We need to talk, because we read it differently. 

I think it was written by the industry. I mean, let me put it this 

way. I’ll restate that. I think it was written with the advice and 

counsel of the industry, and I don’t think anyone from the other 

side sat at the table. 

So you can have an argument, you know, the best legislation I’ve 

ever written calls in everybody from all sides. I just let them sit 

there and argue with one another, well, we meant this, well, we 

didn’t mean that, we meant that, we meant this. At the end of the 

day you come out, you get a bill that you can pass. I don’t think 

a bill that could pass if it doesn’t have everybody’s advice and counsel. 

Ms. WRIGHT. I just wanted to say that what I keep hearing, and 

I may be wrong, but I keep hearing all of these worries about companies going out of business, insurance costs being so high. I just 

want to say that the same thing is true for the average citizen 

when it comes to insurance, for example. If you get two claims with 
38

your regular insurance company, by the third claim, you can’t get 

insured any more. 

So what is being put in place is another insurance pool, in Louisiana, where if you can’t get insured because you have had insurance claims, whether it is by natural disaster, or just a pipe breaking, the insurance companies will not insure you. There is a Louisiana plain. That’s where you go. 

So I’m saying, why not the same answer that you’ve given for 

regular citizens then be given for companies under these extreme 

circumstances, not this kind of sweeping bill? So it seems to me 

that as Senator Boxer was saying, let’s just figure out what the 

problem is and try to put some protections in. In that way, that 

protects everybody, and not just this sweeping bill that I think ultimately hurts the citizenry. 

Mr. ZELENKA. There is no pool in there for insurance. As a small 

business, I sit here and listen to this, and I listen to you say, the 

courts will protect you and you will fight all your claims. 

But I go back to once again, I won’t survive as a small business 

if I have to continue to defend myself against claims that don’t 

have anything to do with my negligence or my company’s negligence, just the fact that I am the only easily suable entity in the 

loop here. I’m in there trying to do the right thing and be a good 

actor, and I’m the only guy that can be sued, so I have to defend 

myself from all these suits. Small business is going to suffer. All 

these businesses, as you talked about, wanting to get in line, they 

are going to suffer. Going out of business, declaring bankruptcy 

and popping up under another name isn’t a very good way to do 

business. We wouldn’t be around for over 100 years if we——

Senator BOXER. Well, Mr. Zelenka, for me as a U.S. Senator, 

from a State that has so many natural disasters, I don’t even want 

to talk to you about it. I mean, it’s just, every other day, we have 

so many happening. I work closely with my business community, 

with my unions, with non-union workers, with the immigrant community and everything else. 

I want to help people who are caught in a situation where they 

are a good actor. I do not want to help people and send the wrong 

message that you can get a Government contract and then be sloppy, don’t live up to the highest standard and all the rest. 

Mr. ZELENKA. I agree with you. 

Senator BOXER. If we could agree on that, it seems to me that 

we have some common ground. Nobody wants to see a good actor, 

a good business, a good citizen be driven out of business. 

Mr. ZELENKA. That’s where I’m headed. 

Senator BOXER. Dr. Wright said, I think what she said was making an overture. She said maybe we need a fund where for these 

circumstances, where there is no blame, that we can have an insurer of last resort, kind of like the terrorism concept. I mean, 

there are ways that we can reach to help the good businesses. 

Not to use this as an excuse to give some broad liability waiver 

to people who are not good actors and to people who are clearly 

negligent. Again, this isn’t the chairman’s interpretation, and I respect that. But we have a disagreement. 

My lawyers have looked at it, his lawyers have looked at it. I 

think it’s broad, it’s sweeping, it will apply too often. It’s a gift to 
39

some potentially bad actor. It’s an incentive for them not to do 

right by their workers, by the community, what do they care at the 

end of the day? 

You know, these big oil companies now that were crying so much, 

oh, oh, it’s a terrible thing, Katrina, we can’t get the supply, it’s 

awful, it’s awful, it’s awful, at the end of the day, they not only 

made more money than they ever made before, but they took bonuses that are so outrageous that the Republican Senate is having 

a hearing tomorrow where we are just going to come down on these 

folks. 

So I think the American people are fair people. If you are good 

citizens, if you want to do the right thing, we don’t want you to be 

hurt. That would be a terrible thing. At the same time, if you write 

legislation that you say is going to protect the good but takes away 

incentives for corporations to be good actors, you have done damage 

to the American family who is just trying to get up in the morning 

and not die of a heart attack or get cancer that’s going to give them 

20 years or have to wheeze their way through the day, as we have 

here. 

I agree with Mr. Shufro, you give a worker equipment to protect 

himself or herself and they don’t use it, you need to give a warning 

and then give a second warning and they’re out. I have a rule in 

my office, no smoking. If anyone does it, you get a warning, then 

they’re gone. They can go somewhere else that has a different policy, that’s fine. 

In any event, I’ve spoken too long. I just want to say, Mr. Chairman, to you, because we are friends and we work together, that if 

you want to take another crack at something that I think is addressing a real problem, I’m there. But if you don’t, we’re going to 

have a big, big debate over this. I think it’s not going to lead to 

anything much, because I think you take Senator Clinton, Senator 

Shumer, who have gone through this stuff, and it’s not like you’re 

coming at this where there’s no experience. 

So anyway, I thank you very much for your allowing me to discuss this matter. I thank the panel, it’s terrific. 

Senator THUNE. I would expect you to disagree with me, frankly. 

I will say that part of this is based upon the experience we have 

been through in New York. I think lessons learned and trying to 

do something that is instructive that would apply to future, and 

again, bear in mind, these are $15 billion, which in California may 

not be as much money as it is other places, but that’s still a pretty 

high threshold. 

It is very narrowly drawn. The people who we are talking about 

here are people who are being asked by their Government to do 

this work. It’s not like they are out there trying to profiteer from 

sweeping in on this disaster. 

Senator BOXER. They’re being invited. 

Senator THUNE. A lot of these folks——

Senator BOXER. They’re being invited. They don’t have to do a 

thing they don’t want to. 

Senator THUNE [CONTINUING]. Are from Louisiana, too. 

Senator BOXER. They don’t have to do it if they don’t think it’s 

going to be worthwhile. This is a capitalistic system. We’re not tell-
40

ing people, you have to do the work. We’re saying, here is a contract, if you are interested, please let us know. 

Senator THUNE. I think the concerns being expressed by the people who are doing that work is they may not do that work in the 

future if they don’t have some protection from what now has 

turned out to be literally thousands of claims in the case of New 

York. I suspect we will see a considerable amount of that with respect to Katrina. 

With respect to them being, just allowing them to be sloppy, this 

is all Federal oversight. If it’s sloppy, it’s because the Federal agencies that are overseeing this work are allowing it to be done in a 

sloppy way. 

Just one final point on the question of jurisdiction. This Subcommittee does have jurisdiction on waste and disposal. I think it 

is important for us to be able to have a discussion about this subject, whether or not ultimately this bill is marked up in the Judiciary Committee or not. 

I think we will release this panel. We have a vote on. How much 

time is left? How many votes, is it a series? Two votes. 

Senator BOXER. Mr. Chairman, I just want to say, I got this from 

the Dolan Media News Wire. It says,

‘‘according to the Louisiana Contractors Licensing Board, the number of applications for a contractor’s license nearly doubled in September to 224 from a normal 

120. In the first week of October, the number of applications increased an additional 

300 percent.’’

I would like to put that into the record. 

Senator THUNE. Without objection, that will be entered into the 

record. 

Senator BOXER. Thank you. 

Senator THUNE. We will take a brief recess to go and vote, and 

then, with the indulgence of our last panel, if their stomachs aren’t 

growling too much, we will come back, I will get the testimony 

going and we will try and ask some questions of that panel as well. 

So we will release this panel. Thank you very much for your testimony. Thanks for your responses to questions. 

[Recess.] 

Senator THUNE. Is everyone still awake out there? 

We have returned. I want to ask the final panel to present their 

testimony. We will have a few questions. I don’t think we are going 

to see Senator Boxer return from the floor. There will be another 

series of votes here before long. 

In any event, I am very pleased and thankful for your patience, 

but very pleased to welcome Craig King, who is a Government contracts attorney; Professor Steve Schooner, from George Washington 

University Law School; and Paul Becker, who is President of Willis’ 

Construction Practice to the hearing today. Mr. King, please proceed and thank you again for being here, and thank you for taking 

time and thank you for your patience. 

STATEMENT OF CRAIG S. KING, GOVERNMENT

CONTRACTS ATTORNEY 

Mr. KING. Thank you very much, Mr. Chairman, and thank you 

for the invitation to provide testimony regarding Government contractor liability provisions of S. 1761. 
41

There is a strong Federal interest in establishing appropriate 

standards for liability for Government contractors for actions taken 

in the exigencies of a disaster situation. Now, if you read the written testimony, it is clear that Professor Schooner and I diverge to 

some degree on this bill. So for purposes of my oral remarks, what 

I would like to do is really focus on those areas, those key areas 

where we do have some differences of opinion, and do so with all 

respect and admiration for the good professor. 

At the core of the bill is the Government contractor defense. The 

defense was established by the Supreme Court and is part of the 

Federal common law of the United States. It provides that if certain requirements are met, a contractor stands in the same legal 

position as the Government, meaning that it bears no liability to 

third parties if the contractor does what the Government tells it to 

do in the contract. 

Under Supreme Court standards, the Government contractor defense would apply to disaster relief efforts without S. 1761. Applying the Government contractor defense, however, would involve 

costly and unnecessary litigation, and what the bill does is add protections that will limit that type of wasteful legal process. 

Go back with me if you will to 1988. In that year the Supreme 

Court decided a seminal case setting forth the Government contractor defense, Boyle v. United Technologies. In that case, the Supreme Court considered the effect on contractors of third party 

suits. It observed that if such suits are allowed, then the contractors have only two economically viable alternatives. No. 1, to not 

do the work, or No. 2, to raise the price to compensate for the legal 

risks. Either way, the Supreme Court said, the interests of the 

United States are adversely affected. 

In his written testimony, Professor Schooner laments that he has 

seen no empirical evidence that contractors are refusing to do the 

work. The Supreme Court has the answer. There are only two economically rational options. If the contractors are doing the work, 

then the Government is under pressure to pay a higher price to 

cover the risks of those lawsuits. 

But there are some complicating factors. We have heard about 

them today. First of all, there is the selfless desire of contractors 

to help, to do what’s right. There is also the desire not to profiteer 

or be perceived as profiteering. Also in the Federal Acquisition Regulations, there are limits on price that keep, or at least put restrictions on the ability to act in an economically rational manner. 

Consequently, the contractors are in a vise, and what’s left for 

them to do is come to Congress and say, can you relieve the pressure, can you help us out of this situation. Now, the Government 

contractor defense is rooted in the Government’s sovereign immunity. Congress waived sovereign immunity of the United States 

when it enacted the Federal Tort Claims Act. It enabled private 

parties to sue the Government in certain situations. 

In so doing, it exempted from this consent to sue the Government 

any situation where there is what the Supreme Court calls a discretionary function exercised by a Government official. So Professor 

Schooner has really two criticisms here. First he says if the parties 

can’t sue the Government, well, they ought to be able to sue the 
42

contractors. His complaint is not really about S. 1761. His complaint is that he thinks the Federal Tort Claims Act is too narrow. 

He says the liability should be allocated to the superior risk 

bearer, and that is clearly the Government. The Government has 

the agencies that can really know about how to respond to a natural disaster, but then he reasons that the Government is immune 

from suit, so let’s let the private parties go after the contractors. 

The essence of the Supreme Court’s Government contractor defense is that private litigants simply cannot get indirectly from the 

contractors that which Federal law prohibits them from getting directly from the Government. 

Now, the second criticism of Professor Schooner is that the discretionary decisions in disaster recovery situations are made by 

contractors, not by Government officials. So he says the Government contractor defense should not apply. 

To the contrary, the Supreme Court has found explicitly that the 

Government contractor defense applies in remediation situations, 

because in a contract for remediation efforts, for example, the EPA 

making decision regarding the cleanup of contaminated sites, these 

are discretionary Government decisions. 

Really, the point is being missed. The key point is that the bill 

provides expressly that protections of the Government contractor 

defense will apply only where a Government official does indeed exercise a discretionary function regarding the work. The bill specifically provides a process for the Government official to review the 

scope of work in the contract and certify that that particular work 

is necessary to the disaster recovery effort. The Government official 

must determine that the work fits into any of five specific types of 

recovery work and that discretionary function requirement then is 

fulfilled by the certification process. 

The bill provides then that with a properly certified contract, the 

elements of the Government contractor defense are deemed satisfied. What this means is that for contracts that are so certified, and 

that’s a narrow group of contracts, for contracts that are so certified, there is no need to litigate regarding the elements of the defense. 

Let me be specific about what that means. In Boyle, that is the 

Supreme Court case, the Court said that there are three elements 

necessary to apply the defense. No. 1, the first element is that the 

Government must approve a reasonably precise scope of work. That 

is fulfilled by the certification requirement. There is no need for 

cost of litigation about that. 

No. 2, it says the contractor must perform in accord with that 

scope of work. There is nothing in the bill that provides any protection for a contractor when that contractor’s conduct is outside the 

scope of work of the contract. 

Third, the contractor has an obligation to warn the Government 

when the contractor knows about dangers that the Government is 

not aware of. The bill does not reduce in any way the contractor’s 

obligation to warn the Government when the contractor has actual 

knowledge. 

What the bill does is it enables contractors and the Government 

to get on with business and to go about the cleanup and recovery 

efforts where the risks are unknown and unknowable. Inherent in 
43

the nature of disaster recovery is that many of the risks are indeed 

unknown and unknowable. 

By deeming the Boyle elements to have been satisfied, a contractor can proceed with the disaster recovery efforts, can do what’s 

directed by the Government, can do so in good faith, and that is 

the reasonable way to proceed in a disaster recovery situation. 

Mr. Chairman, just to end, the bill is reasonable. It implements 

the requirements already set forth by the Supreme Court. There is 

a Federal interest in having the best Government contractors respond in these types of situations without reservation. A certification by a cognizant Government official does meet the requirement of a discretionary function and should not be second-guessed 

by third party litigation. 

Therefore, State tort laws where third parties are enabled to sue 

contractors just because they were there should be displaced in the 

absence of contractor fraud, recklessness, willful misconduct. Contractors don’t escape from their acts. They simply are protected in 

the way the Government is where they do what is right. The bill 

should be enacted. 

Thank you. 

Senator THUNE. Thank you very much, Mr. King. 

Mr. Schooner, now you have a chance to rebut or refute Mr. 

King’s testimony. Please proceed. 

STATEMENT OF STEVEN L. SCHOONER, CO-DIRECTOR, GOVERNMENT PROCUREMENT LAW PROGRAM, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL 

Mr. SCHOONER. Chairman Thune and members of the committee, 

I appreciate this opportunity to discuss these Government contractor liability proposals. 

S. 1761, the Gulf Coast Recovery Act, is simply unnecessary. It 

would discourage responsible contractor behavior, and it would expose the public to unnecessary risk and harm. The bill asserts that 

the fear of future litigation and liability discourages contractors 

from assisting in times of disaster. At best, that’s hyperbole. At 

worst, it’s false. 

We routinely hear apocalyptic tales of monumental barriers to 

entry that deter firms from seeking the Government’s business. 

What we do not see is empirical data supporting the assertion. The 

absence of this support is palpable. Nothing suggests that any significant population of contractors refused to seek their share of the 

Government’s $300 billion annual procurement budget. To the contrary, the best contractors, small and large, domestic and foreign, 

aggressively vie for this work every day. 

Insulating contractors from liability improperly allocates risk of 

harm between the public, the contractors, and the Government. A 

better solution, and Mr. King mentioned it, is to allocate risk to the 

superior risk bearer, the party best positioned to appraise the likelihood that harm will occur, avoid the occurrence of the risk, insure 

against the risk, or bear the cost of the risk. What this bill does 

is allocate the risk of loss to the individual, the party least able to 

anticipate, assess, or avoid the risk, let alone insure against it or 

bear its costs. 
44

Thus, the Government neither assumes responsibility for its contractors nor would it permit the public to hold the contractors accountable. In a responsible Government, protection of the public 

from harm, rather than the protection of the economic interests of 

contractors, must come first. 

Now, the bill creates a rebuttable presumption that all elements 

of the Government contractor defense are satisfied. This turns the 

Government contractor defense on its head. Historically, the Government contractor defense insulated supply contractors that explicitly followed Government direction to their detriment. The defense does not protect contractors that exercise significant amounts 

of discretion. 

Mr. King ignores the fact that when the Government rushes to 

identify contractors, hastily drafts contracts, and loosely manages 

those contractors, the Government abdicates, nay, delegates its exercise of discretion. Thus, in removing debris, a contractor faces 

significant economic choices. For example, drivers with spotless 

safety records probably demand higher wages. Newer, better maintained trucks likely cost more to lease. Minimally acceptable environmental standards cost less than potentially cleaner or safer 

technologies. Truck drivers could save time and money by transporting hazardous waste through, rather than avoiding, residential 

communities. 

It makes no sense to insulate contractors from the fiscal ramifications of these discretionary decisions. 

Now, this differs dramatically from the SAFETY Act, which assumes that without liability protection, contractors might not let 

the Government deploy qualified anti-terrorism technologies to 

combat terrorism. This bill involves common tasks: demolition, repair, debris removal, de-watering flooded property, where the existing standards of care are reasonable. 

Moreover, Mr. King ignores the fact that the rather mechanical 

certification assigned to the Chief of Engineers is a far cry from the 

highly judgmental and discretionary SAFETY Act certification. 

Now, consistent with what Mr. King says, in a fraction of the Government’s contracts that involve nuclear materials or highly volatile missile fuel, work is extraordinarily complex and dangerous. In 

extraordinary circumstances, we have unique rules that insulate 

and indemnify contractors from liability. 

Do not confuse the extraordinary with the ordinary. For basic 

public services, extraordinary measures are not appropriate. This 

bill also continues a trend that exploits Katrina to pursue otherwise untenable public policies. Look, Congress hastily raised the 

micro-purchase threshold, in effect, the charge card purchase cap, 

to $250,000, even though the Government’s management of the 

charge card program has been abysmal. Fortunately, the Administration stopped that. Subsequently, the same can be said for the 

suspension, and later repeal of the suspension, of the Davis-Bacon 

Act for totally disingenuous purposes. 

Now, hopefully reason will prevail here. Knowledgeable procurement executives understand that the current procurement regime 

contains sufficient flexibility for the Government to meet its purchasing requirements in times of crisis, and I believe that’s what 
45

the Corps told you today and what their written testimony says. 

They are not having trouble getting contractors to do the work. 

Finally, elsewhere Congress has called for more auditors and inspector generals to scrutinize Katrina-related contracting. Don’t 

forget that an ounce of prevention is worth a pound of cure. The 

1990’s witnessed dramatic acquisition workforce cuts, and since

9/11, procurement spending has increased by more than 50 percent. 

More auditors and inspector generals will not help avoid the scandals or improve the performance of the procurement system. Conversely, an investment in the number and skills of purchasing officials would reap huge dividends. 

Thank you again for this opportunity, and of course, I would be 

pleased to answer any questions. 

Senator THUNE. Thank you, Professor Schooner. 

Mr. Becker. 

STATEMENT OF PAUL BECKER, PRESIDENT, WILLIS NORTH 

AMERICAN CONSTRUCTION PRACTICE 

Mr. BECKER. Thank you, Senator Thune, good afternoon. 

My name is Paul Becker. I work at Willis, a global insurance 

broker, as a North American Construction Practice group leader. I 

am proud to lead this practice, as my colleagues and I represent 

over 3,500 contractors in North America. We work to structure and 

secure effective risk management programs that can address safety 

issues, contractual liabilities and surety bonds. 

I have been in the insurance business for 27 years, and the vast 

majority of this has been in the construction sector. It is my pleasure and honor to appear before you today to testify to the importance of insurance in the cleanup of New Orleans and the Gulf 

Coast in the wake of Hurricane Katrina; specifically, the need to 

limit the liability of the contractors engaged in this work. 

As insurance brokers, we work with our clients around the world 

and across all industries, helping them assess, quantify, mitigate 

and transfer these risks, thereby allowing them to focus on achieving their business goals. Doing so affords them the comfort and the 

confidence that their assets, property, people, intellectual capital 

and equipment are more than adequately and properly protected 

against a broad range of risks. 

We are not an insurance company. That is, we do not underwrite 

the risks. We are an intermediary, bringing the two parties together, working to fashion the very best customized coverage we 

can secure for our clients. As part of this client advocacy, we work 

and have developed strong relationships with insurance carriers 

around the world, such that we know their risk appetite, how they 

consider certain risks and the various factors that weigh in their 

underwriting decisions. 

Given our experiences, we have a working knowledge as to how 

they think and how they approach various risks. Essentially, 

whether or not to underwrite a risk, how to price a policy and how 

to set the terms and conditions of a policy which amounts to a contract. 

In the aftermath of the events of September 11, Willis secured 

the insurance coverages for the contractors who cleaned up the 

World Trade Center site. As was spoken earlier today, those insur-
46

ances were somewhat limited to workers compensation and a narrow scope of liability. Quite thankfully, and for obvious reasons, the 

characteristics of this site were unlike any we or anyone else in either the construction or insurance industry had ever seen. Normally, before the cleanup of a disaster site starts, environmental 

and engineering firms conduct studies, run assessments and issue 

reports as to the nature of the site and the specifics involved. 

Due to the outstanding circumstances of the events of 9/11, there 

was not time for such exercises, and contractors got to work without a full understanding of what was ahead: how stable was the 

ground, what were the asbestos levels, what other hazardous materials could have a long-term impact on the health of the workers 

and the general public. Today, over 4 years since 9/11, the number 

of suits, as was heard earlier today, being filed continues to grow. 

Only in time will we determine the balance between the insurance 

purchase versus the claims now being filed in New York. 

But one thing is certain. Litigation upon litigation upon litigation 

has created a great deal of uncertainty and serious concern among 

the contractors involved. While the scope of the New Orleans effort 

is multiples larger than the World Trade Center site, the same concerns are on hand today as were on hand on 9/11. The fundamental 

problem in securing the necessary coverage is a reflection of four 

component actions I mentioned a few moments ago. Insurance is 

about assessing, quantifying, mitigating and transferring risks. 

Models predict likely scenarios, calculate possible losses and then 

intelligent plans determine how to avoid such problems and spread 

the risk among various parties at appropriate price. 

In these unique situations, there can be a tendency to focus on 

the financing of the risks so the work can get underway. Without 

the assessment, how does a carrier know what the possible losses 

are? If the risks are unknown, there can be significant unforeseen 

liabilities. One, how can contracting firms adopt preventive measures to avoid problems which can give rise to future claims? How 

can carriers determine the right price for the coverage? 

Over the last several weeks, we have engaged in conversation 

with carriers around the world on this matter, and they are expressing to us the various concerns that I am sharing with you 

today. Uncertain site conditions, unusual and known health hazards, what chemicals are being released into the air during the 

cleanup, the limited nature of the tools available to assess the 

number and types of environmental factors in play, the varying 

standards between local, State and Federal authorities, the fasttrack nature of the work to be done, and the lack of certainty on 

contracting provisions and legal environments. 

All of these factors substantiate the traditional methods of risk 

identification, control and underwriting have been significantly altered and make it difficult to estimate or even guess what the full 

extent of the long-term liabilities arising from the cleanup will be. 

Make no mistake: these are long-term liabilities. It leads us to 

question whether the insurance industry has the ability to fully underwrite the risks inherent in the work. 

If this bears out, contractors will be left fending for themselves 

without adequate insurance protection. This is not to say that contractors will not be able to procure insurance in some form for their 
47

activities in the Gulf. Rather, without addressing the unique factors in this situation, the coverage they will be able to obtain will 

in most cases not adequately protect them over time from the exposures they will be facing. 

This is not a question of if, but when, and based on our experience, these matters will manifest themselves over a 5- to 10-year 

timeframe. There is talk already of a Katrina cough. This is very 

similar to the World Trade Center. 

I might add that without protection, contractors cannot properly 

account for their risks and endanger the long-term viability of their 

companies. Accordingly, these issues could prevent quality contractors from participating in the cleanaup and recovery efforts. 

This is important legislation. Reasonable and responsible contractors tend not to get involved in projects of any magnitude unless they have insurance against what are normally quantifiable 

risks, and carriers as well tend not to write policies if they are not 

able to make the necessary judgments. In the case of New Orleans, 

as it was at the Trade Center, neither can establish the proper control procedures to protect their interests. 

Limiting the liability of construction companies engaged in the 

cleanup such that they can gain the cover they need is critical. It 

has been my distinct honor to share my experiences with you this 

afternoon. Mr. Chairman, I conclude this section of my report and 

will submit the rest into the record. 

Thank you. 

Senator THUNE. Thank you, Mr. Becker. 

Let me ask you a question. In your experience, how many Federal responses have exceeded $15 billion? Do you know the answer 

to that question? 

Mr. BECKER. According to the Insurance Institute, there have 

been four distinctive disasters that have been assessed at more 

than $15 billion. 

Senator THUNE. So it is very narrow, based on at least historical 

experience? 

Mr. BECKER. With insurance catastrophic modeling, that is correct. Those are not all inflation adjusted, but those would be Hurricane Andrew, the World Trade Center, certainly Katrina and probably Northridge Earthquake. 

Senator THUNE. What do you think is the risk if Congress does 

nothing to address the liability issue? 

Mr. BECKER. As it stands right now, the insurance companies are 

telling us that they are having a very difficult time coming up with 

insurance products that will extend over the long term and appropriately cover the long-term risks. Most of what we saw at the 

Trade Center, as you can see, are continuing to evolve, long-term 

chronic injuries or health issues that are just now becoming apparent in a big way. We believe that that long-term nature of it is the 

most difficult part for the insurance companies to address. 

So right now they are not responding to many of our contractors 

with the type of coverage that we believe is appropriate. 

Senator THUNE. I have to say, I guess it is probably indicative 

of this entire discussion, but the profound difference of opinion between Mr. King and Mr. Schooner is if nothing else very inter-
48

esting to listen to. Let me ask a question for Mr. King, and this 

sort of ties back into your testimony. 

Do you believe, from a legal perspective, that it is fair for private 

contractors, which act as an extension of the Federal Government 

during disaster situations, to be subject to tort claims when all applicable Federal rules and regulations are adhered to? 

Mr. KING. Let me address it this way. Senator Boxer said something earlier that I agree with, which is, when you have a problem 

like this, what you want to do is sit down, look at the interests of 

all parties and say, what’s the right thing to do. In this instance, 

the right thing is probably two stages. The first stage is to not penalize contractors for showing up to help. Professor Schooner says, 

listen, we ought to focus on who is the most appropriate to bear 

the liability as between a company and an individual. That’s the 

wrong question. 

As between everybody out there, the contractor should not be penalized for showing up. So the first step is to provide this limited 

liability so that the contractor is in the same shoes as the Government with regard to third party suits. 

Having done that, we have done the first step of the right thing. 

The second step is to then sit back and say, who is it that should 

pay the money and how should it be paid for individuals who are 

affected adversely by Hurricane Katrina, previously the terrorist 

activities up at the World Trade Center, who should pay the price. 

It is not intuitively obvious that the contractor, just because they 

are the only ones on the scene who have any money, ought to pay 

the price. 

So it is appropriate for Congress to answer that question. Now, 

clearly, if we look at the question of who is the superior risk bearer 

it’s the Government. But the Government really has to decide 

what’s the appropriate compensation mechanism. As your question 

implies, the answer is, it’s not the contractors who showed up to 

help you through the problem. 

Senator THUNE. Mr. Schooner. 

Mr. SCHOONER. I actually think that until he closed, what Mr. 

King was offering was an attractive oversimplification, but in the 

end he hit the nail on the head. Faced with a situation like this, 

and this is not unprecedented in terms of experiences the Government has had, we have experience with the nuclear industry. We 

have experience dealing with volatile missile fuel where the potential for disaster exceeds anything that the insurance industry has 

ever been capable or willing to absorb. 

So you get a simple calculus, as he pointed out. The Government 

can require the contractor to purchase insurance and reimburse 

those costs of insurance, which is what happens in Government 

contracts every single day. So we allocate the risks to the contractor and the Government reimburses the contractor for its costs. 

When we reach the point where insurance becomes so expensive 

that the Government doesn’t want to pay it or that the contractor 

truly cannot get insurance, historically the Government has indemnified the contractor and in effect become a self-insurer. The main 

point I am trying to make here is, Mr. King is right that if the Government is willing to assume the responsibility for injured individ-
49

uals, none of this is relevant, because the Government is a far superior risk-bearer. 

It is irresponsible and ultimately unacceptable to say, as a matter of policy, that when a contractor injures someone, we have decided that the superior risk-bearer is an individual that cannot anticipate, cannot avoid, cannot insure against, and cannot bear the 

costs. It is not what a responsible Government would do. 

Mr. KING. May I respond to that just briefly? 

Senator THUNE. I’m sure you will. 

[Laughter.] 

Mr. KING. Professor Schooner posed two very interesting questions. One of them is, and just to put it in jargon in which he and 

I deal, it is the insurance liability clause of the Federal Acquisition 

Regulations, 52228–7, I believe it is, to throw the numbers out 

there. What it says is that in particular instances, the Government 

can require a certain amount of insurance and reimburse the contractor for that. Then any liability over and above that, the Government would reimburse the contractor. 

What he forgot to tell you is that the Government as a policy decision has made it so that that cause is inapplicable to construction 

contractors and engineering contractors. What he has also forgotten to tell you is you only get paid if you go through the full litigation, come back, seek reimbursement, having gone through all this 

disruption, and then there is the question of whether you get your 

litigation costs paid. It is not an adequate response in this type of 

a situation. 

The second one that he points out is what’s called Public Law 

85–804, incorporated by Part 50 of the FAR. In that instance, the 

Government does say if we have these extraordinary nuclear sorts 

of issues, then the Government may bear the risk. There is a process you go through to do that. It is quite burdensome, probably 

doesn’t fit the Hurricane Katrina type situation. 

What he doesn’t tell you is that is limited to national security situations. There is nothing in the Stafford Act that allows that to 

happen. 

So what you have is, in the case of anti-terrorism, you had a war 

on terrorism declared so the White House could then issue an executive order that brought that entire rubric under the national security interests of that sort of indemnification. That doesn’t apply in 

these types of situations. Again, it is not as good or effective as the 

bill that we’ve got pending here that limits liability, doesn’t make 

you go through all of those hoops for extraordinary contractual relief. 

Mr. SCHOONER. First, Mr. King’s points are perfectly valid, but 

what he’s ultimately advocating is first, you could fix or modify a 

clause or you could expand or modify Public Law 85–804, both of 

which would be perfectly reasonable solutions. 

But as a matter of policy, for the Government to stake out as 

statute that the least able risk-bearer should be the one to bear the 

loss is totally irresponsible. It is just unthinkable that our Government could do such a thing. 

Senator THUNE. And least able risk-bearer being? 

Mr. SCHOONER. Individual members of the public that can’t anticipate the risk, can’t insure against it, and can’t bear the costs. 
50

Senator THUNE. What would the Federal Government’s legal exposure be if it carried disaster cleanups without private sector 

firms today? 

Mr. KING. I think the contractors that preceded us indicated they 

simply couldn’t do the job. I guess the General is the one who said, 

we couldn’t do it without contractors. So you have a situation 

where I believe the General said, 99 percent of this work has to be 

done by contractors. The Government directs the work, the Government is immune. Somehow, because the contractors show up, they 

are supposed to be liable. That just doesn’t make sense. 

Senator THUNE. That immunity that applies in these types of situations, though, the Federal Government’s ‘‘sovereign immunity,’’ 

has that ever, in a situation like that, have we, the Federal Government, ever waived that? We did in New York to some degree. 

Mr. SCHOONER. You mean like creating a fund. 

Senator THUNE. Right, which we did in New York. 

Mr. SCHOONER. We do that. 

Senator THUNE. That was sort of an exceptional circumstance, although now it sounds like the claims are well in excess of what was 

allowed. 

Mr. SCHOONER. There’s a number of good models, where the Government has stepped into the fray and solved a failure of the marketplace. I think for example the vaccine fund is a perfectly reasonable situation. Bottom line is, vaccine manufacturers pay into a 

fund. People who are injured by the vaccines have, in effect, an 

automatic suit to the United States Court of Federal Claims, and 

the only real issue is damages. 

So the point there is that you can either prospectively have contractors pay into a pool if you like that approach, or you could have 

the Government indemnify. The only point that I return to time 

and time again is: why would you assign or allocate the risk to the 

least able risk-bearer when there is a harm there? 

I agree with everyone who has testified today. The goal here is 

not to make contractors responsible for injuries to the public by terrorists. The question is: when the contractor comes in to perform 

their work, why shouldn’t they, when faced with a choice, exercise 

standards of care to the extent that the insurance industry would 

normally cover them? It just seems reasonable. 

Senator THUNE. Mr. King. 

Mr. KING. The issue very much is models. There are models to 

do all sorts of things. What Professor Schooner has tried to sidestep 

is the model of the Safety Act. He says it doesn’t apply, we 

shouldn’t consider it. There is no doubt on earth this statute is patterned after the Safety Act. 

Now, let’s talk about what the Safety Act is for just a moment. 

In the wake of 9/11, Congress enacted a statute that said exactly 

what this statute said, but applies it to anti-terrorism technologies. 

Congress invited companies to have their technologies certified by 

the Government as desirable for use against terrorism, then in the 

event of lawsuits, the Government contractor defense would apply. 

Basically all the same types of protections that we are talking 

about here would be there. There would be a certification process, 

the whole sort of thing. 
51

Now, what Professor Schooner says is, that is not like disaster 

recovery efforts for hurricane relief. That is absolutely wrong, because what he is focusing on is the technology, not the risk. If you 

focus on the risk, the risk of the extraordinary cleanup going on 

down in New Orleans is very much comparable to the risk of those 

anti-terrorism technologies. 

When you focus on the risk, what you look at is the types of risk 

to the company, and I will tell you, if you go look at the applications for Safety Act certification, it is companies taking the normal 

work that they do and saying, we would like to have this sort of 

Government contractor defense apply for it, it is doing their normal 

work in an environment of extraordinary risk, which is exactly 

what our contractors told us is going on down in New Orleans. 

They are taking their normal work and they are going into an environment of extraordinary risk, and they are saying, it is not the 

typical situation, we need to have this sort of relief. 

So this is exactly the same sort of thing that we did with regard 

to anti-terrorism technologies under the Safety Act. The decisions 

by the Government are the same types of decisions. The risks are 

comparable, and a Safety Act type model applies, not those other 

models that the professor was talking about. 

Senator THUNE. I do have to go vote again. This is fascinating, 

and we could go on for a long time. 

I will say, and I think that, I am aware of at least one example 

where, it was not while I was in the Congress, but when the anthrax incident hit, actually I think I was in the House at the time, 

I wasn’t in the Senate, but it was in the Senate buildings, Dirksen 

and Hart Buildings, the contractor that came in to do the work on 

that, the Government did indemnify them. 

Mr. KING. That was Public Law 85–804, under the Executive 

Order. 

Senator THUNE. Right. 

Mr. SCHOONER. So it works. 

[Laughter.] 

Senator THUNE. Well, that debate will rage on. 

I thank you very much for your testimony and for your responses 

to the questions. I do want to include, without objection, I will include Chairman Inhofe’s statement for the record, which we will insert. 

Senator THUNE. Also, I have a couple of letters of support for this 

legislation. One from the American Road and Transportation Builders Association. 

[The reference letter can be found on page 97.] 

Then also the Transportation Construction Coalition, which is a 

coalition of not only engineering and construction but also some 

labor unions as well. 

[The referenced material was not submitted at the time of print.] 

Senator THUNE. With that, thank you so much for being here. We 

will leave the record open for a week. I suspect Senator Boxer will 

have some questions for you that she will submit in writing. Regrettably, she could not get here for the balance of this. 

Thanks so much. The hearing is adjourned. 

[Whereupon, at 5:47 p.m., the subcommittee was adjourned.]
52

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE

STATE OF OKLAHOMA

Senator Thune, I would like to start off by thanking you for holding this important hearing. As Chairman of the Superfund and Waste Management Subcommittee, you have and continue to show great leadership and consideration over 

new and evolving issues. 

The devastation from the recent hurricanes has been well covered in the media, 

but the rebuilding efforts—the positive aspects of the story have not been given the 

same level of attention. I hope that changes soon. 

Today’s hearing on your bill, the Gulf Coast Recovery Act focuses on another issue 

that has escaped the public eye—looming litigation and liability costs from trial lawyers against well-intentioned private contractors could have a significant chilling effect on disaster response and cleanup. 

When the state, local or the Federal Government asks for help to rebuild our cities, the public expects the private sector to heed that call, and to work with the authorities. The public certainly does not anticipate that those well intending companies should be penalized simply for meeting their civic and patriotic duties. 

We should promote policies that encourage good deeds, not restrict them. Senator 

Thune’s bill does just that, and I am proud to be a co-sponsor. 

I look forward to hearing from the witnesses, some of whom will explain the problems that they have encountered on the ground and the fear of unknown but likely 

litigation and liability costs makes them think twice before doing the right thing. 

Penalizing Good Samaritans is bad public policy and bad moral policy. We cannot 

let that happen. 

STATEMENT OF MAJOR GENERAL DON T. RILEY, DIRECTOR OF CIVIL WORKS, UNITED

STATES ARMY CORPS OF ENGINEERS

INTRODUCTION

Mr. Chairman and members of the committee, I am Major General Don T. Riley 

and I am the Director of Civil Works for the U.S. Army Corps of Engineers. Thank 

you for the opportunity to testify before you today concerning the Corps’ disasterrelief contracting procedures. Under the leadership of the Chief of Engineers, LTG 

Carl A. Strock, we practice a concept of openness. We strive to maintain transparency in our contracting activities and welcome oversight of our activities. From 

a contracting perspective, this visibility and transparency is best demonstrated by 

the publishing of our contract listing on our web site where we give specific contract 

information, to include the contractor, dollar value, and purpose of the contracts for 

all to see. 

My statement is divided into four parts, pre-disaster planning, contracting during 

the ‘‘emergency’’ situation, ‘‘a return to normalc’’, and I will finish with comments 

on small and local business utilization. 

PRE-DISASTER PLANNING

In our pre-disaster planning, the Corps has been assigned Emergency Support 

Function No. 3 (ESF 3) under the National Response Plan. This is one of fifteen 

assigned functions to various elements of the Federal Government. Under ESF 3, 

Public Works and Engineering, the Corps assumes the lead in the areas of water, 

ice, power, temporary roofing and debris removal. Having this responsibility, the 

Corps has created a program called the Advanced Contracting Initiative, or ACI. 

Under the ACI program, we competitively award contracts for future use in the 

areas of water, ice, power, temporary roofing, and debris removal. Having these contracts in place allows the Corps to rapidly respond to emergency situations. We did 

in fact use our ACI contracts to not only support the Katrina recovery, but those 

areas impacted by Hurricanes Rita, Wilma and Ophelia as well. We also used the 

contracts to support recovery efforts in the Southeast after several hurricanes of last 

year’s hurricane season. The ACI program has been in place for about six years. 

EMERGENCY

Using contractors to provide services that are not governmental in nature is typical of Government operations under normal circumstances. That is even more necessary in a disaster or emergency. Emergency situations typically require the application of significant resources beyond those that Federal organizations, the Corps 

included, need for use during normal operations. For example, it would be prohibitively expensive to maintain a full time, properly trained and equipped workforce 
53

sufficiently large and sufficiently diverse to react to needs arising from any kind of 

disaster response scenario. Instead, we maintain sufficient resources to oversee a 

quick ramp-up of contractors, enabling us to tailor our response to the specific needs 

of the emergency. This avoids having resources that would be underutilized the majority of the year, but enables us to react quickly. 

Turning to the emergency situation, the Federal Acquisition Regulation, (FAR), is 

based upon the principle of full and open competition. Drafters of the FAR, however, 

realized that emergency situations sometimes require emergency actions. As a general rule, the FAR mandates a 15-day advertisement period. The FAR also requires 

a 30 day proposal period in most cases. What does this mean? Simply stated, if we 

were to follow the rules for full and open competition, we would not have awarded 

a contract to get the flood waters out of the city of New Orleans until the end of 

October. Clearly the people of New Orleans could not wait. In fact, the FAR allowed 

us to considerably shorten the time period of the award, under the urgency exception to the Competition in Contracting Act. The Corps contracting officer contacted 

four companies on September 1, 2005. Of those four companies, only Shaw Environmental, Inc, of Baton Rouge, Louisiana, could respond in a timely manner to begin 

the un-watering effort. Contract award was made on September 2, 2005. 

In our other efforts to support relief efforts in response to this emergency situation, the Corps considered and used the entire suite of available contracting options 

authorized under the FAR, including verbal and letter contracts. Using these methods, the Corps procured such critical items as sand bags to be used to stop the flow 

of water into New Orleans. You probably saw pictures of helicopters dropping these 

huge sand bags into the various levee breaches. It was an urgent situation, which 

required expedited procurement. Additionally, we made use of a Naval Facilities 

contract to assist in the un-watering of the city. 

Due to the magnitude of Katrina and the wide-spread devastation, the Corps 

needed to award debris and roofing contracts in excess of those contracts pre-placed 

under the ACI program. Based on the large scale of the work that needed to be performed, we awarded four debris removal contracts following the emergency. Each 

contract is valued at $500 million with a $500 million option. This requirement was 

open to any company, under a shortened advertisement and proposal period. The 

Corps received 22 proposals in response to the advertisement. The contracting officer awarded the contracts on a best value to the Government basis. The Army Audit 

Agency is reviewing the award and administration of these four contracts. 

Oversight of Corps contracts, especially in an emergency situation, is important 

to the Corps. Within just a few days of the storm hitting the Gulf coast, our internal 

review staff teamed with the Defense Contract Audit Agency and the Army’s Criminal Investigation Division and deployed to the area of operations. Their mission, 

which is still ongoing, is to provide oversight of the operation, to include looking for 

instances of fraud, waste and abuse. This includes reviewing contracts. 

RETURN TO NORMALCY

In our efforts to assist in the recovery of areas affected by Hurricane Katrina, we 

concluded that it is not yet prudent to follow the full waiting periods that apply in 

normal circumstances, before awarding contracts. It is our goal, however, to return 

to standard procurement operations as soon as possible. The Corps is currently moving in that direction. We are currently advertising our requirements for longer periods than we did under the urgent situation, we are attempting to give prospective 

contractors as much time as possible to prepare their proposals, and we are using 

Federal Acquisition Regulations principles and competitive awards to the maximum 

extent possible. 

UTILIZATION OF SMALL AND LOCAL BUSINESSES

The Corps has made extensive use of standard authorities granted to us under 

the various small business set aside programs, especially in the area of 8(a) firms. 

Section 8(a) is a Small Business Administration business development authority to 

benefit minority owned, socially and economically disadvantaged firms. The program 

helps aspiring entrepreneurs build their businesses by helping them obtain Government contracts. Participants can receive non-competitive awards up to $3 million 

during a 9-year developmental program. Many of these small companies are local 

and therefore are already in the area and available quickly to participate in recovery efforts. We have also held, and will continue to do so, 8(a) competitions in which 

only Small Business Administration registered 8(a) firms from designated areas can 

compete. In those areas where we have awarded contracts to large businesses, our 

debris contracts mainly, we encourage use of local business subcontractors. We have 

instituted high goals for small business subcontracting and a reporting requirement 
54

that keeps them focused on achieving results in these areas. These contractors report their sub-contracting efforts to us weekly for the first 90 days, and monthly 

thereafter instead of every six months, the typical reporting requirement. We have 

also inserted clauses citing the preference for use of local subcontractors. 

We are in the process of developing our acquisition strategy for a newly assigned 

mission from FEMA, demolition, where the Corps will raze structures determined 

to be uninhabitable. We will include opportunities at the prime level for local disadvantaged companies and a geographic set aside for the unrestricted portion of the 

strategy. We are considering limiting competition to Mississippi companies for the 

Mississippi aspect of the mission and to Louisiana companies for the Louisiana aspect of the mission. Our estimates at this time are that the costs in Mississippi will 

be $500 million and $600 million in Louisiana. Award is planned for late December. 

SUMMARY

To close, I would like to thank you once again, Mr. Chairman, for allowing the 

Corps of Engineers the opportunity to appear before this committee to discuss contracting procedures during times of emergencies. I would be happy to answer any 

questions Members of the committee may have. 

Thank you. 

RESPONSES BY MAJOR GENERAL RILEY TO ADDITIONAL QUESTIONS FROM

SENATOR BOXER

Question 1. Major General Riley, you indicate in your testimony that the Army 

Corps relied on the Advance Contracting Initiative. Did the Initiative allow you to 

rapidly respond to emergency situations after Hurricanes Katrina and Rita? 

Response. Yes, the Advance Contracting Initiative allowed us to rapidly respond 

to emergency situations after Hurricanes Katrina and Rita. We were fortunate to 

have contracts already in place for debris, ice, power, and water, which we used extensively in responding to the hurricanes.

Question 2. Major General Riley, what is the number and value of contracts that 

the Army Corps has entered into that address the cleanup and rebuilding process 

following Hurricanes Katrina and Rita? 

Responses. We have awarded a total of 106 contracts (87 for Hurricane Katrina 

and 19 for Hurricane Rita) to date for the two storms. In addition, we have awarded 

248 task orders (216 for Hurricane Katrina and 32 for Hurricane Rita) to date for 

the storms not including modifications to task orders. A total of approximately $2 

billion has been obligated as of 13 December 2005.

Question 3. Major General Riley, you indicate in your testimony that the Army 

Corps awarded four $500 million Katrina-related debris removal contracts, and that 

each had an additional $500 million option. You also indicated that the Army Corps 

got two dozen proposals for the work. Are you dissatisfied with the quantity of the 

contractors you selected for these contracts? 

Response. No, we are not dissatisfied with the quantity of the contractors selected 

for these contracts. In fact, we are very pleased with the 22 proposals we received 

for this emergency acquisition. Given the magnitude of the work and the geographic 

scope covered by the work, we felt that four contractors were adequate to respond 

to the debris removal action. 

RESPONSES BY MAJOR GENERAL RILEY TO ADDITIONAL QUESTIONS FROM

SENATOR JEFFORDS

Question 1. Major General Riley, on November 3, 2005, the Washington Post published an article, entitled ‘‘Levee Construction Faulted in New Orleans Flood Inquiry.’’ The article discussed an inquiry of New Orleans levee construction by independent investigators and how faulty construction practices by contractors may have 

played a role in failure of the levees. I have three questions regarding the contracting practices of the U.S. Army Corps of Engineers. First, how does the Corps 

screen potential contractors that it employs? 

Response. The Corps generally uses sealed bidding or competitive negotiations. In 

sealed bidding competitions, the contracts are awarded to the contractor that submits the bid containing the lowest price. Competitive acquisitions represent the best 

value for the Government and are awarded based on an examination of the offeror’s 

past performance, technical capabilities, management plan and price as presented 

in the bid package.
55

Question 2. Second, does your screening include a review of complaints and lawsuits filed by private parties against contractors? 

Response. The General Services Administration maintains a Government-wide 

listing of all firms that have been debarred or suspended from contracting with the 

Federal Government. The Contracting Officer’s Representative screens this listing 

prior to making a final contract award decision.

Question 3. Third, regarding S. 1761, if contractors are shielded from liability by 

private parties, how will this impact the Corps in awarding contracts for relief efforts related to Hurricane Katrina and future natural disasters? 

Response. We do not know what impact this proposed legislation would potentially have on competition 

STATEMENT OF ANTHONY ZELENKA, PRESIDENT, BERTUCCI CONTRACTING

CORPORATION

Thank you Chairman Thune, Ranking Member Boxer and the distinguished members of the Subcommittee for this opportunity to testify on Louisiana’s struggle to 

recover from Hurricane Katrina, and the great need for legislation along the lines 

of the Gulf Coast Recovery Act of 2005 (S. 1761), which I support and urge Congress 

to enact. 

I am Tony Zelenka, the President of Bertucci Contracting Corporation. My company is a small business that performs levee and coastal restoration work across 

the Gulf Coast. I was born and raised in New Orleans, and I have over 20 years 

of experience in the construction industry. My family’s firm traces its history back 

to 1875, when my great-great grandfather founded the company in New Orleans. 

The morning after Hurricane Katrina hit the Gulf Coast, I waded through chestdeep water to reach the closest highway. As I did, I carried my bicycle over my 

head, so I could ride to my truck and then drive to my family, who had evacuated 

to Jackson, Mississippi. I had stayed behind to make sure our home and business 

survived the storm. 

While with my family, I learned that the levees in New Orleans had failed. I 

knew that the Army Corps of Engineers was going to need contractors to stop the 

flooding, so I headed for the Corps’ emergency response center in Vicksburg, MS. 

After meeting with Corps officials that first day, and with no more than an oral 

agreement to execute a written contract, I went to work hauling stone and rock to 

repair the breached levees that had flooded New Orleans. I was one of the first contractors to arrive on the scene. 

In a situation like this, contractors like me focus on protecting our employees and 

helping our communities as quickly as possible. Under the direction of the appropriate authorities, we help our country recover from one disaster after another. We 

are the first entities, the first responders, to arrive on the scene of a disaster with 

the goal of providing whatever support we can. In the case of Hurricane Katrina, 

we did everything we could to stop the water from pouring into New Orleans. For 

the past 10 weeks, we have been working seven days a week. 

Personally, this disaster has touched many contractors in the area. While my 

home, thankfully, was spared from the devastation, many of my employees and their 

families’ lives have been ruined by this disaster. As we continue our efforts to cleanup the city, I have also sought to help my employees re-establish their lives and 

livelihoods. 

The cleanup process in New Orleans continues to move forward. Standing sideby-side with my employees, I have personally done a lot of the work, and I have 

done it under crisis conditions. From the beginning, we have worn personal protective equipment, and done our best to protect ourselves from the many hazards, but 

like it or not, we have had to wade through the flood waters, and deal with the 

spray that the helicopters caused. We continue to deal with gas leaks, oil spills, 

downed electrical lines, and backed up and overflowing sewer lines. 

While you all have been watching the devastation on television, we have been living it. Many of my employees are still homeless and have had their families displaced, and my city is uninhabitable. In fact, I am a little nervous about being away 

from the job site in the daylight for the first time since this terrible tragedy first 

happened. 

Construction contractors have a critical role in providing disaster assistance to 

Federal, State and local officials. We are essential in the rescue of both persons and 

property. Our country has never experienced a dislocation of the size and scope of 

Hurricane Katrina. Contractors like me stopped the flow of water into the city and 

we will be busy for months on the demolition, removal, repair and reconstruction 

of both structures and utilities damaged by the hurricane. We will cleanup property 
56

polluted by the hurricane, remove vast amounts of debris, and dewater flooded 

areas. This is our city and we want to bring it back. 

Unfortunately, there are people out there who want to capitalize on this tragedy 

and others like it. Lawsuits have been filed against contractors who have performed 

the types of rescue and recovery work my firm has been doing in New Orleans. Take 

a look at what happened in New York after the terrorist attacks on 9/11. Hundreds 

of lawsuits were filed against contractors for the heroic work they did to cleanup 

Ground Zero in a short amount of time at the express direction of the Federal, State 

and local authorities. I have attached an AP story to this testimony that reports on 

the litigation. 

The madness has already started in Louisiana, where a contractor was named as 

a defendant in a class-action only three weeks after the Hurricane hit. The trial 

lawyers sued the contractor for building a faulty levee which the contractor did not 

build in the first place. The case was dismissed after a few days, but it is a prime 

example of the hunger out there no matter how arbitrary the suit may be - to sue 

contractors. 

I worry that I may be sued for property damage as part of the clean-up. Recently, 

I have been hired to begin work on the massive debris removal contract in New Orleans, which may include the demolition of private homes damaged by the hurricane. This is a very emotional situation even though all levels of Government have 

determined that many of these homes are completely uninhabitable and beyond repair or restoration. The Government has decided that they must be torn down and 

completely rebuilt, due to the flooding, hurricane winds and mold. But I now fear 

legal risk for moving ahead, and doing exactly and only what the Government hired 

me to do. Why am I worried? Because everyone has spent all this time looking for 

someone to blame, instead of looking for a solution. Meanwhile, contractors are expected to continue the cleanup, and do it as safely and quickly as possible, despite 

an uncertain legal and logistical environment. 

Remember, unlike many public officials and their agencies, contractors have no 

sovereign immunity. We look to the Government at all levels for guidance on the 

best way to do this work safely and efficiently. Ultimately, in emergency situations 

we have to put our assets on the line if we want to help, which means I may be 

at risk of losing my company for simply doing what I have been hired by the Federal 

Government to do trying to help save my city. 

I believe passing The Gulf Coast Recovery Act (S. 1761) is necessary to ensure 

that contractors like me will be there to do the work in the future, without fear of 

reprisal. The bill offers limited protection to Government contractors from any citizen suits that might result from their performance of disaster recovery contracts, 

enabling them to focus on the work. This legislation would give my firm a reasonable measure of protection, allowing me to pass this fifth-generation family business 

on to the sixth generation. 

Do not let the trial lawyers penalize the contractors like me who report for duty. 

We are a critical link in the restoration of our city. I ask you to pass this legislation. 

I also ask you to do something else listen to the experts. Listen to the Army Corps 

of Engineers. Listen to the local levee districts. Do not shortchange the rebuilding 

and flood protection efforts underway. 

I have been asking for increased funding for the Southeast Louisiana Urban Flood 

Control Project (SELA) for years, but unfortunately, my calls for increased funding 

to rebuild the wetlands and coastline and provide additional protection for New Orleans have consistently fallen on deaf ears. Please tell your colleagues to not only 

increase investment, but fully fund this national priority. 

Please approve the Gulf Coast Recovery Act and please commit to rebuilding my 

city. 

Thank you for this opportunity to comment. I look forward to working with the 

Subcommittee and would be happy to answer any questions. 

RESPONSE BY ANTHONY ZELENKA TO AN ADDITIONAL QUESTION FROM SENATOR

BOXER

Question 1. Mr. Zelenka, do you believe that negligent contractors should be 

shielded from liability to private parties in cases of a declared disaster of the scope 

described in S. 1761? 

Response. I do not believe that contractors should be shielded from liability to private parties in cases of a declared disaster of the scope described in S. 1761 to the 

extent that the damage is caused by the contractors negligence. 
57

RESPONSE BY ANTHONY ZELENKA TO AN ADDITIONAL QUESTION FROM

SENATOR JEFFORDS

Question 1. Mr. Zelenka, in your testimony, you referenced lawsuits filed against 

contractors performing rescue and recovery work in New Orleans. Are any of these 

suits for damages related to environmental pollution or adverse health effects from 

pollution? 

Response. I do not know of any lawsuits for damages related to environmental 

pollution or adverse health effects from pollution. 

STATEMENT OF BEVERLY WRIGHT, PH.D, DIRECTOR, DEEP SOUTH CENTER FOR ENVI- RONMENTAL JUSTICE AND CO-CHAIR, NATIONAL BLACK ENVIRONMENTAL JUSTICE

NETWORK

INTRODUCTION

Good morning Mr. Chairman. I am Dr. Beverly Wright, Director of the Deep 

South Center for Environmental Justice at Dillard University, formerly at Xavier 

University. Regrettably, both of these Historically Black Colleges are underwater 

now and temporarily closed due to Hurricane Katrina. I am also here today representing the National Black Environmental Justice Network (NBEJN). 

Thank you for the opportunity to testify before the Subcommittee on critical 

issues of concern in the aftermath of the hurricanes. My professional and personal 

experiences of growing up, living and working in the City of New Orleans greatly 

influence my perspective and testimony. 

WHO WE ARE

The Deep South Center for Environmental Justice (DSCEJ), at Dillard University 

in New Orleans, formerly at Xavier University of Louisiana, is now temporarily relocated in Baton Rouge, Louisiana. 

The Deep South Center was launched in 1992 in collaboration with community 

environmental groups and other universities within the southern region to address 

environmental justice issues. DSCEJ provides opportunities for communities, scientific researchers, and decision makers to collaborate on programs and projects 

that promote the rights of all people to be free from environmental harm as it impacts health, jobs, housing, education, and general quality of life. A major goal of 

the Center is development of minority leadership in the areas of environmental, social, and economic justice along the Mississippi River Chemical Corridor. The Deep 

South Center for Environmental Justice is a powerful resource for environmental 

justice education and training. 

DSCEJ has developed and embraces a model for community partnership that is 

called ‘‘communiversity.’’ The essence of this approach is an acknowledgement that 

for effective research and policy-making, valuable community life experiences regarding environmental impacts must be integrated with the theoretical knowledge 

of academic educators and researchers. The Deep South Center for Environmental 

Justice has three components in terms of reaching our objectives: (1) research and 

policy studies, (2) community outreach assistance and education; and (3) primary, 

secondary, and university education. 

The National Black Environmental Justice Network was founded in New Orleans, 

LA in December 1999. NBEJN members founded the organization in New Orleans 

because we felt then, as now, that Louisiana and the Chemical Corridor between 

the City and Baton Rouge are under siege from and epitomize environmental and 

economic assaults. These assaults are costing Black people their very lives. NBEJN 

believes in the sacred value of every human life regardless of race, ethnicity, religion or socioeconomic status. We see in the tragedy of Hurricane Katrina, Hurricane 

Rita and the aftermath a unique opportunity to shape the conversation and dialogue 

about rebuilding of New Orleans and the Gulf Coast region with the goals of environmental and economic justice for everyone. 

TARGET AREA AND POPULATION SERVED

DSCEJ is national in scope with emphasis on the Mississippi River Chemical Corridor and Gulf Coast Region and global emphasis on communities impacted by the 

petrochemical industry. The major populations served include people of color with 

special concentration on African Americans and the African Diaspora, students and 

faculty at Historically Black Colleges And Universities/Minority Serving Institutions 

(HBCU/MSI) and public school teachers in urban areas. DSCEJ has forged collabo-
58

rations with other major research institutions and Governmental agencies that can 

assist in the development and implementation of the center’s work. 

CENTER OBJECTIVES

DSCEJ principal objectives include: (1) development of minority leadership in the 

field of environmental justice; (2) development of culturally sensitive training models for minority residents in at-risk communities; (3) development and distribution 

of culturally sensitive environmental justice education materials and training modules; (4) increasing environmental justice literacy among college students at HBCU/

MSI’s; (5) development of a pipeline creating a new generation of environmental justice leaders at HBCU/MSI’s; (6) development and implementation of a K-12 teacher 

training program in environmental justice; (7) conducting research to determine the 

impact and extent of toxic exposure for minority communities as it affects health 

and the environment; (8) investigating means of addressing these problems (i.e., 

brownfields redevelopment, toxics use reduction, climate change, clean production 

and green chemistry, and economic development; and (9) creating linkages between 

impacted communities, scientific researchers, and Government officials to address 

environmental justice issues as they impact health, jobs, housing, and overall quality of life. 

THE KATRINA AFTERMATH

As the floodwaters recede in New Orleans and the Gulf Coast region, it is clear 

that the lethargic and inept emergency response immediately following this devastating storm was the real disaster that nearly overshadowed the actual storm. We 

were all left nearly paralyzed in front of our television sets completely unable to 

continue with our daily lives watching the unbelievable events unfold right before 

our eyes. Americans were shocked beyond belief that this could happen in America, 

to Americans. It also raised lingering questions and doubts about our overall security. Is Government equipped to plan for, militate against, respond to, and recover 

from natural and manmade disasters? Can the public trust Government’s response 

to be fair? Does race matter? 

Examination of historical data reveals that emergency response reflects the preexisting socioeconomic and political structures of a disaster area and is based on 

race and class differentials. Generally communities of color receive less priority in 

response time than do their white counterparts where emergency response is required. We can assume that this differential response will occur in all areas relative 

to the resolution of the aftermath of Hurricane Katrina. 

ENVIRONMENTAL DAMAGE

New Orleans and outlying areas suffered severe environmental damage during 

Katrina, the extent to which has yet to be determined. The post-Katrina New Orleans has been described as a ‘‘cesspool’’ of toxic chemicals, human waste, decomposing flesh and surprises that remain to be uncovered in the sediments. Massive 

amounts of toxic chemicals were used and stored along the Gulf Coast before the 

storm. Literally thousands of sites in the storms path used or stored hazardous 

chemicals, from the local dry cleaner and auto repair shops to Superfund sites and 

oil refineries in Chalmette and Meraux, La, where there are enormous stores of 

ultra-hazardous hydrofluoric acid. In the aftermath of the storm some sites were 

damaged and leaked. Residents across the Gulf Coast and the media reported, ‘‘oil 

spills, obvious leaks from plants, storage tankards turned on end and massive 

fumes.’’

Short-term rebuilding objectives must not outweigh long-term public health protection for all Americans and the environment they depend upon. Some of the legislative proposals now under consideration in the aftermath of Katrina do not adhere 

to this principle. Congress must act now to protect our most vulnerable populations 

and preserve our most unique and irreplaceable resources. It is imperative that 

Congress responds quickly and effectively to the devastating aftermath of Hurricanes Katrina and Rita. It is also important, to temper our haste to rebuild with 

a strong commitment to public health and the environment. Moreover, the public 

has a right to clean air and water and it must be protected. No law should ever 

move forward that would in any way sacrifice these principles. 

Have we learned anything over the last 40 years, since Hurricane Betsy struck, 

that should guide our decisions after Hurricanes Katrina and Rita? Much of the proposed legislation concerning rebuilding the Gulf Coast region strongly suggests that 

we have not. In fact, it seems that some are using the crisis of Hurricane Katrina 

to advance their political and policy agenda, including weakening, waiving and roll-
59

ing back public health, environmental justice and environmental laws and regulations. 

It is ironic that the tragedy of Hurricane Katrina is being used to justify sweeping 

waivers of public health, safety and environmental laws. The Gulf Coast Recovery 

Act (S. 1761) would leave many citizens without a remedy against contractors that 

cause irreparable harm to the air and water. The bill gives unprecedented legal protection to contractors being paid for work related to Katrina in areas of rescue, recovery, repair and reconstruction. The bill is far reaching in that these protections 

do not only apply to Katrina contractors; under the bill, they will also apply to contractors in all future disasters that result in at least $15 billion dollars of Federal 

assistance. 

The Gulf Coast Recovery Act, while designed to help victims of Katrina, could 

very well end up helping everyone but the victims in the long run. S. 1761 is particularly egregious to low income and minority communities in the Gulf Coast Region. All of the limitations apply only to actions brought by private citizens. The section 4 limitation on filing a lawsuit is specifically limited to ‘‘private parties’’ and 

section 5(e) specifically provides that nothing in that section limits an action that 

any Governmental entity may bring. I thought that the Government’s role was to 

protect the citizenry. This bill (S. 1761) seems designed to do just the opposite. 

By eliminating the threat of liability for contractors you in effect remove an essential protection for the public. Where there are no consequences there are high risk 

and general disregard for the public’s safety. 

This bill seems to not be so well thought out. The actions taken by this bill in 

my opinion, aptly depicts the moral of the old adage of ‘‘throwing out the baby with 

the bathwater.’’ We should remember that, in this case, it is not the contractors who 

are the victims. Powerful corporations with huge Government contracts will make 

millions in profit from the Katrina tragedy. The payments will be made with our 

tax dollars. This bill S. 1761 should be rejected by the Senate. In essence it will 

ultimately defeat the overall purpose of cleaning up the Gulf Coast and setting the 

road for its recovery. If contractors no longer fear legitimate legal liability, where 

is the incentive to do good work? And, when the dust settles with possibly untold 

numbers of properties improperly cleaned up, debris inadequately disposed of with 

personal injury due to contractor’s negligence, who will then pay the bill? 

The victims of Katrina have suffered immensely from first an inadequate response 

that caused the lives of many citizens, the loss of property, family members and 

their communities. Now, the Government will hold harmless contractors who may 

further injure the citizenry through neglect and irresponsibility. 

These citizens of the United States and victims of the worst natural disaster ever 

in North America have been placed in double Jeopardy by this event. And in each 

instance the Government has played a major role. First, with the slow and inadequate response to Katrina and now with a quick response that fails to adequately 

protect citizens in the aftermath of the storm. 

I would like to put into context exactly what has happened here, and who it has 

happened to, in an attempt to explain why S. 1761 is so objectionable. 

BEFORE HURRICANE KATRINA PREEXISTING VULNERABILITIES

Katrina struck a region that is disproportionately African American and poor. For 

example, African Americans make up twelve percent of the United States population. New Orleans is nearly 68 percent black. The African American population 

in the Coastal Mississippi counties where Katrina struck ranged from 25 percent 

to 87 percent black. Some 28 percent of New Orleans residents live below the poverty level and more than 80 percent of those are black. Fifty percent of all New Orleans children live in poverty. The poverty rate was 17.7 percent in Gulfport, Ms. 

and 21.2 percent in Mobile, AL. in 2000. Nationally, 11.3 percent of Americans and 

22.1 percent of African Americans live below the poverty line in 2000. 

New Orleans is prototypical of environmental justice issues in the Gulf Coast region. Before Katrina, the City of New Orleans was struggling with a wide range of 

environmental justice issues and concerns. Its location along the Mississippi River 

Chemical Corridor increased its vulnerability to environmental threats. The City 

had an extremely high childhood environmental lead poisoning problem. There were 

ongoing air quality impacts and resulting high asthma and respiratory disease rates 

and frequent visits to emergency rooms for treatment by both children and adults. 

Environmental health problems and issues related to environmental exposure was 

a grave issue of concern for New Orleans residents. 

The African American community in New Orleans was already grappling with the 

nationally identified health disparities for minorities reported by the National Institutes of Health (NIH). These conditions were exacerbated by environmental condi-
60

1Craig E. Colten and John Welch. ‘‘Hurricane Betsy and Its Effects on the Architecture Integrity of the Bywater Neighborhood: Summary.’’ May 2003. 2See Agency for Toxic Substances and Disease Registry, Public Health Assessment-Agriculture 

Street Landfill, New Orleans, Orleans Parish, Louisiana, Atlanta, GA: ATSDR (June, 1999); 

Alicia Lyttle, Agriculture Street Landfill Environmental Justice Case Study, University of 

Michigan School of Natural Resources, Ann Arbor, MI (January 2003) 

tions triggering asthma and exposing children to lead. High blood pressure, diabetes 

and cancer were also prevalent in the African American community. 

DISPLACEMENT POST KATRINA

Residents in the Gulf Coast region fled the hurricane zone. More than a million 

Louisiana residents fled Hurricane Katrina. An estimated 100,000 to 300,000 Louisiana residents alone could end up permanently displaced. Nearly 100,000 Katrina 

evacuees are in 1,042 shelters scattered in 26 States and the District of Columbia. 

Katrina has left environmental contamination in Gulf Coast neighborhoods that will 

have to be cleaned up before residents can move back. An estimated 150,000 houses 

may be lost as a result of standing in water from Katrina. We are still grappling 

with understanding the full impacts of both Hurricanes Katrina and Rita. 

Thousands of hurricane survivors along the Gulf Coast must now cope with the 

loss of relatives and friends, homes, and businesses and, what we term, loss of community. Katrina displaced just under 350,000 school children in the Gulf Coast. An 

estimated 187,000 school children have been displaced in Louisiana, 160,000 in Mississippi and 3,118 in Alabama. Katrina closed the entire New Orleans school system 

indefinitely. One hundred and twenty-five thousand New Orleans children alone are 

attending schools elsewhere. Over 93 percent of New Orleans schools students are 

African American. Evacuees’ children are being enrolled in schools from Arizona to 

Pennsylvania, including almost 19,000 who will be attending schools in Texas. 

For the survivors who lost everything, it involves coping with the stress of starting all over. Two weeks after Katrina struck, more than 2,500 children were still 

separated from their families. One can only imagine the mental anguish these families are going through. On the heels of this disaster, Hurricane Rita struck the 

coastal areas again. 

There is much speculation about what the new New Orleans will look like: whether the Mississippi Gulf Coast should now consider land-based Casinos versus riverboats; the social economic and political structure of ‘‘New’’ New Orleans; rebuilding 

a green and sustainable Gulf Coast region that embraces innovative green building 

technologies and principles; construction of a levee system that will protect New Orleans; and development of environmentally and economically sustainable communities must all be explored simultaneously. None of these concepts are relevant unless the cleanup in the region is properly conducted and completed. This conclusion 

is not based on speculation. The community of Agriculture Street Landfill in the 

City of New Orleans has lived the nightmare of discovering that their homes were 

built on top of a landfill that was reopened to dispose of the tons of debris resulting 

from Hurricane Betsy. 

HURRICANE BETSY—NEW ORLEANS, LA

Hurricane Betsy struck the State of Louisiana and the City of New Orleans in 

1965. Betsy was then the ‘‘most destructive hurricane on record to strike the Louisiana coast.’’1 The damage and flooding throughout the State covered 4,800 square 

miles, killed 81 persons, caused the evacuation of 250,000 persons, and disrupted 

transportation, communication, and utilities services throughout the eastern coastal 

area of Louisiana for weeks. Betsy hit the mostly Black and poor New Orleans 

Lower Ninth Ward especially hard. This is the same neighborhood that was inundated by floodwaters from Katrina and then suffered the indignity of a second flooding by Rita. Over 98 percent of the Lower Ninth Ward residents are Black and a 

third live below the poverty level. 

Many Black New Orleans residents still believe that white officials intentionally 

broke the levee and flooded the Lower Ninth Ward to save mostly white neighborhoods and white business districts. In 1965, a disproportionately large share of 

Lower Ninth Ward residents did not receive adequate post-disaster financial assistance in the form of loans and other support to revitalize the area. Betsy accelerated 

the decline of the neighborhood and out-migration of many of its longtime residents. 

Debris from Betsy was buried in the Agricultural Street Landfill located in a predominately Black New Orleans neighborhood. Over 390 homes were built on the 

northern portion of the site from 1976-1986. The Agricultural Street Landfill neighborhood was added to the National Priorities List as a Superfund site in 1994.2
61

3Robert D. Bullard, The Quest For Environmental Justice: Human Rights and the Politics of 

Pollution (San Francisco: Sierra Club Books, 2005). 4Alcia Lyttle, ‘‘Agricultural Street Landfill Environmnetal Justice Case Study,’’ University of 

Michigan School of Natural Resource and Environment found at http//www.umich.edu.∼snre492/

Jones/agstreet.htm. (Accessed on October 6, 2004). 5Robert D. Bullard, The Quest For Environmental Justice: Human Rights and the Politics of 

Pollution. 

NEW ORLEANS AGRICULTURE STREET LANDFILL COMMUNITY

Dozens of toxic time bombs along Louisiana’s Mississippi River petrochemical corridor, the 85-mile stretch from Baton Rouge to New Orleans, make the region a 

major environmental justice battleground. The corridor is commonly referred to as 

Cancer Alley. Black communities all along the corridor have been fighting against 

environmental racism and demanding relocation to areas away from polluting facilities.3

Two largely Black New Orleans subdivisions, Gordon Plaza and Press Park, have 

special significance in terms of environmental justice and emergency response. Both 

subdivisions are built on a portion of land that was used as a municipal landfill for 

more than 50 years. The Agriculture Street Landfill, covering approximately 190 

acres, was used as a city dump as early as 1910. Municipal records indicate that 

after 1950, the landfill was mostly used to discard large solid objects, including trees 

and lumber, and it was a major source for dumping debris from the very destructive 

1965 Hurricane Betsy. It is important to note that the landfill was classified as a 

solid waste site and not a hazardous waste site. 

In 1969, the Federal Government created a home ownership program to encourage 

lower income families to purchase their first home. Press Park was the first subsidized housing project of this program in New Orleans. The Federal program allowed tenants to apply 30 percent of their monthly rental payments toward the purchase of a family home. In 1987, seventeen years later, the first sale was completed. 

In 1977, construction began on a second subdivision, Gordon Plaza. This development was planned, controlled, and constructed by the U.S. Department of Housing 

and Urban Development (HUD) and the Housing Authority of New Orleans 

(HANO). Gordon Plaza consists of approximately 67 single-family homes. 

In 1983, a portion of the Agriculture Street Landfill site was purchased by the 

Orleans Parish School Board as a site for a school. The fact that this site had previously been used as a municipal dump prompted concerns about the suitability of 

the site for a school. The school board contracted engineering firms to survey the 

site and assess it for contamination and hazardous materials. Heavy metals and 

organics were detected. 

Despite the warnings, Moton Elementary School, an $8 million state-of-the-art 

public school opened with 421 students in 1989. In May 1986, EPA performed a site 

inspection (SI) in the Agriculture Street Landfill community. Although lead, zinc, 

mercury, cadmium, and arsenic were found at the site, based on the Hazard Ranking System (HRS) model used at that time, the score of three was not high enough 

to place them on the National Priority List (NPL). 

On December 14, 1990, EPA published a revised HRS model in response to the 

Superfund Amendments and Reauthorization Act (SARA) of 1986. At the request of 

community leaders, in September 1993, an Expanded Site Inspection (ESI) was conducted. On December 16, 1994, the Agriculture Street Landfill community was 

placed on the NPL with a new score of 50. 

The Agriculture Street Landfill community was home to approximately 900 African American residents. The average family income is $25,000 and the educational 

level is high school graduate and above. The community pushed for a buy-out of 

their property and to be relocated. However, this was not the resolution of choice 

by EPA. A cleanup was ordered at a cost of $20 million, the community buy-out 

would have cost only $14 million. The actual cleanup began in 1998 and was completed in 2001.4

The Concerned Citizens of Agriculture Street Landfill filed a class action suit 

against the City of New Orleans for damages and relocation costs. It took 9 years 

to bring this case to court.5 The case was still pending before Katrina struck. It is 

ironic that the environmental damage wrought by Katrina may force the cleanup 

and relocation of the Agriculture Street Landfill community. But nothing can give 

them back their health and well being, or replace the family members and friends 

who might still be with them were it not for the health effects of living on a landfill. 
62

THE MOST VULNERABLE

The majority of households and businesses in the 12 Hurricane Katrina affected 

counties in Alabama, Mississippi, and Louisiana do not have flood coverage. FEMA 

estimates that 12.7 percent of the households in Alabama, 15 percent in Mississippi, 

and 46 percent in Louisiana have flood insurance. Similarly, on 8 percent of the 

businesses in hurricane-affected counties in Alabama, 15 percent in Mississippi, and 

30 percent in Louisiana have flood coverage. 

Generally, people of color have higher levels of physical damage than whites 

largely due to segregated housing in older, poorly built homes. Black households are 

less likely to have insurance to cover storm losses and temporary living expenses. 

Because of racism and racial redlining, blacks are more likely than whites to receive 

insufficient insurance settlement amounts. Blacks are less likely than whites to 

have insurance with major companies as a result of decades of insurance redlining. 

Because of the legacy of ‘‘Jim Crow’’ segregation, many African American consumers in the Louisiana, Mississippi, and Alabama Gulf Coast region may be concentrated in the secondary insurance market—smaller and less well-known insurance firms. This could prove problematic for Katrina victims. Nearly a dozen small 

insurance companies collapsed after Hurricane Andrew, which cost the industry 

about $23 billion in today’s dollars. Andrew was the most expensive single hurricane 

until Katrina. The same thing could happen after Katrina. Many, if not most, 

Katrina low and moderate-income victims may not have resources to hire lawyers 

to fight the insurance companies. 

CLEAN-UP STANDARDS AND PROTECTION OF PUBLIC HEALTH

Hurricane Katrina has left environmental contamination in Gulf Coast communities that will have to be cleaned up. In the New Orleans area alone an estimated 

22 million tons of debris must be cleaned up and 145,000 cars ruined by hurricane 

floodwater will have to be disposed of. How, when, and at what level (methods of 

clean-up and clean-up standards) contaminated neighborhoods get cleaned up is a 

major environmental justice concern for African American communities. 

Where the hurricane debris and waste end up is another issue that causes concern because of pre-existing power arrangements and the historical legacy of unequal protection and differential treatment provided to communities of color. It is 

important that Government officials not repeat the mistakes made in 1965 with debris from Hurricane Betsy disposed in an African American area—later to become 

the Agricultural Street Landfill Superfund site community. Black communities in 

the South, as documented in Dumping in Dixie: Race, Class, and Environmental 

Quality, are dotted with landfills, toxic waste dumps, and hazardous waste disposal 

sites. 

Katrina toppled offshore oil platforms and refineries sending shock waves 

throughout the economy with the most noticeable effects felt at the gas pump. 

Katrina and Rita temporarily closed all oil operations and most natural gas operations in the Gulf region that supplies 29 percent of U.S.-produced oil and 19 percent of U.S.-sourced natural gas. 

Katrina caused an unprecedented environmental and health crisis. The powerful 

storm caused 11 oil spills releasing 7.4 million gallons of oil. It also hit 60 underground storage tanks, five Superfund sites, and numerous hazardous waste facilities. More than 1,000 drinking-water systems were disabled and lead and ecoli in 

the floodwaters have far exceeded the EPA’s safety levels. 

Tests from the U.S. EPA and independent sampling conducted by the Louisiana 

Environmental Action Network (LEAN) in several New Orleans areas exceed Federal standards for residential communities. LEAN sampling found high levels of 

polynuclear aromatic hydrocarbons (PAHs) exceeding residential standards. Many 

PAHs are known or suspected of causing cancer. The testers found 12 PAHs in sediments the Lower 9th Ward. One, benzo (a) pyrene, was at 195 parts per billion, 

three times greater than the EPA residential standard of 62 parts per billion. Arsenic, another known cancer-causing agent, was found at concentration 75 times 

higher than residential standards. Tests revealed elevated levels of heavy metals 

and volatile organic chemical associated with petroleum products. Ten PAHs were 

found on Agricultural Street, designated a Superfund site, with benzo (a) pyrene at 

concentration 2.7 times higher than EPA residential standards. The arsenic level in 

the Morrison Road area was 13.3 times higher than EPA residential standards. 
63

RESPONSES BY BEVERLY WRIGHT TO ADDITIONAL QUESTIONS FROM

SENATOR BOXER

Question 1. Dr. Wright, according to the Louisiana Contractor’s Licensing Board, 

the number of applications for a contractor’s licenses nearly doubled in September, 

from 120 to 224. In the first week of October, the number of applications increased 

an additional 300 percent. Do you believe it is necessary to limit contractor liability 

for injuries to ensure enough contractors are interested in the billions of dollars of 

post-Katrina contractor work? 

Response. No. According to Charles G. Marceaux, the executive director of the 

Louisiana’s Contractor Licensing Board, for the 8 months ended August 31, 2005, 

application volume averaged 183 per month. For the period September 1st through 

October 14th, 2005, applications surged to 540 per month. Thus, there is no reason 

to limit contractor liability for injuries to ensure enough contractors are interested 

in the post-Katrina contractor work due to the fact that the LA Contractor Licensing 

Board has seen such an overwhelming demand for contractor licenses!

Question 2. Dr. Wright, I believe that you have experience with worker protection 

issues. In your experience, is preventing injuries so impossible that contractors must 

be relieved of responsibility for negligence to ensure cleanup work gets done? Also, 

is work more likely to be done properly or do we risk further damage if negligence 

is considered acceptable in Government contracts? 

Response. No. S. 1761 would immunize contractors from liability for personal injuries or property damage in most cases. This would be unfair to the victims of contractor wrongdoing and would burden the Federal Government with the cost of any 

personal injuries and damages caused by contractors. In addition, we’d risk further 

damage to worker health and safety and the environment if there was no negligence 

standard in Government contracts. The bill would immunize contractors by improperly expanding the Government Contractor Defense far beyond its traditional purpose, turning it into a blanket immunity provision for most cases. Government Contractor Defense is appropriate only if in fact it was the Government’s negligence 

that caused the injury. The defense generally applies only if the Government provides ‘‘precise specifications to which the contractor must adhere’’—such as specifications for manufacturing military airplanes. The Government instructions must 

be very specific, mandatory, and nondiscretionary. 

Section 5(d) of this bill would create a presumption that all elements of the Government Contractor Defense are satisfied by nothing more than a finding that the 

Army Corps’ Chief of Engineers certified the contract as necessary for disaster recovery (or the contract is a subcontract to a certified contract and not expected to 

exceed $10 million). That presumption can only be overcome by evidence that the 

contractor acted fraudulently or with willful misconduct in submitting information 

to the Chief of Engineers at the time of the contract. In other words, the defense 

will almost always apply to disaster contractors.

Question 3. Dr. Wright, S. 1761 eliminates the right of private parties to bring 

claims under the environmental laws. Such claims could include situations where 

contamination ruins drinking water supplies. What does this exemption mean to the 

people in the New Orleans community where you are from? What do you think 

these changes in the law will mean to the future reconstruction of New Orleans? 

Response. S. 1761 ignores this basic reality and principles of fairness; instead, the 

bill proposes to exempt contractors from citizen suits brought under Federal environmental laws. Specifically, the bill would bar any citizen suit against a contractor 

under the Clean Water Act, the Oil Pollution Act, the Resource Conservation and 

Recovery Act, Superfund and numerous other Federal laws. This means that citizens could not hold contractors responsible if they illegally discharge polluted wastewater or oil into rivers or wetlands, illegally dumping hazardous waste or burning 

toxic materials. Even where the contractor’s actions constituted negligence or recklessness, citizen suits under these statutes would be barred. 

People of color and low income communities in New Orleans are disproportionately exposed to toxic sites. The Mississippi River Chemical Corridor, between Baton 

Rouge and New Orleans, contains about 140 petrochemical plants, six oil refineries 

and numerous state and national Superfund sites. 

If this bill is enacted, the citizens of New Orleans will be slammed with yet another man-made another disaster. This disaster will appear insidiously after citizens 

would have spent more of their limited assets trying to rebuild New Orleans only 

to find that the construction was shoddy and dangerous due to whole sale waiver 

of contractor’s liabilities. 
64

RESPONSES BY BEVERLY WRIGHT TO ADDITIONAL QUESTIONS FROM

SENATOR JEFFORDS

Question 1. Dr. Wright, how would S. 1761 impact low income and minority communities in the Gulf Coast Region? 

Response. Under the pretext of aiding the recovery of hurricane-ravaged areas in 

the Gulf Coast, S. 1761 would put the public at greater risk by removing important 

deterrents against irresponsible conduct that harms public health or environmental 

safety. These deterrents, in of themselves, are not usually adequate to protect the 

public from environmental injustices. With the existing deterrents, environmental 

injustices have continued to plague the New Orleans and Gulf Coast region for decades. For example, the 85-mile stretch of the Mississippi River between Baton 

Rouge and New Orleans—the ‘‘Louisiana Petrochemical Corridor’’—is home to more 

than 140 oil refineries and chemical plants, accounting for one-fourth of the nation’s 

petrochemical production. These factories have for decades spewed a toxic brew of 

pollutants into local communities. Just in the state of Louisiana, more than 50 percent of all residents who live within 3 miles of a refinery are African American. Routine operations at these plants and risky past and present waste disposal practices 

are what provided the ingredients to contaminate the toxic mud that now fills New 

Orleans’ streets. With S. 1761’s proposed waiver of contractor’s liabilities around 

Katrina activities, those who are most at risk, low income communities of color, will 

only face further environmental hazards as there will be less incentives by contractors to protect public health and environmental safety. During times of natural disaster are when disproportionately impacted communities need public health and environmental protections the most.

Question 2. Dr. Wright, how will S. 1761 impede rebuilding efforts in the Gulf 

Coast Region? 

Response. See answer to question No. 3 from Senator Boxer. 

RESPONSE BY BEVERLY WRIGHT TO ADDITIONAL QUESTION FROM

SENATOR THUNE

Question 1. In your opinion, are there any instances where special procedures will 

need to be used for emergency environmental cleanup? 

Response. Yes. Of particular concern are toxic ‘‘hot spot’’ sites that were impacted 

by Katrina. Big industrial facilities, Superfund sites, and other toxic hotspots should 

be far more carefully investigated, with comprehensive sampling and on-site analysis. During cleanup, special attention and priority should be devoted to dangerous 

releases from these sites should be contained immediately, and longer-term cleanup 

planned, initiated, and budgeted. 

Specifically, as you know, the flood waters that inundated these regions carried 

a mixture of soil, sewage, and industrial contaminants. The flood waters left behind 

a layer of sediment—in some places several feet thick—that still covers vast areas, 

including many neighborhoods in which family’s have already returned to live. 

Authorities must immediately remove surface sedimentation from public and private areas in the affected flood areas, as well as from hotspot contamination sites 

such as the Agriculture Street Landfill, and the areas surrounding the former 

Thompson-Hayward pesticide facility. In doing so, FEMA should utilize EPA’s 

screening levels for soil quality, adjusted to take into account all likely routes of exposure in light of ongoing construction, demolition, and cleanup activities which will 

unquestionably create more of an inhalation risk than is covered by EPA’s standards. In addition, we urge use of the most recent and scientifically sound cancer risk 

estimates for arsenic ingestion from the National Academy of Sciences’ 2001 report, 

available at www.nap.edu/books/0309076293/html. 

Finally, a uniform Federal standard must be employed by EPA in gauging environmental health risks in areas affected by Hurricane Katrina and Rita. EPA’s current reliance on differing state standards is at odds with EPA’s oversight responsibility under the currently activated National Contingency Plan within the Hurricanes Katrina and Rita Federal disaster areas. This is most apparent when the EPA 

utilizes, without any opportunity for public comment or input, environmental health 

criteria far less stringent than Federal safeguards. 

STATEMENT OF WARREN PERKINS, VICE PRESIDENT, RISK MANAGEMENT, BOH

BROTHERS CONSTRUCTION COMPANY

Thank you, Mr. Chairman, for the opportunity to address you and the other members of this Subcommittee. My name is Warren Perkins, and I am a Vice President 
65

of Boh Bros. Construction Company (hereinafter ‘‘Boh Bros.’’). I serve as the company’s Risk Manager. 

I am here today to express the company’s views on the matters before this Subcommittee, but as I begin, let me just say a few words for and on behalf of the Mr. 

Robert S. Boh, who serves as the company’s President. Mr. Boh wanted to be here 

today, to personally represent the company, and he deeply regrets that he cannot. 

He asks you to appreciate that he simply cannot leave the scene of the great devastation that Hurricane Katrina has wrought on the Gulf Coast and New Orleans, in 

particular. There is simply too much to do. 

Boh Bros. is a general construction contractor native to Louisiana and based in 

New Orleans. It is closely held, 96 years old, and currently in its third generation. 

It is a union contractor that works under collective bargaining agreements in Louisiana. It is, however, large enough to perform civil work throughout Gulf Coast, 

building bridges, paving roads, constructing underground drain and sewer systems, 

driving pile, and erecting levees and other and flood protection systems. 

Boh Bros. and its employees are among the many victims of Hurricane Katrina. 

The company lost equipment and its work was interrupted. The hurricane shut 

down all of its projects in the Greater New Orleans area, and even today, only a 

handful of those projects have resumed. Many are in jeopardy of being canceled. 

Moreover, as the storm approached, all of the employees in the Greater New Orleans area had to evacuate to other locations. I had to move my family to an Aunt’s 

house in Montgomery, AL, and for three weeks, I had to work out of an office setup 

for me in downtown Montgomery. When I finally returned to New Orleans, I learned 

that a foot of water had flooded my home. I have been living in and working on 

my home ever since, and commuting to Baton Rouge daily. 

As soon as the storm passed, Boh Bros. started scrambling to locate its people, 

to ensure that they were safe, and to let them know that we were temporarily moving our headquarters to our small office in Baton Rouge. We posted an emergency 

notice on our company web site; we set up temporary e-mail addresses for our office 

people; and we began calling people on their cell phones, trying to locate as many 

as possible. 

It took a week for us to locate just 50 percent of them. It also took several days 

and several helicopter rides over New Orleans to assess the condition of out main 

office, equipment yard and job sites, and the damage done to the city as a whole. 

Before Katrina hit, Boh Bros. had over 180 pieces of equipment worth over $60 million in the Greater New Orleans Area, and it took us two weeks to recover just 50 

percent of that equipment. Many pieces were damaged, destroyed or lost. 

During that time, we also set up a ‘‘command center’’ where we received emergency calls for recovery operations, including emergency repairs to the breached levees. Each morning at 7:00 a.m., our President met with our field department leaders 

and project superintendents to plan the coming day’s activities and share information on any new developments. While we were cramped into our Baton Rouge quarters, and lacked our computer and other basic systems, we were determined to get 

the job done. We worked 15 to 20 hours per day, and 7 days a week, for an entire 

month. We knew we were one of the few companies capable of providing emergency 

service to our community. We were also committed to getting our employees paid, 

and to keeping them secure. 

Some of the first phone calls came from the Louisiana Department of Transportation and the U.S. Army Corps of Engineers. We were asked to deploy personnel 

and equipment to the downtown area, and to stop the flooding. By the end of the 

first week, we had received more than ten requests from Government agencies to 

fill breaches in the levees, to pump water out of the flooded areas, to move barges 

blocking parts of the inland waterway system, and to repair bridges over those waterways. We trusted the people calling us, and so we immediately went to work. We 

did what we had to do. 

In the following month, we received many more calls from Government agencies. 

We also bid for and were awarded a contract to repair of the I-10 Twin Span bridge 

over Lake Pontchartrain, which runs between New Orleans and Slidell, and which 

the storm surge had severely damaged. We were told we had 45 days to get twoway traffic moving on one span, and I am extremely proud to tell you that we did 

it in 29 days. 

For the first few days, our temporary headquarters was chaotic, with 200 employees working in an office that normally housed only 40 employees. But we persevered. We were often acting on oral instructions, but determined to be faithful to 

those instructions, because we knew that the Government agencies could not do it 

on their own. It was all about taking orders and then following them, to the letter. 

To get to the areas that needed our help, we had to find access routes through 

flooded streets and around both debris and power lines. We had to set up supply 
66

lines outside the area capable of providing our people with literally everything they 

needed, from water to food to fuel. 

We also had to do our very best to protect our people from environmental and 

other hazards. We made sure to comply with all OSHA and maritime regulations, 

but that was just the beginning. As soon as we could, we hired two engineering companies to do environmental testing of our worksites before we moved our people into 

them. We talked to industrial hygienists about the personal protective equipment 

we should use. We had all of our people vaccinated for Hepatitis A & B and gave 

them Tetanus and Diphtheria shots. We even hired security guards to protect our 

people from the sniper activity encountered in and around the areas where they had 

to work. All of our guards were former members of specialized forces in the military. 

In the early days, we were ready to start working on little more than a handshake. We did not demand the time we would normally take to scrutinize contractual terms and conditions. We were ready to go. We knew that we were incurring 

great expenses, and that we would have to meet our payroll, but we expected the 

Government agencies eventually to sign the contracts, and we trusted them to pay 

us fairly. The U.S. Army Corps of Engineers had come to the Shaw Group, another 

Louisiana firm, and Boh Bros., the most qualified and capable construction contractors in the area, asking for our immediate help, and we were not going to let the 

country down. 

Nor did we dwell on the risk of tort litigation. We knew that the trial lawyers 

were out there, but we simply could not take the time to imagine that someone 

would sue us for trying to save the city. The only risk on our minds was the risk 

that New Orleans would simply cease to exist. 

Now, however, we wonder. Do we risk tort litigation over the actions that we have 

taken, and continue to take? Would the trial lawyers really sue us simply for trying 

to put our community back together? Some people disagree with the contracting and 

regulatory agencies, and believe that the agencies are not doing enough. Would such 

people actually sue us simply for following the agencies’ instructions, or relying on 

their conclusions? 

We understand that the contracting agencies have to guide and direct the recovery effort. If we fail to follow their instructions, we expect to have a problem. We 

also have to answer to the Environmental Protection Agency, the Occupational Safety and Health Administration, and other regulatory agencies. If we fail to comply 

with their standards, we expect them to take to take some kind of enforcement action. We also expect and intend to provide financial support for any employees injured during the course of their employment, and to pay their medical bills. As required, we carry and continue to pay the premiums for workers compensation insurance, and we know that those premiums will climb if we fail to take the steps necessary to safeguard our workers. 

The problem is that we cannot be sure that the agencies are in charge. The problem is the future tort litigation could rewrite the rules, long after the fact. 

Boh Bros. has simply responded to the many requests that the U.S. Army Corps 

of Engineers and other Government agencies have made of our company. At their 

request, and as they instructed, we have, for example, made temporary repairs to 

New Orleans’ flood protection system. These temporary repairs are intended to protect the city only for a short time, as the Corps and other Government agencies develop and implement permanent solutions to the many problems that Hurricane 

Katrina revealed. But we really do not know how much time the agencies will require. The time could stretch into the 2006 hurricane season and beyond. If a future 

hurricane breached any one or more of these temporary repairs, would the trial lawyers sue the Government agencies or Boh Brothers? 

The exposure is real, even if, as we are confident, our work meets all relevant 

standards. Litigation takes an enormous toll on any company. The costs of litigation 

are enormous. They include both legal and expert witness fees, and a host of indirect expenses. Time is lost. Employees are distracted. Insurance carriers may hesitate to provide future coverage. And all too often, a company’s reputation is both 

wrongly and irreparably damaged. 

Since the hurricane hit New Orleans, the trial lawyers have already filed one 

meritless class action against Boh Bros. While based on events that preceded the 

hurricane, it is highly instructive. It demonstrates that the trial lawyers are already 

hoping to profit on the disaster, and it reveals some of the potentially great costs 

involved in simply being sued. The complaint alleged that Boh Bros. had defectively 

constructed a bridge that is very close to the area where the 17th Street Canal 

floodwall failed, and that we were therefore responsible for the flooding of an entire 

neighborhood. The potential liability was enormous. In fact, our company did not 

even work on the bridge. The plaintiffs’ attorney did no research to determine the 

facts. He simply assumed that Boh Bros. must have been involved. The complaint 
67

was quickly dismissed. But not until the plaintiffs’ lawyer had gone on the evening 

news to make his sensational allegations and cause lingering damage to our good 

name and reputation. 

When asked to do the right thing, for New Orleans and its residents, Boh Bros. 

responded. Now, it is time for Congress to do the same. Now it is time for Congress 

to give the contractors working hard to revive New Orleans and the remainder of 

the Gulf Coast with some reasonable measure of protection from unlimited tort liability simply for being there to meet the need. Congress should quickly enact S. 

1761. 

Boh Bros. is a member of the Associated General Contractors of America, and I 

can assure you that responsible contractors throughout the country are playing close 

attention. They are aware of what has happened to the contractors who responded 

to the terrorist attacks on New York City. They are aware of the litigation that followed. They are responsible corporate citizens, but they are deeply concerned. If 

they cannot rely on the instructions that contracting agencies give them, or the 

guidance that regulatory agencies provide, they may find it hard to respond to the 

next natural or other disaster. 

In closing, let me just add that the Greater New Orleans Area requires your particular attention, as it heavily depends, for its very survival, on the design and construction of a new flood protection system. For itself, its employees, and its community, Boh Bros. also urges you quickly to provide enough funding to design and construct a flood protection system that will protect the city from future hurricanes. 

In our opinion, if proper funding is not quickly provided, many of the city’s residents 

will neither return nor rebuild. 

Thank you again for providing Boh Bros. with an opportunity to testify. I would 

be glad to answer any questions you may have. 

RESPONSES BY WARREN PERKINS TO ADDITIONAL QUESTIONS FROM SENATOR BOXER

Question 1. Mr. Perkins, the Washington Post reported on September 20th, that 

a contractor’s trade group, the Association of General Contractors of America, was 

drafting legislation to shield contractors from claims by workers. I believe that you 

company is a member of this trade association and the President of Boh Brothers 

was quoted in the article in support of this legislation. 

Did Boh Brothers or the General Contractors of America participate in the drafting of S. 1761 under discussion? If so, please specifically describe how? 

Response. I believe that you are referring to the Associated General Contractors 

of America, the oldest and largest of the nationwide trade associations in the construction industry, commonly known, throughout the country, as ‘‘AGC.’’

As a threshold matter, I would certainly hope and expect that any member of 

Congress contemplating legislation on or relating to the construction industry to solicit AGC’s views on such legislation. A nonprofit corporation founded in 1918 at the 

express request of President Woodrow Wilson, AGC now represents more than 

32,000 firms in more than 98 chapters throughout the United States. AGC members 

include more than 7,000 of the nation’s leading general contractors, 11,000 specialty 

contractors and 13,000 material suppliers and service providers to the construction 

industry. AGC members construct commercial buildings, shopping centers, factories, 

warehouses, highways, bridges, tunnels, airports, waterworks facilities and multifamily housing units; and they prepare sites and install the utilities necessary for 

housing development. Among AGC’s members are literally thousands of both union 

and open shop contractors. While it represents and serves the nation’s largest construction contractors, the vast majority of its members are small businesses. I simply cannot think of a better place for any member of Congress to go for a fair and 

balanced view of how Federal legislation would be likely to affect the construction 

industry as a whole. 

I am pleased to confirm that Boh Bros. has long been an active member of both 

AGC and its Louisiana chapter, that my company has encouraged AGC to support 

S. 1761, and that AGC has expressed such support. I am, however, confused by your 

reference to legislation that would ‘‘shield contractors from claims by workers.’’ I am 

not aware of any such legislation. 

In its article, the Washington Post referred to something that would ‘‘limit [contractors’] liability from lawsuits,’’ but of course, the workers compensation statutes 

in all 50 states and the District of Columbia already substitute a no-fault compensation system for the litigation that might otherwise arise out of any injuries or illnesses that construction workers suffered in the course of their employment, and 

S. 1761 expressly provides that it does not apply to ‘‘any claim for loss under any 

workers compensation statute.’’ Some workers compensation laws do permit employ-
68

ees to sue their employers under extenuating circumstances, but S. 1761 also provides that it shall not ‘‘affect[] the liability of any person or entity for recklessness 

or willful misconduct.’’

In sum, it is one thing to limit contractor’s liability from lawsuits and quite another to shield them from workers claims. It is one thing to support S. 1761 and 

quite another to diminish workers’ rights. Boh Brothers supports S. 1761 on the understanding that it does not diminish workers rights, and in a press release announcing its support for the bill, AGC expressed the same understanding that ‘‘[a]ll 

environmental, safety and health, labor and ethics laws would continue to apply.’’

Boh Bros. did not participate in the drafting of S. 1761, either directly or through 

AGC. I would assume that AGC communicated its support for such legislation to 

Senator Thune, but I was not involved in any meetings or other communications 

with the Senator, and I cannot say whether or to what extent he relied on any information that AGC did provide.

Question 2. Mr. Perkins, you indicated in your testimony that you did your best 

efforts to protect people from environmental and other hazards in your New Orleans 

cleanup efforts. The bill, S. 1761, would relieve your company of its liability if it 

is negligent and injures people or property. 

Are you concerned that Boh Brothers’ best efforts are no better than negligent 

performance, and do you now believe that Boh Brothers must be shielded as a result? 

Response. In my testimony I referred to protecting ‘‘our people from environmental and other hazards’’. I was referring to protecting our employees. As stated 

above, Bill S. 1761 has nothing to do with relieving our company of its liability and 

responsibility to our employees. In the testimony Senator Boxer has referenced, I 

was simply painting a picture of the hazards Boh Bros. faced in order to respond 

to the emergency calls for help to seal the levee breaches, to restore the pump system, to dewater flooded areas, etc. 

S. 1761 would limit Boh Brother’s risk of liability to private third parties only for 

work that the Government requested, directed and controlled, and expressly found 

necessary for the Gulf Coast’s recovery from Hurricane Katrina and future such catastrophes. The bill would not apply to any or all of my company’s activities, even 

in New Orleans, nor would it apply to any or all activities of other recovery contractors on the Gulf Coast. 

Nor would it excuse any failure to meet the Government’s expectations. Quite to 

the contrary, my company would still have to satisfy all terms and conditions of all 

Government contracts, and to comply with all Federal, State and local regulations 

that apply to the work, including but not limited to all environmental, safety and 

health regulations, and all employment laws. The Government would retain tight 

control. 

The problem is that meeting all of the Government’s expectations will not be 

enough to protect my company from tort liability, much less litigation. As things 

stand today, my company can fully perform all Government contracts for the recovery of the disaster zone, and it can do so to the Government’s express satisfaction, 

and in full compliance with all regulatory requirements—and still incur liability for 

‘‘negligence.’’ As we heard at the hearing on November 8, 2005, over 5,000 lawsuits 

have been brought against the contactors that responded to the attacks on the 

World Trade Center, and yet, to the best of my knowledge, not one of the contracting or regulatory agencies has found fault with their practices. The tort system 

has left juries free to set different standards, or to reinterpret existing standards, 

or to second-guess what these contractors ‘‘should have known,’’ long after the horror of the 9/11 disaster has passed, and memories have faded. In New York, the Occupational Safety and Health Administration obviously thought that it was enough 

for every contractor to provide a respirator to every worker. At the hearing, it was 

seriously suggested that the contractors should have gone further, and indeed, that 

they should have physically forced not only employees but also third parties who 

refused to wear their respirators off of the site. 

By all accounts, Hurricane Katrina was an unprecedented event. It was unlike 

anything that this country had ever seen. Just how was a ‘‘reasonable person’’ supposed to respond to the facts on the ground? Just what was it that such a person 

‘‘should have known’’? Moving construction workers and heavy equipment into New 

Orleans was and is a far cry from driving a car down a highway. The rules of the 

road to New Orleans recovery were are far from clear. 

Yes, I am concerned that someone far removed from the actual disaster might decide at some point in the future that my company’s best efforts were not enough. 

At the leisurely pace of a jury trial, with the benefit of hindsight, comfortable in 

the knowledge that my company’s assets are the only thing at stake, and with an 

understandable sympathy for someone who has suffered a loss, a jury might decide 
69

that my company should have know something that it did not know, or to use your 

pejorative phrase, that even my company’s best efforts were ‘‘no better than negligent performance.’’

I am even more concerned that the cost of defending my company against allegations that it was ‘‘negligent.’’ It would cost tens if not hundreds of thousands of dollars to defend my company against such allegations. Even if, as I believe, my company did everything that anyone can expect of a ‘‘reasonable person,’’ the cost of 

making that point could be enough to drive my company out of business, not to 

mentions the thousands of small and minority-own businesses in the Gulf Coast. 

RESPONSE BY WARREN PERKINS TO AN ADDITIONAL QUESTION FROM

SENATOR JEFFORDS

Question 1. Mr. Perkins, in your testimony, on page 5, you state that: ‘‘The problem is that we cannot be sure that the agencies are in charge. The problem is that 

future tort litigation could rewrite the rules, long after the fact.’’ Please clarify what 

you mean by these statements. 

Response. The tort system is entirely independent of the contracting and regulatory agencies responsible for directing and overseeing the response to a major disaster, and the tort system is therefore free to second-guess any direction or guidance 

that the contracting and regulatory agencies give to the contractors actually on the 

ground, undertaking search and rescue, repairing public infrastructure, remediating 

polluted areas or removing debris. It follows that the recovery contractors cannot 

take the agencies’ direction, or rely on their guidance, without risking tort litigation 

and perhaps liability. Whatever the agencies say today, a jury might later say that 

the contractors should have done something differently. 

As explained to Senator Boxer, a construction contractor can fully perform all 

Government contracts for the recovery of a disaster zone, and it can do so to the 

Government’s express satisfaction, and in full compliance with all regulatory requirements—and still incur liability for ‘‘negligence.’’ As we heard at the hearing on 

November 8, 2005, over 5,000 lawsuits have been brought against the contractors 

that responded to the attacks on the World Trade Center, and yet, to the best of 

my knowledge, not one of the contracting or regulatory agencies has found fault 

with their practices. The tort system has left juries free to set different standards, 

or to reinterpret existing standards, or to second-guess what these contractors 

‘‘should have known,’’ long after the horror of the 9/11 disaster has passed, and 

memories have faded. In New York, the Occupational Safety and Health Administration obviously thought that it was enough for every contractor to provide a respirator to every worker. At the hearing, it was seriously suggested that the contractors should have gone further, and indeed, that they should have physically forced 

not only employees but also third parties who refused to wear their respirators off 

of the site. 

Under these circumstances, contractors have to hesitate. The have to pause and 

reflect on the direction and guidance that Government agencies are giving them, 

and to decide, case-by-case whether to do what they are told. What FEMA or the 

Corp of Engineers now finds critical to do, a jury could later find to be ‘‘negligent.’’ 

And what the agencies lose is their power to control an emergency situation. 

STATEMENT OF MICHAEL FEIGIN, EXECUTIVE VICE PRESIDENT, BOVIS LEND LEASE

Mr. Chairman, I would like to thank you, Senator Boxer and the committee for 

inviting me to participate in today’s panel, allowing me to discuss my company’s experience after the terrorist attacks on the World Trade Center on 9/11. My testimony today will outline our company’s response to the immense tragedy that occurred and offer perspective on the pitfalls and hazards with recovery and cleanup 

efforts following both terrorist and natural disasters. 

Natural disasters are impossible to prevent but proper planning is the essential 

element in coping and rebuilding following their occurrence. The proposed legislation we are discussing today, S. 1761, the Gulf Coast Recovery Act, addresses some 

of the problems following hurricane Katrina. I hope to draw upon the knowledge we 

gained through our 9/11 experience to draw parallels to Katrina and future natural 

disasters and encourage this committee to take into consideration the role private 

businesses play in helping Government with disaster relief. 

Supporting the needs of communities, Governments, commerce and industry on a 

local, national and multinational level, Bovis Lend Lease ranks among the world’s 

leading project and construction management companies. In the United States of 
70

America, Bovis Lend Lease is the nation’s second largest construction manager with 

coverage emanating from its 20 United States offices and in Latin America. 

I begin with a quote from our CEO at Bovis Lend Lease, Peter Marchetto ‘‘At 

‘‘Ground Zero’’, we saw ‘‘all the worst that you could imagine and all the best you 

could ever see.’’

At 1 p.m. on September 11, 2001, approximately 5 hours after the first attack, 

Pete received a call from the department of Design and Construction of the City of 

New York (DDC). They wanted Pete, together with a few others from Bovis Lend 

Lease (BLL), to come to what was being called Ground Zero to help DDC manage 

the daunting task of making sense of the chaos in an effort to save lives. Without 

a moment’s hesitation, Pete and other members of BLL went to help. 

That afternoon, BLL employees were working hand in hand with, and under the 

oversight of, the NYC DDC and the Office of Emergency Management. BLL and 

subcontractors retained by BLL on behalf of the City of New York, supplied labor, 

materials and equipment at ‘‘ground zero’’ for 9 months. 

Shortly after September 11, in addition to its work at Ground Zero, BLL answered 

the call for help from the city’s Economic Development Corporation by completing 

the Family Center at Pier 94 (this facility houses the Red Cross, NYPD, Medical 

Examiner and many others), a Command Center at Pier 92 and ferry slips at Pier 

11. All of this work was done in three days or less and completed on Sunday, September 16. 

Our debris removal work in the World Trade Center area included, at different 

times, search and rescue efforts, removal of debris, demolition work, construction of 

temporary structures and netting and scaffolding. BLL and the three other contractors asked to work at Ground Zero—Turner Construction, AMEC Construction and 

Tully Construction—each worked in a quadrant of Ground Zero. BLL began working 

in an area in the South West quadrant of ‘‘ground zero’’ that included the South 

WTC Tower and the Marriott Hotel. 

By January of 2002, DDC decided to assign a larger role in the management of 

demolition and construction operations at Ground Zero to an alliance between BLL 

and AMEC Construction, and to abandon the quadrant system. Tully Construction 

stayed on as a subcontractor to BLL and AMEC, and Turner left the site. 

The initial estimates by DDC and the Federal Government were that the recovery efforts, debris removal and site stabilization would take 2 years and cost over $1 

billion. The Contractors and others finished the work in 265 continuous days, 24 

hours per day. The Labor force peaked at 2,300 (including uniform services), and 

was stable at 1,700 for much of the period, which included about 250 Bovis personnel. BLL was particularly proud that we had no fatalities and only 36 reportable 

accidents with over 3.2 million man-hours worked. 

No consideration was given by the Contractors to liability issues or potential 

claims or lawsuits before beginning work on September 11. When asked to perform 

work on any other project, any one of these contractors would have been given the 

time to properly analyze the situation, the risks associated with the assignment, 

and the methods to manage those risks. The Contractors also would have determined how to insure whatever potential liability might arise. There was no time to 

do this before starting work at Ground Zero. Immediate response was necessary. 

It soon became apparent that these liability issues would have to be addressed. 

However, given the dangerous conditions, the retroactive nature and the unknown 

aspects of this unprecedented effort, commercial insurance companies would not provide the coverage needed and ultimately only limited coverage was obtained. 

After many months of work, discussions with many members of Congress from the 

New York delegation and our two New York Senate members, we received a commitment from Congress to fund a Captive Insurance Program for a broad range of 

third party liability claims including general liability, environmental liability, professional liability and marine liability. The Captive was funded with a one time paid 

in premium of $1 billion. After many months working with FEMA to establish the 

details of the program, the WTC Captive was formed. This WTC Captive Policy provides coverage for the City of New York as the Named Insured, and all of the contractors, subcontractors, architects and engineers working at Ground Zero as Additional Named Insurers. The policy currently has approximately 140 Additional 

Named Insures. 

The Captive was funded at $1 billion because this was the quickest agreeable 

amount to get a program in place. Some now claim that even the $1 billion might 

not be enough. A significant number of claims have been filed against the Contractors. Today, there are claims from over 5000 individual claimants. These lawsuits 

claim injuries arising from or related to debris removal work at the WTC site following the collapse of the buildings on September 11, 2001. The cases predominately 

involve allegations of respiratory and related injuries including asthma, chronic 
71

cough, chronic obstructive lung disease, pulmonary fibrosis, and fear of cancer. As 

provided for in the Captive policy documents, the Captive has retained lead defense 

counsel for the City and the Contractors and is vigorously defending these lawsuits. 

It is essential that the United States be prepared to respond immediately in cases 

of national emergency, whether it is natural or man made disaster. The sad events 

of 9/11 and the recent events in Louisiana make this painfully clear. What we have 

learned from our experiences at Ground Zero is that the response to these disasters 

cannot wait until the disaster occurs. Resources must be put in place long before 

a disaster for response to be swift and adequate. A disaster response infrastructure 

must be put in place with experienced, qualified oversight and the ability to call 

upon local resources as required. An essential element of such preparedness is a 

plan to protect those who respond from liability. 

BLL did receive compensation for its work at Ground Zero. But for the WTC Captive, expenses for lawyers and consultants would have exceeded any fees made in 

a matter of months. As a result of these ongoing expenses and potential liabilities, 

we would probably lose our bonding lines, our banking support and our insurance 

coverages. In short, responding to a disaster when called would have taken a thriving business employing over 2,500 people in 20 States and Latin Americas and put 

us out of business. Every company responding to a disaster without some kind of 

protection faces the same choice. 

We cannot say in hindsight that we would not respond if called upon again in a 

similar situation. When people’s lives are at stake, we will do our duty. What we 

can say is that we will not voluntarily go into such a situation again. We will not 

extend ourselves, but we will respond if asked. With our experience at Ground Zero, 

and the potential liability we now face, we would be foolish to do otherwise. We 

have put our business, our livelihood, and our families’ prosperity on the line to help 

people and do the right thing. While we think existing law offers a shield in this 

area, the current World Trade Center related litigation demonstrates the need for 

additional clarity not only to protect the Contractors from liability, but also to eliminate or discourage the costly and time consuming process of the litigation itself except in extreme cases. Protection from liability needs to be put in place to eliminate 

any question of response, and avoid penalizing companies that come when called. 

S. 1761 bill does this and requires the support of this committee. 

Mr. Chairman and members of the committee, thank you for the opportunity to 

speak with you today about Bovis Lend Lease experience and I submit my written 

testimony for the record and look forward to any questions you may have. 

RESPONSES BY MICHAEL FEIGIN TO ADDITIONAL QUESTIONS FROM SENATOR BOXER

Question 1. Mr. Feigin, did Bovis conduct its own environmental testing at the 

World Trade Center? Did you conclude that any special worker protections were 

warranted? 

Response. Bovis worked closely with the City of New York, State and Federal 

agencies and other entities throughout the course of Bovis’ work at the WTC site 

and/or related locations as environmental data was collected, reviewed and used to 

make decisions and recommendations regarding worker safety issues—including the 

types of personal protective equipment to be used by workers. For example, Bovis 

worked closely with numerous City, state and Federal agencies and others regarding 

an Environmental Safety & Health plan for the WTC site and/or related locations 

and regarding an OSHA Partnership Agreement—as applied by the city, State and 

Federal agencies and other entities, these plans identified the nature and types of 

worker protections to be used at the WTC site and/or related locations.

Question 2. Mr. Feigin, do you believe that performance no better than negligence 

is the standard most appropriately applied to cleanup contractors? 

Respones. There are various standards of behavior or action that potentially may 

be applicable to contractors performing different types of tasks in different environments. There are standards or regulations applied by local, State and Federal law 

regarding workplace safety, environmental hazards, construction, demolition, and a 

host of other activities that could be involved in a ‘‘cleanup’’ situation. In addition, 

the emergent nature of the situation and/or the activities involved and the environment in which those activities are to be performed also could affect the standards 

which a governing body or court may find were or were not applicable or relevant 

in a particular situation or context. Assuming that the question is directed to the 

standard typically applied by a court of law in determining liability for a person or 

company’s actions and understanding that the factors just discussed may affect a 

court’s determinations in this regard, it is correct that the tort theory of negligence 

typically is used. Which approach is appropriate in an extreme ‘‘cleanup’’ situation, 
72

as was faced in the aftermath of Hurricane Katrina or the WTC disaster, cannot 

be determined without a complete analysis of the specific situation and the applicable law and/or standards.

Question 3. Mr. Feigin, do you believe that workers who can prove that they were 

injured due to a company’s negligence should not be able to get compensated for 

their injury in connection with a declared disaster as described in S. 1761? 

Response. I do not understand that S. 1761’s purpose is to prohibit workers injured as a result of a company’s negligence from getting compensation for their injuries. Rather, I understand that S. 1761’s purpose is to provide protections to contractors who answer the Government’s call for help and provide immediate assistance in times of catastrophic emergency. A private contractor’s rapid involvement 

in responding to an emergency often comes at the request of a Governmental entity 

because the Government is unable on its own to accomplish tasks such as debris 

removal and/or cleanup or other efforts related to the public health and safety. Legislation (such as S. 1761) is needed that provides further protection to Government 

contractors from the risk of liability from such emergency response and that eliminates the costly and time consuming process of litigation over that statutory protection.

Question 4. You indicated in your testimony that there were a total of 36 reportable injuries in connection with the Ground Zero site. Please describe the nature 

and extent of all accidents and injuries and how you determined if an injury was 

reportable. Please also provide copies of all accident and injury reports in connection 

with or related to work at Ground Zero in New York. 

Response. In my prior testimony, I indicated that there were ‘‘only 36 reportable 

accidents with over 3.2 million man-hours worked—’’ This information was obtained 

from an OSHA Trade News Release dated April 12, 2002 and entitled ‘‘Injury and 

Illness Rate at World Trade Center Site Nearly Half National Average for Similar 

Sites’’ which reflects that there were only 35 workers at the World Trade Center 

Site that suffered injuries resulting in lost workdays. My earlier reference to 36 

such accidents apparently was the result of a typographical error. I understand that 

the parameters regarding what is to be classified as a ‘‘reportable’’ injury for OSHA 

purposes is set forth in OSHA regulations and guidelines. 

RESPONSES BY MICHAEL FEIGIN TO ADDITIONAL QUESTIONS TO SENATOR JEFFORDS

Question 1. Mr. Feigin, have any of the lawsuits filed against your company related to cleanup of the World Trade Center involved claims by private parties for 

damages resulting from environmental pollution or adverse health effects from pollution? 

Response. Bovis is not aware of any lawsuits against it relating to its work at the 

World Trade Center Site and/or related locations which involve claims by private 

parties for damages (either property damage or personal injury) resulting from alleged environmental pollution. The lawsuits filed against Bovis and others regarding 

the debris removal and cleanup operations at the World Trade Center Site and/or 

related locations include allegations by individuals of personal injuries allegedly resulting from inhalation and/or exposure to airborne and/or surface contaminants 

present at those locations. As such, those personal injury cases do not appear to allege adverse health effects from environmental pollution. 

STATEMENT OF JOEL SHUFRO, EXECUTIVE DIRECTOR, NEW YORK COMMITTEE FOR

OCCUPATIONAL SAFETY AND HEALTH

My name is Joel Shufro and I am the executive director of the New York Committee for Occupational Safety and Health (NYCOSH), a non profit educational organization dedicated to every workers’ right to a safe and healthful workplace. We 

have a 26 year history of providing quality safety and health training and technical 

assistance to working people, unions, employers, Government agencies, and community-based organizations about how to recognize and eliminate workplace health 

hazards. Since the attack on the World Trade Center, NYCOSH has worked with 

these constituencies to evaluate the environmental and occupational health consequences resulting from the release of dust and fumes which contaminated Lower 

Manhattan. We have had extensive involvement with workers who participated in 

rescue, recovery and cleanup operations at the World Trade Center site, workers in 

offices surrounding Ground Zero, immigrant workers who cleaned offices and residences, utility workers who restored essential services to the area, and residents living in or returning to contaminated homes around Ground Zero. 
73

We are here to oppose S. 1761, which exempts contractors from citizens’ suits 

brought under Federal environmental law and immunizes contractors from liability 

for personal injuries or property damage in response to disasters. Our position is 

informed as a result the thousands of workers who have developed physical and 

mental illnesses in the aftermath of the tragedy at the World Trade Center, September 11, 2001. 

To those involved in the rescue, recovery and cleanup, working at the World 

Trade Center site was more than a job. Those who responded to the disaster did 

so for many reasons: patriotism, altruism, and humanitarianism, among other motives. They responded to the needs of their country; many working 12 hours a day, 

7 days a week for months. But they, like all workers, expected that those who employed them would provide them with safe and healthful working conditions and 

comply with Federal, State and city regulations. They assumed that if they were 

harmed as a result of working at the site, their medical needs would be taken care 

of and they and their families would not be driven into poverty. They believed that 

they would not be forced to give up their homes, and that their children would not 

have to drop out of college so medical bills could be paid. 

Unfortunately, four years following the devastating attacks on the World Trade 

Center, respiratory illness, psychological distress and financial devastation have become a new way of life for many of the responders, office workers and residents in 

Lower Manhattan. According to statistics released by the Centers for Disease Control, workers and volunteers continue to experience high rates of upper respiratory 

illnesses high rates of upper respiratory problems, sinusitis laryngitis and higher 

rates of lower respiratory problems-asthma, bronchitis, chest tightness, coughing 

and wheezing. In fact, the persistent cough is so unique it has been named the 

World Trade Center Cough. It is essential that you understand that these health 

problems were incurred not only by exposure to toxic substances in the dust cloud 

released at the time of the collapse of the twin towers. Rather it is likely that the 

majority of cases of adverse health effects were caused or exacerbated by exposure 

to toxic chemicals by workers and residents engaged in recovery and cleanup operations in the 10 or so months following 9/11. Many of these workers were either employed by Federal or private contractors. 

Nor is the appearance of illness among workers who worked in the area following 

the September 11th tragedy and residents abating. According to Dr. Steven Levin, 

co-director of the World Trade Center Worker and Volunteer Medical Screening Program at Mt. Sinai, symptoms continue to appear among workers four years after 

exposure. Other workers, whose symptoms abated after initial onset, are experiencing re-current symptoms related to their initial exposure. Additionally, as Dr. 

Robin Herbert, also co-director of the WTC Worker and Volunteer Medical Screening 

Program at Mt. Sinai, points out there are, ‘‘grave concerns about their potential 

for developing slower-starting diseases such as cancer in the future. For many coming through our program, the fears of future catastrophic diseases like cancer, which 

can take as long as twenty to thirty years to show up, loom as large or larger than 

their acute ailments.’’ These concerns have been heightened by the recent passing 

of two New York City Emergency Medical Technicians (EMT) whose deaths have 

been related to illness resulting from exposure to toxic substances at the World 

Trade Center. 

Many of the workers are disabled by chronic pulmonary problems. Some are unable to work. In many cases, workers’ lives have been significantly altered by 

breathing difficulties and the psychological consequences of their response efforts. 

Many have also suffered substantial economic disruption because of WTC-related 

health problems, do not have health insurance and are unable to pay for treatment 

or needed medicine. According to the doctors at WTC Screening Program at Mt. 

Sinai, who have seen the most diseased workers resulting from 9/11, many workers 

are without medicine, medical treatment and wage replacement. 

What happened during recovery and cleanup operations at the World Trade Center was a preventable public health disaster. There is no doubt that the World 

Trade clean up was one of the most dangerous and complex construction sites in 

the history of the country. But, those who had management responsibility failed to 

provide workers with working conditions that protected their safety and health. 

They failed to provide workers with a ‘‘safe and healthful workplace, free of recognized hazards’’ as required by law. Rather than make a stronger commitment to 

protect workers and residents from environmental and occupational hazards in future disasters, the contractors are lobbying to pass S. 1761, which would free them 

from most liability for personal injury claims when engaged in responding to a 

major disaster such as Katrina, as well as from citizen suits brought under Federal 

environmental laws. We believe that such legislation would undercut any incentives 

contractors have to comply with safety and health and environmental regulations. 
74

Federal contractors, who are paid by the taxpayers for the work that they do, 

should be held fully accountable to the public if they behave carelessly and cause 

harm to people or the environment. No public policy reason justifies a taxpayer subsidy for negligence or illegal activity. What S. 1761 does is to shift the cost of personal injuries and property damage from Government contractors to the workers 

and/or residents in the disaster areas. 

It is imperative that workers know that, if they come to the aid of their country 

in disaster situations, contractors employed by the Government will be held to high 

standards which protect both the workers and the members of the community in 

which they are working. They need to know if they should be injured or contract 

an illness in the process, their medical needs will be taken care of and that their 

families will be secure. They need the guarantee that contractors who do not act 

responsibly will be held liable. 

Responsible Government contractors should have no need of the sweeping immunity this bill would provide. We urge you to oppose this legislation, which would provide a windfall to irresponsible contractors at the expense of public health and the 

environment. 

RESPONSE BY JOEL SHUFRO TO AN ADDITIONAL QUESTION FROM SENATOR THUNE

Question 1. It is my understanding that all fifty states, including New York, require employers to carry workers compensation insurance for their employees, and 

that, by law, such insurance must pay for any medical treatment that employees 

may need, as a result of any injuries or illness they suffer in the course of their 

employment. It seems that these workers compensation laws also require at least 

some wage replacement for people who cannot work. Is that essentially correct? And 

if so, how is it that the people who worked at Ground Zero cannot get medical treatment or wage replacement? 

Response. Workers compensation is inadequate to provide workers and community residents with a remedy for the types of damages from which contractors are 

asking for relief in the proposed legislation (S. 1761). 

First, workers compensation applies only to workers who are in an employer/employee relationship. By definition, workers who are not employed by the contractor 

who caused the harm, as well as residents and volunteers, would be excluded from 

receiving medical treatment or wage replacement for injuries or illnesses incurred 

as a result of the negligent actions of a contractor responding to a disaster situation. 

Second, it is not true that workers compensation is mandatory in all jurisdictions. 

For example, coverage is optional in Texas. 

Third, workers compensation systems do not allow workers to recover for a wide 

array of damages such as those which may occur as a result of work around disaster 

response, recovery and cleanup. For example, adverse reproductive health outcomes 

caused by exposure to toxic substances are not compensable under workers compensation; nor is an injured worker able to recover for pain or mental anguish or 

loss of companionship. 

Fourth, medical coverage varies from State to State. This is particularly the case 

with occupational illnesses and diseases with long latency periods. Definitions of 

what constitutes an ‘‘occupational disease’’ also vary and may preclude workers from 

filing claims for job related illnesses. Diseases covered in one state may not be covered in another. In addition, what medical treatment and/or procedures are provided 

through workers compensation also varies dramatically State to State. 

Fifth, wage replacement benefits also vary widely from State to State. Since disasters, such as Hurricane Katrina, often affect workers in more than one State, relying solely on workers compensation, results in significant inequities in the wage replacement workers receive. For example, the maximum weekly benefit is $400 in 

New York, $666 in New Jersey, $716 in Pennsylvania and $931 in Connecticut. 

Sixth, many States have a cap on the length of time a worker can collect wage 

replacement for an injury no matter how long the disability lasts or how severe the 

injury is. Consequently, a worker who is permanently totally or permanently partially disabled and unable to work may, after a defined period, face poverty and/

or financial ruin and be forced onto welfare or social security disability. 

Many workers who responded to the tragic collapse of the World Trade Center 

and who worked at or around Ground Zero were exposed to highly caustic dust and 

a plethora of toxic fumes. Many of these workers have developed respiratory illnesses. 

These workers have had great difficulty in accessing medical and wage replacement benefits through the workers compensation system. Unlike workers who suffer 

traumatic job-related injuries, whose cases are relatively straight-forward, workers 
75

who contract occupational diseases routinely have their cases controverted by insurance carriers. While their cases are being litigated, carriers will not provide either 

medical treatment through the workers compensation system or wage replacement 

payments. Furthermore, even if a worker has employer-paid or private health insurance, many health insurers will deny claims if workers indicate that their condition 

is work-related. Therefore, until their case is established, workers who file for workers compensation are denied needed medical treatment and wage replacement payments. 

In New York State, as in many other jurisdictions, it can take years for contested 

occupational disease cases to be resolved. For example, a study at conducted at the 

Irving J. Selikoff Occupational and Environmental Medicine Cline at Mt. Sinai Medical Center of workers who filed claims as a result of musculo-skeletal repetitive 

stress injuries found that it took, on average, approximately 2 years from the time 

a worker filed a claim with the New York State Workers Compensation Board to 

the time that the case was established. For some cases, it took over four years after 

the claim was filed for it to be established. he consequence of such delays for injured 

workers are traumatic; claimants often are forced back to work resulting in further 

injury and/or experience other adverse health outcomes. Other workers, who have 

no financial reserves are forced into poverty. There are cases in which workers are 

forced to sell their homes or their children are required to drop out of college to help 

support the family. 

Recent research has demonstrated that most workers who contract an occupational illness do not receive medical or wage replacement benefits through workers 

compensation. According to one study, workers receive compensation for less than 

1 percent of all occupational disease claims. Rather, than receiving wage replacement from workers compensation, injured workers are forced to rely on state run 

welfare programs or social security disability, which are financed through general 

tax revenues, for sustenance and on programs like Medicaid for medical treatment. 

There are additional impediments which workers face when they apply for Workers 

Compensation which prevent many workers whose health has been impaired by 

work-related causes from receiving medical treatment. In New York State, as in 

many states, the workers compensation system is difficult to navigate without legal 

representation. However, there are certain classes of cases for which there are there 

are strong financial disincentives for attorneys to take cases which are not deemed 

profitable. These include more difficult cases such as occupational disease claims 

where causation is difficult to prove and cases where it is difficult to prove who the 

employer was or if the employer was uninsured (discussed above). 

A significant number of workers who require medical treatment as a result of illnesses arising out of employment at the World Trade Center are still working. 

These workers will not be able to find legal representation because there no legal 

fees paid to lawyers in cases where there is no wage loss—cases known as ‘‘medical 

only.’’ Without the help of an attorney, workers will not get the benefits to which 

they are entitled. Despite the need for medical treatment, these workers, many of 

whom are immigrants, many of these workers, who have legitimate claims will drop 

their cases out of frustration, discouragement, ignorance or fear of dealing with a 

litigious process which they neither understand and perceive as hostile. 

By eliminating the ability of workers and residents to bring suits against contractors who are negligent in the performance of their contracts, the S. 1761 would prevent those injured by the negligent actions of contractors from holding them accountable, allowing them to cut corners and operate in a fashion which could endanger members of the public and residents. Since workers compensation is an exclusive remedy and prevents workers from suing their employer, workers would be unable to hold liable other contractors who may be operating on the same site who 

created hazards. It would also penalize those employers who comply with health, 

safety and environmental regulations. In complex response to disasters this would 

place workers at a serious disadvantage and undercut any incentive for employers 

to adhere to safety standards and protocol 

RESPONSE BY JOEL SHUFRO TO AN ADDITIONAL QUESTION FROM SENATOR JEFFORDS

Question 1. How did the managers of the contracting firms providing cleanup and 

recovery efforts at the World Trace Center fail to provide workers with working conditions that protected their safety and health? 

Response. The attack on the World Trade Center on September 11, 2001 and the 

subsequent magnitude of the destruction and loss of life at the World Trade Center 

created an emergency response, rescue and recovery effort of enormous proportions. 

According to the head of OSHA, the World Trade Center site was ‘‘potentially the 
76

1National Institute of Environmental Health Science (NIEHS), (Worker Education and Training Program (WETP) Response to the World Trade Center (WTC) Disaster: Initial WETP Grantee Response and Preliminary Assessment of Training Needs. 2Ibid. 

3Bruce E. Lippy, CIH, CSP, ‘‘Safety and Health of Heavy Equipment Operators at Ground 

Zero,’’ American Journal of Industrial Medicine, (2002) 42:539-542

most dangerous workplace in America.’’ Although there were no fatalities on the job, 

there were a large number of serious injuries as well as thousands of workers who 

developed respiratory illnesses, some so severe as to prevent workers from ever 

working again and surely not as construction workers. 

As noted by John Moran and Don Elisburg, leading construction safety and health 

experts, who issued a report for the National Institute for Environmental Health 

Sciences (NIEHS) entitled ‘‘Worker Education and Training Program Response to 

the World Trade Center Disaster: Initial WETP Grantee Response and Preliminary 

Assessment of Training Needs’’

The situation created a very complex safety and health setting in which 

there was confusion as to which occupational safety and health standards 

were applicable, whether enforcement agencies indeed had enforcement jurisdiction, and at what point in time the WTC Disaster Site Safety and 

Health Plan would become effective and operative.’’

The report based on observations from September 22-27, 2002 found: 

What emerged in this massive disaster and the protracted and complex response is the fact that rescue, recovery, and other activities have occurred 

in a scenario never anticipated by the safety and health legislation or the 

subsequent standards/regulations. The injury and illness reports for the initial weeks of the search and rescue activity were at unacceptable levels. 

Mover, the exposure data, as well as the potential for serious exposure to 

toxic materials (including asbestos) among the construction response workers, raises significant concerns.1

However, from the outset, worker safety and health took a back seat to production. While the pressure for such production was politically motivated, contractors 

did not provide working conditions which were protective of the safety and health 

of the workers they employed. 

First, safety and health training of workers was woefully inadequate. From the 

outset, it was clear that workers would be exposed to a wide range of hazards. According to Moran and Elisburg, workers needed to be trained in, at least, the following areas: 

• Asbestos 

• Lead 

• Confined Spaces 

• General Construction Safety/OSHA-10

• Personal Protective Equipment 

• Respirator Protection (and remaining requirements of 1910.134) 

• Fall Protection 

• HAZCOM 

• Ergonomics2

Unfortunately, training of workers did not commence until 78 days after September 11th, in mid-to late November. However, the training was an abbreviated 

version of what was required by OSHA standards. In our opinion, the training was 

not sufficient to prepare workers to protect themselves for the wide range of hazards 

to which they would be exposed while working on the pile. 

Second, despite the presence of a wide range of toxic substances, including dusts 

and fumes, fit- testing to wear respirators was not widely offered on the site until 

36 days after September 11th. According to Bruce E. Lippy, CIH, CSP, the Director 

of Research and Special Projects for the Operating Engineers National Hazmat Program, who was on the site working with heavy equipment operators, ‘‘Compliance 

with respiratory protection was generally poor at Ground Zero, less than one-half, 

and sometimes less than one-third, of the heavy equipment operators were wearing 

their respirators while working on the pile.’’3 Even after fit testing was offered, at 

no time were contractors in compliance with OSHA’s respiratory protection standard. For months into the disaster workers were allowed to wear respirators if they 

had beards. 

The situation was complicated by several factors. First, lines of authority were 

complex and unclear. According to Bruce Lippy, ‘‘Participants at the December 2001, 

National Institute of Occupational Safety and Health (NIOSH) conference on worker 

safety at the WTC noted the lack of a clear command structure at the World Trade 
77

4Ibid 

5Op.cit. 

Center (site) thwarted efforts to enforce PPE (personnel protective equipment) and 

risk-reduction behaviors’.4

Since the Occupational Safety and Health Administration (OSHA) saw its role 

during this period as that of a consultant to the Federal Emergency Management 

Agency (FEMA), rather than as an enforcement Agency, contractors did not have 

an incentive to require workers to comply with OSHA’s protective standards. The 

consequence was that wearing a respirator was voluntary and contractors took little, 

if any, responsibility for ensuring that workers wore appropriate personal protective 

equipment. 

Second, contractors created working conditions which guaranteed that workers 

would suffer workplace injuries and illnesses. It is difficult for any worker to wear 

a respirator for a full 8 hour shift while doing heavy labor, let alone to work for 

12 consecutive hours as did the workers at the World Trade Center site. Contractors 

should have developed a programs which included administrative controls, limiting 

work to a reasonable period of time, giving workers time to rest and recover. Moran 

and Elisburg noted that by the end of three and a half weeks ‘‘The intensity of effort, long hours, continual work seven days a week has resulted in severe stress and 

fatigue, and a high rate of injury and illness among those workers.’’5 Work continued at this pace for over 9 months with the consequence that thousands of workers 

have been diagnosed with mental illness from the stress experienced working at the 

World Trade Center site. Also, contractors did not take into account that OSHA 

standards were written based on 8-hour exposures. Levels of exposure to which a 

worker may be exposed over 8 hours which are deemed acceptable, may not be the 

same as those appropriate for a 12-hour shift. 

Third, the contractors did not issue a site safety and health plan until 48 days 

after September 11th. By failing to develop safety, detailing lines of authority and 

the responsibilities of each party while work was proceeding, the contractors sent 

a message about the low priority they gave to safety on the job. 

IMMIGRANT WORKERS

While construction workers, firefighters, police, volunteers and others were performing the rescue and recovery operations at Ground Zero, day laborers were hired 

by private contractors to shovel the thick dust and debris from the buildings near 

the World Trade Center site. Their job was to make the inhabitable offices and residences in lower Manhattan livable. An estimated 1,800 to 2,000 day laborers worked 

immediately following the disaster and for many months thereafter. These are primarily immigrant workers from Latin America, Poland and parts of Africa. Most of 

them do not speak fluent English. 

For the most part, contractors and their sub-contractors provided these workers 

with no personal protection, special equipment or safety training. Indeed, at the outset, many of the contractors were not paying workers and it was only after the 

intervention of the New York State Attorney General who intervened to force contractors to live up to their contractual obligations. 

Because of the contractors failure to provide training and protective equipment, 

,any of the workers have developed health problems as a result of their work at the 

World Trade Center site. In January of 2002, the Center for the Biology of Natural 

Systems, New York Committee for Occupational Safety and Health and the Latin 

American Workers Project provided medical screening to 410 workers engaged in 

the cleanup of Lower Manhattan. Of the workers who participated in the medical 

screening, nearly 100 percent had developed respiratory illness requiring medical 

attention as a result of dust exposure. 

RESPONSES BY JOEL SHUFRO TO ADDITIONAL QUESTIONS FROM SENATOR BOXER

Question 1. Do you think S. 1761 sends workers a signal that their health may 

be sacrificed without recourse against a negligent contractor? If so, do you think it 

creates a disincentive for the best workers to join in cleanup efforts? 

Also, could such a negative signal actually undermine cleanup efforts rather than 

aid those efforts as contracting companies suggest? 

Response. The legislation, if enacted, sends a clear message to workers and volunteers: if you respond to a disaster situation, you are doing so at your own risk. 

Worse, it allows contractors to operate outside the legal framework which protects 

workers and residents from negligent behavior of a contractor which adversely af-
78

fects the health, safety and property of workers, volunteers and community residents. 

Workers responded to the catastrophe on 9/11/2001 out of many different motivations: some did so out patriotism, others out of humanitarianism, some out of altruism and others for economic reasons. No matter what the reason that impelled 

workers to respond during a time of emergency, they expected that they, and their 

families, would be taken care if they are injured or made ill as a result of a negligent contractor. Although it is hard to predict an individual’s behavior in the future, I think that the knowledge that participating in a rescue or recovery operation 

would may not only endanger your own health, but threaten the well-being of your 

families, would provide a disincentive for participation. 

Given the levels of unemployment among the immigrants, there will always be 

a labor pool who will work-even under the most dangerous of conditions. At the 

World Trade Center and in the Gulf Coast, contractors have taken advantage of the 

vulnerability of workers, particularly immigrants, to avoid Government safety and 

health and environmental regulations. In both situations, the consequence has been 

that thousands of workers have contracted occupational illnesses and have suffered 

significant loss of income, family life and their own health. 

During the hearing on this legislation, contractors explicitly stated and implicitly 

implied that if they were not able to escape liability for their actions, they would 

be reluctant in the future to respond in emergency situations. What this legislation 

does is to shift the costs from the contractors to workers and holds them harmless 

for violations of the country’s environmental and labor laws. 

This form of cost shifting is unacceptable and unproductive. 

STATEMENT OF CRAIG S. KING, GOVERNMENT CONTRACTS ATTORNEY

Mr. Chairman, I appreciate the invitation to provide testimony regarding the impact of certain Government contractor liability provisions—in particular, Senate bill 

1761 (hereinafter ‘‘S. 1761’’ or the ‘‘bill’’)—on environmental laws. 

There is an important Federal interest in having the best, most responsible private contractors respond promptly and without reservation in the event of a disaster. In recent disasters, many private contractors have responded selflessly, even 

heroically, to provide the immediate response necessary to preserve life and property and, in subsequent months, to help remediate and restore normalcy to devastated communities. 

However, disaster recovery efforts—even when performed responsibly by these 

companies and in accordance with contracts awarded by Federal, State and local 

Government authorities—expose private contractors to potentially costly litigation 

and even liability. The risks of litigation and potential liability that arise from contractors’ responsible, good faith performance in response to disasters threaten to undermine future responses. The best, most responsible companies must think twice 

before becoming involved in future disaster recovery efforts, and may opt to stay 

away altogether. Equally important, the price tag for disaster recovery efforts necessarily includes compensation to contractors for the risks associated with the 

work—which means significant increases in the Government’s costs to the extent 

contractors face lawsuits and potential liability for doing the work directed by the 

Government. 

Thus, the Federal Government (‘‘Government’’) has a strong interest in establishing appropriate standards for liability of Government contractors for actions 

taken under the exigencies of a disaster response. Of course, any limitations on contractor liability must be narrowly tailored to the needs of the disaster response, and 

must complement, not undercut, the enforcement of environmental laws, labor laws, 

safety laws and similar laws that promote additional Federal interests. Also, any 

limitations on contractor liability must not absolve private contractors from liability 

if they behave recklessly or commit willful bad acts. Contractors must remain accountable for improper conduct, as well as for proper performance of their contract 

obligations. Even in the exigencies of a disaster response, there can be no excuse 

for recklessness or willful misconduct. 

The bill provides a reasonable approach to achieving the foregoing objectives. Key 

provisions of S. 1761 that bear on Government contractor liability are discussed 

below. 

A. THE GOVERNMENT CONTRACTOR DEFENSE

Section 5(d) of S. 1761 provides that, if certain requirements are fulfilled, a contractor can avail itself of the Government contractor defense in the event of thirdparty litigation arising out of disaster recovery efforts. As discussed more fully 
79

below, the essence of the Government contractor defense is that a contractor stands 

in the same legal position as the Government, and thus bears no liability to third 

parties, if it does what the Government tells it to do in the contract (provided, of 

course, that certain requirements are fulfilled). 

The Government contractor defense is well established in the Federal common 

law. The principles underlying the defense reach back as far as 1940, when the U.S. 

Supreme Court determined that a contractor that performed a Federal contract to 

build dikes to improve navigation of the Missouri river was not subject to liability 

in a suit by a landowner for erosion caused by the work. Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940). In Yearsley, the Court found that where there is 

a valid Federal contract, ‘‘there is no liability on the part of the contractor for executing [the Government’s] will.’’

In 1988, the U.S. Supreme Court set forth more fully the parameters of, and rationale for, the Government contractor defense. In Boyle v. United Technologies Corporation, 487 U.S. 500 (1988), the Court found that a Federal interest exists in Government procurement contracts—stating:

The imposition of liability on Government contractors will directly affect the 

terms of Government contracts; either the contractor will decline to manufacture the design specified by the Government, or it will raise its price. Either way, the interests of the United States will be directly affected.

Boyle, at 507. 

The Court explained that the Government contractor defense is rooted in the Government’s sovereign immunity. The Court observed that when Congress waived the 

Government’s sovereign immunity in the Federal Tort Claims Act to enable suits 

against the Government arising out of acts of Government employees, Congress exempted from this consent to suit any claim ‘‘based upon the exercise or performance 

or the failure to exercise or perform a discretionary function or duty on the part of 

a Federal Agency or an employee of the Government, whether or not the discretion 

involved be abused.’’ Boyle, at 511. The Boyle Court concluded that contractors 

should be subject to the same limits on liability as the Government officials who 

direct the contractor’s actions. The Court stated: ‘‘It makes little sense to insulate 

the Government against financial liability for the judgment that a particular feature 

of military equipment is necessary when the Government produces the equipment 

itself, but not when it contracts for the production.’’

The Court reasoned as follows: the selection of the appropriate design for military 

equipment is a discretionary function which should not be second-guessed in tort 

litigation; the financial burden of tort judgments against contractors will predictably 

raise their prices to cover, or insure against, such contingent liabilities; and state 

law which holds Government contractors liable for design defects does in some circumstances present a ‘‘significant conflict’’ with Federal interests and must be displaced. The Boyle Court embraced a standard that liability for design defects in 

military equipment cannot be imposed, pursuant to state law, when (i) the Government approved reasonably precise specifications; (ii) the equipment conformed to 

those specifications; and (iii) the contractor warned the Government about the dangers in use of the equipment that were known to the contractor but not to the Government. 

1. The Government Contractor Defense Applies to Contractors that Enter Government 

Contracts to Respond to Disasters 

The Supreme Court’s reasoning in Boyle and Yearsley applies equally today in the 

case of contractors that enter Government contracts to respond to disasters:

• There is a Federal interest in having the best, most responsible private contractors respond promptly and without reservation in the event of a disaster. 

• Determinations as to the work that should be done to respond to a disaster are 

a discretionary function of cognizant Government officials—and should not be second-guessed in tort litigation under State law. 

• The financial burden of tort judgments against contractors will predictably raise 

the prices to cover, or insure against, such contingent liabilities—or may lead the 

best, most responsible contractors to decline to participate in disaster recover efforts. 

• Here, as in Boyle, it makes little sense to insulate the Government against financial liability for the judgment as to work to be performed in response to a disaster if the Government performs the work itself, but not when it contracts for performance of the work.

It follows that state tort laws that would make Government contractors liable for 

work performed in response to a disaster present a ‘‘significant conflict’’ with Federal interests and must be displaced. Applying the standards announced in Boyle, 
80

1A disaster zone is any region of the United States in which major disasters relating to Hurricane Katrina were declared by the President on August 29, 2005 under the Stafford Disaster 

Relief and Emergency Assistance Act (42 U.S.C. 5170), or were so declared thereafter if the disaster requires Federal assistance in an amount that exceeds $15 billion. 

it is already clear that liability for work done under Government contracts to respond to disasters cannot be imposed, pursuant to state law, when: (i) the Government approved a reasonably precise scope of work; (ii) the work performed was in 

accordance with the scope of work; and (iii) the contractor warned the Government 

about any dangers in performing the work that were known to the contractor but 

not to the Government. 

As set forth below, the effect of the bill is to avoid costly litigation about the applicability of the Boyle standards in the case of contracts undertaken pursuant to the 

exigencies of disaster recovery. 

2. The Effect and Limited Scope of the Applicability of the Government Contractor 

Defense Under S. 1761

S. 1761 affirms that the Government contractor defense is applicable to certain 

contracts entered for the purpose of disaster recovery, and provides certainty and 

uniformity of approach to the application of the defense by providing, among other 

things, a process by which a cognizant Government official reviews the scope of 

work of a contract and certifies that the contract is necessary to the disaster recovery effort. More specifically, the Bill provides that the elements of the Government 

contractor defense shall be deemed satisfied without further proof in Court if the 

following conditions are satisfied:

i. A competent Government authority (i.e., the Corps of Engineers) certifies in accordance with the Bill that it has reviewed the scope of work set forth in the contract and the work is necessary for the recovery of the disaster zone1 from a disaster. In order to so certify, the Government authority must determine that a majority of the scope of work set forth in the contract is for one or more of the following 

five activities:

a. The search, rescue, or recovery of individuals or property dislocated by the disaster; 

b. The demolition, removal, repair, or reconstruction of structures or utilities damaged by the disaster; 

c. The clean-up or remediation of property polluted by the disaster; 

d. The removal of debris deposited by the disaster (including dredging); or 

e. The de-watering of property flooded by the disaster.

ii. The contractor did not act fraudulently or with willful misconduct in submitting information to the Government to obtain the certification (Section 5(d)(3)), and 

did not act with recklessness or willful misconduct in performing the work (Section 

5(e)(3)). 

The bill is subject to appropriately narrow limitations as to geographic scope (i.e., 

the bill applies only to Government contracts necessary for the recovery from Hurricane Katrina or a similarly declared disaster that requires at least $15 billion in 

Federal assistance—and does not apply to any other situation). In addition, the Bill 

applies only to contracts involving the five specified types of contracts. 

S. 1761’s provision for deeming the elements of the Government contractor defense to have been satisfied is important to reduce risks and costs, and to provide 

for uniformity of application of the defense. In cases in which the Government contractor defense has been invoked, there often has been protracted litigation over the 

application of the Boyle standards. After considerable legal wrangling, it has by now 

become reasonably well settled that, for example, Boyle applies in non-military as 

well as the military contexts and applies to virtually all types of Government contracts, and Government decisions with respect to remediation efforts (e.g., EPA decisions regarding clean-up of contaminated sites) are ‘‘discretionary functions’’. Nonetheless, there has been considerable litigation to reach these conclusions, and legal 

wrangling continues in particular cases to meet plaintiff’s challenges, for example, 

as to whether the Government’s work specifications in that particular case are sufficiently specific to support the Government contractor defense. 

The bill’s process for the Government to provide a certification that the scope of 

work of a contract fulfills one of the five purposes of disaster recovery is a reasonable approach that will provide certainty in the application of the Government contracts defense to contracts for disaster recovery. The ‘‘discretionary function’’ requirement of Boyle is fulfilled by the certification. A cognizant Government official 

will have reviewed the scope of work and determined that the work is necessary for 

the recovery of the disaster zone from a disaster. The limitation to a specified geographic region and to the five specified types of activities keeps the application of 
81

the Bill appropriately narrow. The exigencies of a disaster response warrant providing the assurance that, for contracts within the five specified disaster response 

activities, the Government’s exercise of discretion as to the work that will be performed will not be second-guessed in a tort litigation. 

Certainty and uniformity of approach are enhanced in a reasonable manner by 

S. 1761’s provisions for: (i) a Federal cause of action for claims arising out of performance of a contract that is certified by a Government official; and (ii) original 

and exclusive Federal jurisdiction over lawsuits for loss of property, personal injury, 

or death arising out of the performance of such a contract. Consistent with U.S. Supreme Court’s findings in Boyle and Yearsley, S. 1761 amounts to a Congressional 

declaration that: there is Federal interest in having the best, most responsible private contractors respond promptly and without reservation in the event of a disaster; a certification by a cognizant Government official under the Act that certain 

work is necessary for the recovery of the disaster zone is ‘‘discretionary’’ and should 

not be second-guessed under State tort laws; and therefore state tort laws must be 

displaced absent evidence of contractor fraud, recklessness or willful misconduct. As 

the Court stated in Boyle, these are matters of Federal common law that involve 

Federal preemption to displace state tort laws. It is appropriate that such be resolved in the Federal courts. Indeed, one would be hard pressed to think of issues 

more suited to be resolved in Federal, rather than State, court. 

Of course, this does not complete the analysis. Under the Act, the Government 

contractor defense would apply only if the contractor did not act fraudulently or 

with willful misconduct in submitting information to the Government to obtain the 

certification, and did not act with recklessness or willful misconduct in performing 

the work. These seem to be reasonable parameters for proscribing wrongful conduct 

of contractors vis-&-vis third parties—especially in view of the exigencies associated 

with a disaster response. The ultimate effect is that contractors are held accountable under the contract to perform the work set forth therein—but they are not liable to third parties for the Government’s decisions as to what work should be done 

or for their non-reckless performance of that work. Absent recklessness of willful 

misconduct, third parties must look to the Government for any available relief—if 

not through tort litigation against the Government, then in some other manner. But 

where a private suit against the Government is barred by sovereign immunity (i.e., 

is not available under the Federal Tort Claims Act), there is no alternate route 

under the law to sue a contractor that performed the job the Government asked it 

to do. 

Private litigants simply cannot recover indirectly from contractors that which Federal law bars them from recovering directly from the Government. This is the essence of the U.S. Supreme Court’s holdings relative to the Government contractor 

defense. The bill recognizes what is embodied in Federal common law, and provides 

assurances of certainty and uniformity of approach in the application of the Government contractor defense for contracts entered to respond to disasters. 

What S. 1761 means as a practical matter is that, for contracts certified as necessary for disaster relief, there will be no litigation as to the application of the Boyle 

standards. The first Boyle standard (i.e., Government approval of a reasonably precise scope for the work) is satisfied by the certification process, and thus is appropriately deemed fulfilled under the bill. The second Boyle standard (i.e., the work 

was performed in accordance with the scope of work), is deemed fulfilled subject to 

a showing that the contractor was reckless or committed willful misconduct. The 

Bill does not provide protection for contractor conduct that is not covered by the second Boyle standard—i.e., activities that are outside of the scope of work. 

Finally, the deeming of the third Boyle standard (the contractor’s obligation to 

warn the Government of dangers about which the contractor is aware but not the 

Government) means that contractors may proceed with disaster recovery work directed by the Government even though many risks are unknown and unknowable. 

The bill eliminates costly litigation over what the contractor knew or did not know 

in undertaking work in a disaster relief situation. It is inherent in the nature of 

disaster relief work that many risks are unknown and unknowable. Government officials and contractors make good faith efforts to act in a prudent manner, but cannot fully assess the risks. By deeming the Boyle elements to have been satisfied, 

a contractor can proceed immediately with disaster recovery work as directed by the 

Government without the type of risk assessments that may be expected in normal 

construction and remediation efforts but that cannot reasonably be done in a disaster relief situation. 

3. Potential Amendments to S. 1761

As discussed below, the subcommittee may wish to consider an alteration to the 

provisions of S. 1761 that designate the Army Corps of Engineers (‘‘Chief of Engi-
82

neers’’) as exclusively responsible for the review and certification of Government 

contracts under the Bill. 

Government contracts certified under the Bill might be awarded by the Army, 

FEMA or other Federal agencies. In addition, state and local Governments may 

enter contracts for work in the five areas identified in the Act, and then request 

that FEMA reimburse them with Federal funds. As I understand it, if FEMA were 

to deny reimbursement for a contract awarded by a state or local Government, the 

Bill nonetheless would apply and such a State or local contract could qualify for certification. 

S. 1761 contemplates that, in order for the certification provisions to apply, the 

Chief of Engineers will review the scope of work and provide the requisite certification for all disaster recovery contracts—whether issued by a Federal Agency or 

a state or local Government. This imposes a burden on the Chief of Engineers that 

may be undue and unnecessary. It also divorces the certification process from the 

contract award process (and from the decision whether to provide Federal funds to 

reimburse a state or local Government contracts)—and this has been shown in another context not to be a particularly effective approach. 

The certification process described in S. 1761 is similar to the process for certifying antiterrorism technologies under the SAFETY Act. In the SAFETY Act, Congress invited companies to apply to have their technologies certified by the Government as desirable for use against terrorism. In the event of lawsuits arising out of 

the use of a certified technology, the Government contractor defense applies and, as 

under the Bill at issue here, the elements of the Government contractor defense are 

deemed to have been satisfied through the certification. The Department of Homeland Defense was given exclusive responsibility for certifying antiterrorism technologies under the SAFETY Act. The certification process was divorced from the 

procurement process. The result has been that few certifications have been granted, 

and the certification process has not been very effective in meeting the needs of the 

companies or Government procurement officials. 

The subcommittee may, instead, want to consider having the certifications done 

by: (i) in the instance of a contract awarded by a Federal Agency, the Government 

contracting officer who awards the Federal contract; and (ii) in the instance of a contract awarded by a state or local Government, by the Federal official who determines whether to reimburse the contract with Federal funds. As to the first of these, 

the Government contracting officer would be well suited to review the scope of work 

and make the appropriate determinations, and could do so as part of the contract 

award process. Nobody is in a materially better position to make the type of determinations required by the Act—and having the contracting officer provide the certification likely would result in little or no delay due to the need for a certification. 

As to the second point, the Federal official who reviews the scope of work for reimbursement would be well positioned to make the certification. For State and local 

contracts that are not submitted for Federal reimbursement, an alternate mechanism for providing the certification may need to be developed—or the committee 

might choose to exclude such contracts from the coverage of the Act. 

B. WHAT THE BILL DOES NOT DO

As a conclusion, it may be appropriate to emphasize what the bill does not do. 

The bill does not abrogate the applicability of any other laws or regulations. All environmental laws would continue to apply. Federal State and local Government enforcement officials would continue to be able to take whatever steps they deem necessary to enforce full compliance with the environmental laws, and to punish noncompliance. As I understand it, the bill would limit certain private rights of action, 

but would do nothing to impair the ability of cognizant Federal, State and local officials to fully enforce these laws. 

Similarly, all Federal, State and local labor and employment laws would continue 

to apply. The rights of cognizant Government officials, individual applicants and employees to enforce these laws in court are unaffected by the bill. 

The same holds true for health and safety laws. The enforcement authorities of 

the U.S. Occupational Safety and Health Administration are not affected by the bill. 

Perhaps most important, as discussed above, the bill does not limit the liability 

of Government contractors for recklessness or willful misconduct, nor does it limit 

the ability of the Government to require proper performance of contract obligations. 

The bill does not allow contractors to escape liability for bad acts. 

C. CONCLUSION

The thrust of S. 1761 is merely to put contractors that perform Government contracts on the same legal footing as the Government personnel who award them 
83

those contracts. It provides for cognizant Government personnel to review the scope 

of work for such contracts, and determine that the work is necessary to the disaster 

recovery effort. With such deliberation and exercise of discretion on the Government’s part, it is fair and reasonable for Contractors to proceed with the work 

promptly and without fear of legal liability so long as they are not reckless and commit wrongful misconduct. In view of the exigencies of disaster response, and the 

Federal interest in having the best, most responsible contractors available for recovery efforts, the bill seems a measured and appropriate approach. 

Thank you. 

RESPONSE BY CRAIG KING TO AN ADDITIONAL QUESTION FROM SENATOR THUNE

Question 1. Because Section 4 of S. 1761 waives an individual right of action for 

contractors who carry out a Government disaster contract, can you explain whether 

or not this provision waives a contractors obligation to follow existing Federal environmental laws? 

Response. The waiver of an individual right of action that is contained in S. 1761 

would not diminish contractors’ obligations to follow existing Federal environmental 

laws. All Federal environmental laws would continue to apply. Federal, State and 

local enforcement officials would continue to enforce compliance with those laws. 

There is nothing in S. 1761 that would abrogate the applicability of any other laws 

or regulations, or impair the enforcement of the environmental laws by Government 

officials. 

RESPONSE BY CRAIG KING TO AN ADDITIONAL QUESTION FROM SENATOR BOXER

Question 1. Mr. King, if a contractor is negligent in its performance of a contract 

and injures or kills an innocent citizen in a declared disaster as described in S. 

1761, will the contractor receive liability protection and the victim lose their claim 

unless the victim can show that a Government contractor acted fraudulently or with 

willful misconduct in merely submitting information to the Chief of Engineers for 

the Army Corps? More specifically, this information is the material that the Chief 

of Engineers uses to determine whether the work is necessary for the recovery of 

a disaster zone from a disaster, including a review of the scope of work that the 

Government contract does or will require and that the work includes cleanup, debris 

removal, reconstruction, de-watering and other such tasks. 

Response. The thrust of S. 1761 is that a contractor who is doing what the Government directed it to do will not be second-guessed in tort litigation unless it can 

be shown that the contractor acted with ‘‘recklessness or willful misconduct.’’ The 

liability protection derives from the Government contractor defense—which is well 

recognized in the common law and provides that a contractor stands in the same 

legal position as the Government, and thus bears no liability to third parties, if it 

does what the Government tells it to do in a contract. Sovereign immunity shields 

Government officials from third-party suits when these officials make the type of 

discretionary decisions that are necessary in disaster relief efforts. The courts have 

made clear that in instances where the decisions of Government officials are insulated from liability, it makes little sense to not similarly insulate contractors who 

implement such Government decisions. 

It would not be appropriate for this protection to apply to contractors who fail to 

implement dutifully the Government decisions and instead commit wrongful acts 

that cause injury. Thus, S. 1761 specifically provides that a contractor would be subject to full liability to third parties arising from the contractor’s reckless acts or willful misconduct. More specifically, S. 1761 provides that the liability protections shall 

not affect ‘‘the liability of any person or entity for recklessness or willful misconduct.’’

The question suggests that the Senator may believe that, in holding contractors 

accountable for any wrongful acts, it is more appropriate to use a standard of ‘‘negligence’’ rather than ‘‘recklessness or willful misconduct.’’ This is certainly a debatable proposition. Under a negligence standard, any person adversely affected in a 

disaster could sue so long as they could come up with a plausible theory as to why 

the Government’s decision, or the contractor’s implementation of it, was not ‘‘reasonable’’. This seems too loose a standard for application in the exigencies of a disaster 

response. Disaster situations often require prompt, decisive action by the Government and its contractors with little time for the type of engineering, planning and 

risk assessments that would be normal in other circumstances. Under a negligence 

standard, a contractor could perform precisely and dutifully in accordance with the 

Government’s direction and still face suits for ‘‘negligence’’ based on third-party ar-
84

guments that the Government’s decisions were not reasonable. Under the exigent 

circumstances of disaster recovery, such after-the-fact second-guessing of the actions 

of the Government and its contractors, absent evidence of recklessness or willful 

wrongdoing, seems highly likely to be unfair—and to create unwise legal impediments to contractors pitching in when needed in future disaster recovery situations. 

By not using a ‘‘negligence’’ standard, S. 1761 provides a measure of deference in 

disaster recovery situations to Government decision makers and the contractors who 

implement the Government’s decisions. That deference seems warranted under the 

exigencies of disaster recovery efforts. 

That does not end the issue. It may well be appropriate to provide compensation 

to those who suffer injuries in disaster recovery situations even if the contractor was 

not reckless or willful. It does not necessarily follow, however, that contractors must 

be, in effect, the default source of such compensation. During the hearing, the panel 

participants discussed several potential approaches for providing compensation to 

parties injured in disaster recovery situations through no recklessness or willfulness 

of a contractor. Congress should seriously consider enacting one or more of these 

approaches, or some other appropriate measure, to ensure that individuals injured 

in disaster recovery situations receive due compensation. 

Finally, the question refers to the provision in S. 1761 that allows for defeating 

the presumption that the elements of the Government contractor defense have been 

satisfied. The presumption can be defeated based upon a ‘‘showing that a person or 

entity awarded a Government contract acted fraudulently or with willful misconduct 

in submitting information’’ to the Chief of the Corps of Engineers. The reference in 

the question seems to be based on an incomplete understanding of S. 1761. Certainly, the presumption that the Government contractor defense applies can be defeated by showing fraud or willful misconduct in submitting the information to the 

Government. However, the more relevant provision for purposes of the question is 

the very last clause of S. 1761, which was discussed above. That provision makes 

the liability protections completely inapplicable—and thus enables suits by injured 

parties—where a contractor acts recklessly or with willful misconduct in performing 

disaster recovery activities. 

RESPONSE BY CRAIG KING TO AN ADDITIONAL QUESTION FROM SENATOR JEFFORDS

Question 1. Mr. King, in your testimony, on page 3, you discuss the Government 

contractor liability defense and relevant case law on this defense. You have interpreted this case law to provide that private litigants cannot recover indirectly from 

contractors when they are barred under Federal law from recovering directly from 

the Government. How does the bill’s bar against private parties filing claims against 

contractors for Federal environmental laws affect a citizen’s ability to sue a negligent contractor whose negligence results in harm to human health and the environment? 

Response. The bar in S. 1761 against private parties filing claims for violations 

of the Federal environmental laws does not bar private party claims that do not 

arise under the Federal environmental laws. While enforcement of the environmental laws is reserved for Government enforcement authorities, a party injured by 

a contractor’s actions in a disaster recovery effort could bring suit against the contractor on other appropriate grounds. As discussed above, there is room for honest 

debate as to those other appropriate grounds—i.e., whether the appropriate legal 

standard for such suits by injured parties is ‘‘negligence’’ or ‘‘recklessness or willful 

misconduct.’’ S. 1761 embraces the notion that under the exigencies of a disaster 

recovery there should be a measure of deference to Government decision makers and 

contractors who implement the Government’s decisions—and that therefore it is appropriate that a contractor doing the Government’s bidding be immune from suits 

unless the contractor is reckless or commits willful misconduct. 

STATEMENT OF STEVEN L. SCHOONER, CO-DIRECTOR, GOVERNMENT PROCUREMENT

LAW PROGRAM, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL

Chairman Thune, Ranking Member Boxer, and members of the committee, I appreciate the opportunity to appear before you today to discuss the impact of certain 

Government contractor liability proposals on environmental laws. My discussion of 

S. 1761, the Gulf Coast Recovery Act, and its treatment of Government contractor 

liability, derives from my experience in Federal procurement policy, practice, and 

law. This committee’s focus upon, and interest in improving, the procurement process is an important and valuable public service. 
85

1U.S.C. §3730. 2Here, history is instructive. At similar hearings 20 years ago, Senator Grassley asked the 

Aerospace Industries Association [AIA] whether any members of its association ‘‘no longer bid 

on Government contracts because of the fear of liability suits?’’ AIA asserted that it lacked sufficient information to respond at the hearing and, in a subsequent written response, was no more 

convincing. Even responding ‘‘on a non-attribution basis[,]’’ AIA failed to identify a single firm. 3Generally, the Government expects contractors to purchase insurance and, accordingly, the 

Government willingly pays contractors to obtain that insurance. Prospective indemnification is 

employed only in extraordinary circumstances (for example, in the nuclear industry) where contractors either cannot obtain insurance for a certain risk or the cost of insurance would be prohibitive. See, e.g., 48 C.F.R. §50.403 (indemnification for unusually hazardous or nuclear risks); 

Public Law No. 85-804. Thus, indemnification—through which the Government, in effect, selfContinued

From a public procurement perspective, this legislation is entirely unnecessary. 

The bill would expose the public, specifically individuals, to unnecessary risk and 

harm. Moreover, the bill would discourage responsible contractor behavior and, instead, encourage behavior that is harmful to the public. Further, this bill reflects 

a disconcerting trend of seemingly opportunistic post-crisis behavior. Specifically, 

the bill seeks to capitalize upon hurricane Katrina’s devastation to obtain, for the 

contractor community, long-sought after, and long-denied, insulation from liability. 

This type of opportunistic behavior is not only ill-conceived, but it is harmful to the 

credibility of the Federal Government’s procurement process. 

THIS LEGISLATION IS ENTIRELY UNNECESSARY

The bill’s findings assert that ‘‘well-founded fears of future litigation and liability 

under existing law discourage contractors from assisting in times of disaster.’’ Experience suggests that this assertion, the premise underlying S. 1761, is, at best, hyperbole and, at worst, simply false. I have seen nothing that suggests that a significant number of the nation’s (or the world’s) best contractors have been discouraged 

from seeking the United States Government’s business. 

This tactic is not new. Throughout my career (in the private sector, in the Government, and in academia), I have heard apocalyptic tales of monumental barriers to 

entry, erected by the Government, that frighten firms away from seeking, or continuing to seek, the Government’s business. (As a procurement policy official, I most 

often confront these assertions in the context of efforts to eliminate the qui tam provisions in the False Claims Act.)1 What I have not seen—and what is again absent 

here—is empirical data or concrete information supporting the assertion. This absence of support is palpable.2

Q: Has any AIA member company declined to bid for or accept the award 

of a Government contract because that company could not be indemnified 

by the Government for catastrophic risk? 

A: The consequences of unusually hazardous or nuclear risks arising under 

Government contract, generally, do influence the business decision process. 

Letter from Lloyd R. Kuhn to the Honorable Charles E. Grassley, June 28, 1985, 

S. Hrg. 99-321, Hearing before the committee on the Judiciary on S. 1254, U.S. Senate, 99th Congress, 1st Session (Serial No. J-99-32, June 11, 1985) at 96-97. 

Every day, the best contractors, small and large, domestic and foreign, aggressively vie for a share of the Government’s $300 billion procurement budget. At one 

end of the spectrum, firms compete for the lion’s share of the Government’s contracts, which might be described as garden-variety or commercially available work, 

providing, for example, office supplies, custodial services, construction, or information technology support. At the other end of the spectrum, a far smaller population 

of firms compete to design and build unique systems involving the most advanced, 

cutting edge technology imaginable. In a fraction of contracts found in the latter 

group, where the work can be extraordinarily complex and dangerous, unique rules 

have evolved to insulate contractors from certain liabilities. But a stark, deep chasm 

distinguishes these extraordinary contractual actions from the ordinary. S. 1761 

does not appear to cover extraordinary work; rather the bill specifically describes 

seemingly ordinary tasks such as debris removal, logistics, reconstruction, and basic 

public services. Accordingly, extraordinary measures are neither necessary nor appropriate. 

ALTERING THE EXISTING RISK ALLOCATION REGIME SENDS THE WRONG MESSAGE

S. 1761 intends to insulate certain contractors from liability, even when the contractor is at fault. If that is the case, the bill’s mechanism is flawed, particularly 

in its allocation of risk of harm between the public, contractors, and the Government.3 As a matter of policy, we should prefer a solution that allocates risk to the 
86

insures rather than reimbursing the contractor for its insurance costs—derives from a failure 

of the marketplace, specifically the insurance industry. See, generally, Ralph C. Nash & John 

Cibinic, Risk of Catastrophic Loss: How to Cope, 7 NASH & CIBINIC REP. ¶ 44 (July 1988). 

But bear in mind that the indemnification debate focuses upon prospective allocation of risk between the Government and its contractors—it does not suggest that members of the public, if 

injured, should have no remedy. 4As the Defense Department explained twenty years ago: 

5This seems troubling from a behavioral standpoint. 

6Consider the 1963 report on catastrophic accidents in Government programs prepared by the 

Legislative Drafting Research Fund of Columbia University on behalf of the National Security 

Industrial Association. Albert J. Rosenthal, Harold L. Korn & Stanley B. Lubman, Catastrophic 

Accidents in Government Programs, 72-76 (1963). The report staked out the immensely reasonable conclusion that: ‘‘The most important objective—is the assurance of prompt and adequate 

compensation of the public.’’ Id., Summary at 12. 7The Department of Justice (DOJ) objected to a 1985 bill to, among other things, reduce liability of contractors, because it did not ‘‘believe that Government indemnification of contractor 

losses is the appropriate way to solve the problems faced by Government contractors because 

of changing tort liability—’’ S. Hrg. 99-321, Hearing before the committee on the Judiciary on 

S. 1254, U.S. Senate, 99th Congress, 1st Session (Serial No. J-99-32, June 11, 1985). ‘‘In the 

past few years, the efforts of Government contractors to transfer their product liability exposure 

to the Government has increased dramatically.’’ Id. at 22. Although DOJ acknowledged ‘‘that 

the changes in the tort system have created problems for contractors, [it] did not believe that 

indemnification is an appropriate response, and certainly it does not correct the underlying reasons for these problems.’’

superior risk bearer. Here, it seems reasonable to conclude that the superior risk 

bearer is the party best positioned to, among other things, (1) appraise, in advance, 

the likelihood that harm will occur; (2) avoid the occurrence of the risk; (3) insure 

against the risk; or (4) bear the cost of the risk. This bill appears to do the exact 

opposite. S. 1761 allocates the risk of loss to the individual, the party with the least 

opportunity to anticipate, assess, or avoid the risk, insure against it, or bear its 

costs. Ultimately, however, what is particularly troubling is that the bill dilutes contractors’ incentives to assume responsibility for their work and adopt prudent risk 

avoidance strategies.4

. . .Indemnification creates a difficult balance. In the commercial world, 

risks of third party liability are covered by insurance or are assumed by the 

manufacturer. . . We are concerned that blanket indemnification may reduce the contractors’ incentive to assume responsibility for the performance 

of their products. . . We prefer to contract in an environment similar to 

the commercial marketplace where companies must take all the steps that 

would be required of a prudent businessman in order to ensure the safety 

of the company’s product. 

Statement of Mary Ann Gilleece, Deputy Under Secretary of Defense for Acquisition Management, S. Hrg. 99-321, Hearing before the committee on the Judiciary 

on S. 1254, U.S. Senate, 99th Congress, 1st Session (Serial No. J-99-32, June 11, 

1985) at 30. 

Again, under S. 1761, the Government neither will take responsibility for its contractors’ actions, nor will the Government permit the public to hold those contractors accountable. The bill appears to determine, in advance, that neither the Government nor its contractors would be held responsible if contractors injured (or 

killed) people or damaged (or destroyed) personal or commercial property.5

The immediate effect of the [Government contractor] defense is to place the full 

cost of mishaps on injured parties who, but for Government involvement, would be 

able to shift that cost to the contractors. Conversely, assimilating contractor liability 

to normal tort rules might advance traditional objectives of compensating injured 

parties, spreading losses, or implementing generalized notions of fairness. 

Ronald A. Cass & Clayton P. Gillette, The Government Contractor Defense: Contractual Allocation of Public Risk, 77 VA. L. REV. 257, 260 (1991) (emphasis added, 

footnotes omitted). 

Protection of the public from harm—rather than protection of the economic interests of contractors—must come first.6 In contrast, this legislation appears to mandate that: (1) the party at greatest risk should be the individual, a member of the 

public, who is harmed; (2) neither the Government nor the Government’s contractors 

should bear responsibility for harm inflicted upon the public; and (3) this outcome 

should prevail even if the insurance market could better allocate, in advance, the 

risk of harm. Again, these issue of contractor liability is not new.7 But the solution—that the public should bear the risk of loss, rather than the Government or 

its contractors—is as novel as it is unappealing. 
87

8See, e.g., Boyle v. United Technologies Corp., 487 U.S. 500 (1988). 

9The Boyle decision seems to be providing the logical framework—to decide whether the Government contractor defense will protect contractors from tort liability—[T]he Supreme Court has 

given a set of straightforward requirements—the most important of which is the Government 

approval requirement.—[W]here the Government Agency is a full participant in the design process, the defense can be predicted to be a winner. In contrast, if the Government has not participated in design the contractor will find it very hard to use the defense. If the plaintiff can prove 

that the defect occurred in the manufacturing process, the defense will be of little or no value 

to the contractor. Ralph C. Nash & John Cibinic, Postscript: The Circuit Court View of the Government Contractor Defense, 8 NASH & CIBINIC REP. ¶ 52 (August 1990). 10In removing debris, for example, a contractor faces significant economic choices with regard 

to, among other things, (1) the experience of its personnel (e.g., drivers with spotless safety 

records might demand higher wages); (2) the quality and maintenance of its equipment (newer, 

better maintained trucks likely cost more to purchase or lease); (3) the means of performance 

(the minimally acceptable environmental standards likely cost less than more current, potentially cleaner and/or safer technologies); or (4) time management (truck drivers might save time 

and money by transporting hazardous waste through, rather than avoiding, residential communities). 11Pub. L. 107-296, § 861. See, generally, Homeland Security SAFETY Act page at https://

www.safetyact.gov/DHS/SActHome.nsf/Main?OpenFrameset&6HYKFL;Alison M. Levin, Note: 

The SAFETY Act of 2003: Implications for the Government Contractor Defense, 34 PUB. CONT. 

L.J. 175 (2004). 12This point cannot be over-emphasized. For a good articulation of this principle, see, e.g., Patrick E. Tolan, Jr., Environmental Liability Under Public Law 85-804: Keeping the Ordinary Out 

of Extraordinary Contractual Relief, 32 PUB. CONT. L.J. 215 (2003) (emphasizing the unique (or, 

specifically, extraordinary) nature of the contractual requirements, particularly in research and 

development, that proved uninsurable because they involved, for example, nuclear power or 

highly volatile missile fuels). 13The seven criteria include: prior United States Government use or demonstrated substantial 

utility and effectiveness; availability of the technology for immediate deployment in public and 

Continued

MISUSE OF THE GOVERNMENT CONTRACTOR DEFENSE

Unfortunately, the bill attempts to apply, quite broadly, the ‘‘Government contractor defense’’ to disaster relief. In so doing, the bill turns the Government contractor defense on its head. S. 1761 would create a ‘‘rebuttable presumption that—

all elements of the Government contractor defense are satisfied; and—the Government contractor defense applies in the lawsuit.’’ This would be a dramatic (and inappropriate) application of the Government contractor defense. 

The Government contractor defense, as it has been interpreted, seeks to insulate 

(historically, supply) contractors that explicitly follow Government direction to their 

detriment.8 To the extent that contractors exercise significant amounts of discretion 

in the performance of their contracts, however, the defense has not protected them.9

This point is particularly important. When the Government rushes to identify contractors, hastily drafts its contracts (or merely relies upon open-ended, vague statements of work), and loosely manages contract performance, the Government necessarily delegates the exercise of discretion to contractors in performing their contracts. Specifically, contractors must weigh, among other things, haste versus caution, or, to some extent, profits versus care.10 It is troubling enough that the Government would cede such important decisions to contractors; but it seems strange 

that the Government, prospectively, would insulate its contractors from the fiscal 

ramifications of those decisions. 

This scenario is dramatically different from, for example, the types of contracts 

intended to be covered by the Support Anti-Terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act).11 The SAFETY Act sought to encourage the development, and protect the use of, new or evolving (and, implicitly, unproven) technologies. The underlying assumption of the SAFETY Act is that, without insulation 

from liability, contractors might not otherwise permit the Government to deploy 

these technologies, known as qualified anti-terrorism technologies (QATTS), to combat terrorism. In other words, the contracts involve unusual work or technologies 

(or unusual use of technologies) that is perceived as extraordinarily risky.12

Here, the statute would apply to far more common, if not mundane, tasks. Although clearly important, by and large, the contracts that this bill would cover involve routine tasks such as search and rescue; demolition and repair; debris removal; and de-watering of flooded property. In all such cases, the existing standard 

of care seems reasonable. Moreover, the rather mechanical certification responsibility assigned to the Chief of Engineers is a far cry from the highly judgmental and 

discretionary decision required of the Homeland Security Department Under Secretary pursuant to the SAFETY Act. Specifically, the SAFETY Act employs a number of criteria,13 most, if not all, of which are absent here. For example, it is difficult 
88

private settings; existence of extraordinarily large or unquantifiable potential third party liability risk exposure to seller (or another provider of the technology); substantial likelihood that the 

technology will not be deployed unless SAFETY Act protections are extended; magnitude of risk 

exposure to the public if the technology is not deployed; evaluation of all scientific studies that 

can be feasibly conducted to assess the capability of the technology to substantially reduce risks 

of harm; and whether the technology would be effective in facilitating the defense against acts 

of terrorism. See, e.g., Homeland Security SAFETY Act page at https://www.safetyact.gov/DHS/

SActHome.nsf/Main?OpenFrameset&6HYKFL. 14Public Law 109-62, § 101(2). 15Memorandum from Clay Johnson III, Deputy Director for Management, Limitation on Use 

of Special Micro-purchase Threshold Authority for Hurricane Katrina Rescue and Relief Operations (October 3, 2005). 16Steven L. Schooner, Fiscal Waste: Priceless, L.A. TIMES (September 14, 2005). 17Appendix B to Revised OMB Circular A-123, ‘‘Improving the Management of Government 

Charge Card Programs.’’ 18Proclamation by the President: Revoking Proclamation 7924 (November 3, 2005), http://

www.whitehouse.gov/news/releases/2005/11/20051103-9.html. 19‘‘Iraq—taught us that many of the flexibilities contained in the Federal Acquisition Regulation—are poorly understood by many in Congress and the media—These flexibilities include limited as opposed to full and open competition, higher levels under which purchases can be made 

instantly, and more. Capitalizing on these flexibilities enables us to meet the demands for speed 

and agility integral to any recovery effort.’’ Stan Soloway, Baghdad’s Lessons for Orleans, GOV. 

EXEC. (Oct. 1, 2005), http://www.govexec.com/features/1005-01/1005-01advp2.htm. Last year, 

the Defense Department created the Joint Rapid Acquisition Cell (JRAC), because: ‘‘Some combatant commanders, as well as acquisition experts, don’t realize that many legal requirements 

that tend to bog down military contracts don’t apply during wartime—’’ See, e.g., http://

www.defenselink.mil/news/Nov2004/n11242004—2004112405.html. 

to create a scenario in which there would be a ‘‘substantial likelihood that the technology [involved in, e.g., debris removal] will not be deployed unless the [Gulf Coast 

Recovery Act] protections are extended.’’

OPPORTUNISTIC POST-CRISIS LEGISLATION HARMS THE PROCUREMENT PROCESS

As discussed above, this legislation may be good for contractors, but it does not 

appear to be in the best interests of the nation. Frankly, it is difficult to understand 

why Congress would rush to protect, prospectively, those contractors that, in performing post-Katrina construction work, unnecessarily fail to take precautions, inadequately supervise employees, or employ unduly risky processes or substandard materials or equipment that place the public’s health, safety, and property at risk. Unfortunately, this bill seems to further the trend, since hurricane Katrina, to utilize 

the disaster to pursue public policies that otherwise might prove untenable. 

For example, in its $51.8 billion post-Katrina emergency supplemental appropriation, Congress hastily raised the ‘‘micro-purchase threshold’’ (which, in effect, serves 

as the charge card purchase cap) to $250,000 for purchases relating to relief and 

recovery from Hurricane Katrina.14 That’s a 100 percent increase on the typical 

$2,500 limit and a completely different animal from the $15,000 limit previously imposed during contingencies and emergencies. Fortunately, the administration soon 

thereafter chose to bar further use of this authority.15 That this authority became 

law is breathtaking.16 At the time, more than 300,000 Government purchase cards 

were in circulation. A mountain of Inspector General reports, Government Accountability Office studies, and Congressional hearings have demonstrated that the Government’s management of its charge cards has been abysmal. In August, the White 

House issued long overdue guidance mandating fundamental training and risk management policies.17 Moreover, the effect upon small businesses would have been devastating. 

The same can be said for the administration’s suspension—and subsequent repeal 

of the suspension—of the Davis-Bacon Act.18 The suspension of this law, which requires that workers on Federal construction contracts be paid prevailing wage rates, 

would have ensured that contractors could profit from the massive reconstruction 

effort without permitting minimum wage workers to receiving prevailing wages that 

might permit them to rise into the lower middle class. The administration’s putative 

explanation—that without suspension of the Davis-Bacon Act, insufficient labor 

would be available—was simply disingenuous. 

In both of these examples, the rush to change procurement policies subsequently 

was overcome by reason. Hopefully, reason will prevail here as well. Bear in mind 

that knowledgeable Federal procurement executives—both with regard to Iraq and 

post-Katrina relief understand that the current procurement regime contains sufficient flexibility for the Government to meet its purchasing requirements in times 

of crisis.19
89

20See also, Steven Kelman & Steven L. Schooner, Scandal or Solution?, GOVEXEC.COM

http://www.govexec.com/dailyfed/1105/110705ol.htm (November 7, 2005). 21Outsourcing, or its more palatable pseudonym, ‘‘competitive sourcing,’’ has been one of five 

Government-wide initiatives in the Bush management agenda. See, e.g., Executive Office of the 

President, Office of Management and Budget, The President’s Management Agenda, Fiscal Year 

2002, www.whitehouse.gov/omb/budget/fy2002/mgmt.pdf. ‘‘President Bush is a major advocate 

of—hiring private firms to do the Government’s work—’’ Dru Stevenson, Privatization of Welfare 

Services: Delegation by Commercial Contract, 45 ARIZ. L. REV. 83 (2003), citing, David J. Kennedy, Due Process in a Privatized Welfare System, 64 BROOK. L. REV. 231, 232 (1998) (referencing ‘‘Governor Bush’s effort to privatize most of Texas’ welfare system—in his attempt to 

make a name for himself—that could carry him to national office.’’ See also, Matthew Diller, 

Form and Substance in the Privatization of Property Programs, 49 UCLA L. REV. 1739, 1763, 

n. 94 (2002) (‘‘Governor Bush sought to hand the administration of the state’s welfare system 

over to—Lockheed Martin—and Electronic Data Systems—’’). 22See, generally, Steven L. Schooner, Feature Comment—Empty Promise for the Acquisition 

Workforce, 47 THE GOVERNMENT CONTRACTOR ¶ 203 (May 4, 2005), available at http://ssrn.com/

abstract=719685; Griff Witte & Robert O’Harrow, Jr, Short-Staffed FEMA Farms Out Procurement, WASHINGTON POST D01 (September 17, 2005). 23A simple Iraq ‘‘lesson learned’’ was that, if the Government relies heavily upon contractors, 

the Government must maintain, invest in, and apply appropriate acquisition professional resources to select, direct, and manage those contractors. Unfortunately, insufficient contract management resources were applied. See, generally, Steven L. Schooner, Contractor Atrocities at 

Abu Ghraib: Compromised Accountability in a Streamlined, Outsourced Government, 16 STAN- FORD LAW & POLICY REVIEW 549 (2005). For example, General Fay poignantly articulated: 

‘‘[T]here was no credible exercise of appropriate oversight of contract performance at Abu 

Ghraib.’’ MG George R. Fay, Investigating Officer, AR 15-6 Investigation of the Abu Ghraib Detention Facility and 205th Military Intelligence Brigade, at 52 ( ‘‘the Fay Report’’). This problem 

exists Government-wide: ‘‘[T]he administration of contracts[,] once they have been signed[,] has 

been the neglected stepchild of [procurement system reform] effort.’’ Steven Kelman, Strategic 

Contracting Management, in MARKET BASED GOVERNANCE: SUPPLY SIDE, DEMAND SIDE, UPSIDE, 

AND DOWNSIDE at 89-90, 93 (John D. Donahue & Joseph S. Nye Jr. eds., 2002). 24See, generally, Federal Procurement: Spending and Workforce Trends, GAO-03-443 (April 

2003); Steven L. Schooner, Fear of Oversight: The Fundamental Failure of Businesslike Government, 50 AM. U.L. REV. 627 (2001); Office of the Inspector General, Department of Defense, 

DoD Acquisition Workforce Reduction Trends and Impacts, Report D-2000-088 (February 29, 

2000). 

THIS LEGISLATION IGNORES THE GOVERNMENT’S MOST CRITICAL PROCUREMENT

PROBLEM

I would be remiss if I failed to take this opportunity to address a pressing matter 

that cries out for Congressional attention and intervention.20 The Federal Government must devote more resources to the acquisition function. This investment is urgent given the combination of the 1990’s Congressionally-mandated acquisition 

workforce reductions, the administration’s pressure to outsource,21 and the dramatic 

increase in procurement spending since the September 11, 2001 attacks and, now, 

hurricane Katrina.22

Congress has been quick to call for more auditors and inspectors general to scrutinize Katrina-related contracting. That’s a responsible gesture. But there has been 

no corresponding call for more contracting experts to perform the many functions 

that are necessary for the procurement system to work well. In order to serve the 

taxpaying public and meet the needs of Agency customers, acquisition professionals 

must promptly and accurately describe what the Government wants to buy, identify 

and select quality suppliers, ensure fair prices, structure contracts with proper monetary incentives for good performance, and manage and evaluate contractor performance.23

Sadly, the contracting workforce desperately requires a dramatic recapitalization.24 A bipartisan, post-Cold War, 1990’s initiative severely reduced the contracting workforce, leaving the Government unprepared for a post-9/11 spending 

binge. In the last four years, contracting dollars have increased by half, without a 

corresponding increase in the workforce. For fifteen years, the Government skimped 

on training, while contracting officers faced increasing workloads and confronted increasingly complex contractual challenges. Scarce resources, when they become 

available, were allocated to oversight, rather than supplementing, supporting, or 

training contracting people. Senior procurement officials increasingly bemoan that 

no young person in his or her right mind would enter Government contracting as 

a career. 

The old adage—an ounce of prevention is worth a pound of cure—rings true. More 

auditors and inspectors general will guarantee a steady stream of scandals, but 

they’ll neither help avoid the scandals nor improve the procurement system. Conversely, a prospective investment in upgrading the number, skills, and morale of 

Government purchasing officials would reap huge dividends for the taxpayers. 
90

1 In these excerpts, the numbering of the footnotes has changed from the original. 2 See, e.g., Boyle v. United Technologies Corp., 487 U.S. 500 (1988). 3 The Boyle decision seems to be providing the logical framework . . . to decide whether the 

Government contractor defense will protect contractors from tort liability—[T]he Supreme Court 

has given a set of straightforward requirements, the most important of which is the Government 

approval requirement. [W]here the Government Agency is a full participant in the design process, the defense can be predicted to be a winner. In contrast, if the Government has not participated in design the contractor will find it very hard to use the defense. If the plaintiff can prove 

that the defect occurred in the manufacturing process, the defense will be of little or no value 

to the contractor. Ralph C. Nash & John Cibinic, Postscript: The Circuit Court View of the Government Contractor Defense, 8 NASH & CIBINIC REP. 52 (August 1990). 4 In removing debris, for example, a contractor faces significant economic choices with regard 

to, among other things, (1) the experience of its personnel (e.g., drivers with spotless safety 

records might demand higher wages); (2) the quality and maintenance of its equipment (newer, 

better maintained trucks likely cost more to purchase or lease); (3) the means of performance 

(the minimally acceptable environmental standards likely cost less than more current, potenCONCLUSION

That concludes my statement. Thank you for the opportunity to share these 

thoughts with you. I would be pleased to answer any questions. 

RESPONSE BY STEVEN L. SCHOONER TO AN ADDITIONAL QUESTION FROM

SENATOR JEFFORDS

Question 1. Please discuss how the Government contractor defense would work 

under S. 1761. 

Response. Frankly, the Government contractor defense simply would not work—

in terms of serving its original purpose—under S. 1761. My perception is that the 

process would entail the following: 

1. A request would be submitted to the Corps of Engineers for a certificate. This 

request could be prospective or retrospective. It also appears that such a request 

could be submitted either by the Government, a contractor, or another entity such 

as an insurance company. 

2. The Chief of Engineers would be required to issue a ‘‘certificate of need.’’

• if the work would take place in the disaster zone. (It is unclear whether the 

Chief of Engineers actually would need to determine whether the work ‘‘was or will 

be necessary for the recovery of a disaster zone from disaster. . . .’’); and 

• if at least 50 percent of the work fell into any of the identified (albeit broad) 

categories (including construction, clean-up, debris removal, etc.); and 

• regardless of how much discretion the contractor enjoyed in performing the 

work; and 

• regardless of whether the request applied to a Federal, State, or local Government contract.

3. Contractors (and subcontractors) could raise the Government contractor defense 

to defeat claims brought by a damaged party (e.g., a member of the public or a contractor employee). Specifically, they would be entitled to a rebuttable presumption 

that all of the elements of the Government contractor defense were satisfied and 

that the Government contractor defense applied to the lawsuit.

• ‘‘Moreover, a damaged party could not overcome the above presumption without 

producing evidence that the contractor acted fraudulently or with willful misconduct’’ in relation to the certificate process. Accordingly, this usage of the phrase 

‘‘rebuttable presumption’’ seems inapt. Typically, one rebuts a presumption by producing evidence to the contrary. Here, however, even the production of specific, unequivocal evidence that demonstrated that it was inappropriate to apply the Government contractor defense would be to no avail. 

4. Ultimately, then, the bill turns the Government contractor defense on its head. 

As I explained in my written statement:1

The Government contractor defense, as it has been interpreted, seeks to insulate 

(historically, supply) contractors that explicitly follow Government direction to their 

detriment.2 To the extent that contractors exercise significant amounts of discretion 

in the performance of their contracts, however, the defense has not protected them.3

This point is particularly important. When the Government rushes to identify contractors, hastily drafts its contracts (or merely relies upon open-ended, vague statements of work), and loosely manages contract performance, the Government necessarily delegates the exercise of discretion to contractors in performing their contracts. Specifically, contractors must weigh, among other things, haste versus caution, or, to some extent, profits versus care.4 It is troubling enough that the Govern-
91

tially cleaner and/or safer technologies); or (4) time management (truck drivers might save time 

and money by transporting hazardous waste through, rather than avoiding, residential communities). 5 Public Law 109-62, §101(2). 6 Memorandum from Clay Johnson III, Deputy Director for Management, Limitation on use 

of Special Micro-purchase Threshold Authority for Hurricane Katrina Rescue and Relief Operations (October 3, 2005). 7 Steven L. Schooner, Fiscal Waste: Priceless, L.A. TIMES (September 14, 2005). 8 Appendix B to Revised OMB Circular A-123, ‘‘Improving the Management of Government 

Charge Card Programs.’’ 9 Proclamation by the President: Revoking Proclamation 7924 (November 3, 2005), http://

www.whitehouse.gov/news/releases/2005/11/20051103-9.html. 10 ‘‘Iraq . . . taught us that many of the flexibilities contained in the Federal Acquisition 

Regulation . . . are poorly understood by many in Congress and the media. . . These flexibilities include limited as opposed to full and open competition, higher levels under which purchases can be made instantly, and more. Capitalizing on these flexibilities enables us to meet 

the demands for speed and agility integral to any recovery effort.’’ Stan Soloway, Baghdad’s Lessons for Orleans, GOV. EXEC. (Oct. 1, 2005), http://www.govexec.com/features/1005-01/1005-

01advp2.htm. Last year, the Defense Department created the Joint Rapid Acquisition Cell 

Continued

ment would cede such important decisions to contractors; but it seems strange that 

the Government, prospectively, would insulate its contractors from the fiscal ramifications of those decisions. 

REPONSES BY STEVEN L. SCHOONER TO AN ADDITIONAL QUESTIONS FROM

SENATOR THUNE

Question 1. In your testimony, you expressed great dismay at what you call a ‘‘disconcerting trend of seemingly opportunistic post-crisis behavior.’’ I am not sure what 

you mean by that, so let me ask what it is that you heard during our subcommittee 

hearing (from Mr. Zelenka, Mr. Perkins, or Mr. Feigin) that you would consider opportunistic? Are these gentlemen among the people you have in mind? 

Response. My oral testimony was an effort to condense my prepared statement, 

which addressed this issue at great length under the heading: ‘‘Opportunistic PostCrisis Legislation Harms the Procurement Process.’’ Please consider the following 

excerpt:

. . . Unfortunately, this bill seems to further the trend, since hurricane 

Katrina, to utilize the disaster to pursue public policies that otherwise might 

prove untenable. 

For example, in its $51.8 billion post-Katrina emergency supplemental appropriation, Congress hastily raised the ‘‘micro-purchase threshold’’ (which, in effect, serves as the charge card purchase cap) to $250,000 for purchases relating 

to relief and recovery from Hurricane Katrina.5 That’s a 100 fold increase on 

the typical $2,500 limit and a completely different animal from the $15,000 

limit previously imposed during contingencies and emergencies. Fortunately, 

the administration soon thereafter chose to bar further use of this authority.6

That this authority became law is breathtaking.7 At the time, more than 

300,000 Government purchase cards were in circulation. A mountain of Inspector General reports, Government Accountability Office studies, and Congressional hearings have demonstrated that the Government’s management of its 

charge cards has been abysmal. In August, the White House issued long overdue guidance mandating fundamental training and risk management policies.8

Moreover, the effect upon small businesses would have been devastating. 

The same can be said for the administration’s suspension—and subsequent repeal of the suspension—of the Davis-Bacon Act.9 The suspension of this law, 

which requires that workers on Federal construction contracts be paid prevailing wage rates, would have ensured that contractors could profit from the 

massive reconstruction effort without permitting minimum wage workers to receiving prevailing wages that might permit them to rise into the lower middle 

class. The administration’s putative explanation-that without suspension of the 

Davis-Bacon Act, insufficient labor would be available—was simply disingenuous. 

In both of these examples, the rush to change procurement policies subsequently was overcome by reason. Hopefully, reason will prevail here as well. 

Bear in mind that knowledgeable Federal procurement executives—both with 

regard to Iraq and post-Katrina relief—understand that the current procurement regime contains sufficient flexibility for the Government to meet its purchasing requirements in times of crisis.10
92

(JRAC), because: ‘‘Some combatant commanders, as well as acquisition experts, don’t realize 

that many legal requirements that tend to bog down military contracts don’t apply during wartime. . . .’’ See, e.g., http://www.defenselink.mil/news/Nov2004/n11242004—2004112405.html. 11 See also, Steven Kelman & Steven L. Schooner, Scandal or Solution?, GOVEXEC.COM 

http://www.govexec.com/dailyfed/1105/110705ol.htm (November 7, 2005). 12 Outsourcing, or its more palatable pseudonym, ‘‘competitive sourcing,’’ has been one of five 

Government-wide initiatives in the Bush management agenda. See, e.g., Executive Office of the 

President, Office of Management and Budget, The President’s Management Agenda, Fiscal Year 

2002, www.whitehouse.gov/omb/budget/fy2002/mgmt.pdf. ‘‘President Bush is a major advocate 

of. . . hiring private firms to do the Government’s work. . .’’ Dru Stevenson, Privatization of 

Welfare Services: Delegation by Commercial Contract, 45 ARIZ. L. REV. 83 (2003), citing, David 

J. Kennedy, Due Process in a Privatized Welfare System, 64 BROOK. L. REV. 231, 232 (1998) 

(referencing ‘‘Governor Bush’s effort to privatize most of Texas’ welfare system. . . in his attempt to make a name for himself. . . that could carry him to national office.’’ See also, Matthew Diller, Form and Substance in the Privatization of Property Programs, 49 UCLA L. REV. 

1739, 1763, n. 94 (2002) (‘‘Governor Bush sought to hand the administration of the State’s welfare system over to. . . Lockheed Martin. . . and Electronic Data Systems. . . .’’). 13 See, generally, Steven L. Schooner, Feature Comment—Empty Promise for the Acquisition 

Workforce, 47 THE GOVERNMENT CONTRACTOR 203 (May 4, 2005), available at http://ssrn.com/

abstract=719685; Griff Witte & Robert O’Harrow, Jr, Short-Staffed FEMA Farms Out Procurement, WASHINGTON POST D01 (September 17, 2005). 14 A simple Iraq ‘‘lesson learned’’ was that, if the Government relies heavily upon contractors, 

the Government must maintain, invest in, and apply appropriate acquisition professional resources to select, direct, and manage those contractors. Unfortunately, insufficient contract management resources were applied. See, generally, Steven L. Schooner, Contractor Atrocities at 

Abu Ghraib: Compromised Accountability in a Streamlined, Outsourced Government, 16 STAN- FORD LAW & POLICY REVIEW 549 (2005). For example, General Fay poignantly articulated: 

‘‘[T]here was no credible exercise of appropriate oversight of contract performance at Abu 

Ghraib.’’ MG George R. Fay, Investigating Officer, AR 15-6 Investigation of the Abu Ghraib Detention Facility and 205th Military Intelligence Brigade, at 52 ( ‘‘the Fay Report’’). This problem 

exists Government-wide: ‘‘[T]he administration of contracts[,] once they have been signed[,] has 

been the neglected stepchild of [procurement system reform] effort.’’ Steven Kelman, Strategic 

Contracting Management, in MARKET BASED GOVERNANCE: SUPPLY SIDE, DEMAND SIDE, UPSIDE, 

AND DOWNSIDE at 89-90, 93 (John D. Donahue & Joseph S. Nye Jr. eds., 2002). 15 See, generally, Federal Procurement: Spending and Workforce Trends, GAO-03-443 (April 

2003); Steven L. Schooner, Fear of Oversight: The Fundamental Failure of Businesslike Government, 50 AM. U.L. REV. 627 (2001); Office of the Inspector General, Department of Defense, DoD 

Acquisition Workforce Reduction Trends and Impacts, Report D-2000-088 (February 29, 2000). 

Following this section, my written statement attempted to contrast this opportunistic behavior with what, instead, would prove a more productive focus of legislative 

energy in a section titled: ‘‘This Legislation Ignores The Government’s Most Critical 

Procurement Problem.’’

I would be remiss if I failed to take this opportunity to address a pressing matter that cries out for Congressional attention and intervention.11 The Federal 

Government must devote more resources to the acquisition function. This investment is urgent given the combination of the 1990’s Congressionally mandated acquisition workforce reductions, the administration’s pressure to 

outsource,12 and the dramatic increase in procurement spending since the September 11, 2001 attacks and, now, hurricane Katrina.13

Congress has been quick to call for more auditors and inspectors general to 

scrutinize Katrina-related contracting. That’s a responsible gesture. But there 

has been no corresponding call for more contracting experts to perform the 

many functions that are necessary for the procurement system to work well. In 

order to serve the taxpaying public and meet the needs of Agency customers, 

acquisition professionals must promptly and accurately describe what the Government wants to buy, identify and select quality suppliers, ensure fair prices, 

structure contracts with proper monetary incentives for good performance, and 

manage and evaluate contractor performance.14

Sadly, the contracting workforce desperately requires a dramatic recapitalization.15 A bipartisan, post-Cold War, 1990’s initiative severely reduced the contracting workforce, leaving the Government unprepared for a post-9/11 spending 

binge. In the last four years, contracting dollars have increased by half, without 

a corresponding increase in the workforce. For fifteen years, the Government 

skimped on training, while contracting officers faced increasing workloads and 

confronted increasingly complex contractual challenges. Scarce resources, when 

they become available, were allocated to oversight, rather than supplementing, 

supporting, or training contracting people. Senior procurement officials increasingly bemoan that no young person in his or her right mind would enter Government contracting as a career. 

The old adage—an ounce of prevention is worth a pound of cure—rings true. 

More auditors and inspectors general will guarantee a steady stream of scan-
93

16 Pub. L. 107-296, §861. See, generally, Homeland Security SAFETY Act page at https://

www.safetyact.gov/DHS/SActHome.nsf/Main?OpenFrameset&6HYKFL;Alison M. Levin, Note: 

The SAFETY Act of 2003: Implications for the Government Contractor Defense, 34 PUB. CONT. L.J. 175 (2004). 17 This point cannot be over-emphasized. For a good articulation of this principle, see, e.g., 

Patrick E. Tolan, Jr., Environmental Liability Under Public Law 85-804: Keeping the Ordinary 

Out of Extraordinary Contractual Relief, 32 PUB. CONT. L.J. 215 (2003) (emphasizing the unique 

(or, specifically, extraordinary) nature of the contractual requirements, particularly in research 

and development, that proved uninsurable because they involved, for example, nuclear power 

or highly volatile missile fuels). 18 The seven criteria include: prior United States Government use or demonstrated substantial utility and effectiveness; availability of the technology for immediate deployment in public 

and private settings; existence of extraordinarily large or unquantifiable potential third party 

liability risk exposure to seller (or another provider of the technology); substantial likelihood 

that the technology will not be deployed unless SAFETY Act protections are extended; magnitude of risk exposure to the public if the technology is not deployed; evaluation of all scientific 

studies that can be feasibly conducted to assess the capability of the technology to substantially 

reduce risks of harm; and whether the technology would be effective in facilitating the defense 

Continued

dals, but they’ll neither help avoid the scandals nor improve the procurement 

system. Conversely, a prospective investment in upgrading the number, skills, 

and morale of Government purchasing officials would reap huge dividends for 

the taxpayers.

Moreover, just to be clear, no, my testimony was not written with Messrs. 

Zelenka, Perkins, or Feigin in mind.

Question 2. How would you characterize the work being done in New Orleans? Are 

these ‘‘seemingly ordinary tasks’’? Are they mundane? Are these ordinary working 

conditions? Is there nothing unique about the situation? I ask this question because 

earlier this month, the mayor of New Orleans testified before the full EPW Committee and described the destruction as being ‘‘unprecedented’’ in nature. 

Response. On a contract-by-contract basis, the lion’s share of the work that would 

be covered by S. 1761, consistent with the work being done in New Orleans, can 

fairly be described—from a public procurement perspective—as ordinary or mundane. I do not dispute that the scope of the destruction is unprecedented. Nor do 

I mean to suggest that the affected work is in any way unimportant. Rather, this 

characterization merely reflects the nature of the work, rather than the working 

conditions, the situation, or the scope of the combined tasks. 

To be clear, I use these terms to describe tasks such as search and rescue; demolition and repair; debris removal; and de-watering of flooded property in contrast to 

work for which (a) an extremely small number of contractors (or a limited pool of 

individuals) are capable of performing, or (b) unique facilities are required to perform, the work. To put this in context, the ordinary nature of the work is reflected 

in the fact that the private sector, in the United States and abroad, offers a nearly 

unlimited capacity to perform these tasks. Contrast this, for example, with the extremely limited private sector capacity available to design, manufacture, or repair 

a nuclear submarine. 

As indicated above, my oral testimony was an effort to condense my prepared 

statement, which addressed this issue at great length under the heading: ‘‘Misuse 

of the Government Contractor Defense.’’ Consider the following excerpt:

This scenario is dramatically different from, for example, the types of contracts 

intended to be covered by the Support Anti-Terrorism by Fostering Effective 

Technologies Act of 2002 (SAFETY Act).16 The SAFETY Act sought to encourage the development, and protect the use of, new or evolving (and, implicitly, 

unproven) technologies. The underlying assumption of the SAFETY Act is that, 

without insulation from liability, contractors might not otherwise permit the 

Government to deploy these technologies, known as qualified antiterrorism 

technologies (QATTS), to combat terrorism. In other words, the contracts involve unusual work or technologies (or unusual use of technologies) that is perceived as extraordinarily risky.17

Here, the statute would apply to far more common, if not mundane, tasks. Although clearly important, by and large, the contracts that this bill would cover 

involve routine tasks such as search and rescue; demolition and repair; debris 

removal; and de-watering of flooded property. In all such cases, the existing 

standard of care seems reasonable. Moreover, the rather mechanical certification responsibility assigned to the Chief of Engineers is a far cry from the 

highly judgmental and discretionary decision required of the Homeland Security 

Department Under Secretary pursuant to the SAFETY Act. Specifically, the 

SAFETY Act employs a number of criteria,18 most, if not all, of which are ab-
94

against acts of terrorism. See, e.g., Homeland Security SAFETY Act page at https://

www.safetyact.gov/DHS/SActHome.nsf/Main?OpenFrameset&6HYKFL. 

sent here. For example, it is difficult to create a scenario in which there would 

be a ‘‘substantial likelihood that the technology [involved in, e.g., debris removal] will not be deployed unless the [Gulf Coast Recovery Act] protections are 

extended.’’

STATEMENT OF PAUL BECKER, PRESIDENT, WILLIS NORTH AMERICAN

CONSTRUCTION PRACTICE

Good afternoon. My name is Paul Becker; I work at Willis, a global insurance 

broker, as the North American Construction Practice Group Leader. I am proud to 

lead this practice, as my colleagues and I represent more than 3,500 construction 

related clients in North America. We work to structure and secure effective risk 

management programs that can address safety issues, contractual liabilities, surety 

bonds and more. I have been in the insurance business for 27 years—the vast majority of which has been in the construction sector—and it is my pleasure and honor 

to appear before you today testifying as to the importance of insurance in the cleanup of New Orleans in the wake of Hurricane Katrina—specifically the need to limit 

the liability of contractors engaged in this important work. 

As insurance brokers, we work with our clients around the world and across all 

industries helping them assess, quantify, mitigate and transfer their risks thereby 

allowing them to focus on achieving their business goals. Doing so affords them the 

comfort and confidence that their assets—property, people, intellectual capital, 

equipment—are more than adequately and properly protected against a broad range 

of risks. We are not an insurance company—that is, we do not underwrite the risks. 

We are an intermediary bringing the two parties together working to fashion the 

very best, customized coverage we can secure for our clients. As part of this client 

advocacy, we work with and have developed strong relationships with insurance carriers around the world such that we know their risk appetite, how they consider 

certain risks and the various factors they weigh in their underwriting decisions. 

Given our experiences, we have a working knowledge as to how they think and how 

they approach various risks—essentially whether or not to underwrite a risk, how 

to price a policy and how to set the terms and conditions of a policy—which amounts 

to a contract. 

EXPERIENCE WITH EXTRAORDINARY ‘‘JOB SITES’’

In the aftermath of the events of September 11, 2001, Willis secured the insurance coverages for the contractors who cleaned up the World Trade Center site. 

Quite thankfully—for obvious reasons—the characteristics of this site were unlike 

any we or anyone else in either construction or insurance had previously seen. Normally, before the clean-up of a disaster site starts, environmental and engineering 

firms conduct studies, run assessments and issue reports as to the nature of the site 

and the specifics involved. Due to the outstanding circumstances of the events of 

9/11, there was not time for such exercises and contractors got to work without a 

full understanding of what was ahead. How stable was the ground? What were the 

asbestos levels? What other hazardous materials could have a long-term impact on 

health of the workers and general public? Today, over four years since 9/11, the 

number of law suits being filed continues to grow. Only in time will we determine 

the balance between the insurance purchased vs. claims now being filed in New 

York. But one thing is certain, litigation, upon litigation, upon litigation has created 

a great deal of uncertainty and serious concern among the contractors involved. 

While the scope of the New Orleans effort is multiples larger than the World 

Trade Center site, these same concerns are at hand today as they were in September 2001. The fundamental problem in securing the necessary coverage is a reflection of the four component actions I mentioned a few moments ago—insurance 

is about assessing, quantifying, mitigating and transferring risk. Models predict 

likely scenarios, calculate possible losses and then intelligent plans determine how 

to avoid such problems and spread the risk among various parties at an appropriate 

price. In these unique situations, there may be a tendency to focus on the financing 

of the risk so the work can get underway. Without the assessment, how does a carrier know what the possible losses are? And if the risks are unknown such that 

there could be significant unforeseen liabilities, 1) how can contracting firms adopt 

preventative measures to avoid problems which will give rise to future claims? and 

2) how can carriers determine the right price for the coverage? 
95

Over the last several weeks, we have been engaged in conversations with carriers 

around the world on this matter and they are expressing to us the very concerns 

that I am sharing with you today:

• Uncertain site conditions; 

• Unusual and unknown health hazards; 

• What chemicals are being released into the air during the cleanup?; 

• The limited nature of the tools available to assess the number and types of environmental factors in play; 

• Varying standards between local, state and Federal authorities; 

• The fast track nature of the work to be done; and, 

• The lack of certainty on contracting provisions and legal environments.

All these factors substantiate that the traditional methods of risk identification, 

control and underwriting have been significantly altered and make it difficult to estimate—or even guess—what the full extent of the long-term liabilities arising from 

the cleanup will be. It leads us to question whether the insurance industry has the 

ability to fully underwrite the risks inherent in this work. If this bears out, contractors will be left fending for themselves without adequate insurance protection. That 

is not to say that contractors will not be able to purchase insurance in some form 

for their activities in the Gulf; rather, without addressing the unique factors in this 

situation, the coverage they will be able to obtain will in most cases not adequately 

protect them over time from the exposures they will be facing. And this is not a 

question of if but when and based on our experience, these matters will manifest 

themselves over a 5- to 10-year timeframe—though there is already talk of the 

‘‘Katrina Cough.’’

I might add that without adequate protection, contractors cannot properly account 

for their risks and endanger the long-term viability of their companies. Accordingly 

these issues could prevent quality contractors from participating in the clean-up and 

recovery efforts. 

This is important legislation. While many first-rate contractors are already on the 

ground participating in this important effort, many others are hesitant to get involved in projects of this magnitude unless they have insurance against what are 

normally quantifiable risks. And carriers as well tend not to write policies if they 

are not able to make the necessary judgments. In the case of New Orleans, as it 

was with the World Trade Center, it will be almost impossible to establish the proper control procedures to protect their interests. Limiting the liability of construction 

companies engaged in the clean-up of New Orleans such that they can gain the 

cover they need is critical and it has been my distinct honor to share my experiences 

with you this afternoon. 

Mr. Chairman, I’ve concluded the section of my prepared remarks that I would 

like to share with you today and am happy to enter the remainder—which addresses some general issues of insurance you may wish to consider—into the record. And 

I would be happy to answer any questions you might have. 

SOME ADDITIONAL BACKGROUND ON INSURANCE

Insurance is meant to have the premiums of many similarly insured parties pay 

for the losses of the few which actually have claims. By financing risks in such a 

way, insurance serves as a vital tool supporting commercial activity. It brings the 

assurance of capital when the unforeseen and unfortunate event occurs. Insurance 

enables construction firms to undertake work knowing that they have a financial 

partner ready to provide capital that may be necessary to assure that the contractor 

remains viable and can complete the work as promised. 

Both the insurance carriers and their insured construction contractors have a 

great interest in working together to identify risks and to develop effective protocols 

and procedures to avoid or control those risks. Clearly identifying and managing 

risks to avoid losses is the most cost-effective approach for both parties. This critical 

part of the insurance process, that of identifying and trying to measure risks, is 

often not understood by non-insurance professionals, but it is completely integrated 

into the process of agreeing to insure certain risks and how much such insurance 

costs. Simply put, if insurance companies do not or can not understand the risks 

they are being asked to insure, they have a very difficult time providing the risk 

financing which allows companies to operate. 

Insurance policies by their nature are specific to different types of risks and exposures, and contractors often purchase a number of different types of coverage each 

year to address different operational risks. The most relevant to today’s hearing are 

the coverages which come into play for liability protection when claims are brought 

by third parties. They include:
96

• General Liability Insurance, which addresses the liabilities contractors have to 

third parties for operations and for damages or injuries which occur once those operations are completed. This coverage applies to many obvious types of situations including injuries to third parties, and damage to property while performing operations and once the work is completed. These policies do not normally extend to environmental liabilities which arise out of the work. Those types of risks are usually 

insured by Pollution Liability policies. • Contractors Pollution Liability, which addresses liabilities that arise out of hazardous materials which contractors encounter on job sites. In the case of the cleanup and reconstruction activities it is expected that this will be a critical coverage. 

It is important to note that this policy differs from insurance company to insurance 

company and as a result has significant differences in scope of coverage and limits 

of liability which can be obtained. • Umbrella and Excess Liability, which is used as a method to obtain higher limits of coverage excess of the General Liability insurance limits. It does not act to 

increase the pollution liability limits.

To understand the complex limitations of such insurance, it is important to note:

• Each insurance company offers different coverages for each policy depending on 

their underwriting philosophy and financial goals. • Policies are underwritten based on the underwriters’ understanding of the risks 

and typically narrowed to cover those risks which are known or can be anticipated. • These policies all have a defined limit of insurance which once exhausted, cause 

the policies to no longer respond. • The policies respond to the liability of the specific contractor so it is often the 

case that a claim will cause several insurance carriers to respond to several contractors. This can cause significant delays in addressing claims as liability is sorted out 

by the legal process and each carrier defends each insured separately. • Coverages vary as noted from carrier to carrier and from contractor to contractor based on the individual contractors’ understanding of its risks, its expertise 

in obtaining coverage and the amount of premium involved. 

Insurance is a risk financing business which uses historical data to predict future 

costs and establish premiums. The limitations noted above create a situation where, 

in the case of a broad based catastrophe such as Katrina, claims will be unknown 

at the outset, difficult to predict or measure, and subject to uncertainty of how insurance coverage will respond. This contrasts with normal construction activities 

where underwriters have significant experience and data which shows a path to 

pricing the risk and taking on the exposure in the form of insurance policies. 

RESPONSE BY PAUL BECKER TO AN ADDITIONAL QUESTION FROM SENATOR JEFFORDS

Question 1. Mr. Becker, In your testimony, you stated that insurance is about assessing, quantifying, mitigating and transferring risk and you wonder if the insurance industry has the ability to fully underwrite the risks related to a tragedy like 

Hurricane Katrina. 

The exceptionally broad liability shield for contractors in S. 1761 passes the risk 

of loss from the insurer and contractor to the citizens of the Gulf Coast. How does 

the bill’s treatment of private citizen correlate to the insurance industry’s usual 

practice of spreading the risk among parties? 

Responce. Senator Jeffords, thank you for your question on how the Gulf Coast 

Recovery Act’s (S. 1761) treatment of private citizens correlates to the insurance industry’s usual practice of spreading risk among parties. 

In evaluating risks, the insurance industry typically evaluates the exposures and 

the spread of the risk among parties. In the case of the damages from Hurricane 

Katrina, the insurances community needs to first determine the risks and exposures 

that will be associated from the recovery efforts. Without this information, insurance carriers will be unable to provide accurate coverages and establish reasonable 

premiums. As a result, contractors will be assuming risk which will be difficult to 

predict (or in many cases will be impossible to identify) and will be faced with essentially rolling the dice on longer terms risks versus available insurance. 

Absent of a large disaster like Hurricane Katrina, the typical spread of risk by 

insurance carriers remains a difficult job. Given the broad affects of claims that 

arise out of construction general liability insurance coverages, the insurance industry must consider the various contractual relationships of their insured contractors. 

In the evaluation to exposures and the adjustment of losses, the insurance industry 

also takes into consideration Federal and local jurisdictional statutes that may alter 

the liability of their insured. In many local jurisdictions (for example— Georgia and 

Florida), contractors are afforded liability caps in situations where all project speci-
97

fications of a State’s Department of Transportation Contracts were adhered to. 

Thus, in cases of lawsuits against roadway contractors alleging a design defect in 

the roadway (possibly causing an automobile accident—for example), these statutes 

provide equal protection to contractors who built or re-designed a roadway to the 

exact specifications and codes stated by the local Department of Transportation. 

In the end, S. 1761 would provide insurance carriers greater information on potential risks from the recovery efforts. The bill’s effects on the evaluation of exposures and spreading of risk by the insurance industry would be similar to their typical assessment of other Federal and local statutes that alters liability in loss situations among parties. 

STATEMENT OF THE AMERICAN ROAD AND TRANSPORTATION BUILDERS ASSOCIATION

Chairman Thune and other members of the subcommittee, thank you for providing the American Road and Transportation Builders Association (ARTBA) an 

opportunity to submit testimony on Government contractor liability issues arising 

from major disaster situations. ARTBA is the only national organization representing the collective interests of the transportation construction industry before 

the Federal Government. ARTBA’s membership includes public agencies and private 

firms and organizations that own, plan, design, supply and construct transportation 

projects throughout the country. Our industry generates more than $200 billion annually in the United States economic activity and sustains more than 2.2 million 

American jobs. 

Mr. Chairman, there are two common themes to every national disaster situation:

they occur with little to no advance warning; and a herculean response and recovery 

effort is required by those in and outside the affected area. Major disasters hit hard 

and fast. Those responding to these events must be allowed to react with the same 

vigor. The widespread damage accompanying national catastrophes frequently call 

for a comprehensive response from a host of partners, including the construction industry. 

Federal, State and local Governments need the assistance of the construction industry in these situations. ARTBA member firms routinely—and voluntarily—step 

up when emergencies arise. Construction and engineering companies are often the 

first responders in declared disasters, providing critical knowledge, know-how, and 

skills—as well as equipment and materials—to rescue and recovery efforts. Working 

at the direction of public agencies and officials, these firms lead efforts to demolish, 

remove, and repair and reconstruction damaged utilities, structures and facilities. 

Our industry, for example, played a major role in the rescue and recovery efforts 

following the September 11 terrorist attacks on the World Trade Center and Pentagon. Employees of Tully Construction of Flushing, New York, were among the first 

to arrive at the Ground Zero site. Tully was completing work on the Westside Highway in Lower Manhattan when the attacks occurred, which enabled the firm to 

have equipment and manpower in place to begin assisting with rescue, recovery and 

debris removal efforts immediately. 

Once the magnitude of the devastation and the complexity of the clean-up necessary were fully understood, the industry’s role at the site increased, and these 

firms and individuals remained on the job until it was completed. Tully was named 

as one of the four prime contractors responsible for debris removal, demolition work, 

and construction of temporary structures at the site. ARTBA’s New York City chapter—the General Contractor’s Association of New York—provided critical leadership 

to the efforts by assisting Federal, State and local officials in the coordination of operations. Numerous engineering firms provided technical expertise and project 

managementexperience to carry out the complex recovery effort. Finally, equipment 

manufacture’s worked to locate and deliver the construction machinery necessary to 

carry out the clean-up. 

Many of these activities were carried out before contracts for the work could be 

drafted and signed. Rescue and recovery could not wait for contracts, and these 

firms did not hesitate to assist Federal, State and local officials in the efforts. 

The transportation construction industry also routinely provides Federal, State 

and local officials assistance in recovery, repair and rebuilding efforts following natural disasters. After Hurricane Katrina devastated the Gulf Coast, ARTBA member 

firms joined in efforts to clear debris and reopen airport, roadway, rail, transit and 

other transportation infrastructure facilities damaged during the hurricanes. 

In assisting Federal, State and local Governments respond to disasters, these contractors are often times exposed to liability and litigation for doing the right thing 

and responding in time of national tragedy. Unlike public officials and the agencies 
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1 ASCE, founded in 1852, is the country’s oldest national civil engineering organization. It 

represents more than 139,000 civil engineers in private practice, Government, industry, and academia who are dedicated to the advancement of the science and profession of civil engineering. 

ASCE carried out Building Performance Assessments of the World Trade Center, the Pentagon, 

and the Murrah Federal Building, and technical assessments following earthquakes, hurricanes, 

and other natural disasters. ASCE is a 501(c) (3) non-profit educational and professional society. 

firms are assisting, private contractors are not protected by the principle of sovereign immunity. 

The firms responding to the September 11 terrorist attacks were subject to substantial litigation costs. With approximately 3,000 actions filed to date against the 

contractors involved in the Ground Zero site clean-up, litigation cost are expected 

to grow. In fact, several of these companies were threatened with the loss of insurance coverage for the potentially open-ended liability they incurred by doing the 

right thing. 

As such, the threat of class action lawsuits and lack of liability protections could 

dampen private firms’ response to emergency situations. Contractors do not carry 

the insurance necessary to cover all of the many potential risks involved in taking 

necessary action during times of crisis. Companies are risking crippling financial 

impacts on their firm for responding to emergency situations for which they do not 

have liability coverage. The lack of limited liability protections for construction and 

engineering firms providing important public service during emergency situations 

could undermine response, and ARTBA urges congressional action to ensure that 

the threat of open-ended lawsuits does not slow or block future disaster recovery 

efforts. 

To this end, ARTBA fully supports, the ‘‘Gulf Coast Recovery Act,’’ S. 1761. This 

measure would better prepare our nation for disaster response by ensuring that construction and engineering firms that respond to major natural disasters, terrorist 

incidents or other emergencies are not putting themselves at risk for unwarranted 

liability claims and litigation tied to rescue and cleanup efforts. This common-sense 

proposal would provide contractors assisting in rescue, recovery, repair, and reconstruction work a limited measure of liability protection. In doing so, the bill would 

also limit potential legal actions that slow recovery efforts and reduce legal expenses 

that lead to increase recovery costs. 

Specifically, S. 1761 would provide the construction firms working on Hurricane 

Katrina and major future disasters the same liability protections Congress provided 

security technology companies from lawsuits that arose out of the September 11 terrorist attacks. It would also make critically important legal procedural improvements to ensure that firms and contractors receive the protections necessary to 

allow them to focus rescue, recovery and rebuilding efforts without having to worry 

about being subjected to unwarranted and costly lawsuits. 

While S. 1761 provides limited liability protection to contractors, it would not undermine Federal safety, health, ethics, environmental or labor laws. Contractors 

would remain liable for any reckless or willful acts, and would remain subject to 

punishment for noncompliance with any Federal rule or regulation. S. 1761 would 

not limit the command of the Federal agencies charged with rescue, recovery, and 

rebuilding efforts. 

As was demonstrated in New York City, the ability of transportation construction 

industry firms to respond quickly during times of crisis, delicately move large 

amounts of debris and manage complex projects under demanding conditions are invaluable skills when responding to any emergency. Without reasonable protections, 

however, our industry’s ability to respond to future acts of terrorism, natural disasters or other emergencies would be constrained. 

S. 1761 would provide reasonable level of liability protections for construction and 

engineering firms involved in the clean-up efforts in the Gulf Coast region and future major disasters, without undermining Federal laws or requirements. This legislation will also help ensure that construction and engineering firms continue to 

serve as first responders in future emergency situations. Thank you again for the 

opportunity to submit testimony on this important topic. We look forward to continuing to work with the subcommittee and its members to address this situation. 

STATEMENT OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS

Mr. Chairman and Members of the Subcommittee. The American Society of Civil 

Engineers (ASCE)1 is pleased to offer this statement for the record in support of S. 

1761, the Gulf Coast Recovery Act of 2005, a bill that would clarify the liability of 

Government contractors assisting in rescue, recovery, repair, and reconstruction 
99

work in the Gulf Coast region of the United States affected by Hurricane Katrina 

or other major disasters. 

We believe the bill is a good start toward enacting a broad-based Federal ‘‘Good 

Samaritan’’ law to protect professionals who engage in disaster recovery efforts at 

great potential cost to themselves. As of now, 21 states have Good Samaritan legislation to cover those who respond to natural disasters and other emergencies. Louisiana, Mississippi, Alabama, and New York do not have Good Samaritan legislation 

at all. We are not aware of any state laws that protect those who would aid in the 

recovery from terrorist attacks or the aftermath of such attacks. When professional 

design and construction expertise is needed, there should be no legal impediment 

to our members’ responding to provide help and possibly saving lives. 

ASCE encourages its members, as individuals, to provide pro bono expertise and 

professional services to charitable causes and those in emergency situations. Members who provide professional services pro bono for ASCE-endorsed programs are 

covered by the Society’s liability insurance. 

But pro bono services provided by an individual in emergency situations or to 

charitable institutions outside of ASCE’s endorsed programs are not covered by the 

ASCE liability policy. The engineer, in emergency situations, may be called upon to 

make decisions with little or no opportunity for study, evaluation, or even identification of alternatives and should not be held to the same standard of care that would 

be used in evaluating her actions under normal circumstances. Legislation is needed 

to protect the engineer under these circumstances. 

Engineers have the technical ability to assist in emergency situations. Protection 

as proposed in S. 1761 rightly would not relieve the engineer of responsibility to act 

in accordance with the ASCE Code of Ethics. The engineer must continue to act 

within his appropriate level of expertise, with due recognition of the limitations of 

that expertise. 

Finally, the United States legal system has evolved to a point where excessive litigation, including frivolous lawsuits, often occurs. Moreover, findings of liability increasingly bear no relationship to the proportion of fault in a case, and astronomical 

damage awards for unquantifiable claims are frequently granted. 

The enormous growth in litigation against businesses and professionals, coupled 

with excessive and unreasonable jury awards, has led to dramatic increases in insurance premiums, reduced policy coverage, and even outright cancellations of professional liability insurance coverage. 

A growing number of professional engineers, including those with little or no history of litigation ever brought against them, have found that professional liability 

insurance is a substantial cost of doing business. In addition, efforts to advance innovation, new products and designs are inhibited by the current legal climate. 

ASCE is very concerned about the adverse economic impact of the nation’s litigation crisis and escalating liability insurance costs on the civil engineering profession. 

These adverse economic impacts affect the availability and affordability of professional liability insurance needed for the orderly and responsible conduct of business, 

including engineering services, in the United States. 

Mr. Chairman, ASCE thanks you for your efforts. Please do not hesitate to call 

on us for assistance with this important legislation. 

THE ASSOCIATED PRESS ARTICLE

HUNDREDS SUE OVER HEALTH EFFECTS OF WORLD

TRADE CENTER CLEAN-UP

NEW YORK—Hundreds of people who worked on the World Trade Center cleanup have filed a class-action lawsuit against the leaseholder of the towers and those 

who supervised the job, alleging they did little to protect workers from dust, asbestos and other toxins in the air. 

The lawsuit, filed in Federal court on Friday and made public Monday, was 

brought against Silverstein Properties and the four construction companies hired to 

oversee the removal of the 1.5 million tons of debris. 

David Worby, a lawyer for the plaintiffs, said he will seek billions of dollars in 

compensation for victims. The lawsuit also asks for the establishment of a system 

to track for the next 20 years all those who were exposed. 

The lawsuit alleges that many workers did not have access to protective gear, and 

those who did were not taught how to wear it properly. 

While some of the plaintiffs suffer from afflictions ranging from tumors to heartburn, many say they show no symptoms from their work at the site, but have joined 

the suit because they fear they risk developing cancer in the future. 
100

‘‘The tragic reality is that so many of the brave heroes who worked so tirelessly 

and unselfishly are becoming a second wave of casualties of this horrific attack, and 

we’re only seeing the tip of the iceberg,’’ Worby said. 

The defendants said they had not seen the complaint and had no immediate comment. 

The class-action case, with about 800 plaintiffs, was filed the last day before a 

Federal 3-year statute of limitations expired for lawsuits related to the terrorist attack. 

The Government is already funding six health screening programs to monitor 

ground zero workers, but none are funded beyond 2009. 

Last week, the Centers for Disease Control and Prevention released a study showing that many recovery workers suffered from respiratory problems long after the 

clean-up concluded, and that some still battle ailments. Problems include asthma, 

sinusitis, constant coughing and stuffy nose, facial pains, chest tightness, wheezing 

and shortness of breath. 

Proper respiratory gear would have allowed the workers to block out smoke, dust, 

diesel exhaust, pulverized cement, glass fibers, asbestos and other chemicals and 

prevent throat and lung diseases, according to the CDC study. It found that only 

about one in five of the workers wore respirators while they worked at the site. 

The four companies that led the clean-up were Turner Construction, AMEC Construction, Tully Construction and Bovis Lend Lease. According to AMEC’s Web site, 

the company stationed safety experts on site during the clean-up and provided respirators, hard hats and safety goggles to workers.

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