Published February 19, 2011
Subcontractors say they are still owed hundreds of millions of dollars for their work in the Gulf oil spill cleanup.
“I’ve been bullied,” says Rick Myers, owner of Rhino Construction in Bay St. Louis, MS.
Myers, who had 650 workers clearing beaches at the peak of cleanup efforts, says his weekly payroll of $1.4 million during that time didn’t take long to burn a hole in his pockets. He, like almost all contractors, took out loans to pay his workers while waiting to receive his payment. Five months later, Myers and other contractors, are still waiting.
“I worked 20 hour days, 7 days a week for 3 months. It was exhaustive. And we did what was asked of us, and we’re not getting anything in return,” says Myers, who’s asking for $650,000 still owed to his company, and an estimated minimum of $280 million owed to the 40 other small businesses he’s representing.
Mike Evans, owner of T.H.E. Construction in Taylorsville, MS, says he and the other subcontractors essentially financed BP’s cleanup effort, and now they’re all suffering for it.
“We’re paying 7-8% on our money that we’ve got borrowed from the banks to do the work, and you know, there’s nothing left at the end if they keep holding the money.”
Myers says unpaid bills range from a few thousand dollars all the way up to several million.
Because contractors typically can’t pay other subcontractors until the first has been paid, the ripple effect of not paying the top contractors is huge, affecting hundreds of businesses.
BP says it is current on all payments to its prime-contractors. In Mississippi and much of the rest of the gulf, the prime-contractor is Houston-based, O’Brien’s Response Management.
When FoxNews.com asked O’Brien’s about the unpaid bills, they admitted to only paying 90% of all amounts invoiced. When asked why they weren’t paying subcontractors the remaining 10%, O’Brien’s VP of Communications, Tim O’Leary, responded via e-mail, saying “O’Brien’s Response Management has devoted its full resources to secure timely and appropriate payments for its direct contractors.”
Lawyers and accountants of the affected subcontractors are estimating that 10% is several hundred-million dollars, if not more. And Evans says with that amount of money in the bank, O’Brien’s is making a fortune everyday they delay paying their subs.
When given an opportunity to respond to those allegations and explain why they had withheld payments from their subcontractors, O’Brien’s directed us again to their previous statement.
“They’re just making their bottom line look better by holding money and drawing interest on it. That’s the bottom line,” Evans says.
Interest though, is what’s crushing many subcontractors of the oil spill cleanup, Evans says. The ones suffering can’t pay the interest on the loans they took out to finance the cleanup projects without their money from O’Brien’s.
“You’re talking about it affects hundreds of contractors, not one or two contractors. In
our case it’s just everyday that goes by that we haven’t received it (payment from O’Brien’s), it just eats our profit margins up, and sooner or later if there’s no profit, it’s a negative, and if it’s a negative you can’t stay in business long doing that.”
Rick Myers says the gulf can’t recover from all it’s been through in recent years if companies are allowed to come in and take advantage of people by not paying them.
“I mean we’ve had so many natural disasters, oil spills, over the past, what is that, 6 years now. We can’t afford to lose a single job. I’m to a point now, we’ve exhausted all means and we’re really begging for some help down here.”
Myers and Evans, along with all the unpaid subcontractors, want BP to step in and put more pressure on O’Brien’s to pay up.
But, BP spokesman Ray Melick says O’Brien’s was hired to manage the cleanup and handling of subcontractors, and that BP will allow them to handle that job however they see fit.
“We encourage O’Brien’s to deal with its sub-contractors in a timely and professional manner, and are trying to resolve this issue the best we can without interfering in somebody else’s business,” Melick says.
When asked how much longer, after more than five months for some subcontractors, ‘timely’ would apply until BP steps in, Melick says he didn’t know at what point, or if there would be a point, that would happen.