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Just hours after Hurricane Katrina smashed into the Gulf Coast last August, Tom Stinnett knew the federal government would need travel trailers as temporary housing for storm victims.
But, according to a report in the Louisville (Ky.) Courier-Journal, he never dreamed his company would be involved in $100 million worth of federal contracts to supply those trailers.
As it turns out, Stinnett, who owns Tom Stinnett RV Freedom Center in Clarksville, Ind., has done more Katrina-related business with the Federal Emergency Management Agency (FEMA) than any other company in the Louisville area, according to a list of federal contracts.
Stinnett had worked with the federal government after previous hurricanes. And he was able to continue doing Katrina-related business even after the government moved to steer contracts to companies in the Gulf region.
Stinnett said most of the trailers his company has delivered have gone to temporary “RV parks,” where eligible hurricane victims are living for free while their homes are being rebuilt.
The retail price of each trailer is in the low- to mid-$20,000 range, he said. And because the contracts require delivery, he has hired hundreds of drivers to haul them south using pickups.
Stinnett, 55, who lives in Louisville, received his first contract with FEMA on Sept. 17. At the time, the $37.1 million deal was among the largest of its kind for travel trailers procured from RV dealers.
A handful of other businesses in Indiana and Kentucky also provided trailers. But after the initial round of contracts were awarded last fall, the government started steering more of its funds toward companies in the Gulf region.
Michael Widomski, a FEMA spokesman in Washington, said the shift was part of an effort to get hurricane-damaged businesses back on their feet and to boost tax revenues in states such as Louisiana and Mississippi.
But Stinnett said he was able to remain involved in the FEMA work by partnering with smaller recreational vehicle dealers in the Gulf area that otherwise wouldn’t have been able to handle large amounts of inventory.
According to the Courier-Journal, the smaller companies’ names appeared on the contracts while Stinnett’s company acted as a kind of subcontractor, delivering the trailers, handling the paperwork and providing financial backing.
Stinnett said the deals he worked on through partnerships with other businesses were worth about $63 million.
Stinnett declined to say how much he made through the partnerships. Eight other companies were involved, he said, and his profit margin was lower because a portion of the proceeds went to the other dealers.
Steven Burnett, president of Candy’s Campers Inc. in Scottsville, Ky., received $5.4 million in Katrina-related FEMA contracts. He called Stinnett’s partnerships a “clever move” that allowed him to continue supplying trailers after other dealers outside the Gulf region were cut out.
Stinnett’s company wasn’t the only one that continued to do business through joint ventures. Tom Raper RVs Inc. in Richmond, Ind., received a $14 million contract with FEMA for about 1,500 trailers, then teamed up with a Louisiana company to deliver additional units.
Stinnett said his company’s partnership contracts didn’t cost FEMA any extra money and were just as efficient as those involving a single dealer.
If some people are critical of the partnerships, Stinnett said they don’t understand the financial hurdles that dealers in the Gulf region faced in the aftermath of the storm.
“You’ve got guys who complain about not getting the business, but they didn’t work hard,” Stinnett said. “We feel like we did contribute to the local (Gulf-region) economy. We knew early in the game that the way to get more contracts was to make sure we shared our information with dealers down there.”