How much is left in the till? Part 2

Today, the Corps issued their long-awaited solicitation for the permanent pump stations at the lakefront. It can be found here. I've been looking it over.

On page 11 of the main solicitation (there is a solicitaiton document and a more technical summary of work) can be found this statement:

"The Government’s contract budget for the design and construction of the project is $650,000,000.00."

That's not simply a recommendation to bidders. The next sentence in the solicitation reads,

"Offers that exceed the contract budget will be eliminated from the competition without further consideration."

Congress appropriated $804 million for the project. So what explains the $154 million gap?

1) A somewhat benign - if benighted explanation

The summary of work notes that demolition of the current Interim Closure Structures will be accomplished under a separate contract. So that's a few million.

Also, we know they have been using the money for the permanent stations to maintain the existing interim stations. Permanent pumps project manager Dan Bradley said at the October 15, 2009 Southeast Louisiana Flood Protection Authority - East meeting:

"Last year the maintenance cost [for the existing interim closure structures and pumps] was approximately $5 million. The cost of maintenance could increase each year and these costs are coming out of the project funds."

If we (generously) accept Mr. Bradley's number for the expected lifetime of the interim stations (nine years from 2006 to 2014), that would account for $45 million for maintenance.

Also, the Corps has been paying Black & Veatch, ECM, GEC and other engineering firms to consult on the project for years. That's about $2 million lots and lots of millions (I still have to get a final tally, but that's a good rough estimate based on the B&V purchasing documents I have received through FOIA requests).

That still leaves a gap of about $100 million between the appropriation and the known and budgeted expenses on the project.

$100 million just happens to be the amount the Corps wants to spend reinforcing (that is, modifying) the walls along the outfall canals, according to this March 1, 2010 article in the Times-Picayune. The lede:

"The Army Corps of Engineers plans to drive steel sheet piling about 60 feet into the ground along parts of the London Avenue Canal's eastern floodwall -- three to four times deeper than those that catastrophically failed during Hurricane Katrina -- in hopes of significantly increasing the volume of water that the canal can hold.

The project is part of a corps initiative, expected to cost more than $100 million, to raise the "safe water" levels in the London and 17th Street canals by repairing and improving some deficiencies. The money also will go to close a floodwall gap in the more robust Orleans Avenue Canal, which didn't breach in Katrina and already enjoys a higher capacity than the weaker channels."

The numbers sure work out nicely, except for one thing.

The Corps made their (tragically sucessful) argument against lining the canals under Option 2 by saying, in part, that the language of the permanent pump appropriation didn't really mean what it said. That language directs the Corps to

"modify the 17th Street, Orleans Avenue, and London Avenue drainage canals and install pumps and closure structures at or near the lakefront."

The Corps claimed that driving sheet pile cutoffs and lining the canals with concrete (i.e. Option 2) was not a modification, but an entirely different project, and thus not covered under the Congressional language. However, this work they are actually planning to do along the outfall canals (driving sheet piling cutoffs in selected weak spots) would seem to be a substantial modification. And - if they truly are taking the money for that new effort from the funds for the permanent stations - then they have completely undermined their own argument, which was the thrust of my earlier post on this topic. That is, how can driving sheet piling along all the canals not be "modifying" the canals, but putting it in selected spots is?

2) A much more ugly, but simpler, explanation

a) the money for the new sheet piles and other outfall canal work is coming from somewhere other than the permanent pump station appropriation.

b) The Corps blew a huge chunk - $100 million? - of the permanent pump station money on the interim closure structures, which is clearly not allowed under the language of the appropriation. That would be very, very bad.

This is a question that must be answered either way.

Rusty

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