Fix the pumps

Friday, July 01, 2011

Permanent pumps slip to Katrina 10th anniversary

[Updated July 12, 2011 - see bottom of post]

[Corps confirms 2015 permanent pump completion. See July 16, 2011 update at bottom of post.]

In my last post, I mentioned the outfall canal updates the Corps gives the Southeast Louisiana Flood Protection Authority - East. In the most recent update, from early June, there was also a slide about the permanent pump station project:

It indicates that the completion date for the permanent pumps will likely slip to 2015, due in part to the bid protests filed by losing bidders (but really due to the Corps' lassitude and intransigence in getting the project underway from 2006 through 2010). These stations were supposed to have been in service in 2010.

The permanent pump stations project was awarded April 13, 2011 to a coalition of companies calling themselves "CBY Builders." It includes CDM, Brasfield & Gorrie, and Yates Construction. It immediately garnered bid protests from two of the losing bidders. That's not a surprise, since the job value is $674,998,555.36. Notably, that's over $129 million less than the $804 million congressional appropriation for the job.

Who are the protestors? Who were the other bidders?

The Corps used a two stage bidding process. In the first stage, they accepted bids from anyone. They also made public the technical specification. Then, in the second and much more secret stage, they narrowed the list to the five top players (i.e. "the list that counts"). In this second stage the Corps didn't let anyone know who was bidding, they didn't release any specifications or drawings, and they didn't put out any press releases. It was remarkably hush-hush for a project worth over half a billion dollars.

We already know the winner. Here's the other four:

Bechtel team (protestor)

Bechtel partnered with New Orleans-area engineering firms Waldemar S. Nelson; Brown, Cunningham & Gannuch (aka "BCG"); N-Y Associates; and Eustis Engineering. During the bidding process, Bechtel had a website up at, but it went away after the contract was awarded.

PCCP Constructors (protestor)

PCCP Constructors is made up of Kiewit, Traylor Brothers, and the New Orleans-area based M.R. Pittman group. This is the same set of companies that make up the joint venture "Gulf Intracoastal Constructors," who has the prime contract for the West Closure Complex.

Louisiana Canal Constructors (no protest)

"Louisiana Canal Constructors" appears to be Alberici and Archer-Western (a subsidiary of Chicago-based Walsh Group), the same team that worked levee project LPV-111 along the Gulf Intracoastal Waterway in New Orleans East. Parsons was also involved. We know this because all three firms are listed on the Louisiana Secretary of State entry on LCC. Incidentally, that entry shows that LCC is actually not in good standing due to failure to file an annual report this year. That's not surprising, since their lack of bid protest activity says the LCC team has decided to call it a day on this project.

Weston group (no protest)

The Weston group also includes engineering heavyweight HNTB. Weston was so interested in this project last year that they actually lobbied congress on it. A lobbying disclosure form for Weston's chief lobbyist, Sean McGraw, notes the New Orleans Permanent Pump Stations as a target for their lobbying during debates over the FY2010 Energy & Water bill

Other companies floating around the bidding process included Odebrecht, Arcadis, Shaw (who had advertisements on job boards for work on this project two years ago) and Volkert, though I don't know who they were partnered with. All these names are rather heavy hitters in the engineering industry, which is no surprise considering the mammoth size of this prize.

Corps helps out finalists

Part of the reason we know who's who among the bidders is because of solicitations for small business subcontractors each team issued last fall. These sorts of subcontracting gatherings are common for bigger projects; they're useful for signing up small businesses to meet the Corps' small business goals. Sometimes the Corps puts them on, but in this case, each firm - each privately-owned firm - staged them. PCCP Constructors' event was on October 19th, 2010 at the University of New Orleans (UNO):

Bechtel's was on October 6th at the Best Western on Severn in Metairie:

Louisiana Canal Constructors' event was on September 23rd at Southern University:

Weston's team had an event on October 20th at UNO:

I can't find an announcement for an event hosted by the winning bidder, the CDM team.

Here's the twist: all these announcements for events put on by private companies were - and are - residing on the Corps' computers, specifically the subdirectory associated with the Corps' Small Business office. PCCP Constructors' is here, Bechtel's is here, LCC's is here, and Weston's is here.

At one point, the Corps provided links to the Weston and PCCP Constructors flyers on their Small Business Programs page:

[Note to Corps: I've already got Google screenshots showing each of these flyers on your servers, so don't bother taking them down.]

If you think having a government agency advertise for private companies looking to do business with that agency is unseemly, you're right. But it's par for the course for the New Orleans District, which enjoys cozy ties to many large firms (see the details on Kiewit's protest below). One of the flyers notes that two officials from the Small Business Administration (Jo Lawrence and actually-Corps-guy Randy Marchiafava) were confirmed attendees, and two Corps officials (Ned Foley and Michael H Bloom, both Corps small business guys) were invited, so the government was out there appearing at events held by private firms to help them improve their bids.

Details on the protests

It is noteworthy that there's not just one protest for each of the two protesting bidders. In fact, each of them have filed three protests since the contract award. According to the General Accountability Office's bid protest docket, Bechtel filed protests on April 26th, May 2nd, and June 6th. Kiewit's group filed protests on April 26th, June 6th, and June 24th.

I'm sure the April 26th protests by each firm were probably already prepared before the contract was even awarded. The June 6th protests appear to be protestors' responses to the Corps' initial report to the GAO, if the schedule above is to be believed.

[Update July 12, 2011

The July outfall canal update indicates the June protests by the bidders were "supplementals," whatever that means. See complete update at the bottom of this post.]

Back before all these protests started rolling in, the Corps' schedule (found on the last page of the April, 2011 Orleans Levee District status update) naively called for absolutely no impact by them, and a project completion date of October, 2014:

With Kiewit's protest filed on June 24th, the GAO's latest response date is now October 3, 2011 (the GAO has 100 days to decide bid protests). Note this is later than what early June schedule above shows, since the slide was produced before the latest protests were filed. Comparing the two schedules and the GAO protest dates, it is easy to conclude about six months of schedule slippage, pushing the project completion date to approximately March, 2015. And that assumes the project doesn't get rebid as a result of the protests, which is what one of the protestors is calling for.

[Update July 12, 2011

It is possible the protests are all part of one big file, with an August deadline still in effect. The Corps is playing the project delay card close to their vest. See the complete update at the bottom of this post.]

Kiewit goes public
Alleges Corps revolving door killed their bid

Kiewit went to the local media about their protest soon after filing in April. On May 4, 2011, WVUE-TV ran a story titled "Former employee accused of giving inside info to competing company."

The story reports:
"PCCP Constructors believes a senior level Corps employee provided inside information to the company that was ultimately chosen for the project, CBY Builders.

'It’s something that needs to be looked at and examined so that we know exactly what was said when and what kind of inside information may or may not have been disclosed that would benefit one party over another,' PCCP spokesman Kent Grisham explained. [note: Grisham actually works for Kiewit]

Grisham is talking about Richmond Kendrick. Kendrick was the chief of program execution for the Corps’ pump stations project. But in August 2010, Kendrick left the Corps and went to work for a company named CDM.

CDM is a partner of CBY Builders."

That's a pretty interesting charge. Of course, the revolving door between the Corps and contractors is well known within construction circles, but less so to the general public. Many of the most prominent, and some of the less prominent, figures involved in the Corps' post-Katrina work have left for contracting jobs which brought them right back into the Corps' offices working on that same post-Katrina work. In fact, here's a 2009 article in an industry trade organ featuring two of them: Dan Hitchings (former Task Force Hope leader and now working for Arcadis on Corps hurricane protection contracts) and Mike Rossi (who wasn't directly involved in the post-K work, but who now works for Vali Cooper International, the New Orleans-area company started by former Hurricane Protection Office leader Jeff Bedey and which claims to have Corps hurricane protection contracts, though they're more likely subcontracts). Ironically, the article also features an interview of Richmond Kendrick in his now-former capacity as deputy of program execution for the Corps’ Hurricane Protection Office.

Anyhow, it's unusual for the revolving door to get publicized in this fashion, but when there's hundreds of millions of dollars on the table...

The WVUE-TV report continues with an actual quote from one of Kiewit's protests. Given the May 4th date of the story, it could only be their first one, filed on April 26th:
"The protest filed by PCCP to the Government Accountability Office states, 'The most critical events in selecting the winning offeror for the PCCP (Permanent Canal Closure and Pumping) contract occurred after Mr. Kendrick took his inside knowledge concerning this procurement to CDM.'

Grisham says the company’s goal is to have the Army Corps re-open the bid process, now that Kendrick has left the government agency."

That would certainly be remarkable, though given the size of the contract, not unprecedented.

I'll stick close to this $674,998,555.36 story.

Update, July 12, 2011

The latest outfall canal remediation project update - issued in the first week of July - also contains a small update on the permanent pumps:

This update seemingly still calls for an August 4, 2011 response to all the protests. It calls the latest round of protests from June "supplemental protests." It also notably removes any reference to the start or completion date of the project.

I'm not sure what to make of the Corps insisting the GAO will come back August 4th with a decision. That date is based on the date of the original protests in April. The GAO's own docket indicates that each protest restarts the 100-day clock for them, so that while the earliest protest could be resolved in August, the later June ones might not get a decision until October.

Of course, we could just be seeing a limitation of the GAO's website, in that all three protests for each firm might indeed be part of a whole, but the website doesn't have a way to show that. Indeed, ther eis some support for that. The protest numbers given to PCCP Constructors' (nee Kiewit's) protest are B-405036.1, B-405036.4, and B-405036.6, while those assigned to Bechtel's protest are B-405036.2, B-405036.3, and B-405036.5. That would seem to indicate that they are simply part of an overall file numbered B-405036.

Two other shreds of information come out of this latest stab at a schedule by the Corps:

1) There was apparently some kind of hearing the last week of June in Washington.

2) That hearing was followed up by a briefing (presumably by GAO to the Corps) on July 7th, last Thursday.

Again, I'll try to stay on top of this.

Update, July 16, 2011

The Corps has confirmed the 2015 completion date for the permanent pumps.

In a July 12, 2011 presentation given to FEMA about the hurricane protection system by the Corps' Mississippi Valley Division (one step above the New Orleans District), the 2015 date was made explicit on this slide of completion dates for incomplete projects:

Incidentally, that is slide 1 of a pair of slides listing 30 incomplete 100 year protection projects:

The 16 projects with blue rows are those only at the 100 year level of protection if the Corps brings in Hesco baskets and sandbags immediately before a storm. The 13 projects with yellow rows actually have something built (like sheetpile or the like) to give interim 100 year protection. Remarkably, there's a still a project in St Charles Parish which hasn't even been awarded. So much for breaking their backs to meet the June 1st, 2011 deadline.

And finally, it turns out the Corps actually confirmed the 2015 date the same day this post first appeared. In a July 1, 2011 press release trumpeting their piecemeal, inadequate remediation work along the outfall canals, they included this:
"The 17th Street, Orleans Avenue and London Avenue outfall canals extend from interior pump stations to Lake Pontchartrain in metro New Orleans. Interim Closure Structures currently block 100-year storm surge from entering the canals; they will be replaced with permanent canal closures and pump stations that are scheduled to be complete in 2015. Because of the canal closures, the outfall canals’ primary purpose is to remove rainwater from the city. The floodwalls and levees lining the canals are no longer the primary storm surge defenses for New Orleans."


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