[StBernard] Protests by unsuccessful bidders have slowed corps' hurricane projects

[Westley Annis]

Protests by unsuccessful bidders have slowed corps' hurricane projects
By Sheila Grissett, The Times -Picayune 
December 06, 2009, 5:27AM

Protests by unsuccessful bidders have slowed or stopped work on three
hurricane protection projects, prompting the Army Corps of Engineers to
cancel and revise one contract in St. Bernard Parish and put temporary holds
on others in East Jefferson and New Orleans.

The latest challenges, lodged the week before Thanksgiving, will affect
progress on design of the Seabrook floodgate at the New Orleans lakefront
and construction of protective barriers for drainage pumping stations in
Metairie and Kenner. A mid-October protest targeted a Chalmette floodwall
contract.

Corps officials said they don't yet know whether the protests will affect
their target completion date of June 1, 2011, the increasingly questionable
goal for providing the New Orleans region with "100-year" protection from
hurricane-driven flooding. They say they are taking steps to offset the
protest-related delays wherever possible.

But it takes at least three months to resolve a federal contract challenge,
and these contracts were behind schedule before a protest was ever filed.
Like so many others in the corps' $14 billion initiative to repair, rebuild
and improve the levee system that failed during Hurricane Katrina, the
contracts were to have been awarded many months earlier but were pushed back
many times for a variety of reasons.

"There's no doubt that any time we're delayed, for any reason, it makes it
that much more challenging to meet our goals," said Rick Kendrick of the
corps' Hurricane Protection Office. "I just won't know what effect (the
protests) will have on completion until we see how, and how long, it will
take to resolve them."

The arbiter of federal contract complaints is the Government Accountability
Office, the investigative arm of Congress. It has 100 days after a protest
is filed to render findings. And no work can be done under challenged
contracts until GAO rules.

In the case of the New Orleans and East Jefferson corps contracts, GAO
findings aren't expected until late February. The agency's office of general
counsel, which routinely announces decisions on 20 or so federal bid
protests a month, may deny or dismiss a challenge, uphold it or recommend
corrective action. 

"I hate to see the protests, but it's the right of people proposing to
question," Kendrick said. "Everybody puts a lot of work into their bid and
thinks they're going to win, and I understand that. But there can only be
one winner."

Federal law lets bidders or other interested parties protest if they think a
contract has been or is about to be improperly awarded, or if anyone thinks
a bidder is being unfairly denied a contract or the opportunity to compete.

A review of recent GAO records indicates that few protests are upheld.

To ensure that there is no release of proprietary business data during the
protests process, not even the substance of individual challenges is made
public until they are settled.

The corps has awarded more than 200 local contracts since Katrina, but
officials say these are the only three to draw formal protests. 

Ironically, two of the three are a new variety of "early contractor
involvement" awards that the corps in New Orleans began using in the past
year or so to speed the construction process.

Proponents of this type of award say that bringing in a construction
contractor early to collaborate on design of complicated and time-challenged
projects increases the prospect of finishing on time and within budget. Such
a contract is first awarded to give the design team nothing more than
"preconstruction services," but it can subsequently be expanded to pay for
construction as well.

In St. Bernard, for example, the contested contract that will be
re-advertised early next year was a $904,675 job for preconstruction
services awarded on Sept. 24 to a joint venture of Odebrecht Construction
Inc. in Coral Gables, Fla., and Baker Concrete Construction of Houston. But
the company that ultimately wins that contract stands to get another $278
million to build the 8-1/2 miles of new floodwall from Verret to Caernarvon
when later phases of work are activated.

Likewise, on Oct. 30, Alberici Constructors of St. Louis, Mo., won a
$495,000 contract to provide preconstruction services to designers of the
Seabrook floodgate structure. Under terms of that contract, subsequent
options for building a sector gate and two vertical lift gates south of the
Ted Hickey Bridge will be worth an estimated $155 million.

It isn't clear just how much the loss of preconstruction services will
affect the Seabrook closure structure or the Chalmette Loop floodwall.
Design work can continue but without whatever value might have been added by
the early collaboration with a builder.

The bid being challenged in East Jefferson is a straight construction
contract worth $195 million. It was awarded Nov. 6 to Kiewit Louisiana Co.,
a two-year-old affiliate of its Nebraska-based company, to build
floodwall-type structures to protect the Duncan, Elmwood, Suburban and
Bonnabel pump stations from storm-driven surges. The contract, now in limbo,
also includes installing new valves and gates to prevent lake water from
flowing back through pump stations into drainage canals during storms.

Corps officials confirm that Cajun Constructors of Baton Rouge filed the
protests in East Jefferson and St. Bernard, and that Granite Construction
Co. of Watsonville, Calif., an unsuccessful bidder, protested the Seabrook
contract.

Although the GAO hasn't yet posted any findings yet, corps representatives
said the St. Bernard protest was dismissed Oct. 29. At the same time,
however, the corps also confirms canceling the St. Bernard contract, which
it had awarded to Odebrecht-Baker .


But corps representatives offered only muddy, even conflicting, explanations
for why the contract was canceled. Some suggested the award was pulled and
revised as a direct result of the protest; others said the corps itself
identified an "inconsistency" while examining the contract solicitation
after the protest was filed.

What everyone interviewed this week agreed, however, is that an amended
solicitation has been prepared and redistributed to the original pool of
bidders, and that a second award will be made early in 2010.