Corps Resumes Rebid of Protested New Orleans Flood Project
Contractors will get another shot at winning a $700-million U.S. Army Corps of Engineers flood-control contract this fall.
Reprocurement of the design-build contract, ordered last year by successful bid protests but interrupted by a subsequent legal challenge, was reset in motion by a May 11 U.S. Court of Claims ruling that was not released publicly for two more weeks. Barring other lawsuits or appeals, New Orleans should receive the final piece of its post-Hurricane Katrina, 100-year flood reduction system in time for the 2016 hurricane season, officials say.
In a May 11 ruling, Judge Victor J. Wolski upheld the contract reprocurement begun by the Corps' New Orleans district in 2011. It was relaunched following a decision by the U.S. Government Accountability Office (GAO) to uphold protests by losing bidders who challenged the original 2011 contract award and cited alleged flaws in procurement documents.
CBY Design-Builders, a CDM-led joint venture awarded the contract in April 2011, had filed the claims-court suit late last year to halt the rebidding and allow its award to proceed.
Bechtel Infrastructure Corp. and PCCP Constructors, a Kiewit Corp.-led joint venture, were losing, short-listed bidders that protested the contract to GAO. The contract is for permanent storm-surge closures and pumps at New Orleans' three outfall canals to replace interim structures built after the 2005 storm. Work was set to finish in 2014.
In his ruling, Wolski said the Corps' "corrective action," based on GAO's recommendation because of technical and other flaws it found in the original contract documents, was not "arbitrary and capricious," as CBY contended.
He said the court "has determined that it lacks subject-matter jurisdiction ... and that the GAO's recommendation concerning the evaluation of CBY's foundation design provided a rational basis for the corrective action taken by the Corps."
But Wolski dismissed a conflict-of-interest allegation that protestors raised because of CBY's hiring of a former Corps official, noting it was already ruled "moot" by the Corps and GAO.
The court also supported GAO's contention that the Corps might not have clearly communicated the role of price in the evaluation, since all bids other than CBY's came in at or slightly above $700 million. Competing contractors also seemed to be flummoxed by the Corps' "build-to-budget" strategy, which often is used by the military for design-build projects.
Wolski also upheld GAO's call for further Corps fine-tuning of technical specifications, such as requirements for withstanding lateral loads. He said, "Although the other RFP changes, relating to hydraulics issues raised in the GAO proceeding, would not warrant a resolicitation and could have been accomplished through a contract modification, the Court does not see any reason why they cannot be addressed, when revised proposals and a new evaluation have been deemed necessary."
Wolski said that the Corps' re-bid process "had a rational basis."
A Corps spokesman says amending an RFP numerous times and accepting revised proposals is not uncommon. He says the Corps considered this the best option to move the project "and still comply with GAO's recommendations." Corps officials are meeting with each of the project's five original, short-listed bidders, which also include Weston Solutions Inc. and Archer Western Contractors, for feedback on the amended RFP, released on June 4.
A decision is expected this fall. Tim Black, the district's chief contracting officer, says the RFP includes the original $500,000 stipend for short-listed bidders "that submitted an acceptable proposal but were not selected."
A CBY spokesman says the CDM-led venture "has been notified by the Corps of [its] tentative corrective-action schedule and is considering our options." He would not confirm CBY's intent to repropose under the amended documents or take additional legal action. He says, "We stand ready to help the Corps move the PCCP project forward."
CBY has a right to appeal Wolski's ruling, "but precedent for doing so is not favorable to them," says one attorney, who asked not to be named.
Marcia Madsen, a Washington, D.C., attorney for Bechtel, says, "This is the second time we've won this case." A Kiewit spokesman says the ruling is "consistent with what we asked for." Both firms will submit new proposals, say spokespersons. Officials of Weston and Archer Western could not be reached.
If the Corps keeps to the procurement schedule, the project could be completed by April 2016.
In the meantime, "We rigorously maintain and test the three outfall canal interim structures," says district Commander Col. Ed Fleming.
