…that IEM was awarded last week.
Remember, this was the contract IEM bid $250 million to perform back in March, and when the bids were opened IEM’s offer was rejected out of a fairly dubious contention by the Louisiana Board of Licensing for Contractors through its executive counsel, former state senator and convicted bribe-taker Larry Bankston. IEM wasn’t the only bidder thrown out based on a challenge to its credentials; second-place bidder PRDM also had its bid thrown out. But public furor over the discovery that Bankston’s son Ben is the Baton Rouge regional manager for a subsidiary of third-place bidder Sullivan Land Services forced the state to re-bid the contract rather than simply award it to Sullivan, proving the value of the internet and social media in promoting government transparency and warding off corruption.
IEM then bid again, this time at $227 million, and won the contract in the second competition – despite a protest from AECOM, another bidder who said the process was rigged this time in IEM’s favor and who claims to have bid at least some $60 million less.
That isn’t what Louisianans ought to be particularly concerned about, though. See if you can spot the item of concern here…
The size of the contract is an estimated $226.7 million. Of that, $126.7 million will go to IEM for program management and building/construction management.
An additional $100 million will be paid to the firm to cover construction costs for those homeowners who opt to let the state program handle the rebuilding of their homes.
Under the program, homeowners can choose one of four options: State-managed construction; homeowner-managed construction; reimbursement for eligible expenses on completed rebuilding; and buyouts in certain limited circumstances.
The $226.7 million contract does not include some $81 million for federally required environmental reviews. Gov. John Bel Edwards has requested several times since last fall that Congress waive the review requirement, which would subject flooded homeowners to a costly and time consuming environmental review process before they can begin rebuilding.
“We are hopeful Congress will grant that waiver in the upcoming (budget) Continuing Resolution this week,” Edwards’ communications director Richard Carbo says.
Meaning the contract is undervalued by $81 million, and the state is betting on the come that Congress will let the environmental reviews slide. We’ve heard conflicting stories about whether that’s going to happen.
That potential hand grenade notwithstanding, Edwards is surely going to tout his fiscal responsibility in re-bidding the contract to generate $23 million in savings – AECOM’s protest, which essentially says that if they’d gotten the contract the second time the savings might have been on the order of $90 million, notwithstanding. One might question whether Joe Six Pack, of Denham Springs, Louisiana but lately of temporary residence elsewhere thanks to the flood and the slow flow of recovery aid coming from the government, thinks the six-week delay was worth the $23 million.
Especially if it turns out those environmental reviews have to be priced back into the contract after all.