AECOM rips IEM bid for contract to manage Louisiana flood recovery program

AECOM, the firm that lost out to IEM on the contract to administer the state’s $1.3 billion flood recovery assistance program, has filed a formal complaint over IEM’s selection.

In its protest to the state, AECOM, which had the second-highest score of the five teams that submitted proposals earlier this month, says IEM should be thrown out for no less than a dozen reasons.

Chief among them, however, is that IEM’s price is some $65 million to $74 million more than AECOM’s. AECOM estimates its proposal would enable the state to help an additional 1,000-1,200 flooded homeowners.

“The AECOM team will significantly help more low-income people than IEM,” reads a draft copy of the protest document, obtained by Daily Report. “AECOM is the best value for our citizens and should have been selected.”

Additionally, AECOM challenges the way IEM structured the cost estimates in its proposal, making it conditional on serving no less than 36,000 homes. It also accuses IEM of submitting unbalanced bids, which are grounds for disqualification.

An unbalanced bid is one in which the bidder artificially inflates one cost and decreases another to create more profit. The protest notes, for instance, that IEM’s bid would charge the state $2,800 per unit to process an applicant’s intake and eligibility, but only charge $50 to do final file disposition and inspections.

“IEM made the first step in the process the most expensive,” the protest reads. “It should have been rejected for being unbalanced.”

AECOM’s protest comes as the state is rushing to finalize contract talks with IEM and get the flood recovery program off the ground. Federal money became available to the state early last week, and critics of Gov. John Bel Edwards have accused his administration of taking too long to get money to homeowners.

However unfounded the criticism may be, the protest is another controversy over this contract that the administration doesn’t need. In early March, the state selected IEM to run the program. Before a contract could be finalized, however, it scrapped the procurement and restarted the contract solicitation process because of issues about licensure requirements and concerns about cost estimates in the proposals, which ranged from $250 million to $350 million.

At the time, state officials said they hoped the second round of procurement would produce cost savings for the state. But while IEM bested the other four teams in the second round of procurement on its subjective technical scoring, it was the second-most expensive of the five proposals submitted. Only CB&I submitted a costlier proposal.

It is unclear exactly how much IEM would charge the state in bottom-line dollars because the proposal only gives unit costs, which are variable. Also, sources familiar with the situation say state officials are trying to negotiate IEM’s cost downward, likely in response to concerns raised in the protest.

In its complaint, AECOM accuses the state of skewing the evaluation of the firms’ technical abilities to favor IEM. IEM’s scores for approach and methodology, experience, and staff qualifications shot up compared to the scores it received in the first round of procurement.

Conversely, the other teams, which outscored IEM on technical qualifications the first time around, saw their technical scores this time plummet to curiously low numbers.

“It defies all logic that every firm scored significantly lower on the re-compete except for one firm, IEM,” the protest document reads. “The selection panel clearly wanted to select IEM and the subjective technical scores reflect that predetermined solution.”

It is not clear that the protest will at all delay execution of the contract with IEM or the startup of the program. Officials with the state decline to comment, as do officials with AECOM. A call to IEM was not returned in time for publication this afternoon.

—Stephanie Riegel

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