Louisiana inks deal with IEM for $227M flood recovery contract

    The state has finalized its deal with disaster recovery contractor IEM to administer the $1.3 billion federal flood recovery program for homeowners.

    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.

    The contract, which was signed late April 21, brings to a close more than six weeks of controversy over the selection of a firm to administer the program. In early March, the state selected IEM from among five well-connected teams of contractors, engineers, architects, attorneys, accountants and consultants. But it scrapped the procurement three weeks later and restarted the contract solicitation process amid questions over licensure requirements, concerns about costs and protests from losing teams.

    Earlier this month, a new selection committee from the state again selected IEM from among five teams, even though the firm’s proposal was the second-most expensive.

    The firm that finished second behind IEM in the scoring process, AECOM, lodged a formal protest with the state April 20, challenging IEM’s selection on the grounds that it would cost the state more money and would not be able to serve as many homeowners. AECOM also said the subjective, technical scoring process, in which IEM outscored all its competitors, seemed to predetermined to favor IEM.

    But the protest did not slow contract talks between the state and IEM, and Carbo says state officials are pleased that the new deal with IEM will save the state money over its original proposal, which was estimated to be around $250 million.

    —Stephanie Riegel

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