Controversy over a long-term, lucrative deal to modernize the aging energy system on the LSU main campus is intensifying, now that the university’s technical staff and consulting firm, KPMG, have recommended the board award the contract to Enwave Energy over Louisiana Energy Partners, a venture owned in part by businessman Jim Bernhard’s portfolio company Bernhard Energy.
Enwave scored 17 points higher than LAEP in an evaluation of the proposals conducted earlier this month by LSU staff and KPMG, with a guarantee of savings to LSU of some $90 million over the 30-year life of the contract, compared to LAEP’s promised savings of $30 million.
The LSU Board of Supervisors was set to vote on the staff recommendation at a Dec. 22 meeting that was postponed. Multiple sources familiar with the situation say there was disagreement among members about how to proceed amid pressure from those who want to award the deal to the powerful and politically connected Bernhard.
Now, the Bernhard group is challenging Enwave’s eligibility to bid on the deal because the firm does not have a commercial contractor’s license in Louisiana. LAEP filed a formal complaint this morning with the Louisiana State Licensing Board for Contractors, effectively seeking to disqualify Enwave from the process, the agency’s executive director, Michael McDuff confirmed.
McDuff had not seen the complaint but says the board is investigating and that if Enwave submitted a proposal related to construction services and does not have a license it would be disqualified.
It is unclear, however, whether LSU solicited for construction services when it asked Enwave and LAEP to submit proposals earlier this year.
The chair of the contractors’ licensing board, Lee Mallet, is also a member of the LSU board.
Mallet says that although as chairman of the licensing board he does not have a say in the controversy, it is “cut and dry,” in his opinion, that Enwave should be disqualified.
“I think the documents speak for themselves that at a minimum we require a contractor’s license,” he says.
Because LSU did not publicly bid the contract, the solicitation documents have not been made public and were not immediately available this morning.
Enwave declined to comment.
In addition to the licensing issue, Bernhard has been trying to build a case that hiring a local firm would create more local jobs than hiring Enwave.
Enwave, which has a long-term contract with the LSU Health Sciences Center in New Orleans, is based in Canada. LAEP, though half-owned by a local company, is a joint venture with multinational Johnson Controls, headquartered in Ireland.
Shortly before Christmas, a top executive with Bernhard, Jeff Koonce, sought an opinion from local economist Jim Richardson on whether hiring a local firm would create more local jobs, according to Koonce and Richardson.
In his reply, and in a subsequent letter sent to LSU Board Chair Robert Dampf, Richardson said the board should focus on awarding the contract to the firm that offers the best deal to LSU.
“Politics shouldn’t be part of the game,” Richardson tells Daily Report. “You want the best company. It is nice to have a company from here but we are looking for the best company. You have to evaluate who can do it for the best price and that is why LSU hired KPMG.”