When a contract worth somewhere between $250 million and $350 million is up for grabs, Business Report Editor Stephanie Riegel says you have to know it’s not going to go down without a fight, especially in Louisiana.
“But the controversy over the state contract to manage the $1.6 billion flood recovery program, Restore Louisiana, is proving to be a particularly classic example of what happens in Baton Rouge when politics and big business collide on a playing field littered with disaster recovery dollars,” Riegel writes in her latest column.
The latest move in the escalating flap over the lucrative contract came late Wednesday, when the state’s Office of Community Development issued a revised procurement document seeking a program manager to oversee the contract.
The state scrapped a contract it awarded earlier this month to a team of companies headed by IEM, which bested four competing teams in a request for proposals scoring process largely on the basis of price. Its $250 million proposal was significantly less than the other proposals.
But the second-place finisher in the process, a team called PDRM and led by local firm CSRS, filed a complaint with the State Licensing Board for Contractors on the grounds that IEM did not possess a commercial contractor’s license at the time it submitted its proposal. Last week, the licensing board ruled that a residential contractor’s license was required to submit a bid. The state was troubled enough by the controversy to scrap the whole process and start over, which prompted IEM earlier this week to file a lawsuit in 19th Judicial District Court.
“The suit was filed against the licensing board, not the state, and IEM didn’t seek to block the new round of procurement from going forward. As a result, the lawsuit hasn’t had much of a practical effect on anything yet and hasn’t slowed the new procurement process, which is currently underway,” Riegel writes. “The state even hopes to have a new contractor in place by April.”
But the playing field has been dramatically altered, as each of the teams has now seen its competitors’ proposals, Riegel notes.
“To say the procurement process has been compromised would not be an understatement—which is where this otherwise fascinating battle among well-connected Baton Rouge players becomes really unfortunate,” she writes. “For one thing, it opens the administration of Gov. John Bel Edwards up to criticism that isn’t really warranted, except in this narrow instance. His detractors are already making political hay out of the delays they say this will cause, never mind that no flood recovery money has yet come to the state. The controversy, protests and lawsuit make the process look tainted and those involved in it incompetent at best.”
More importantly, Riegel says, the situation potentially jeopardizes the state’s ability to secure additional federal funds.
Read the full column. Send your comments to editors@businessreport.com.
