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US: Four Major Katrina Recovery Deals Planned

N.O. hopes feds pay for most of contracts


by Gordon RussellThe Times-Picayune
December 28th, 2005

A ubiquitous feature of the post-Hurricane Katrina cityscape -- the tens of thousands of cars, boats, buses and trucks littering streets and neutral grounds, marked with brown lines bearing witness to the height of floodwaters -- might finally start to disappear soon.

Nearly four months after the storm flooded 80 percent of New Orleans and left more than 30,000 ruined vehicles in public rights of way, Mayor Ray Nagin is poised to award a large contract to a private company that will oversee the collection and disposal of the wreckage, city officials said.

It's one of four major tasks the administration plans to outsource to private firms through contracts that, taken together, will be worth tens of millions of dollars and could amount to the city's largest professional-services deal ever.

Officials hope the contracts will be mostly paid for by the federal government. The Nagin administration also is seeking firms to manage projects, to stabilize and repair public buildings, and to hire workers to supplement city staff.

The biggest contract of the four appears to be the deal to clean public buildings, though it's difficult to get a handle on the numbers because most of the 24 proposals received by the city for one or all of the tasks contain only vague cost estimates. One of the few bids to estimate costs, submitted by engineering firm Montgomery Watson Harza, said it would cost $77 million to $90 million to clean the 225 damaged buildings owned by the city. The estimate covers inspection, stabilization, debris disposal and environmental mitigation of the structures.

Although the city will seek to be fully reimbursed, the Federal Emergency Management Agency is likely to require it to carry part of the load. Cynthia Sylvain-Lear, Nagin's deputy chief administrative officer, said debris removal from buildings, for example, is likely to be covered fully, but the city may have to pay some reconstruction bills.

Disposing of abandoned vehicles is also expected to be expensive, with Montgomery Watson putting the overall cost at $9 million to $11 million. The job involves towing, removing fluids and other hazards, recording identification numbers and taking the cars to a scrap yard.

Various reasons for action

The planned outsourcing comes two months after Nagin cut the city's work force by about half from its pre-Katrina level of about 6,000 employees, citing New Orleans' worsening financial straits. The storm dried up sales tax revenue to a trickle and ruined much of the city's taxable property.

Sylvain-Lear said the four tasks -- some of which might ordinarily be done by city staffers -- are being contracted out for various reasons, ranging from the large scope of the work to be done to its technical nature.

In some cases, she said, the employees provided by the private firm selected will function almost as city workers. But they will be needed for a finite amount of time and specific tasks, so hiring new permanent employees is not a sensible option, Sylvain-Lear said.

For instance, the city might ask the private contractor to supply building inspectors one day and accountants the next, she said. It will be up to the company to find the appropriate workers.

"You might need persons with a specialized expertise for the short term," she said. "We really need assistance in certain areas for a certain period of time."

Sylvain-Lear said she couldn't say precisely how the workers will be deployed, but she expects "a big push in certain areas" as the recovery process starts to gain steam. For example, some workers will almost certainly be assigned to the public works and safety and permits departments, she said.

24 proposals received

Initially, the city had sought to outsource seven services. But two of those tasks -- building inspections and hazard mitigation -- were completed by the Shaw Group of Baton Rouge, which had already begun those jobs under an emergency contract it won from the city in October, before the city had finished evaluating the responses.

Shaw seems likely to receive more work from the city when the firms for the four new tasks are announced, based on rankings of the proposals done by city administrators.

The city received 24 proposals, not all bidding for every task offered. City memos indicate that officials plan to award two of the tasks -- project scheduling and reporting, the least costly of the services; and building renovation -- to a single firm, with the contracts for vehicle removal and staff augmentation to be awarded separately.

A panel of bureaucrats including Sylvain-Lear, Chief Administrative Officer Brenda Hatfield, Finance Director Reggie Zeno, Homeland Security Director Terry Ebbert and Economic Development Director Don Hutchinson compiled a short list of companies with the best responses.

Bids are rated

For project management and building stabilization and renovation, Shaw received the highest mark, 89 points out of a possible 100, followed by CH2M Hill and Henry Consulting, which received scores of 82 and 70, respectively.

For staff augmentation, CH2M Hill got the highest score, 95, followed by Shaw with 93 and Montgomery Watson Harza with 83. Montgomery Watson, the only firm to predict a total cost, put the value of the job at $5.6 million to $29.5 million, depending on how many staffers are needed.

And for vehicle disposal, Shaw got the top score, 98, followed by Henry Consulting and CH2M Hill, which were scored 94 and 92, respectively. Montgomery Watson, again the only firm to give a total price, estimated the job cost at $9 million to $11 million.

Most of the firms received perfect scores in several ranking categories: for instance, having an office in New Orleans and complying with the city's programs for disadvantaged businesses. The scores diverged mainly in two subjective categories, "specialized experience" and "performance history."

Sylvain-Lear said many of the firms "were very small and clearly did not have the resources to tackle some of these jobs," whereas others "have done the work and are skilled."

The score sheets have been forwarded to Nagin for a final decision, which could come at any time, Sylvain-Lear said. The mayor will not be bound by the rankings submitted by his staff.





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