Last week I posted on theWWL story of a contractor stuffing the joints of a NOLA floodwall with newspaper instead of rubber. I followed with another post called“I Iz Contractr.” However given new information that post should have rightly been titled “I Iz ACE.” (Army Corps of Engineers).Via Jeffrey is this from theTimes Picayune: Corps officials said it used its own hired workers in 2006 to put in the newspaper filling, not a contractor. As Alan atThink New Orleans asks: Finally, who here can rest assured that “those three gaps were the only ones where such a method was used?” … Continue reading “Paper Levee” Scandal Gets Worse

Last month FEMA released areport (pdf) chronicling waste and fraud in FEMA trailer maintenance and deactivation contracts. The GAO estimated that almost $30 million in waste or potentially fraudulent payments were made to contractors between June 2006 to January 2007 and “likely led to millions more in unnecessary spending beyond this period.” GAO prepared and reported on several case studies of potentially fraudulent payments. Though the report does not name the companies involved in the case studies, my research suggests that one case involves PRI/DJI a joint venture with ties to Fluor Corp.

BACKGROUND

The maintenance and deactivation (MD) contracts were born from
controversy and have continued to be mired in more controvery since
their inception. After criticism of the Bush administration’s awarding
of no bid contracts to 4 national firms shortly after Katrina struck,
FEMA decided to bid out 36 MD contracts to“small, local companies.” However
FEMA came under fire from local companies when the winning bids were
announced and it appeared FEMA was to give“more than
half the work to out-of-state companies.” One such company, DJI or Del-Jen Industries, did
not appear to be local (out of CA) or small as it was a wholly owned
subsidiary of Fluor Corp–one of the 4 large national companies that
originally received no bid contracts and also a company“with
campaign contributions lopsidedly in favor of the Republican Party.”

DJI partnered with PRI, or Project Resources Inc., as“part of a special
mentoring program that allows large firms [like DJI] to pair with small,
minority-owned ones” like PRI which are referred to as 8(a) companies.
However it was reported the joint venture PRI/DJI was awarded“two [MD] contracts of as much
as $100 million each as an 8A company.”

Given what the GAO found this appears accurate and not surprising.

POTENTIAL FRUAD

The GAO summarized one case of potential fraud as such:

In reality, FEMA awarded GSM contracts to two companies that did not appear to
have submitted independent bids, as required. These companies shared
pricing information prior to submitting proposals to FEMA and also
shared the same president and accountant. Personnel at both
companies also misrepresented their job titles and functions, a
potential violation of the False Statements Act.

I would submit the 2 companies are PRI/DJI though the GAO report does
not identify the companies. Rather the report lists the 10 contractors
in question in the report by numbers 1 through 10. The report states
that Contractors 4 and 5 are the same company which received 2 contracts
priced at $177,312,545 each (p16 of pdf). Research yieldsthis document which shows that PRI/DJI
received a MD contract for $177,312,545 as an 8(a) which is designated
by 8A in the accompanying code–HSFEHQ-06-R-8AMS– in the document. In the body of the GAO
report where the potential fraud is detailed it states: “FEMA awarded
one business two contracts: one contract as a “single entity” and one as
part of a “joint venture” with another firm.” Further in itsown
response to a
DHS Office of the Inspector General investigation on the 36 MD
contracts, FEMA identified PRI/DJI in the matter and defended their contract award by
saying the company was determined to be local but interestingly went on
to say that even if it were not local“it still would have received the
awards based on the pricing evaluation methodology used.”

That may be some FEMA truthiness to focus on “pricing
evaluation methodology” but the GAO report raises far more serious
problems with the contracts and the details of what they found ought to
be read. They are quite astounding. …

Continue reading “Investigating contractor fraud in FEMA trailer contracts…One case”

The Commission on Presidential Debates deigned NOLA wasn’t ready for a debate but Google and YouTubemust think otherwise. Google, the dominant Web search engine, and YouTube, the online video platform, are proposing the forum with the major party presidential candidates be held Sept. 18 at the Ernest N. Morial Convention Center, just after the parties complete their conventions in late August and early September. It would be eight days before the first scheduled presidential commission debate in Oxford, Miss. The announcement, made today on Google’s Web site, did not reveal whether any of the candidates — presumptive Republican nominee Sen. … Continue reading Presidential Debate in New Orleans?

McCaintoday in New Orleans Lower 9th Ward: He also told reporters he was not sure if he would rebuild the lower 9th ward as president. “That is why we need to go back is to have a conversation about what to do -rebuild it, tear it down, you know, whatever it is,” he said. A good portion of what was the hardest hit area of the Lower 9th is already torn down…just saying adding…But let’s have the conversation and I’ll know McCain is serious about that when he discusses it in Indianapolis and Omaha and Miama and Seattle and… Until … Continue reading “Whatever it is”