Friday, January 4, 2008

GAO noted that the Corps' rush to award contract

The Army Corps of Engineers followed federal rules when it awarded a contract to a politically connected manufacturer to provide pumps to this city after Hurricane Katrina, Congress' investigative arm said Thursday.

The Government Accountability Office reaffirmed findings it made in May after the Office of Special Counsel, an independent federal whistleblower agency, said in October that there was a ''substantial likelihood'' the Corps acted improperly in handling the contract.

The report was the latest look at the contract awarded in early 2006 to Moving Water Industries Corp. Corps officials in New Orleans installed the company's 34 pumps before the 2006 hurricane season despite allegations by Maria Garzino, the engineer who oversaw their installation, that the pumps would fail during a hurricane.

''The Corps' actions in awarding and administering the pumping system contract were generally in accordance with federal requirements,'' the new report said.

The GAO, however, noted that the Corps' rush to award the contract ''resulted in deficiencies in key contract provisions.''

The report said the agency performed ''limited market research,'' used specifications for the pumps very similar to MWI's and drafted a contract ''not written as precisely as it should have been.''

The pumps were plagued by numerous problems, including undersized gear oil circulation motors, vibrations and suspect pipe welds, resulting in a lower pumping capacity than expected, the GAO said.

In the future, the GAO said, the Corps should do a better job, even during emergencies, of following ''sound acquisition practices'' and making sure that a contract's criteria, such as testing requirements, are spelled out clearly.

The GAO also noted that although the pumps were deficient during the 2006 hurricane season, as of September 2007 the Corps said it had corrected flaws with the equipment and successfully tested the pumps for two hours each.

The Corps has added a new series of pumps on the canals built by different manufacturers to bolster pumping capacity. Corps officials declined to comment on the report.

William E. Bucknam, MWI's vice president and general counsel, said the report ''confirms the position we have taken all along that MWI did in fact deliver on this critical pump contract under extremely challenging circumstances and strict time constraints.''

MWI is owned by J. David Eller and his sons. Eller was once a business partner of former Florida Gov. Jeb Bush in a venture called Bush-El that marketed MWI pumps.

In the coming weeks, the Corps is expected to decide whether MWI should be awarded a $5 million bonus for delivering the pumps before June 1, 2006, or pay a penalty for late delivery of $1,700 per pump a day, the GAO said