An engineering and consulting firm that has drawn frequent fire from critics of the Los Osos sewer project has been ripped in a scathing draft report from the city of New Orleans Inspector General’s Office.
However, the vice president of communications for Montgomery, Watson, Harza said the New Orleans report was leaked to the media prematurely and contains inaccuracies. She said the company would have a detailed response by mid-April.
Its spokeswoman, Meg VanderLaan, added that the New Orleans project has nothing to do with the Los Osos project.
County Public Works Director Paavo Ogren, who heads the Los Osos effort, said the county is aware of the report and is monitoring it, and that what comes out of New Orleans could influence the county’s use of the firm. MWH is on the county’s short list of firms being considered to design and build the sewer system.
The 28-page Inspector General’s report zeroed in on a contract awarded in 2007 to MWH Americas to manage the city’s program for repair and rehabilitation of city-owned buildings, facilities and streets in the wake of Hurricane Katrina.
The Inspector General’s internal review copy of the report cited numerous problems, including:
• An alleged lack of meaningful competition in awarding the contract;
• Inadequate cost controls;
• The city “improperly paid MWH for negotiating the contract”;
• The contract “presents a high risk of excessive charges”;
• MWH employees “sought reimbursement for gifts to city employees and elected officials”; and
• The city paid MWH more than $1.3 million for “unspecified expenses” during the first 18 months of the contract.
In a strongly worded statement, MWH said it “reject(s) any suggestion that we are profiting unfairly.”
It said it had been hired to “oversee one of the largest infrastructure rebuilding programs ever undertaken, at a time when the city itself did not have capacity to take on this challenge.”
VanderLaan pointed out to The Tribune that the city of New Orleans has signed an amendment to the contract, since the Inspector General’s report became public.
The New Orleans Times-Picayune reported that New Orleans has signed the extension, and quoted Mayor Ray Nagin as saying “The IG’s got things a little twisted.”
The question for local residents is: Does this affect the Los Osos sewer? MWH has performed work for the Los Osos Community Services District, and, as mentioned, is on the short list for the county’s design-build plans.
Ogren told The Tribune that “we have the ability to exclude nonresponsible entities from final selection.”
“Whether the draft New Orleans report, and what I imagine will be subsequent follow-up on it, causes us to develop a conclusion that MWH is not a responsible party would be speculation at this time,” Ogren wrote in an e-mail to The Tribune.
“Issues considered at that future time, if we had a recommendation to hire MWH, would include things like ... what are the conclusions of the New Orleans report? If wrongdoing did in fact result by MWH (versus staff of New Orleans), was it the result of individuals or is it symptomatic of a firm that (and I’m not saying that they do) follows unethical business practices ... How significant were the issues? etc.,” he wrote.
Former Los Osos CSD member Lisa Schicker, one of several sewer critics who have complained to the Board of Supervisors that MWH is unfairly favored by the county, claims that “their pattern of conducting these suspicious business practices are similar wherever they go.”