TYPO CLARIFICATION (6:00 PM PST): Fixed an obvious typo on the first paragraph (changed Los Osos to New Orleans)
Around the time the New Orleans Inspector General’s report was posted on local news sites, San Luis Obispo County government supporters and MWH Americas, Inc. sympathizers littered blogs and message boards with character attacks against those who supported the report’s findings. Unwilling to read the report and dissect the details, which show that MWH overbilled the city of New Orleans for their work — after Hurricane Katrina hit the region in late 2005 — by billing 118% percent of the actual value of their work.
Vocal former members of the 2005 “Save the Dream” campaign have resurfaced to refute those who believe that the information should be taken into consideration for the County’s Los Osos wastewater project. Interestingly, during the 2005 Los Osos Community Services District Recall, “Save the Dream” was given $10,000 by MWH in hopes that their contribution would help keep Stan Gustafson, Gordon Hensley and Richard LeGros in office. All three board directors solely supported MWH for their wastewater treatment facility plans on the Tri-W site.
MWH is a contractor that County supporters have fought for from the start of the County’s LOWWP process. Now that details are emerging that give a greater insight into MWH’s overbilling practices, County supporters have come out in full swing to defend their cash cow. Here is what some of them have been saying online:
“When former LOCSD director Lisa Schicker filed her formal complaint against Paavo Ogren and his supposed conflict of interest with MWH, Schicker’s supporters wasted countless hours of public testimony time to discuss MWH, which impeded on the board’s progress with the sewer (i.e. moving the site from Tonini to Giacomazzi).”
Where’s the relevance? From the point when Schicker filed her formal complaint on April 7, 2009 to when County Counsel Warren Jensen released his “Preliminary Legal Evaluation” of the complaint on August 18, the overwhelming majority of public comment speakers asked when Counsel was going to release his analysis. The majority of overall speaking time accrued was from talks between Planning Commission members and County Public Works, which would often go past 5:00 p.m. None of those talks included MWH as topic of discussion. On August 13, 2009, the Planning Commission decided to relocate the project from Tonini to Giacomazzi. Nobody mentioned MWH or the formal complaint (as shown in the meeting minutes).
MWH was never utilized as a wedge issue to significantly delay project deliberations. The Razor has determined this claim is FALSE.
“The no-sewer people believe that MWH already won the contract for the project. This is just part of their plan to stop the sewer. Then they’ll ask the board to bring W.M. Lyles back to the process and put STEP/STEG back on the table.”
There is reason to believe that MWH is the preferred contender of choice for County Public Works. Patrick Klemz of the New Times wrote on August 10, 2006 that County officials felt revisiting the old contracts from the previous project from 2005 would make the most fiscal sense after the passage of Assemblyman Sam Blakeslee’s AB2701 bill. Nearly three years later, MWH emerged as one of the top three contractors for both wastewater collection and treatment despite the fact that MWH has been a proactive, political influence in Los Osos since 2001. Before AB2701, there was no room for other contractors to participate on the same playing field. After AB2701, despite questionable business practices and overbilling in New Orleans and Cape Coral, MWH rose to a position where a more reasonable, affordable, non-controversial contractor should be. That contractor doesn’t have to be W.M. Lyles.
The “no-sewer” label is tiresome, overplayed and false. Hypothetically speaking, people who didn’t want a sewer would move to blacklist every gravity collection-based contractor on the design-build RFQ. However, it is true that there are activists who are dedicated to moving STEP/STEG back into the design-build process and having the system compete in total project cost comparisons. Therefore, it makes no sense, other than as a smokescreen, to suggest that everyone who doesn’t want MWH involved is “no-sewer.” That doesn’t mean that everyone who doesn’t want MWH involved wants W.M. Lyles and STEP/STEG to be revisited and included is unrealistic, since that option appears to be the long shot of all long shots.
Requesting MWH to be removed from the design-build RFQ will not stop the sewer. Removing MWH from the short list does not delay the sewer. The Razor has determined this assessment to be NUTS.
“The report shows the local government of New Orleans to be inept. It’s the city’s problem for what happened because they accepted MWH’s contract and inadequately monitored the situation.”
While the city should not have accepted their $150,000/year contract when their proposal had no cost information or fee schedule, saying that only the city is responsible for MWH’s overbilling practices is not a logical argument. While they city should have provided appropriate controls or incentives to contain costs, it was MWH that exploited the city’s ineptness to keep the contract limited to the $150,000 scope of work. In reality, both the contractor and the city government are to blame for the situation spiraling out of control. That is what the New Orleans Inspector General said and nobody is disputing that.
MWH tipped their hand once they charged New Orleans substantially more for labor than their two competitors (Burk-Kleinpeter and Regional Management Group) and listed their personnel charges as “professional” without any specific cost breakdown. Then, MWH refused to provide evidence to the Office of the Inspector General (OIG) that they honored the “Truth-in-Negotiation” contract provision (pg. 19 of the report), which was the promise that MWH would not charge higher than the same or substantially similar services that they were already providing for the city. Let’s not forget MWH’s brazen request to be reimbursed for gifts given to city employees. Maybe that would explain why city officials played fast and loose with the MWH contracts and contract extensions. We can only speculate.
New Orleans city officials engaged in practices that waived basic government functions to MWH and let the contract mushroom from $150,000 to $48 million, but MWH still exploited the conditions of the deal. We rate this assessment to be HALF TRUE.
Key questions about MWH remain unanswered as a fistful of sewer politicos have aggressively descended on the contractor’s critics in Los Osos. Why? Because critics are threatening to undermine MWH’s influence in Los Osos by holding up the New Orleans rip-off and and calling for fairness and openness in a rogue process that Los Osos “Prohibition Zone” homeowners continue to pay for — and will with interest for the next 30 years.
– Aaron Ochs
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