Lafayette can’t spend $13.5 million in federal funds on major drainage projects
The Lafayette Consolidated government has tied up $13.5 million in federal funds on a drainage project that accounting consultants say it can’t spend the money on.
Lafayette Parish Council has allocated $13.5 million of its federal COVID-19 stimulus money to LCG’s Bayou Vermilion Flood Control Project at the repeated request of Mayor-Chairman Josh Guillory.
But the two most expensive parts of this project — main retention ponds near Homewood Drive and off Duhon Road is expected to total over $50 million – cannot be paid with federal funds because LCG’s process to hire a contractor to build them was not competitive enough to comply with federal law.
Guillory’s administration repeatedly asked the parish council to reallocate its federal stimulus money to the Bayou Vermilion flood control project this spring, with the latest claim in May after LCG lost the case for its rapid land grab for the massive Homewood Drive detention project.
These requests came with assurances that the project was eligible for federal funding and that the federal money was used as a stopgap measure while LCG dealt with state reimbursement issues.
But the inquiries soon died down, after Guillory’s administration was told by national accounting and consulting firm Deloitte that the process LCG used to award a special contract for this project to Rigid Constructors in January did not meet the federal bidding requirements.
The contract, for Construction Management Services at Risk (CMAR), was awarded to Rigid to construct the Homewood Drive and Duhon Road ponds through a process devoid of an element of competitive pricing, which is required for federal funding.
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Deloitte was hired by LCG to oversee Lafayette’s $86 million federal COVID-19 stimulus package, and it told LCG finance staff on June 2 that its CMAR bidding process did not meet the federal bidding requirements in an email obtained by The Current and shared with The Daily Advertiser.
The Daily Advertiser’s Sept. 14 communication request between LCG and Deloitte regarding the CMAR issue had not been met by LCG on Friday.
“Bidders have no opportunity to differentiate on the basis of price, as the evaluation criteria are all based on qualifications,” Bobbie Harper, senior consultant at Deloitte, wrote in a June 2 email to LCG staff.
“There does not appear to be price competition in the LCG CMAR selection process,” she added.
The CMAR contract differs from typical LCG projects in that the cost is not defined up front and the contractor takes on more responsibility to ensure the project is completed correctly. But it also bypasses the traditional government tendering process, which offers greater price transparency.
Although LCG’s CMAR bidding process does not meet federal funding standards, the CMAR system is an authorized process that local governments may use under state law.
Rigid was one of only two companies bidding on the CMAR project when LCG announced it in December.
Rigid won the contract over construction giant Lemoine on the basis of greater experience with CMAR contracts, although this advantage came from partnering with construction company JB Mouton for this contract.
So far, LCG has paid $38 million to Rigid under the CMAR contract, of which $19 million has been reimbursed by the state. LCG spokeswoman Jamie Angelle said no federal money was paid to Rigid under its CMAR contract.
Instead, LCG used its pooled cash from various sources to cover CMAR project money during its dispute with the state government over refunds.
This practice raises questions about how LCG will balance its books with denied federal funding and $22 million in state funding blocked due to documentation and land ownership issues.
Whether LCG can be reimbursed for the money it has already spent is a crucial question, as it is currently unclear how the money spent on the CMAR contract will be returned to other LCG services.
But despite learning in June that federal funding could not be spent on the project’s two largest expenses, Guillory’s administration did not inform the parish council of the restriction and made no ask the council to solve the problem.
With the door still open for LCG to resolve the state reimbursement issue, that route is hopefully the most likely option, Councilman Josh Carlson said.
“I think the expectation is that it will be paid for with state money, with the idea that some of this revenue has not yet been reimbursed by the state,” he said. -he declares.
“The only big outstanding question is that we haven’t received any money from the state,” he added. “And I think we’re going to get a big chunk whenever the legal issue is resolved.”