When the Army Corps of Engineers solicited bids for new drainage pumps in New Orleans, it copied the specifications from the catalog of the politically well-connected manufacturer that eventually won the $32 million contract, according to a review of documents by the Associated Press. In fact, so slavishly did the Corps copy Moving Water Industries' specs that it even repeated typos, the AP reports:
...[A]n erroneous phrase in MWI catalogs - "the discharge tube and head assembly shall be abrasive resistance steel" - also appears in the Corps specifications. The phrase should say "abrasion resistant steel." An incorrect reference to the type of steel that would be required apparently was also lifted.
The Corps awarded the pump contract to MWI in January 2006. The installation of the 34 pumps was already underway last May when one of the agency's own engineers penned a memo warning of mechanical problems and criticizing testing procedures. The AP obtained the memo, and the Government Accountability Office is now investigating at the request of Sen. Mary Landrieu (D-La.). That investigation is expected to be completed by mid-May.
Last month, Sen. David Vitter (R-La.) called on the Corps to investigate how MWI got the New Orleans contract. Though copying specs from a company's catalog does not necessarily violate federal regulations, the practice is discouraged because it could give the impression that the job was rigged for a particular company.
The Corps withheld about 20 percent of MWI's contract price, including a $5 million timely delivery incentive, until the equipment problems have been resolved, the AP reports. But at the same time, the agency paid MWI $4.5 million for six additional pumps for use in evaluating the faulty ones.
The AP's latest revelation does little to ease concerns about cronyism possibly tainting the MWI deal. Based in Deerfield Beach, Fla., the private company is owned by J. David Eller, a generous donor to mostly Republican political causes and a one-time business partner of former Florida Gov. Jeb Bush. During the presidency of George H.W. Bush, their firm, Bush-El, struck a deal to sell Nigeria MWI-brand irrigation pumps financed with a $74 million loan from the U.S. Export-Import Bank.
That deal sparked an ongoing whistle-blower lawsuit against MWI and Eller under the federal False Claims Act, with a former MWI employee charging that the company paid $28 million in excessive, highly irregular commissions to a Nigerian sales representative and also made payments to Nigerian officials. The U.S. Department of Justice, which joined the suit in 2002, contends that Eller took trips to the Bahamas and Grand Cayman with cash-filled suitcases in an effort to hide assets.
The whistle-blower in the Nigeria deal, Robert Purcell, was also the person who informed the Corps contract officer in charge of the New Orleans pump bid about the copied specifications after MWI won the contract, according to the AP. Purcell now works with FPI Inc., a Florida company that also bid on the New Orleans project. The contract officer, Cindy Nicholas, denied knowing anything about the copied specs in a recorded phone call provided to the AP by FPI.
It's not only the Corps' contracting process for Gulf Coast reconstruction that's raised concerns about impropriety. In 2003, Bunnatine Greenhouse, then the Corps' top civilian contracting official, charged that the agency granted the Halliburton Co. -- which has close ties to Vice President Dick Cheney -- large contracts for work in Iraq and the Balkans without following rules to ensure competition and fair prices to the government. For example, Greenhouse said Army officials inappropriately allowed Halliburton representatives to attend a meeting during which they discussed the terms of a contract the company was to receive. She called for an investigation of what she described as threats to the "integrity of the federal contracting program."
But in late August of 2005, as Hurricane Katrina spun into a Category 3 storm in the Gulf of Mexico, Greenhouse -- a Louisiana native who holds three master's degrees -- was demoted for what the Army called "poor job performance" despite years of stellar reviews in which supervisors called her ethics "above reproach" and praised her "unquestionable loyalty, integrity and dedication to mission." The news of her demotion hit the New York Times on Aug. 29, 2005 -- the same day Katrina hit New Orleans.
One wonders how differently Gulf Coast reconstruction might have proceeded had someone like Greenhouse been overseeing the contracting process.