Patrol boats, barges, cranes, ramps and an on-call mechanic were among the charges billed to Lafayette Consolidated Government for a February operation to dig up spoil bank levees on the Vermilion River.
The $3.7 million project, now the subject of a barbed lawsuit with St. Martin Parish in federal court, was top secret and never competitively bid. Instead, the caper was appended to a $390,000 contract awarded in December to Rigid Constructors LLC, the lowest bidder for as-needed excavation work.
Executed and paid for in days, the spoil banks operation is emblematic of the quick pace of government the Guillory administration has bragged about but has nonetheless landed it in legal trouble. And the peculiar vehicle for awarding such a large contract, in effect side-stepping the transparency and cost controls required of public contracting, may itself have violated public bid law, according to interviews with a dozen contractors, engineers, lawyers and former LCG employees.
Most of the professionals contacted for this story reviewed documents The Current received from LCG and spoke on the condition of anonymity, so as not to jeopardize ongoing relationships with local government. Over the past several months, The Current has reviewed hundreds of of pages of court documents and records obtained from LCG related to its immense capital program for drainage.
Bid law exists to protect against cost overruns and to keep negotiations honest. Whether the amended contract was awarded illegally hinges on if the work on the spoil banks falls within the scope of the original contract. And experts agree there is good reason to question the scope, in large part because it increased the value of the original contract tenfold.
“If you materially change the original scope of the contract, then you can’t just amend it like that and be in compliance with the bid law. You have to go out and re-bid it,” says former Louisiana Legislative Auditor Daryl Purpera. “And certainly going from $300,000 or $400,000 to $3 [million] or $4 million would be a material change in the contract. So it sounds to me like they’re in violation of the bid law.”
The as-needed contractor
Having already lost two major expropriation suits related to stormwater projects at the district court level, the Guillory administration’s speed has potentially sunk tens of millions of dollars into projects that may never be completed.
Lafayette-based Rigid Constructors has been paid handsomely for its role in the blitz of detention projects. And it’s connected to all three stormwater projects mired in lawsuits.
Since November, Rigid has been paid a total of $37 million from LCG for various projects, $3.7 million of that coming for the spoil banks project that took less than two days to complete. It was paid only $1.6 million in all of the previous fiscal year, according to online records.
Rigid’s $390,000 bid last year for the “2021 LCG as-needed excavation and disposal contract” for work “throughout the Lafayette City-Parish” (the contract does not allow for work outside of the parish) was the lowest among five bids; four other contractors sent bids that ranged from $568,000 to $1.1 million. Six days before the contract was signed, Rigid CEO Cody Fortier made a $2,500 donation to the mayor-president’s campaign, according to campaign finance records. Payment records show at least three other projects were billed to the as-needed contract, including excavation work for detention ponds on Coulee Ile Des Cannes. In all, the as-needed contract’s value alone has ballooned to approximately $5.2 million in a few short months.
The contract was awarded for one year, with options to renew for two additional one-year terms. It’s unclear how much information the bidders were given about potential projects to come and whether they knew of LCG’s plans for St. Martin Parish.
City-Parish Attorney Greg Logan confirmed in a phone interview that work on the St. Martin project started soon after the as-needed contract was awarded in December.
“I know it took a month, and equipment came from all over the country. I did see something that it was done in two days, but the equipment that was brought in from as far as Idaho, and a lot of that Rigid had to pre-pay I remember was going on. It’s not all that appears on its face.”
Rigid played a limited role in the Lake Farm Road detention project that first landed LCG in court over property rights, having been paid $61,000 to clear and burn trees on the Randol family land near Costco in May 2021. In February it was chosen over The Lemoine Company to negotiate pricing with LCG on the $60 million Homewood Detention Ponds project, the largest drainage undertaking in the parish’s history. The maximum price of the project’s first phase was negotiated at $30.6 million, but grew to $38 million when Rigid was forced to mobilize to another drainage project during litigation with the landowners. Both Homewood and the St. Martin spoil banks are part of the Bayou Vermilion Flood Control project, the centerpiece of a $106 million capital program to stop homes and businesses from flooding.
Records from LCG and Open Book reveal that Rigid’s invoices are typically paid within days, with one for $9.3 million for the Bayou Vermilion Flood Control project paid via wire transfer to Rigid on May 9, one working day after it was submitted. Open Book’s 10-digit “check numbers,” which seem to indicate wire transfers, show Rigid as the sole contractor paid by wire transfer this fiscal year, with LCG paying via wire transfer only 11 times out of 35,000 payments made so far this year. The wire transfer to Rigid came five days after LCG lost the Homewood ruling and is for work on that project. Turnarounds of days, rather than weeks, is atypical, according to sources.
Pending the governor’s signature, both the spoil banks project and the catchall Bayou Vermilion Flood Control project are set to receive more state dollars in the 2022 capital outlay budget. Bayou Vermilion Flood Control alone was allocated $22 million from the state’s windfall of one-time money.
LCG’s drainage program is itself unusually massive in scope and speed. Dozens of projects have been OK’d by the councils with scant scrutiny, even as the administration lost expropriation cases in court. Guillory has made clear he’ll do whatever it takes to push projects through faster. After rain storms in May 2021, Guillory advocated using an emergency ordinance to appropriate $20 million for city drainage projects, cutting red tape in part by bypassing bid requirements for a raft a projects.
But even against that backdrop, the spoil banks project stands out. If LCG was to successfully pull off its plan to go into the Cypress Island Swamp area without St. Martin’s knowledge or cooperation, it needed to move quickly and quietly.
Normal processes for getting the project done would not have made that possible.
A half-page paper trail
Even if it tries to maintain that the work was an extension of the existing contract, LCG has so far not produced a single record to suggest that it did anything more than accept what Rigid put in front of it.
According to state law, change orders within the scope of the contract can be negotiated in the public’s best interest or let out for bid, but change orders “outside of the scope of the contract that exceed the contract limit must be let for bid.”
The law also suggests that it is “a best use of public funds” to put out for bid change orders within the scope that are more than the contract limit. The Louisiana attorney general has opined that any additional public work outside of the scope of the existing contract “should be negotiated or let out for public bid rather than by change order to the existing contract.”
But rather than bid the markedly different contract, LCG accepted a single quote from Rigid valued at $3.7 million, the sole documentation for which appears to be a half-sheet of letter-sized paper with seven line items Rigid refers to as “Bid Item(s)” with an eighth line it calls “Total Base Bid.” To be clear, there was no advertised bid.
On Feb. 18 LCG filed with the Lafayette Parish Clerk of Court “Amendment #1” to the as-needed contract, saying the “parties desire to amend the agreement to add line items for additional services.” The amendment was signed by Mayor-President Josh Guillory and Rigid’s Fortier. Attached to it was Rigid’s half page invoice.
Three days later, on Feb. 21, before obtaining permits from either St. Martin Parish or the U.S. Corps of Engineers, LCG quietly purchased an undivided interest in a 41-acre tract from both the Guilliot family and Blanchet Land Company for $42,000 each (leaving a third owner out of the transaction), and it had to be only hours before Rigid was working the site (the sale was not recorded with the St. Martin Parish Clerk of Court until March 9). On Feb. 23 Rigid invoiced LCG’s Public Works Department $3.7 million for the work, billed as a “change order,” and was paid five days later out of the city general fund, according to LCG’s Open Book, an online financial transparency tool debuted by the Guillory administration in 2020.
Very little of what Rigid charged on the spoil banks project is related to excavation. Just $4,800 was spent on tree clearing and $260,000 on “excavation and fill.” Rigid billed $1.9 million for “expedited mobilization,” a sum that, according to the original contract’s terms, should have been included in the contract pricing. LCG did not turn over any construction plans for the project, saying it had “no known documents” responsive to our request for them.
Rigid’s quote for the St. Martin work also tacked on $1.2 million for “Barges/Temporary Barges, Cranes, and Rigging,” $30,000 for patrol boats and $117,000 to have a mechanic on stand-by for the 24-hour job.
LCG did not turn over any evidence that the costs were negotiated within the percentages allowed by the contract, that a 5 percent retainage was withheld or that a new performance bond was posted by Rigid. The contract also requires LCG to give written instructions to the contractor increasing the quantity of work and/or change orders.
One contractor interviewed by The Current defended the pricing in the contract, noting it’s what he would charge for the work. But the contract terms require Rigid to document and justify those overages. No records of such documentation have been produced in our records requests, besides the half-page “bid” table pricing the rush-ordered work.
Was the change legal?
Whether LCG devised the as-needed contract to slip the spoil banks project through unnoticed is unclear.
What is clear is that advertising the operation would have put LCG’s furtive plans in the public eye, something it had an interest in avoiding.
“‘Why didn’t you tell me?’” St. Martin Parish President Chester Cedars said he asked Guillory when the two spoke after the operation was completed. “’I guess I should have,’” Guillory reportedly told him.
In all likelihood, St. Martin Parish would have gone to court to stop the work, and indeed Cedars has since threatened to sue everyone involved. And if LCG intended the arrangement to avoid bid law, that’s a problem, experts say.
“You can’t sign a contract or pass an ordinance that allows you to ignore public bid law,” says one former LCG official. “Bid law trumps.”
Neither Rigid’s Fortier nor LCG Public Works Director Chad Nepveaux responded to requests for comment. A public records request for electronic communication between Fortier and LCG officials is pending.
Logan confirmed that it was his idea for LCG to do more as-needed contracts, which aren’t that unusual in public works departments. Local experts say they are, however, typically for more focused projects, like ditch cleaning, small drainage projects, water line maintenance, asphalt overlays — those with set costs — and typically make changes in the thousands of dollars, not millions.
“We have one of the best procurement lawyers in the state that works for us out of New Orleans,” attorney Logan says. “I’m pretty sure all of this was done with her permission or her approval.”
Should the Louisiana legislative auditor look into a municipality’s contracting practices, its role would only be to flag potential problems with contracts in an audit report, says Jenifer Schaye, general counsel for the legislative auditor’s office; violations can lead to restitution or, more rarely, criminal prosecution.
“The auditor’s office places the facts out there. … The attorney general can pursue that violation. The district attorney can pursue that violation. There can be a myriad of violations,” says Shaye, who declined to comment on whether her office has been alerted to LCG’s contracts.
LCG’s drainage projects are already costing taxpayers tens of thousands of dollars in city-parish legal fees, plus millions in re-mobilization costs. Logan and Guillory have defended the approach and use of “quick take” expropriation, characterizing the suits as negotiating tactics on the part of landowners looking for a better price in the case of Homewood and Lake Farm. As for the spoil banks, they’ve stood by the merits of the project and accused St. Martin Parish of trying to obstruct it.
Not only could the millions spent digging ponds and removing spoil banks be money down the drain, but the city and/or parish could be on the hook for property owners’ legal fees and millions in penalties to restore lands to their original conditions. The losses could substantially burden both city and parish finances.
“It is likely a court would find, based on the facts specific to this project, how it was bid, and the quick resulting change order which appears to have changed the scope of work … that LCG did not comply with Louisiana’s public bid law,” says David Vicknair, an experienced public bid law attorney with the firm Scott Vicknair LLC in New Orleans.
Vicknair, who says by law the project should have been re-bid, believes the losing bidders could have standing for damages if they sued, with the runner-up bidder in the best position to succeed.
“The problem a challenging bidder is going to have in a damages claim, which LCG may have assumed when they structured the contract this way, is that there’s a lot of case law from various appellate courts and the Louisiana Supreme Court requiring a losing bidder in a damages claim to show ‘good cause’ on why they did not seek injunctive relief to stop the work before making a claim for damages,” Vicknair continues, “so the question really is could they have known within the very short period of time from when that change order was publicly recorded until the work was performed to file for injunctive relief?”
Vicknair also notes the original December bidders could go to court to enjoin the remainder of the as-needed contract, which has options to be extended another two years, if any of that work is out of scope of the original bid work.
One former public official is willing to give LCG the benefit of the doubt on the contract amendment.
“While it may get around the bid law, it shouldn’t get around the court of public opinion,” he says. “It leaves a lot of questions, especially with the $1.8 million mobilization charge.”