Is Bourbon Street roadwork contract legal?

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Amid rising costs and delays, the eight-block Bourbon Street reconstruction project is now facing legal scrutiny from an attorney representing a contractors association over whether the project's contract runs afoul of state public bidding law, according to a letter obtained Wednesday (Aug. 2) by NOLA.com | The Times-Picayune.

Signed by an attorney representing the trade group Louisiana Associated General Contractors, the letter questions whether the city is issuing work order changes "outside the scope of the contract" for the Bourbon project. That could constitute a possible violation of state public bid law, which requires that work be put back out for bid if large change orders reshape the contract's overall scope, the letter contends.

Additionally, the letter alludes to concerns over the city's decision to tack the Bourbon project onto a maintenance contract. Typically, major road construction projects like the current Bourbon Street overhaul fall under capital improvement contracts, and observers have wondered whether using a maintenance contract has allowed the project's costs to increase.

The letter "requests" that the city only issue additional change orders that stick to what the maintenance contract prescribes. Any larger work "outside the scope of the contract" should be put out for bid in the future, it says.

"The City's issuance of change orders outside the original scope of a contract not only deprives all qualified contractors from competitively pursuing work in accordance with the law, but also could subject the City to certain unanticipated legal challenges with respect to that work," the letter states.

Dated July 24, the letter was signed by attorney Murphy Foster of the Baton Rouge-based firm Breazeale, Sachse and Wilson, L.L.P. Foster confirmed Thursday morning that he wrote the letter on behalf of Louisiana Associated General Contractors, for whom he serves as general counsel.

The letter was addressed to Mayor Mitch Landrieu and Public Works Director Mark Jernigan. A spokesperson for the mayor's office did not immediately respond to a request Thursday for comment on the letter.

The July 24 letter apparently arrived days ahead of a presentation Jernigan gave Tuesday (Aug. 1) to several members of the New Orleans City Council, to whom he detailed the Bourbon project's complexities. Speaking before the council's Public Works, Sanitation and Environmental Committee, Jernigan outlined how wet weather and the tangled innards of Bourbon Street's nearly century-old utility lines spurred the ongoing budget revisions and delays.

Those delays have already delayed completion of the first block of Bourbon more than a month past its scheduled June 29 completion date. City officials previously said the entire project is still scheduled to wrap up by the end of the year, despite delays.

On Tuesday, Jernigan also defended the city's decision to use a maintenance contract for the Bourbon project. He's previously said it gives the city flexibility to help manage costs in the face of the project's "unforeseen site conditions." He didn't mention the July 24 letter.

"We're approaching this project as a major maintenance rehab project," Jernigan said Tuesday. "We're going to continue to evaluate that approach."

According to city officials and public records, the Bourbon project was tacked onto a "specialty pavement rehabilitation services" contract put out for bid in December and won by Hard Rock Construction, LLC, which submitted a $3,965,050 bid. That offer came in nearly $1 million below that of the next lowest bid, records show. The contract was signed April 3.

On April 24, the city issued a notice to proceed for Hard Rock to start work on the entire eight blocks of Bourbon from Canal to Dumaine streets in the French Quarter. Notices to proceed codify costs, and the April 24 notice directed Hard Rock to reconstruct all eight blocks for about $2.2 million.

But last month, the city scrapped its original work-order arrangement and began issuing notices to proceed for each of the project's eight blocks. So far, the city has only issued a new notice to proceed for the first block of Bourbon, at a cost of almost $1 million - nearly half the original amount ordered for all eight blocks.

More than three months into the project, and with work underway on four of the eight blocks, city officials have yet to indicate what the project's final cost may be.

There aren't any records yet of payments made to Hard Rock by the city, so those numbers aren't available to get a sense of the full costs. Hard Rock has submitted its first invoice, Jernigan said in an email Wednesday, but it's "under review."

In general, payments for construction projects are processed on a monthly basis. Jernigan said contractors usually invoice the city each month "or as major items or phases of work are completed."

"It is the responsibility of the contractor to submit their invoices," Jernigan wrote Wednesday. "The City does not mandate a schedule for submitting them."

A representative for Hard Rock did not respond to requests Wednesday for comment.

Regardless of cost, the effort to reconstruct the heavily touristed street has been rife with challenges, Jernigan told city council members Tuesday.

Although engineers used closed-circuit video cameras to look under Bourbon Street before breaking ground, construction crews immediately discovered a tangle of utility lines untouched since 1928 that had shifted locations over time in confounding ways. The vast majority of pipes were either missing or completely different sizes from what was depicted in the city's infrastructure records, Jernigan said.

On top of that, Jernigan said heavy rains that have pounded the New Orleans area this summer also dampened progress. Crews had to stop working during storms and also spent time pumping out rainwater pooled up in the piping and job site.

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