Controversial contractor MWH Global, which serves as the project manager for most major city recovery projects, is billing the city at a higher rate than allowed for in federally subsidized projects, according to an internal city memo obtained by The Lens.
“…MWH has grossly exceed [sic] the 8% cap max fee allowable for project billing,” wrote New Orleans’ former capital projects director Bill Chrisman in an e-mail to Chief Administrative Officer Brenda Hatfield. The Feb. 20 e-mail says MWH’S billing “must be properly revised to reflect the actual budgets of projects.”
Chrisman didn’t cite any examples, but in general, he said MWH is being paid based on the original budget of a project, not the actual costs, which are coming in lower than expected in some cases. The Lens has requested public documents regarding these contracts, but city attorney Penya Moses-Fields has not yet complied.
Chrisman wrote the e-mail weeks before he left his office amid a flurry of disagreements with Mayor Ray Nagin’s administration.
For instance, the administration forwarded an amendment on MWH’s contract to Chrisman’s office for approval. It would have spent more than $2 million in disaster funds towards on payments for MWH project-management invoices. Chrisman rejected the amendment.
A week later, on Feb. 18, city technology chief Harrison Boyd asked Hatfield by e-mail to “remove Bill Chrisman immediate [sic] from the process for approving Capital Projects requisition and invoice disbursements.”
“It is clear that a problem has emerged and without a global solution will result in a total shut down of the recovery business procedure,” wrote Boyd.
Nagin was copied on that e-mail.
In his Feb. 20 letter to Hatfield, Chrisman raised concerns about the city’s use of a revolving loan fund that gives the city an advance on money that ultimately will be reimbursed by FEMA for professional service contracts such as the one held by MWH.
Specifically, he takes issue with a contract with Haggerty Consulting. Chrisman said the contract check sheet shows the dollar value has gone up to more than $2.3 million from $298,000 in 2008: “An 800-percent increase from the original contract value while essentially performing the same services.”
Chrisman also raises questions about a contract with Telecommunications Development Corporation. In October, the company’s contract was valued at $450,000. The contract was “strangely once again amended,” he said, to a value of more than $4.5 million… a 1,000 percent increase in just three months.”
In a statement to FOX8 TV, Chrisman said he left City Hall because in recent weeks he’s been faced with an “ethical dilemma,” which he felt was not in the best interests “of the recovery, our city and the next administration.”