Louisiana Officials Criticize Delays on the 'Road Home'
Monday, January 29, 2007
ICF International's largest contract is turning into its biggest headache.
In June, the Fairfax company was picked by Louisiana's Office of Community Development to run a program worth more than $7 billion that will distribute thousands of federal grants to homeowners whose houses were damaged by hurricanes Katrina and Rita in 2005.
Since then, residents and state and federal officials have accused ICF of moving too slowly, paying its lawyers too much and valuing homes too low. The company's performance has been criticized by Donald Powell, federal coordinator of Gulf Coast rebuilding, and the Louisiana House and Senate have called for the contract to be canceled and for an audit of the company's $19 million in travel expenses.
"Every part of this recovery process has been challenging. They understood that when they came in," Louisiana Gov. Kathleen Babineaux Blanco (D) said of ICF in an interview.
"There has been a bottleneck," Blanco said. "I simply want them to clear out the bottleneck."
ICF defends its performance, saying that it has changed how it calculates the value of homes in urban areas and that it is ahead of schedule in parts of the program, which analysts expect to constitute 40 percent of its 2007 revenue. Some of the complaints lobbed at the firm reflect the way the program was designed by the state, including provisions to prevent fraud, not the way ICF is implementing it, company officials say.
"We're making progress, but we're constantly looking to improve," said Michael F. Byrne, ICF's program director. "We want to get the money to them fast, that's the number one priority, but we want it to be a fair and equitable progress."
Fairfax-based ICF is a mid-size contractor that provides consulting and technology services for government agencies, including the Department of Housing and Urban Development and the Defense Department, as well as some large companies. The firm has more than 2,000 employees worldwide, including about 1,200 in the Washington area.
The program, known as Road Home, is among the most high-profile for Louisiana residents affected by the storms. The state expects to dole out grants of up to $150,000 each to about 100,000 homeowners. An additional $869 million has been set aside for owners of small rental properties, a pool of about 80,000 potential applicants. The contract is worth up to $756 million to ICF.
"It's critical to the long-term rebuilding effort," Powell said in an interview. "If you're a homeowner in New Orleans, this is your source of rebuilding; it puts certainty into your life."
But complaints about the company and the contract have piled up. Under the contract, the company's lawyers make $375 an hour, significantly higher than private attorneys working on a state contract earn, said state Rep. J.P. Morrell (D-New Orleans). The contract also allocates $19 million for travel expenses without any requirement that the firm account for how it is spent, he said.
"You're giving this company a blank check to travel on the public dime," he said. "They are getting paid out of money that could be going to people's homes."
But the most significant complaints about the ICF have centered on the pace of the program. So far, 331 homeowners have received their grants, valued at an average of $80,000. Some received less than $10,000.
That is too slow, say skeptics, who want the program wrapped up before homeowners begin registering their children for school in the fall. "It's the pace," Powell said. "I think it's too slow. It's not meeting the needs of the people."
Blanco said she has given ICF "a lot of leeway" and will meet with company officials soon to gauge when the bottleneck will be relieved and to ensure that ICF's 22 subcontractors also have a sense of urgency.
Compounding the frustration was an expectation that ICF would issue 500 awards a day starting this month. That was a misunderstanding, said ICF spokesman Douglas Beck. It does not expect to issue awards at that rate until May, he said.
ICF will launch the next phase of the program today as it takes applications from owners of small rental units, and it is applying the lessons from the homeowners program, Bryne said. "We're going to provide information to the people on a more routine basis, we're going to be available to answer questions," he said, so that "they never feel like they're disconnected."