Contractor takes the heat for slow pace of post-Katrina program in La.
Wednesday, January 31, 2007
BATON ROUGE, La. -- Nearly eight months after it was hired by the state, a consulting company in charge of dispensing billions in federal aid to people whose homes were damaged by Hurricanes Katrina and Rita has received 101,000 applications but handed out fewer than 300 grants.
And now the company is getting much of the blame for the overall slow recovery of New Orleans and the rest of the Louisiana Gulf Coast.
Frustrated homeowners are bitterly criticizing Fairfax, Va.-based ICF International Inc., and state lawmakers are demanding Gov. Kathleen Blanco fire the company. But ICF is defending its handling of the aid program, saying it is a task of unprecedented proportions.
ICF was awarded a contract valued at up to $756 million in June to run the Road Home program, a $7.5 billion federally funded, state-administered program to compensate property owners whose houses were damaged or destroyed by the 2005 hurricanes. For ICF, the contract amounts to a potential 10 percent commission.
'Obviously not equipped'
"ICF should be ashamed of themselves. They should never have even attempted to take on a project like this. They were obviously not equipped to do it," said New Orleans homeowner Mark Samuels, who lives with his three children upstairs while he rebuilds his gutted home.
He is haggling with Road Home over how much aid he should receive 17 months after Katrina breached a floodwall and swamped the house with foul water. Samuels said he is contesting ICF's first offer, made Jan. 4, because it was one-third of what he expected and based on inaccurate damage figures.
Other homeowners have complained about incorrect paperwork, a labyrinthine bureaucracy, unreturned phone calls, low-ball assessments of their homes' value and the damage done, stingy grant offers and a slow-moving process overall. ICF has taken final action on only 300 applications.
Reed Kroloff, who is dean of Tulane University's architecture school and has been deeply involved in the post-Katrina planning, said Road Home's problems are among the biggest roadblocks to New Orleans' recovery. He cited the slow pace of ICF payouts, coupled with the program's late start -- 10 months after Katrina -- and "inexcusable delaying" by government at all levels.
ICF maintains it is ahead of the schedule specified in its contract to run Road Home, a program it helped design before winning the bid. ICF officials also say the program is unparalleled in size and complexity. More than 2,000 people are at work on Road Home, some for ICF, others for subcontractors.
"There's never been a project like it in the United States. The comparables or things that you would have to search are in other countries that are mostly involved in wars," said Anita Rechler, an ICF senior executive who is working on Road Home.
Earlier this month, state lawmakers ordered an audit of the program after ICF refused to provide an itemized breakdown of $19 million in employee travel expenses billed to the taxpayers. The company denied any wrongdoing, and said the state's public records law does not require it to turn over such information.
In addition, lawmakers have complained that lawyers working under Road Home are being paid more than other attorneys working on business for the state -- up to $375 an hour, according to the ICF contract.
ICF has more than two decades of experience in government housing aid programs. Its work also has included contracts in defense, energy, environment and health care. ICF worked on projects in the aftermath of Hurricane Andrew in Florida in 1992 and the Sept. 11, 2001, terrorist attacks.
But by its own admission, the 38-year-old company has never managed a housing contract close to the size of Road Home. ICF's work with the U.S. Department of Housing and Urban Development, for example, totals $23.6 million since 2001.
With complaints mounting, Blanco, a Democrat who is running for re-election, said she is displeased with the pace at which applications are being processed but is not considering firing the company. Still, she questioned whether ICF should handle Road Home's next segment, a loan program for small landlords.
Blanco this month also began blaming the slow pace of Road Home on Washington Republicans. The White House and other federal officials have denied that the decisions made about New Orleans were politically influenced.
The handling of the Road Home program drew fire Monday from members of a Senate Homeland Security Committee, meeting in New Orleans.
Sen. Barack Obama, D-Ill., said money is "still not reaching ordinary folks" quickly enough. "Until it does," he added, "all the numbers, the meetings and the planning that's being done is inadequate."
The Road Home is offering homeowners up to $150,000 each to rebuild, fortify their homes or sell out to the state. As many as 123,000 people may be eligible.
A team of state and national officials chose ICF to run the program, determining the company had more hands-on experience than other applicants, said Suzie Elkins, director of Blanco's Office of Community Development, which oversees ICF's work. ICF's bid was not the lowest offer.
Elkins defended the hiring decision. "ICF had a good reputation," she said, adding that she was satisfied with the company's performance so far.
The timing of the contract was good for ICF: It bumped up ICF earnings just as the company was going public on Sept. 27, 2006. Analysts rated the stock a "strong buy."
Douglas Beck, an ICF vice president, discounted any link between the Road Home contract and the taking of the company public. He said the ICF board decided in December 2005 to go public and did not hear about Road Home until last April.
Samuels, whose house was valued at $700,000 before Katrina, said flood insurance gave him $100,000 to make repairs to the damaged, 30-year-old home, but he said his repair costs were estimated to cost more than twice that. Samuels' grant offer from Road Home was $43,000.
He said that from Jan. 4 to Jan. 22, he called Road Home representatives "at least once just about every single day and sometimes two and three times." Last week, Samuels talked to a grant adviser and asked for a re-evaluation.
Samuels, who owns a jazz recording company, said he wonders how people without computers and without lawyers can wander through the maze: "If I can't get through this system, I really know that there are very few people who can."