Soon after Hurricane Irma slammed into the state, Gov. Rick Scott made the decision to ignore the debris removal contracts already in place in the Florida Keys and instead push forward with a plan to issue emergency contracts for the lucrative work of clearing fallen trees and palm fronds, as well as the remnants of destroyed homes and trailers.
One of the companies selected had no previous emergency debris removal experience, while more qualified firms were prevented from even submitting bids.
The governor’s emergency contracts will end up costing taxpayers an additional $28 million to $30 million, according to an analysis by CBS4 News.
CBS4 News reviewed more than $43 million worth of invoices submitted to the state through February by Munilla Construction Management (MCM) and Community Asphalt, the two firms selected to operate in the Keys under the emergency contract.
If the governor had instead used one of the companies already under contract with the state, it would have cost taxpayers as little as $13 million to do the same work.
Scott Amey, the general counsel for the Project on Government Oversight, a watchdog group based in Washington, said that by ignoring the existing debris removal contracts, the governor “subjected state and federal taxpayers to millions of dollars of wasteful spending.”
“This is a rookie mistake made by a state that shouldn’t be making rookie mistakes,” Amey added.
Richard Skinner, who served as the inspector general for the Department of Homeland Security under Presidents George W. Bush and Barack Obama, said Gov. Scott may have had the power to do what he did, but the decision to ignore existing contracts that were competitively bid in favor of an emergency contract raises some troubling questions.
“Notwithstanding the fact that you have wide discretion following a disaster, you also have to act in a very reasonable, prudent manner,” he said. “You just can’t ignore good business sense.”
He said that is why federal officials encourage states to use pre-existing contracts.
“There is a whole variety of reasons why you would want to have these contracts in place before disaster strikes,” Skinner said. “And it makes no sense at all to just ignore those contracts and redo the entire process.”
He added: “It is something I would examine if I was the inspector general today. We would conduct an audit just to get to the bottom of whether taxpayer money was being properly spent.”
A spokeswoman for Scott issued the following statement to CBS4 News: “It is inaccurate to compare pre-disaster contracts with emergency debris removal contracts — it is comparing apples to oranges and must be reflected in your story.”
The statements issued by the governor’s office, however, contradict statements Scott made days after the storm, instructing cities and counties to use their pre-storm contracts to avoid “being price-gouged by debris removal contractors.”
“We will not tolerate any attempt by businesses to take advantage of our communities during their time of need,” Scott said during a Sept. 22 news conference, “especially in the wake of a natural disaster like Hurricane Irma.”
Planning is cast aside
The eye of Hurricane Irma made landfall on Cudjoe Key, near Mile Marker 22, at 9 a.m. Sept. 10. With winds of 130 mph, the Category 4 storm ripped through trailers, uprooted trees, and tore the roofs off of homes.
Miraculously, no one in the Keys was directly killed by the storm.
Despite the destruction, both Monroe County and the state seemed prepared to handle the aftermath.
Key West, Islamorada and even the resort community of Ocean Reef all had contracts with a private firm, AshBritt, to clean up storm debris at prices that were negotiated months in advance.
AshBritt, based in Broward County, is one of the largest disaster response firms in the country. It oversaw the cleanup in New Jersey after Hurricane Sandy, in Mississippi following Hurricane Katrina, and in California in the wake of the recent wildfires.
Monroe County also had a contract with AshBritt that had been competitively bid before hurricane season started.
The Florida Department of Transportation seemed ready, as well. It had six companies on standby, under their own pre-storm contracts, ready to go into the Keys to clear US 1. Three of those companies — Ceres Environmental, Bergeron Emergency Services, and AshBritt — had crews pre-positioned on the border between Monroe and Miami-Dade expecting to be called in to help.
Yet all of this planning was ignored.
Rather than using Ceres, Bergeron or AshBritt, state officials quietly sent notices to a handful of companies, inviting them to bid on a new emergency contract. The emails went out late in the afternoon of Sept. 12 and the responses were due by 11 the next morning.
And the new contract would not be limited to removing debris along US 1, but now included everything within the hardest hit areas of the Florida Keys from Mile Marker 16 to Mile Marker 40, just south of the Seven Mile Bridge.
By the afternoon of Sept. 13, the state decided on two firms: MCM and Community Asphalt. (In an unrelated matter, MCM is currently under scrutiny for its role in constructing the FIU pedestrian bridge that collapsed in March killing six people.)
The rates for debris removal contained in MCM’s emergency contract are believed to be the highest in the state and stand in sharp contrast to the prices Ceres, Bergeron, and AshBritt would have received under their pre-existing debris removal contracts.
For example, MCM charged taxpayers $913 a mile for every curb and gutter swept.
Ceres would have charged $123 a mile, AshBritt $32, and Bergeron just $12.
To haul rock, sand, soil and sediment MCM charged the state $77.50 a cubic yard.
AshBritt would have charged $11, while Ceres and Bergeron would have charged between $6.50 and $15.95.
To remove a washing machine, a dryer or a stove, MCM charged the state $969 for each appliance.
AshBritt would have charged $75 per item, Ceres $48.15 and Bergeron $60.
The governor's office has since noted that AshBritt is under investigation by the attorney general's office for allegedly raising its fees in other jurisdictions in the wake of Irma — an allegation AshBritt denies. The AG investigation was not underway at the time the emergency contracts were awarded, and the company performed post-hurricane cleanup in other sections of the Keys without breaching pre-existing fee structures.
It wasn’t until MCM and Community Asphalts started submitting bills for their services that the true cost of these emergency contracts could be measured.
CBS4 News reviewed $30.1 million worth of invoices submitted by MCM to the state for work it had done through February.
If that same work had been done by AshBritt it would have cost taxpayers $10.4 million.
Ceres would have done it for $9 million and Bergeron would have cost taxpayers only $8.5 million.
A similar story can be found with Community Asphalt. CBS4 News reviewed $13.5 million in invoices submitted by the firm.
That same work would have been done by AshBritt for $5.5 million.
Ceres would have charged $5.6 million and Bergeron $4.1 million.
Both Community Asphalt and MCM defended their work, noting the state invited them to bid on the emergency contracts and their prices reflected the conditions at the time.
The governor’s office has repeatedly claimed the emergency contracts were issued only because Monroe County requested them. “We want to be clear,” the governor’s office declared, “emergency crews were brought in to supplement ongoing work because the local government requested FDOT's assistance to quickly solve this issue so families could return home.”
The governor’s staff identified Martin Senterfitt, Monroe’s emergency manager, as the person making the request.
However, in a sworn deposition obtained by CBS4 News, Senterfitt said: “I did not make a request.”
Asked if he expected FDOT to issue emergency contracts, Senterfitt said: “I did not.”
Senterfitt’s account is supported by a video of the Sept. 27 Monroe County Commission meeting in which Monroe County Mayor George Neuent expressed dismay that the state hired its own crews to remove debris.
“We don’t need these other guys helping us,” said Neugent, referring to MCM and Community Asphalt. The mayor said it was important for the county to maintain control over how the work was done.
Monroe County Administrator Roman Gastesi told commissioners during that Sept. 27 meeting that he tried to kill the emergency contracts when he learned about them.
“We told the state: Stop it,” Gastesi told commissioners. “We've already said to Tallahassee, you know, we've got this. We have a contractor. You're disturbing our issues. Go away.”
Neugent, a Republican, noted during the meeting that the rates being paid under the emergency contract to MCM and Community Asphalt should be a concern for taxpayers, especially compared to the rates specified by the county’s contract with AshBritt.
“But if you talk about price gouging,” the mayor said, “based upon the contract that we have, the governor was actually doing the price gouging.”
THE GOVERNOR’S FULL STATEMENT TO CBS4 NEWS
After this report was broadcast on CBS4, the governor's office issued a lengthy "Setting the Record Straight," as it often does after investigative stories.
Scott's office also issued this statement:
"It is inaccurate to compare pre-disaster contracts with emergency debris removal contracts — it is comparing apples to oranges and must be reflected in your story.
"It is the state’s responsibility to clear US 1 following a storm like Hurricane Irma because it is a state road. Clearing US 1, which was accomplished in just a matter of days, was absolutely critical for the entire Keys community. Due to the critical need of this roadway, this service was provided at no cost to the local government and at the request of the local government. Ninety percent of this cost is reimbursable through FEMA.
"The initial clearing was accomplished in just a few days, but continued due to the sheer volume of debris on the roadsides and the additional debris people were setting out on US 1.
"Debris companies had a lot of contract disputes and legal battles in Florida and other states following Hurricane Irma and Governor Scott will never let special interests impede recovery in any community.
"We want to be clear: Emergency crews were brought in to supplement ongoing work because the local government requested FDOT's assistance to quickly solve this issue so families could return home. FDOT was asked to help and immediately provided assistance because that is what taxpayers deserve."