Florida Keys

Feds audit Irma debris-removal contracts in Keys after allegations of price gouging

A crane adds to an ever-growing pile of vegetative debris from Hurricane Irma at a Key Largo site, one of several throughout the Florida Keys in the aftermath of Hurricane Irma, which struck the Keys on Sept. 10, 2017.
A crane adds to an ever-growing pile of vegetative debris from Hurricane Irma at a Key Largo site, one of several throughout the Florida Keys in the aftermath of Hurricane Irma, which struck the Keys on Sept. 10, 2017. dgoodhue@flkeysnews.com

The U.S. Department of Homeland Security’s Office of Inspector General is conducting an audit of debris-removal contracts in the Florida Keys approved right after Hurricane Irma ransacked the island chain last year, according to a letter the agency sent to Florida Democratic House members last week.

Specifically, John V. Kelly, acting inspector general, told the members of Congress in a Sept. 20 letter that his office will look into why existing storm debris removal contracts between six companies and Monroe County were set aside last September in favor of Florida Department of Transportation-picked firms that were awarded contracts with much higher emergency rates to haul debris after the Sept. 10, 2017, Category 4 storm.

Kelly also stated in the letter his office will review the Federal Emergency Management Agency’s oversight of debris-removal operations in Florida and Georgia following Irma.

“We believe that this work will address many of the concerns raised in your letter,” Kelly wrote, referring to the lawmakers’ July 18 letter to his office.

The lawmakers, led by Rep. Debbie Wasserman Schultz, D-Weston, accused Gov. Rick Scott’s administration in their letter to Kelly of orchestrating a “price gouging” scheme “in an inept and possibly corrupt procurement of debris removal services following Hurricane Irma.”

The contracts ended up costing Florida tens of millions of dollars more than the existing companies were charging, and the Democratic lawmakers say they are concerned because the state is requesting to be reimbursed by FEMA for removing the debris.

“Unfortunately, satisfactory explanations for these unusual and highly questionable contract decisions have not been forthcoming from the state of Florida. Even more troubling, Governor Rick Scott has said publicly that he ‘would do the same thing again,” the Democratic representatives wrote.

Scott said he ordered FDOT to find new companies at the request of Monroe County officials and officials in other Keys municipalities who complained companies with existing contracts with the county were moving too slowly in clearing branches, palm fronds, seagrass, appliances, boats and other items that were stacked up alongside U.S. 1 and clogging neighborhood roads.

Volunteers work hard to clear and salvage the home of Joan Thoman. A group of women distributed hot and cold meals to workers, volunteers, and residents rebuilding Big Pine Key on Oct. 25, 2017. CARL JUSTE cjuste@miamiherald.com

“Prior to Hurricane Irma, counties entered into contracts with debris removal companies. After the storm, the governor heard from many local communities, including Monroe County, that many of these companies were not providing the agreed upon service and were demanding higher prices,” McKinley Lewis, a spokesman with the Scott administration said in a statement. “This is unacceptable.”

The existing county contracts were with six companies, including AshBritt Environmental, based in Fort Lauderdale, which is suing Monroe County and FDOT for breech of contract. The two companies that were awarded the emergency contracts were Munilla Construction Management, based in South Miami, and Community Asphalt, headquartered in Tallahassee, according to CBS 4, whose series of reports on the post-Irma debris-removal contracts sparked the letter from Wasserman Schultz and her colleagues.

Munilla Construction was the contractor hired to build the FIU pedestrian overpass bridge, which collapsed in March.

“All Americans, especially those whose communities have been damaged by natural disaster, deserve the basic assurance that the precious federal funds that Congress allocates to recovery efforts are being spent competently and without favor or influence,” the Congressional members wrote.

According to AshBritt’s lawsuit filed last October in Monroe County circuit court, FDOT awarded the contracts on Sept. 13, 2018 — three days after Irma hit the Keys — to Munilla and Community Asphalt to remove and grind debris for $23 per cubic yard. AshBritt’s pre-existing rates were much lower and its bid for the emergency contract was $14 per cubic yard, according to the lawsuit.

For removing “white goods,” like refrigerators and other appliances, the two companies charged up to $969, significantly higher than what the existing companies would have done the work for.

“In the pre-position contracts that DOT ignored, the average price for removal of white goods to temporary debris management sites, including all six contractors, was $98,” according to AshBritt’s complaint.

Scott’s office denies the Democrats’ price-gouging complaints, arguing that in Irma’s aftermath, mountains of debris piled up on Keys right-of-ways and local streets, and Ashbritt and the other firms were not working fast enough to clear it.

Scott ordered FDOT to immediately clear Keys roads at the request of Monroe County officials, McKinley said. The agency entered into the new contracts to ensure enough workers and equipment were available to get the job done, according to a background statement sent by Scott’s office.

“Although not required to do so due to the state of emergency, FDOT went above and beyond emergency procurement requirements to completely solicit multiple bids from pre-qualified vendors that could safely and efficiently respond to Monroe County’s immediate debris removal needs,” the statement reads.

Ashbritt’s attorneys said that because of the money FDOT awarded Munilla and Community Asphalt, the company could not rely on the stable of subcontractors it typically uses in South Florida. While the company still tried to work in the Keys, its workers and their equipment were being poached by the higher-paying firms, the attorneys claim.

“Every truck that came in was poached by one of the FDOT contractors,” AshBritt chief executive Randy Perkins told Monroe County commissioners during a Sept. 27, 2017, meeting. “We’re paying a certain rate, and other contractors can double or triple the rates we can pay.”

The letter from the Democrats states the emergency contracts were signed “over the objection of Monroe County officials.”

However, county officials were vocal in the immediate weeks following the storm about their dissatisfaction with AshBritt.

“AshBritt is not performing under terms of the contract,” county Mayor George Neugent said Oct. 3. “Under the contract, they were supposed to have 200 trucks on the ground in this kind of situation. I suspect they’re struggling to have 50.”

By Oct. 27, AshBritt threatened to stop working in the Lower Keys unless the county renegotiated its contract with the company. This prompted County Attorney Bob Shillinger to threaten to declare the company in default of its agreement with Monroe. Days later, the company filed suit.

The lawsuit also argues FDOT awarded the emergency contracts at the request of Monroe County.

At least one county official, Emergency Management Director Marty Senterfitt, stated publicly that the county appreciated FDOT’s help in clearing the roads. Senterfitt declined to comment on whether the county asked for FDOT’s help, however, because of the AshBritt lawsuit.

In testimony Senterfitt gave in front of the Florida House Select Committee on Hurricane Response and Preparedness last October, he said that the debris situation in the Keys was at crisis level and the county needed FDOT’s help at the time.

“The amount of debris we’re facing, some estimates over 2 million cubic yards of debris. It’s piled on the streets. It looks like the Florida Keys now has mountains. The debris issue is tremendous, but we’re working it,” Senterfitt said. “Fortunately, great partnerships, FDOT stepped forward, has taken a leadership role and has helped us solve these problems. The reality is, in times of disaster, there’s never perfect answers.”