    U.S. Army Corps of Engineers' Procurement of Pumping Systems for
    the New Orleans Drainage Canals (23-MAY-07, GAO-07-908R).

    To avoid flooding in New Orleans after a rain storm, the city's
    Sewerage and Water Board pumps rainwater from the city into three
    drainage canals which then flow unrestricted into Lake
    Pontchartrain. While critical to prevent flooding from rainfall,
    these canals are vulnerable to storm surge from Lake
    Pontchartrain during a hurricane, and consequently are lined with
    floodwalls along both sides to protect storm surge from
    overtopping the canals and flooding the city. However, during
    Hurricane Katrina, several breaches occurred in the canal
    floodwalls allowing significant amounts of water to enter New
    Orleans from Lake Pontchartrain. In its efforts to restore
    pre-Katrina levels of hurricane protection to New Orleans by the
    June 1st start of the 2006 hurricane season, in late 2005, the
    U.S. Army Corps of Engineers (Corps) considered strengthening the
    drainage canal floodwalls but decided to postpone this effort due
    to cost and time constraints. Instead, the Corps decided to
    install three interim closure structures (gates) at the points
    where the canals meet the lake. These gates would be closed
    during major storm events to prevent storm surge from entering
    the canals and potentially breaching the canal floodwalls and
    flooding the city. Due to space constraints along the canals and
    the limited amount of time it had before the start of the 2006
    hurricane season, the Corps decided to procure 34 large-capacity
    hydraulic pumping systems1 to provide the most pumping capacity
    possible by June 1, 2006. The Corps acknowledged that its
    decision to install the gates and provide pumping capacity that
    was less than what was needed to keep the city dry could result
    in some flooding by rainfall but believed that the risk from a
    hurricane-induced storm surge was far greater than the risk of
    flooding from heavy rainfall. During the process of acquiring,
    testing, and installing the pumping systems for the drainage
    canals, many concerns were raised by the media about potential
    problems with the operation of these pumping systems, and GAO was
    asked to examine the (1) specifications and requirements of the
    contract and the basis for selecting the supplier of the pumping
    systems; (2) concerns identified during factory testing and the
    Corps' rationale to install the pumping systems in light of the
    factory test failures; (3) actions the Corps has taken to address
    the known problems with the pumping systems; and (4) pumping
    capacity that existed on June 1, 2006, the capacity that
    currently exists, and the capacity that is planned for the 2007
    hurricane season.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-908R
        ACCNO:   A69986
      TITLE:     U.S. Army Corps of Engineers' Procurement of Pumping
    Systems for the New Orleans Drainage Canals
         DATE:   05/23/2007
      SUBJECT:   Disaster planning
    	     Emergency preparedness
    	     Flood control
    	     Floods
    	     Hurricane Katrina
    	     Hurricanes
    	     Inland waterways
    	     Natural disasters
    	     Operational testing
    	     Performance measures
    	     Procurement planning
    	     Product evaluation
    	     Timeliness
    	     New Orleans (LA)

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    GAO-07-908R

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    May 23, 2007

    The Honorable Mary L. Landrieu
    Chairman
    Ad Hoc Subcommittee on Disaster Recovery
    Committee on Homeland Security and Governmental Affairs
    United States Senate

    Subject: U.S. Army Corps of Engineers' Procurement of Pumping Systems for
    the New Orleans Drainage Canals

    Dear Madam Chairman:

    To avoid flooding in New Orleans after a rain storm, the city's Sewerage
    and Water Board pumps rainwater from the city into three drainage canals
    at 17th Street, London Avenue, and Orleans Avenue, which then flows
    unrestricted into Lake Pontchartrain. The maximum amount of water that the
    Sewerage and Water Board can pump into these drainage canals is 10,500
    cubic feet per second (cfs) at the 17th Street Canal, 7,980 cfs at the
    London Avenue Canal, and 2,690 cfs at the Orleans Avenue Canal. While
    critical to prevent flooding from rainfall, these canals are vulnerable to
    storm surge from Lake Pontchartrain during a hurricane, and consequently
    are lined with floodwalls along both sides to protect storm surge from
    overtopping the canals and flooding the city. However, during Hurricane
    Katrina, several breaches occurred in the canal floodwalls allowing
    significant amounts of water to enter New Orleans from Lake Pontchartrain.

    In its efforts to restore pre-Katrina levels of hurricane protection to
    New Orleans by the June 1st start of the 2006 hurricane season, in late
    2005, the U.S. Army Corps of Engineers (Corps) considered strengthening
    the drainage canal floodwalls but decided to postpone this effort due to
    cost and time constraints. Instead, the Corps decided to install three
    interim closure structures (gates) at the points where the canals meet the
    lake. These gates would be closed during major storm events to prevent
    storm surge from entering the canals and potentially breaching the canal
    floodwalls and flooding the city. With the gates closed, however,
    rainwater cannot flow from the drainage canals into Lake Pontchartrain and
    large capacity pumping systems are needed to pump water out of the canals
    and into the lake. Due to space constraints along the canals and the
    limited amount of time it had before the start of the 2006 hurricane
    season, the Corps decided to procure 34 large-capacity hydraulic pumping
    systems1 to provide the most pumping capacity possible by June 1, 2006.
    The Corps acknowledged that its decision to install the gates and provide
    pumping capacity that was less than what was needed to keep the city dry
    could result in some flooding by rainfall but believed that the risk from
    a hurricane-induced storm surge was far greater than the risk of flooding
    from heavy rainfall. In mid-2006, the Corps decided to procure six
    additional hydraulic pumping systems, thereby bringing the total number of
    pumping systems to be installed along the three drainage canals to 40.

    During the process of acquiring, testing, and installing the pumping
    systems for the drainage canals, many concerns were raised by the media
    about potential problems with the operation of these pumping systems, and
    you asked us to examine the (1) specifications and requirements of the
    contract and the basis for selecting the supplier of the pumping systems;
    (2) concerns identified during factory testing and the Corps' rationale to
    install the pumping systems in light of the factory test failures; (3)
    actions the Corps has taken to address the known problems with the pumping
    systems; and (4) pumping capacity that existed on June 1, 2006, the
    capacity that currently exists, and the capacity that is planned for the
    2007 hurricane season.

    To address these objectives, we reviewed the Corps' plans for the three
    interim gates and temporary pumping systems for the three New Orleans
    drainage canals. (Unless otherwise noted, the pumping systems discussed in
    this report are the temporary ones installed at the three canals.) We
    reviewed documentation, including e-mails, correspondence, and other
    documents related to the solicitation process, contract specifications,
    factory test results, performance requirements, and the Corps' plans for
    increasing pumping capacity through 2007. We visited the 17th Street Canal
    and observed the pumping systems. We interviewed officials from (1) Corps
    Headquarters, New Orleans District, other Corps districts, and members of
    the Mississippi Valley Division's independent team reviewing issues
    related to the contract and pump performance; (2) Moving Water Industries
    Corporation and two other pump suppliers that bid on the solicitation; and
    (3) the architectural and engineering consulting firms under contract with
    the Corps. We conducted our work from late-March through mid-May 2007 in
    accordance with generally accepted government auditing standards.

    On May 17, 2007, we provided a briefing to your staff on the results of
    this work. This report summarizes the information presented in that
    briefing and officially transmits the slides used during that briefing.

    1 A hydraulic  pumping system is  one where pressurized  fluid is used  to
    transmit power from the engine to the pump motor and impeller. This allows
    for greater flexibility  in the placement  of the engine  and the  pumping
    system because they are connected by hydraulic lines.

    Summary

    The Corps' decisions to acquire the 34 hydraulic pumping systems were
    focused on satisfying its commitment to have pumping capacity on the
    drainage canals in place by June 1, 2006--the start of the 2006 hurricane
    season. In order to increase the likelihood that pumping capacity would be
    in place when needed, the Corps utilized several tools to expedite and
    streamline the acquisition process. The Corps appears to have had a valid
    reason for each of the iterative decisions it made at each stage of the
    procurement process. The cumulative effect of these decisions resulted in
    one supplier--Moving Water Industries Corporation--being in the strongest
    competitive position to receive the contract for the pumping systems.

    Factory testing of the pumps occurred from March through May 2006, and
    revealed several problems with specific components of the pumping systems.
    As a result of the concerns identified during factory testing, the Corps
    had no assurance that the pumping systems would operate to capacity when
    needed. Nevertheless, the pumping systems were installed as planned
    because the Corps believed that it was better to have some pumping
    capacity along the drainage canals during the 2006 hurricane season rather
    than none. The Corps also believed that many of the problems identified
    during factory testing could be resolved after installation.

    Since June 1, 2006, the Corps has continued to take steps to correct known
    performance problems with the pumping systems, including uninstalling them
    to make some repairs. Specific problems that have been addressed include
    replacing some components that were undersized, such as springs and
    motors; rewelding of some critical structural welds; and revising certain
    start-up procedures.

    On June 1, 2006, the Corps had installed 11 pumping systems, and by July
    2006, it had installed 34, although it is uncertain how much of the
    theoretical capacity of these pumping systems would have worked and for
    how long. By June 1, 2007, the Corps plans to complete the reinstallation
    of all 40 pumping systems that have been repaired and each has been tested
    for between 45 minutes to 2 hours, thus providing greater assurance that
    they will perform as designed during the upcoming 2007 hurricane season.
    By mid-August 2007, the Corps plans to expand pumping capacity at the 17th
    Street and London Avenue canals by adding 19 additional pumps, acquired
    under another contract with a different supplier. However, the total
    planned pumping capacity will still not meet the Sewerage and Water
    Board's drainage needs to keep the city from flooding during a hurricane
    when the canal gates are closed. First, weaknesses in some canal
    floodwalls will continue to restrict the amount of water that can be
    pumped into the canals to about 69 percent of their maximum capacity.
    Second, even if these restrictions are lifted, the Corps' capacity to pump
    water out of the canals would only be about 82 percent of the maximum
    capacity that the Sewerage and Water Board can pump into the canals.

    Agency Comments

    We obtained oral comments on our draft briefing slides at a meeting with
    the Director of Civil Works, U.S. Army Corps of Engineers and other senior
    Corps staff. In commenting on the slides, these Corps officials concurred
    with our findings and conclusions, and stated that they were very helpful
    in pointing out weaknesses in the Corps' approach and would help them
    develop procedures to prevent similar problems from occurring in the
    future. The Corps also provided us with technical comments that we have
    incorporated as appropriate.

                                       - - - - -

    As agreed with your office, unless you publicly announce the contents of
    this report earlier, we plan no further distribution until 30 days from
    the report date. At that time, we will send copies to the Secretary of
    Defense, the Commanding General and Chief of Engineers of the U.S. Army
    Corps of Engineers, and appropriate congressional committees. We will also
    provide copies to others upon request. In addition, the report is
    available at no charge on GAO's Web site at [3]http://www.gao.gov .

    If you and your staff have any questions or need additional information,
    please contact me on (202) 512-3841 or [4]mittala@gao.gov . Contact points
    for our Offices of Congressional Relations and Public Affairs may be found
    on the last page of this report. Major contributors to this report were
    Edward Zadjura, Assistant Director; James Dishmon; Terry Dorn; Christine
    Frye; Moses Garcia; Bradley James; Richard Johnson; Stephanie May; Kenneth
    Patton; Alyssa Weir; and, William Woods.

    Sincerely yours,

    Anu K. Mittal
    Director, Natural Resources and Environment

    Enclosure

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