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][email protected] . 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

(360822)

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