Contractor that New Orleans officials want to ban says it is being unfairly blamed

A contractor that New Orleans officials have vowed to bar from future work over a dispute surrounding a Treme construction project says it is being unfairly maligned and made into a scapegoat, while some question whether the city can legally enforce such a ban.

The owner of Command Construction Industries alleges the firm is being blamed for delays that the city actually caused.

“It’s unfortunate that the administration looked to make Command Construction a scapegoat, but the record is clear that we completed our work on the Treme B project until the project stalled because of the city’s poor design and the Sewerage and Water Board’s inability to close the water valves,” Kelly Commander said in a statement. “We share the frustration of citizens that the city allowed this issue to linger for almost two years.”

Mayor LaToya Cantrell’s administration agreed to pay Command $8 million in FEMA funds for 40 blocks of road and infrastructure repairs in Treme-Lafitte beginning in late 2020. But when Command workers reached a final section of the project last year on St. Peter and North Villere streets, progress stopped as the city realized more work outside the initial project scope needed to be done. 

At a Sept. 5 city council meeting, officials said they had tried working with Command for months on a plan change to include the added work. But after reaching an impasse, the contract was terminated in May. 

Since then, St. Peter Street has become impassable and overgrown with weeds.

Complaints from residents who live near the partially demolished street brought the issue to the attention of Councilman Freddie King and, earlier this month, the council voted unanimously to declare the road to be an “imminent threat.” That cleared the way for Cantrell’s office to put the rest of the work, which will cost the city about $1.5 million, out to an emergency bid.

Commander says that price is more expensive than what her company asked for to complete the work.

“It makes no financial sense for the city to spend $1.5 million when they could have agreed to a plan change with Command Construction for a fraction of that cost,” Commander said.  

During the council meeting, Joe Threat, the city’s deputy CAO for infrastructure, said the company would not get another contract because of the Treme project.

“We’re in the process that the contractor will not do work for the city any longer,” Threat told council members.

Weeks later, the city has not walked back that claim. But Commander, industry experts and a review of the law governing public works contracts show that Threat’s promise to bar Command may be impossible to keep.

“The city or any public entity has no discretion on who they do business with by design and on purpose,” said Scott Hedlund, an attorney who has been working in construction law for about two decades. “The logic is, and I think it’s sound, that we’re spending taxpayer dollars on some public benefit of construction, something that the public entity needs, and we don’t want those public dollars to be spent based on any form of favoritism or nepotism.”

The law requires that city officials accept the “lowest responsive and responsible bid.” Under statute definitions, Command would be deemed “responsive” as long as it submitted required paperwork on time and “responsible” as long as it maintains proper licensing and is in good financial standing.

That may mean that if Command put in the lowest bid on a contract in the future, the city would be required to work with the company again unless it found that the firm was not responsible. That determination would have to come in writing and Command would get the chance to have a hearing before the city could hire someone else. 

And if Command disagreed with the city’s findings, the company could litigate the issue.

“There is certainly nothing in statute that would say you can’t take a bid from somebody because you don’t like them or you think they’ve done bad work in the past,” Hedlund said.

Hedlund said the city might have standing if the contract was terminated for something that could be blamed on Command. But if the contract was terminated for convenience and not for cause, he said it’s unlikely it could be used against the company on future projects.

Andre Kelly, spokesperson for the Associated General Contractors of Louisiana, also questioned the ban. He said he understands if the city needs to reprimand companies for shoddy work, but that it must do so within the limits of the law.

“A municipality can’t just deny a company if they are licensed, insured and check all their boxes,” Kelly said. “If a duly licensed firm submits a bid, they can’t be denied the award.”

City officials did not respond to requests for comment on Commander’s claims and assertions that a ban could not be enforced. 

Commander, who has a workforce of about 170 employees, said both the contract termination in May and the claim that her company would be barred from future work came as a surprise. Until then, she felt she had a positive working relationship with the city after completing about $75 million in projects just in the past four years.

She said the dispute will only make it harder for the city to find contractors in the future, adding to companies’ concerns over issues such as late payments. Commander said the city has owned her company nearly $1 million for months and at times in the past has owed as much as $4 million, a sum that many companies could find impossible to manage.

“It’s no secret that many contractors do not want to work for the city of New Orleans because of problems like this and because the city cannot pay its bills on time,” Commander said.