Count us not happy with the city of Galveston having to pay $13.5 million to an Ike recovery contractor fired for poor performance.

While the $13.5 million is $400,000 less than the maximum settlement payment approved by the Galveston City Council earlier this month and $2.2 million less than what a district court ordered the city to pay in November, the payment still stings.

The court originally ruled the city owed the firm CDM Smith $15.7 million in a lawsuit the city lost in September.

The city has been locked in legal battle with the company, which used to be known as Camp Dresser & McKee, since officials fired the firm over complaints about performance on a post-Hurricane Ike housing reconstruction program.

As reported in The Daily News, the city hired CDM Smith to manage parts of a disaster recovery housing program underway in 2009, months after Hurricane Ike made landfall and damaged thousands of island homes. The company was meant to oversee housing projects funded through a $160 million Community Development Block Grant Disaster Recovery program from the U.S. Department of Housing and Urban Development.

The Texas General Land Office in 2012 urged the city to end its contract with CDM Smith amid claims the city and the company had failed to meet benchmarks set for the housing recovery program.

And it is here we remain puzzled. If the Texas General Land Office urged the city to end the contract based on poor performance, why are Galveston residents on the hook? Why is the city having to make a 2 percent reduction in budgeted expenses as a result of following the advice of an apparently guiding governmental body, the Texas General Land Office?

And we still cannot help but wonder if the Texas General Land Office should be absorbing some or all of the responsibility. After all, a local entity followed the direction of a state-level entity with the threat of having funding pulled away. No matter how you slice it, this just does not feel right.

The courts have spoken. The city has reached what it calls an amicable agreement. But city residents have every right to feel a bit miffed about $13.5 million going to an underperforming vendor due in large part to the direction of a state governing body.

• Leonard Woolsey

Leonard Woolsey: 409-683-5207; leonard.woolsey@galvnews.com

President & Publisher

(4) comments

Jarvis Buckley

Brian , Leonard said the city hired CDM you have said that CDM was awarded the contract by the state
through a public bid. I am confused.
Which of you are correct. What am I missing?

City Manager

The entire program was a federal program and the state/city was the local subrecipient. We had to follow all state guidelines, which included a public bid to determine management of the program. The state program called for the city be the contract holder and not the state, which is why CDM was forced to sue the city and not the state. The state did direct the city to terminate the contract with CDM and the state did not pay their final invoices as submitted by the city. Keep in mind the program began with TDHCA, a now defunct state agency. The issues came in with the take over of the program by the GLO and their desire to bring in their own contractor, URS. So the city did bid the job but the award had to be approved by the state as did all contracts and payments. The city never held any of the money, the city had no jurisdiction to award any of the money and in the end the city had to pay for the work, even though the city had no authority or ability to tap the federal funds held by the state. Clear as mud ain't it.

Jarvis Buckley

Thanks Brian. Not very clear to an old man . I think I understand the pecking order a little better now.

Wayne Holt

Brian, is there any link for an online look at this court decision? I would love to see the legal reasoning behind forcing payment by the city for an action it apparently had no ability to influence.

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