WASHINGTON -- United States Senator Mary L. Landrieu, D-La., today sent a letter to the Justice Department asking for an investigation into the Army Corps of Engineers 2006 contract with Moving Water Industries (MWI) to provide pumps for New Orleans drainage canals. An independent report commissioned by the Corps and released today found that MWI did not test the pumps in accordance with their contract, and that much of the documentation between the company and the Corps is missing, leaving the government vulnerable to contract claims by MWI.

"I respectfully request that the United States Department of Justice conduct a full investigation into the charges of misconduct in the contract administration between the Corps of Engineers and Moving Water Industries." Sen. Landrieu wrote in her letter to Attorney General Alberto R. Gonzales. "Due to the severity of the situation, it is necessary for the Department of Justice to further examine the contracting process and hold the Army Corps of Engineers to the highest standards."

The report was written by an independent team of Corps engineers from outside the Vicksburg Division. "Reduced reliability increased the risk to public safety," the report stated.

The Corps report determined that MWI deviated from the contract, and in some instances it appears that MWI independently changed elements of the contact.

"This testing was not performed in accordance with the contract requirements and a significant credit is due to the government for the nonperformance of it," the report states. "It actually appears in certain circumstances as if the contractor himself developed the scope of work for the change order along with the pricing."

The report also found that "key elements" of contract documents were missing and as such, "further investigation" is needed. Among the missing documents are: the government's request for proposal, price, and cost analysis; technical analysis; price negotiation/reasonableness memorandums, independent government estimates; price negotiations; and negotiation meeting notes.

"Any lack of proper documentation leaves the government open to potential contract claims that would be difficult to defend," the report says. "The government must be able to defend its position on contractual actions if MWI makes any allegations seeking additional monetary compensation due to this contract."

In a preliminary report released May 29 at Sen. Landrieu's request, the Government Accountability Office (GAO) found that the Corps was hasty in installing pumps in New Orleans drainage canals before the 2006 hurricane season despite warnings of factory-tested problems and having no comprehensive test plan. The GAO said it did not find any instances of fraud or impropriety. However, the Corps' internal investigation team, which did today identify potential impropriety, did so after having been provided greater access to sources and evidence.

"This report demonstrates that with greater investigatory access comes a greater understanding of the facts, and the GAO must keep digging to ensure that Congress and the people of New Orleans have the truth," Sen. Landrieu said. "While it was very important to release some findings prior to the start of the 2007 hurricane season, I asked the GAO last month to incorporate this expected report and other subsequent information turned up into the final 'blue cover' version anticipated later this year."

The independent Corps report also places a high priority on having certified hydraulic systems inspector review the piping system to certify that the current pump system is safe to operate. The Corps must then incorporate any additional operating requirements determined by the inspector.

"The proper functioning of the canal pumps is crucial to the safety and flood protection of New Orleans," Sen. Landrieu wrote in her letter to Gonzales. "In addition to the contracting misdeeds, I find it gravely troubling that the independent report cited 10 instances of catastrophic failure, as well as several other minor failures of the hydraulic oil pumps. As we enter the 2007 hurricane season, it is imperative that New Orleans be equipped with adequate pumping capability.

The report said that in 2006, the "pumps would not have performed as designed" due to deficiencies that include:

• Personnel was not on the platform to start operation of the pump equipment, which can cause irreversible damage to the hydraulic oil pumps.
• The pumps experienced hydraulic pulsation during operation that could have led to motor failure.
• The pumps did not meet the anticipated speed when operating at the maximum rpm, which reduced discharge capacity.
• The welding of pumping equipment was found to be faulty, and if the welds failed, it could have shut down the equipment.

"Perhaps the Corps' biggest mistake was not being up front with the public about the ineffective pumping operation in the New Orleans region during the 2006 hurricane season," Sen. Landrieu said. "They led us to believe we were safe. They knew we were not."

A copy of Sen. Landrieu's letter is available here.

A copy of the independent report is available here.