USA – Two and a half months after the most costly wildfire season in Oregon history comes the flood—of federal dollars.
Wildfires burned more than 1 million acres this summer, destroyed 5,000 homes and other structures, and took nine lives.
The state, using federal dollars, has been awarding contracts to clean up the devastation.
But this week, WW learned, a losing bidder is legally challenging one of the state’s decisions, testing the contracting and management skills of the Oregon Department of Transportation. That’s the agency assigned to dole out what the state expects to be a minimum of $600 million in contracts.
On Nov. 17, ECC, a 35-year-old Burlingame, Calif.-based contractor, won $89 million in contracts from the state to fell and remove tens of thousands of trees damaged by this summer’s fires.
On Nov. 20, AshBritt Environmental, a Florida company that has been a major player in the big business of disaster cleanups, accused ECC of “gaming” the competitive bidding to remove the trees.
In its protest letter, AshBritt alleges two problems: It says ECC did not examine the terrain and trees in question and thus underestimated the difficulty and expense of the work. AshBritt also says ODOT’s bid documents were poorly written and grossly understated the number of “hazard trees” that need to be removed from burned areas.
The net effect, AshBritt alleges: ODOT’s poorly written bid documents will allow ECC to dramatically increase its price after the work begins in January.
AshBritt accuses ECC of a tactic sometimes used in competitive bidding: submitting a low-ball bid to win the business, then subsequently raising the price dramatically by submitting “change orders,” or otherwise exploiting contractual terms.
“ECC gamed the pricing based on an apparent error in the bid sheet,” Ashbritt’s attorneys wrote in their Nov. 20 protest letter to ODOT. “The result of that gaming will work to the state’s disadvantage when ECC’s costs balloon to several orders of magnitude higher than its current bid.”
ECC declined to comment.
Bid protests are common in the high-stakes world of cleanups funded by the Federal Emergency Management Agency. But ODOT, which rarely handles contracts of this size, hasn’t operated in that world before.
ODOT spokeswoman Angela Beers Seidel says the agency is confident in its handing of what it calls an “unprecedented process.” “We’ve used a contracting approach that enables us to move quickly while ensuring that the work is done safely and efficiently,” Beers Seidel said. “Our request for proposals considered countless elements that will be faced in the field and was the product of significant deliberation and due diligence.”
Oregon regularly experiences expansive wildfires—those in 2012 burned more acres than the state lost this year—but until 2020, those fires didn’t do enough economic damage to structures nor creep close enough to populated areas such as Clackamas County to warrant FEMA stepping in to pay for the cleanup.
But with FEMA footing the bill—or, more precisely, between 75% and 100% of it—the big disaster contractors from around the country have descended on Oregon.
Those big companies—including AshBritt and Ceres Environmental, based in Minnesota; DRC Emergency Services from Alabama; and ECC—travel the country, and often the globe, chasing big contracts to clean up debris, haul away what’s left of buildings and, in the case of wildfires, take down hundreds of thousands of trees.
Randy Perkins, who founded AshBritt in 1992, says the steep terrain, narrow roads and weather make Oregon’s the most complex tree removal job he’s contemplated. “The closest would be California and there’s no comparison,” Perkins says. His company and its competitors bid to dispose of more than 160,000 Oregon trees.
Perhaps because they move from disaster to disaster, operating in environments where locals want the work done fast, and the paymaster is in distant Washington, D.C., the industry has a cowboy reputation, with frequent litigation. AshBritt and several of its peers got hauled into federal court in California after the 2017 fires, but allegations that the company inflated the loads on its trucks were dismissed.
“If any of the criticisms of our company were accurate, we wouldn’t be a leader in this business,” says Perkins, adding that he’s spent most of the past two months in Oregon.
All of the FEMA contractors have hired sophisticated Oregon representatives. Ceres, for instance, hired Misha Isaak, former counsel to Gov. Kate Brown, now at the Perkins Coie firm, for legal advice. Tonkon Torp represents both ECC and DRC. AshBritt hired NW Public Affairs, headed by longtime Salem lobbyist Phil Donovan.
In its protest letter, AshBritt says the winning bidder, ECC, submitted a bid that equates to $632 per tree—about one-fifth what it says the state is currently paying for preliminary work.
If ODOT proceeds with a poorly written bid, Perkins says, the work might not get done properly and the agency will pay far more than it expects.
On Nov. 23, the ODOT rejected AshBritt’s protest of the tree-removal contract. That same day, AshBritt filed a motion in Marion County Circuit Court for a preliminary injunction to block the award. That case is pending.