The Army Corps of Engineers did not comply with requirements last April in a $675-million design-build contract award for New Orleans flood defenses, the U.S. Government Accountability Office ruled on Aug. 4 in a bid protest decision.

CBY Design Builders, a team led by CDM, Cambridge, Mass., won the contract for the so-called Permanent Canal Closures and Pump stations project, set to finish in 2014. GAO upheld protests by a Kiewit Corp.-led team and Bechtel Infrastructure Corp. GAO did not release its ruling or even a version redacting competitive details by ENR press time on Aug. 8. In a statement, it says the Corps has 60 days to respond to recommendations to review cited procurement flaws and re-evaluate revised proposals. The ruling likely means the contract must be reprocured, says a GAO spokesman.

GAO legal official Ralph O. White says the Corps did not properly handle an "unfair competitive advantage and organizational conflict of interest" related to CDM's hiring last fall of Richmond Kendrick as a project manager. He retired last August as chief of program execution in the Corps Hurricane Protection Office, responsible for the project and its contracting. The Corps took steps to address the issue, but "GAO did not consider them sufficient," says a district spokesman. White says bidders may also have been "misled about the role of price in the evaluation" but did not elaborate. He also says the Corps did not determine if CBY's approach would meet "requirements for withstanding lateral loads" for pump-station operation.

CBY project manager Robert Davis says, "We are certainly disappointed … because we were ready to start the project." Bechtel would not say if it will bid in any reprocurement. Kiewit did not respond. The Corps spokesman says "it's too early to know" how the protest and any reprocurement would delay project completion.