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Audit finds Shaw overbilled for sand berms

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Posted: Nov 7, 2011 5:01 PM
Updated: Nov 7, 2011 5:01 PM
Source: Associated Press

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Topics: new orleans, shaw, group. overbill, sand, berm, gulf of mexico, oil, bp, spill, wbrz, louisiana, budget

NEW ORLEANS - The Shaw Group may have overbilled the state about $500,000 after it was hired by Gov. Bobby Jindal's administration to build $250 million worth of sand berms along the Gulf of Mexico to block oil spewing from an out-of-control BP well from washing ashore, according to the state legislative auditor.

A legislative auditor's report Monday said Shaw billed the state between June 2010 and August 2011 for $251 million - $12.2 million for labor and $238.8 million in other costs - and that about $495,000 worth of invoices either should not be paid or should be paid only with more documentation. The audit found problems with bills for material and equipment, travel charges and reimbursable expenses.

The berm project, which involved moving huge amounts of sand from the Mississippi River out to open water along the coast, has been regarded as a colossal waste of money because the sand islands probably did little to stop oil from coming ashore. Last December, a presidential commission set up to investigate the BP oil spill called the project "underwhelmingly effective, overwhelmingly expensive."

BP PLC gave Louisiana the money to build the berms.

The state agency overseeing the berm project, the Office of Coastal Protection and Restoration, asked the legislative auditor to help vet Shaw's invoices.

"There were definitely some errors and exceptions that we called into question," said John L. Morehead of the legislative auditor's office. But he did not characterize the overbilling as egregious. The report did not provide examples or go into the details of the overbilling.

State and Shaw officials said they were working through outstanding bills.

"Considering the emergency conditions and the massive size of this effort, we were able to keep billing exceptions to a fraction," said Garret Graves, a top aide on coastal affairs to Jindal. So far, he said the state has refused to pay about $200,000 of the outstanding bills.

"Shaw believes all issues raised by the audit have since been resolved in support of contract close-out in compliance with program requirements," said Gentry Brann, VP of investor relations with Shaw.

The Jindal administration continues to defend the berm work, arguing that putting all that river sand onto the coast is helping restore badly eroding barrier islands.

"There is sand in the system that was not previously there," said Robert Routon, a project manager with the Office of Coastal Protection and Restoration, the agency overseeing the berm project.

Initially, state officials hoped to build 36 miles of berms, but by the end of the project just roughly 16 miles were built with about 20 million cubic yards of sand.

Nathaniel Plant, an oceanographer with the U.S. Geological Survey, has been monitoring the berms built near the Chandeleur Islands and said they have been breaking apart after storms.

"New holes have been breached," he said. "If they continue (to break apart) at this rate, more than half has disappeared on two northern (berm) sites, another year could easily take the rest of it."

USGS is tracking what happens to the berms because it wants to see if the sand transported to Chandeleur Sound winds up accumulating on the barrier islands, which scientists fear will disappear as sea levels rise and hurricanes pummel them.

"A research question is to what degree has putting that much sand out there turned the clock back (on island disintegration). We don't have a final answer on that at all," said Asbury Sallenger, a USGS oceanographer who heads up efforts to map changes along the Gulf Coast.

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