Baton Rouge Business Report: Why are Louisiana coastal restoration projects bogged down?

RS CEO George Howard is quoted in this interesting article regarding the implementation of the new performance-based contracting model for coastal restoration projects in Louisiana.

coastal restoration

Why are Louisiana coastal restoration projects bogged down?

Baton Rouge Business Report

By Stephanie Riegel

Published November 7, 2019

In 2017, Louisiana lawmakers passed a bill that got little attention at the time but had the potential to make a big difference, long term, in getting coastal restoration projects done more quickly.

The legislation, dubbed Pay for Success by the Gov. John Bel Edwards administration, established the framework for an alternative delivery model for coastal restoration projects that enabled the state Coastal Protection and Restoration Authority to contract with the private sector to deliver a predetermined amount of restored marshland—and assume all the risk.

Under the model, known as performance-based contracting, the contractor finances the project and handles everything from acquiring land rights and securing permits to design, engineering and construction. The state doesn’t have to pay until a project is delivered, and even then it doesn’t have to remit the full amount until several years later, once the marsh had proven it is sustainable, hence the term “performance based.”

The bipartisan legislation was a rare win-win during an otherwise contentious legislative session, and was hailed by private sector contractors and environmental groups alike because it promised to put BP oil spill settlement dollars, already earmarked for the state and sitting in a trust fund in Washington, to work restoring the coast of a state that is losing a football field of coastline every 30 minutes.

But more than two years later, Pay for Success has yet to be implemented. Earlier this year, the CPRA issued its first RFP seeking a performance-based contractor for a marsh restoration project in the Barataria Basin in Plaquemines Parish. But in August, the agency threw out the four proposals that came back, saying they all were too expensive.

Contractors, who each spent hundreds of thousands of dollars acquiring the land rights needed to even bid on the project, are frustrated and raising questions about why an approach that seems like such an ideal solution has yet to be deployed.

CPRA officials acknowledge they, too are frustrated, and want to use this new tool in their tool box. But they say the numbers have to make sense, especially when funding is coming from a pot of money controlled—not so much by them—but by four separate federal agencies.

“It is a bureaucratic mess when you are talking about federal oil spill dollars,” CPRA Board Chair Chip Kline says. “But I would like to see, and I believe we will see, performance-based contracting be successful.”

Flexible and efficient

Performance-based contracting has been used specifically for marsh and wetland recreation projects in other states for years, most notably North Carolina, whose legislation was the template on which Louisiana’s was based.

Advocates of the approach say there are several advantages to performance- or outcome-based contracting over traditional design-bid-build. For one, private contractors—usually teams of engineering, dredging and environmental consulting firms—shoulder the upfront costs rather than the state.

This is important in Louisiana because while the state, on paper, has $7.2 billion in three different pots of BP oil spill money to spend on coastal restoration over the next 15 years, it doesn’t have all the cash on hand today. Even if it did, it can’t spend it without getting certain federal approvals.

coastal restoration

Perhaps more significantly, under performance-based contracting the contractor assumes a much greater share of the risk, essentially guaranteeing the work. The contractor doesn’t get paid until a project is completed and, even then, it may only end up getting 65% or 75% of what it’s owed. The rest comes several years later, after the restored marshland has stood the test of time.

The model is also more efficient because private contractors are motivated to work more quickly and have more flexibility than the state or the CPRA when it comes to acquiring land rights.

“The private sector can work with landowners in different ways than the government can,” says lobbyist Scott Kirkpatrick, who advocates for infrastructure funding. “They’re not hamstrung by as many regulations.”

Some even believe the private sector is more effective than the state in obtaining permits from the U.S. Army Corps of Engineers, which is frequently blamed for dragging its feet on coastal restoration projects.

But all those pros come with a con: They add to the cost of the project, and how could they not? If a contractor isn’t going to recoup his front-end costs for years and has to guarantee the work, that’s going to make the project more expensive.

On the other hand, the longer the state waits to start restoring marshland, the more expensive the undertaking will be in the long run. A 2017 study by The Water Institute of the Gulf determined the cost to restore an acre of wetlands doubles over 20 years. So if the state can enlist the private sector to jump start projects now and pay the front-end costs, everyone is better off in the long run—at least in theory.

“The beauty of performance-based contracting is if we can find a way to get either private investments or other investments into the program so we can projects on the ground sooner rather than later that is a good thing,” Kline says.

Government mindset?

Earlier this year, the CPRA issued its first RFP under the performance-based contracting model to do a marsh restoration in a particularly vulnerable area of the Barataria Basin in Plaquemines Parish. The RFP challenged qualified responders to demonstrate their ability to restore as much new marshland as possible within the required area at a cost not to exceed $65 million.

After an initial round of procurement, four teams led by well-known firms eventually submitted proposals: Maryland-based Ecosystem Investment Partners, Dallas-based Ecological Service Partners, North Carolina’s Restoration Systems and Houston-based Resource Environmental Solutions. Though all four came in at $65 million or less, Restoration Systems received the highest score from the selection committee. It also had the second-lowest price—$64.7 million, or $92,500 per acre.

coastal restoration

All four proposals, however, were rejected on the grounds they were too expensive—not by the CPRA, but by the Trustee Implementation Group, or TIG, that oversees the particular pot of BP settlement dollars that is funding this project.

That pot is called the Natural Resource Damage Assessment, or NRDA, and will eventually total $5 billion. But the spending of NRDA dollars is tightly controlled. Though the CPRA has some authority over the money, it cannot act alone. Representatives from the National Oceanic and Atmospheric Administration, the Environmental Protection Agency, the U.S. Treasury Department and the U.S. Fish and Wildlife Service all have representatives on the TIG and they all have to give the green light to spending on projects as well.

Kline and others say they’re not completely convinced the TIG understands the long-term value in using performance-based contracting.

“I think there were concerns at the TIG level on the premium the state would have to pay to make this mechanism work under the initial RFP,” Kline says. “We know we are going to have to pay a premium to make this work up front but we have to justify the value of getting a project on the ground sooner rather than later and how does that equate to the number of dollars we want to pay?”

Restoration Systems CEO George Howard says the value comes not only having the private sector shoulder the front-end cost but also the performance guarantee that’s inherent in such contracts. He says when the TIG looked at Restoration Systems’ proposal—all the proposals, actually—it wasn’t factoring in the 20% premium that a five-year warranty on an expensive marsh restoration project costs.

He also believes, however, there’s a government mindset at play, one that is resistant to change and innovation.

“I think there is a certain amount of bureaucratic inertia at the federal level that is embedded in the processes that has grown around the NRDA funding mechanism,” he says. “There is a resistance to letting the private sector come in and do this in a turnkey manner.”

Take two

Despite the initial hiccups, CPRA officials say they remain committed to figuring out how to make performance-based contracting work. After the initial unsuccessful RFP, they invited all four teams to meet with them, one on one, and suggest ways the RFP could be modified so that prices can be lowered.

One suggestion on the table is to shorten the warranty required in the initial RFP from five years to three. Another suggestion is to remove from the RFP a clawback provision that would enable the CRPA to not only withhold payment from a contractor if a restoration project fails, but to also go after them for any payments that have been made in the event a project doesn’t “perform.”

“We said if you can do a three-year warranty with no clawbacks that would lower the cost a good bit,” Howard says. “The clawback is like a belt and suspenders approach.”

Kline says his agency is sincerely interested in trying to make something work and is mulling over numerous modifications. Howard and others are optimistic that a second RFP can be drafted in such a way that lessens their risk and, therefore, their proposed price tag.

If that happens, will the federal agencies controlling the purse strings be willing to go along?

“We feel very positive about dealing with the state,” Howard says. “We’re still concerned about the federal trustees and their general support for this project. We wish we could interact with the TIG directly. It seems to act like something of a star chamber.”

Jesuit Bend profiled in ‘good news’ Christmas Day Wall Street Journal Op-Ed

Gulf Coast writer Quin Hillyer did an incredible job making Jesuit Bend’s complex story interesting and readable in an op-ed last week. Ecological facts, policy insight, local perspective and technical specs all wrapped up with a bow. We are thrilled and grateful at RS to be a good news item in America’s largest newspaper on Christmas Day.

Here is the link at

How Markets Can Restore Louisiana¹s Marshes – WSJ[11] by Restoration Systems, LLC

Stream Mitigation Benefits to Private Landowners

Section 404 of the Clean Water Act authorizes the Secretary of the Army to issue permits for the discharge of dredged or fill material into streams, wetlands, and other waters. Applicants for Section 404 permits generally must mitigate for unavoidable impacts to streams and wetlands associated with their development. Stream mitigation may include such on-the-ground activities as preservation or restoration of vegetated riparian buffers; fencing of livestock from riparian buffers; stream bank stabilization activities; installation of in-stream habitat structures; and reshaping of streams to make them more stable and less likely to erode.

NC House Committee on Wetland and Stream Mitigation to meet Feb. 27


The House Committee on Wetland and Stream Mitigation (LRC)(2013) will meet at the following time:


February 27, 2014

9:00 AM

544 Legislative Office Bldg


Rep. David R. Lewis (Co-Chair) House Appointment
Rep. Chris Millis (Co-Chair) House Appointment
Legislative Members
Rep. Kelly M. Alexander, Jr. House Appointment
Rep. Becky Carney House Appointment
Rep. Rick Catlin House Appointment
Rep. Kelly E. Hastings House Appointment
Rep. Charles Jeter House Appointment
Rep. Chuck McGrady House Appointment
Rep. Garland E. Pierce House Appointment
Rep. Phil Shepard House Appointment
Rep. Paul Stam House Appointment
LRC Member
Rep. Tim Moore Ex Officio

Construction Industry Compliance Assistance Center (CICA)

Thumbs up to one construction industry compliance advocacy group for what it is saying about mitigation banking!
+ + + It is a regulatory preference that the wetlands are kept undisturbed. Where avoidance is not practical, wetland substitution, or replacement, at another site often provides a sound solution for the need to preserve wetland habitats. Until the mid-1990s the developer had just two options:
1. Mitigate the impacted wetlands on-site. The developer could replace the lost wetlands on the same site but at a potential loss of expensive real estate value.
2. Mitigate the impacted wetlands off-site by purchasing another piece of property and construct compensatory wetlands. This option is usually prohibitive considering cost and the time requirements because developer must locate and purchase the land, secure the necessary permits and convert the property it into an acceptable wetland.

A relatively new concept called mitigation banking offers a new alternative that simplifies the process for the development community. Preserves, called mitigation banks, are large areas of constructed, restored, or preserved wetlands set aside for the express purpose of providing compensatory mitigation for impacts to habitat. A bank is authorized to sell the habitat values created on the preserve. These values, known as credits, are sold to landowners who need to substitute wetlands for those lost to development where avoidance or on-site mitigation is not feasible. Get a quote from Central Penn Contracting on the construction.
+ + +
For more on CICA, go to


2014 National Mitigation and Ecosystem Banking Conference, Session 1 – Aligning Agency Programs

Kicking off the educational track at this May’s National Mitigation & Ecosystem Banking conference, this session is classified as “advanced” but the presenters’ topics could not be of more importance in today’s changing world.

Moderator: Erik J. Meyers, The Conservation Fund
As a Vice President at The Conservation Fund, Erik Meyers works to advance business strategy for mitigation opportunities, mainly for projects that impact energy, water and transportation infrastructure. He also chairs the Board of Directors of the Natural Capital Investment Fund, advises companies on sustainability initiatives, manages relationships with water-related agencies, and oversees climate adaptation projects. Working with the Fund since 2004, Erik has led an array of efforts, including a pioneering climate adaptation project to help vital coastal ecosystems persist despite sea level rise. He holds a B.S.F.S. from Georgetown University and a J.D. from Fordham University School of Law.

Travis Hemmen, Westervelt Ecological Services, “Habitat Conservation Plans – A New Market or Challenge?”
Mr. Hemmen directs the Business and Market Development for WES. Mr. Hemmen coordinates with private and public clients on project specific mitigation and manages sales of existing bank credits. Mr. Hemmen identifies potential site acquisitions, analyzes market information to ensure the finished mitigation banks are a viable product. He has a background in environmental consulting and regulatory compliance planning for one of the national residential home builders. As a consultant, he has managed small- and large-scale projects, including state and federal permitting of projects by local water agencies, port redevelopment and dredging programs, and development of master planned communities. He has a B.A. degree in Biology with an emphasis in Ethics from the University of Northern Iowa, and a M.S. degree in Environmental Law and Policy with an emphasis in Alternative Dispute Resolution from Vermont Law School.

Roselle Henn, USACE North Atlantic Division, “Potential for Sage Mitigation Banking”
Ms. Hemm is Environmental Team Leader for the North Atlantic Division (NAD) of the US Army Corps of Engineers (USACE) with primary responsibility for ecosystem restoration throughout the region and the Environmental Lead in the Hurricane Sandy North Atlantic Coast Comprehensive Study (NACCS), National Planning Center of Expertise for Coastal Storm Risk Management (PCX-CSRM). While compiling the study, scientists and engineers will consider future sea-level rise scenarios and integrate economic, climatological, engineering, environmental and societal data from Virginia to Maine to develop a comprehensive framework to reduce coastal flood risk and promote resiliency. The study will be collaborative, comprehensive and integrated, and conducted in partnership with federal, tribal, state and local government representatives as well as non-government organizations, academia, technical experts and interested parties.

Steve Glomb, US Department of the Interior, “National Resource Damage Assessment & Restoration and Other Opportunities”
The U.S. Department of the Interior’s (DOI) Natural Resource Damage Assessment and Restoration Program (NRDA Restoration Program) manages the confluence of the technical, ecological, biological, legal, and economic disciplines and coordinates the efforts of six bureaus and four other offices within DOI to accomplish the mission.  The NRDA Restoration Program has a nationwide presence encompassing nearly the full span of natural and cultural resources for which the Secretary of the Interior has trust responsibility and authority.  Each bureau has its unique natural resource trusteeship and brings its expertise to bear on relevant sites. The NRDA Restoration Program is a truly integrated Department-wide program, drawing upon the interdisciplinary strengths of its five bureaus (Indian Affairs, Land Management, Reclamation, Fish & Wildlife Service, and National Parks Service.)

I look forward to seeing you in Denver in May!

THIS JUST IN: All Corps Mitigation Permit Decisions Must be Documented


Today we received very good news! As of October 26th all permit decisions which the Corps makes must document decision making process for mitigation. This is significant because the mitigation rule (33 CFR 332.3) defines a mitigation hierarchy which has mitigation banking as the preferred method of mitigation. The Association has been fighting since the mitigation rule came into existence in 2008 for the Corps to follow the preference found in the rule. This directive requires that the permit officer document his/her decision making process which should have the effect of causing additional compliance with the hierarchy. I want to thank each and every one of you who have participated in this fight at both the District level and at HQ level for the hard work it has taken to achieve this milestone. We will be discussing this directive on the regular monthly NMBA call (Thursday, November 18th, 10 to 11 am Eastern,1-866-305-2467 access number 836122)

We hope you will participate in the call.

Thank you,

Victoria K. Colangelo

Click & link to:
The new Department of the Army Memorandum Documenting Nationwide Permit Template
Chief, Operation & regulatory Division letter discussing Minimum Level of Documentation required for Permit Decisions

Nationwide 8-Digit Hydrologic Units Codes (HUC's)

I was reviewing our Google Earth file of 8-Digit HUC’s and and it occurred to me an image of all the HUC’s nationwide might make for a fun and informative post on the RS blog.

When learning about the business and policy of mitigation banking people will often ask, “Can a wetland or stream restored in North Carolina [for instance] compensate for a permit issued in California?”  Emphatically no —  I’ll answer.

The general rule of thumb is that each individual bank is assigned a Service Area, which includes a small assemblage of 8-Digt HUC”s — the polygons you see below — or fewer if the demand is stronger.

In all southeastern U.S. Army Corps Districts — with the exception of Wilmington, North Carolina — you are allowed, according to standard operating procedure, adjacent HUC’s in your Service Area for mitigation if no other bank is present.  So, take two or three of the polygon areas in this image and you are looking at a typical Mitigation Bank Service Area in the Southeast.

Interesting figure, huh?

Nationwide 8-Digit USGS Hydrologic Unit Codes (HUC’s)

UNC School of Government Study of EEP: Solid as Banana Cream Pie

UNC School of Government Study of EEP: Solid as Banana Cream Pie

This past Friday the UNC School of Government released its “Phase 1 Report” on evaluating the Ecosystem Enhancement Program’s method for procuring its mitigation.

As all long suffering followers of the inner workings of the ‘black box’ known simply as EEP understand, there are two separate processes for this: 1) a competitive bid system known as Full Delivery in which the provider assumes all liability for delivering the contracted amount of mitigation without an any change order provisions and is fully bonded, and 2) an arbitrarily awarded design contract (not competitive bid) for projects from a list of ‘on-call’ design firms which is then subsequently farmed out to bid for only the construction component known as Design Bid Build.

One would have assumed that UNC would have actually looked into the mechanics of these two methods and drawn some conclusions or at least made some salient observations. Oh wait, if that’s what was done then there would actually be something useful coming from this process. Instead, all that UNC did is establish a set of criteria for how to evaluate the two methods and with apologies to my friends at UNC—a third grader could have come up with the two main ones: effectiveness and transparency. The SOG work so far has been analogous to a round table discussion of the shade of black on the side of the box, with little discussion of what’s inside and why nobody gets to see it.

Was it really necessary to engage dozens of stakeholders in the process to come up with those revelations? Can you say ‘pass the butter knife so I can cut the banana cream pie’?

As one of those stakeholders who falls under the category in the study of “Mitigation Provider” i.e. one who actually does this work and has been well acquainted with both EEP and its DENR management since before the 2003 start of the program, let me add one point of clarification to the second sentence of the second paragraph on page 1 of the study which reads “DENR’s new leadership identified a need to have an objective third party review EEP’s procurement process.” WHOA!

There is an elephant in the room here and it needs to be acknowledged. The Assistant Secretary of DENR ever since the EEP has existed, Robin Smith, is married to Mike Smith the head of UNC’s School of Government. Now, both

and Smith are well regarded in their respective capacities and I am not trying to imply any cronyism was at play in the decision for DENR to give UNC the $25,000 contract for this study. After all, if DENR had wanted to bring in Bain Consulting to perform a thorough top to bottom review of the EEP, as UNC did when it had Bain study its layers of overlapping university bureaucracy, it would have cost a heck of a lot more than $25k.

However, I am disappointed that the study offered no disclaimer to this obvious reality which was discussed by several stakeholders outside of the series of meetings. It does neither institution any favors when even the appearance of a potential conflict of interest is involved, especially so when it is not duly acknowledged in an allegedly “transparent” process.

The one clear take away result from the study is that what is likely to come next—you guessed it, is another study! One can only hope that the Phase 2 Report actually comes up with real analysis and recommendations.

If not then we ‘stakeholders’ better be prepared for more banana cream pie. One can only wonder what the budget is for another serving of the same mush?


Mea Culpa: SOG not involved in Fee Program Development

We had a facinating meeting today at the UNC-School of Government.  As Stories predicted yesterday it was a heavily proscribed discussion guided by public policy development and analysis methodology.  But I will elaborate on the dangers of that approach later in a separate post.

For now, a quick fact check is necessary regarding the Swamp Merchant’s claim yesterday that the SOG was involved in the development of the original NC Fee Program. Untrue, as far as Richard Whisnant (now) of the SOG knows and informed me today in an entirely affable manner.   And Richard has reason to know.  He was at DENR as general counsel when the program was first developed in the mid-90’s — not at SOG as I mistakenly believed.

According to Richard, while DENR counsel he did answer some discreet legal questions regarding the program prior to it becoming law.  I think that was the source of my mistake.  Mitigation policy has an informal oral history maintained by the older rats in the barn.  Somewhere in that history it became a relatively unimportant footnote that Richard Whisnant was involved in the formulation of the program — strictly, true. Did SOG and Richard Whisnant have a policy formulation role of the kind I was implying might bias today’s review? Plainly, no.

Richard’s limited involvement with the Fee Program was  previously at DENR, not SOG.  The UNC – School of Government and Richard are looking under the hood of the Fee Program for the first time.

The Swamp Merchant is duly chastened and will work to re-earn what credibility I have lost.  My only solace is my belief that it is not the point of blogs to provide facts — it is the point of blogs to discover them through enhanced communication.  That happened here.  Sometimes being wrong in public will reveal the truth.