City Council struggles to attract firms to help regulate Entergy New Orleans

The New Orleans City Council is planning to rebid a contract to conduct a management audit of Entergy New Orleans, after its first attempt received zero responses from firms. The management audit was announced in September, in the wake of Hurricane Ida and the weeks-long power outages it caused in New Orleans and throughout Louisiana.

“To be candid we’re nowhere,” said Councilman and utility committee chair JP Morrel in an interview. “We got zero responses.”

The lack of responsive companies is not isolated to this one contract. In recent months, the council has faced roadblocks finding companies to fill several contracts vital to its role as regulator of Entergy New Orleans.

Morrell called it “frustrating” and “jarring.”

“There’s a lack of responses across the board,” Morrell said. “I have huge trepidation that we are not getting active, numerous responses on these several hundred thousand to multi-million dollar contracts. Just complete disinterest.”

Morrell said he didn’t yet see a comprehensive explanation for that disinterest, but that he suspected a few contributing factors, like the city’s reputation for always hiring the same utility consultants and Entergy’s influence as a major economic driver in the region.

“I’m very concerned that having a lack of a diverse pool to pull people from speaks to some larger problems I’m not seeing, in that, are people in this town so conflicted by their relationships with the major utility that they feel like they can’t answer?”

A recent letter from Energy Future New Orleans, a coalition of local consumer and clean energy advocates, said the lack of responses was “a worrisome confirmation that the audit services market does not believe the Council has shown serious commitment to this effort.”

The issues began before Morrell joined the council in January. Last year, under then-utility chair and current Councilwoman Helena Moreno, the council released a request for qualifications, or RFQ, for legal and technical utility advisors — vital roles in council’s regulation of Entergy New Orleans.

The two contracts are the most profitable awarded by the city council, worth more than $5 million a year in combined value in recent years. They have also gone to the same two consultants for over three decades — a reliance the council is trying to break away from.

But only two companies responded to each of the two RFQs, including the existing consultants that currently hold the contracts.

“Typically, whenever you’re talking about contracting at this level, you usually have to beat all the suitors off with a stick.” Morrell said. “I would have thought you’d have law firms kind of tripping over each other.”

When Morrell became utility chair in January, he decided they weren’t adequate for what the council is trying to do — to stop relying on two giant consultant contractor responses and create a pool of qualified firms they could tap for smaller, individual projects.

So instead of choosing from those four firms, the council put out a new bid on Feb. 2, this time to hire a headhunter that could help them attract more candidates for the consultant RFQs. Firms have until the end of March to apply for the contract, but so far none have.

“Ironically, we got no responses for the headhunter,” Morrell said.

The explanation for the lack of applicants is not fully clear. But he said “a large part of the problem” is the city’s decades-long history of exclusively awarding utility contracts to the same few consultants. The Lens reported in 2018 how those consultants had used political connections and contributions to help keep a firm hold on the profitable contracts.

“When you’ve had one consultant for 40, 50 years, you have to really make the case to people who are potential respondents that we really want you to apply, you have a real shot at this,” Morrell said, adding that’s exactly why he wanted to hire headhunters to amplify that message.

He said Entergy’s outsized influence in the region’s economy may have also played a role. He was clear that he had no evidence of current active “economic intimidation” from Entergy, but said that companies that stand to work with Entergy may see the council contracts as a liability.

“Someday you might want to do work with Entergy,” Morrell said. “There’s always going to be the idea both from law firms and accounting firms locally, that if you do work for the council on one of these pieces, you might conflict yourself out of any future work with Entergy.”

But he said that still didn’t fully explain the lack of interest from national firms, and didn’t fully apply to the headhunter contract.

“Entergy is one of the largest employers in the city. But on the same token, I don’t have a good articulable reason of why I can’t get responses on any of these three things, both locally, regionally and nationally.”

Morrell offered more specific possible explanations for the management audit contract. First, the bid was released on Dec. 8, right before the holidays. He said the bid also had a typo on it that accurately said responses were due by January 2021, instead of January 2022.

Finally, he said that it was possible the council was doing something wrong the way it advertised and attracted contractors. That, however, was one of the things he’d hoped a headhunter firm could help them improve.

“The whole reason I wanted to look for a headhunter is to have someone come in to say here’s what we’re doing wrong. But the fact that we can’t get any headhunters to come in is kind of troubling.”

Morrell said he was working “to try and figure out what ways we can restructure the headhunter RFQ.” But, he said if headhunters still aren’t applying, the council will likely have to go forward with new consultant RFQs and do whatever they can to attract candidates without the help of a recruitment consultant.

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