UDOT bids differed by 1 point; chief apologizes to lawmakers
By Jenny Brundin
Salt Lake City, UT –
Documents released by the Utah Department of Transportation on its website yesterday show the difference between the winning the bid for the largest road construction project in state history was a single point. UDOT's director told lawmakers that "adjustments" were made to swing the bid to a Provo construction firm. But he said choosing that firm was a "no brainer" because their plan would save the state time and money. What John Njord had a harder time doing was explaining to lawmakers why he didn't inform them about a $13 million dollar payout to one of the losing bidders.
The story starts with three construction companies. Each toiled two years preparing a bid to build the $1.7 billion dollar expansion of the I-15 in Utah County, the largest road project in the state's history. In the end, Provo River Construction won the bid. That much lawmakers knew. But they were kept in the dark about other details: Why did one of the companies file a complaint after it lost the contract? Why did that company later receive a $13 million dollar pay-out to avoid a lawsuit? And why did lawmakers not know about the deal? For that, UDOT director John Njord apologized.
"I should have come to this body, I should have come to the Governor's office, and made full disclosure to everybody," he said. "I did not do that and that was my mistake and obviously we have some pretty significant allegations today as a result of the mistake that I made. And I am apologetic for that and I have no excuse."
The allegations that he's referring to are that donations from the winning bidder to Governor Gary Herbert's campaign fund helped them win the bid. Herbert has denied that he had anything to do with choosing Provo River Construction. He was also embarrassed at a news conference Monday when he learned for the first time of the 13 million dollar settlement to one of the losing bidders. Lawmakers yesterday told UDOT leaders they should have known about the deal. Representative Johnny Andersen:
"If this were a private organization and I were your boss, I would be patting you on the back," he said. "But it's not. And the fact that this came as a surprise to the governor in that press conference is horrible. And the fact that it's a surprise to every one of us and the emails that we're getting on this calling for heads to roll is horrible. We should have been made aware of it."
Some lawmakers were miffed, though, that a losing bidder - Flatiron/Skanska/Zachry or FSZ - was rewarded with 13 million in taxpayer dollars. Lawmakers promised to work on policy changes to avoid the scenario again. Though UDOT has settled about a dozen similar cases, Njord said never one of this magnitude. Njord spent the bulk of yesterday's testimony explaining how UDOT conducts its bids, to prove that this one was above board. He also refuted the notion that the Governor used his influence to sway the decision.
"That did not happen," he said. "That could not possibly have happened under this process."
Here's how the bid in question happened, according to Njord. Sixty-five mid-level technical staff at UDOT spent 12,000 hours evaluating the technical aspects of the proposals. They gave each proposal a good, bad, or exceptional grade. That information went to a selection committee, made up of half a dozen of Njord's most senior, trusted, engineers. That team made some adjustments to those recommendations and sent them to Njord, his chief engineer, and 4 independent observers.
"It was unanimous amongst all four of those as well as [chief engineer] Carlos [Braceras] and I that the PRC team was the best proposal," Njord said.
Word on the street among contractors though - because of leaks from UDOT - was that Flat Iron -FSZ - had won. Njord notified FSZ and another bidder that they'd lost.
"The second place winner, Flatiron/Skanska/Zachry was extremely upset," he said. "Flatiron was ready to pop out the champagne bottles when I called them and told them they'd lost. They were devastated. They had invested so much time and energy. They thought something was wrong."
Flat Iron met with UDOT officials, who provided notes and documentation on the selection process. Njord said there were good reasons Provo River Construction won. They'd do the project in less time and keep more lanes open during construction. But FSZ lodged a bid protest. Njord said the company was unsatisfied and unwilling to go away, proposing only this:
"You must cancel the contract with PRC," Njord recounted. "You must give it to us or we're going to sue you."
UDOT leaders estimate that court fees and delays would have amounted to at least $52 million dollars. Njord asked FSZ what it would take for them to agree not to sue. The company said they'd go away if UDOT paid their bidding expenses. John Njord:
"I agreed to pay their actual expenses," he said. "They certified those expenses to us and we issued a check for 13 million dollars."
Lawmakers said they understood the cost of doing business, but 13 million is a lot of money in tight budget years. Senator Stephen Urquart.
"We hold the purse strings and we're elected to be accountable for them," Urquart said. "From our perspective as budgeters, this is about of a percent of the weighted pupil unit."
That's the unit used to calculate how much money is sent to Utah schools. UDOT has promised to release all the documents related to the bid on on a separate website by early next week. Meanwhile, some lawmakers apparently had problems following their own rules. Representative Jay Seegmiller questioned committee chair Representative Julie Fisher about the fact that she included discussion on the 13 million dollar settlement on the agenda at the last minute, without the 24-hour notice as required by Utah's open records law.
"That's why I was concerned about whether we could discuss it at this meeting," Seegmiller said. "Or whether it was appropriate, even law under the current law."
"Sue me, I put it on the agenda," she said.