Tollway bungled construction contracts, state regulator says
A state regulator has ruled the Illinois tollway acted illegally in its handling of unsuccessful bids from two construction companies on separate projects, a move that caused delays and contrasts with agency goals of strengthening procurement policies.
In March, Walsh Construction Co. and Lorig Construction Co. filed protests with Illinois' Chief Procurement Officer for General Services after losing contracts cumulatively worth more than $70 million.
The firms contended they weren't properly notified about decisions, which were related to tollway diversity goals.
Tollway leaders argue both contractors were kept in the loop.
Chief Procurement Officer Ellen Daley sided with the contractors, concluding they weren't properly notified that their bids fell short, which caused them to lose out on a chance for reconsideration. The tollway committed an "illegal act that undermines the integrity of the procurement process," Daley concluded in two separate reports dated July 6 and obtained by the Daily Herald through a Freedom of Information Act request.
Tollway leaders downplayed the CPO's conclusion, saying it was "in reference to a small procedural issue."
Daley said, however, the agency dropped the ball in terms of communicating effectively.
"Neither the procurement system in general nor (diversity) inclusion efforts in particular are well-served by keeping bidders ignorant when they fail to measure up," she said. But she noted, "I do not think the tollway acted in bad faith by not notifying Walsh/Lorig of its determination."
Meanwhile, two important projects are in limbo as the construction season dwindles and Illinois' unemployment rate stands at 14.6%.
"The industry is very concerned whenever the integrity of the procurement process is threatened or in this case undermined," Illinois Road and Transportation Builders Association President Michael Sturino said.
After the tollway administration changed hands in 2019 following concerns about nepotism, Executive Director Jose Alvarez recruited a number of colleagues from his previous job at the Chicago Housing Authority to create a gold-standard procurement department.
Bids for a I-55/I-294 bridge project Lorig sought were opened in December. Bids for a construction project on I-490 that Walsh desired were opened in January. Work should have started in May.
Typically, construction contracts go to the lowest qualified bidder, but Lorig and Walsh did not secure enough minority subcontractors to reach the tollway's 30%-range diversity goal, documents show.
The agency is deeply committed to diversity "to ensure it reflects the communities it serves," a spokesman said.
And,, "being the lowest bidder does not ensure receipt of a contract award. A bidder must, among other things, satisfy the goals included in the solicitation and show good faith efforts to do so."
The two firms are long-time tollway contractors that have met diversity goals previously and currently on other projects.
A tollway provision allowed unsuccessful bidders to seek reconsideration from the agency's diversity chief. Lorig and Walsh both claim they worked to find more qualified minority firms and didn't receive notice of a decision until it was too late to appeal.
The tollway board awarded the two contracts to the lowest responsive bidders on March 26. The difference in cost was about $1.27 million combined.
Tollway officials state they "provided verbal notification of non-responsiveness to both bidders."
But there are no records to prove proper procedures were followed, and weeks passed until the firms learned their bids were officially rejected, Daley said.
"Silence is not a notification, it is an absence of a notification," she said.
State Sen. Laura Murphy has asked Senate Transportation Committee Chairman Ram Villivalam to hold a hearing on the bid protests, saying she found the CPO's findings "very concerning."
The tollway has a "responsibility to ensure the bid is fair, meets the procurement guidelines and provides the most cost-efficient bid for taxpayers," the Des Plaines Democrat said, noting that for the CPO to have to intervene in what should have been a routine procurement issue seems needless.
Tollway officials said, "we're stunned the senator believes that holding our ground against contractors who fail to meet diversity goals will cost more and is 'needless,' especially given the CPO stated our agency acted in good faith within the low-bid process."
Murphy said she supports diversity goals - the concern is "the procurement process should work like clockwork, (but) there certainly seems to have been a snag."
Tollway board Director and former state Sen. Karen McConnaughay of St. Charles was troubled by Daley's report. "Any time, the state's CPO rules against the tollway on a procurement matter, it needs to be taken seriously and requires close examination" of procedures, she said.
What's next? "To date, there have been no contract awards," tollway officials said, noting Walsh and Lorig now will get administrative reconsideration, as the CPO directed.
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