Rhode Island news
Contractor alleges coercion on DOT contracts
01:00 AM EDT on Thursday, October 1, 2009
PROVIDENCE — Shire Corp, a major bridge contractor, accused the state government Wednesday of illegally withholding multimillion-dollar construction contracts to coerce the company into saving the administration from embarrassment.
The accusations are contained in a $15-million lawsuit that names as defendants 10 present or former top Department of Transportation officials, including present director, Michael P. Lewis, and his two predecessors, James R. Capaldi and Jerome F. Williams.
It also accuses a number of unnamed officials in the “executive branch” of government, which includes Governor Carcieri and his staff, of playing key roles in denying contracts to Shire or offering to award them in return for the company’s dropping embarrassing claims against the DOT.
The administration denies it. Carcieri’s press secretary, Amy Kempe, said in a statement: “We believe this lawsuit is entirely without merit and the allegations against current and former state officials are outrageous.” She said the state will make its case in court.
Shire said in the suit that the DOT repeatedly refused to award it contracts despite being the lowest bidder. It also said that state officials dangled the possibility of contract awards in return for Shire not pressing its claims against the state.
For example, Shire says that in 2005 it was the low bidder, at $11.2 million, on a contract for safety improvements to Route 95. But it said it learned through a DOT official that it would get the contract only if it dropped its claims against the state on the ongoing Barrington Bridge replacement project.
In one of those claims, Shire said, the DOT’s plans showed excavation to be performed on land. In fact, Shire said, “the excavation needed to be performed in the water,” requiring special, expensive procedures for drying and disposing of the material excavated.
In another case, the suit says, an otherwise unidentified present or former executive branch employee demanded that Shire speed up its work on the Barrington Bridge; in return, it would get a contract where it was already the low bidder, rebuilding the Union Avenue Bridge in Providence. It also said it was told in early 2008 by “a former member of the governor’s campaign staff” that it would get a contract to rebuild that bridge.
The state public bidding process requires that the job be awarded to the low bidder.
Shire claims that the DOT has been able to deny or delay contract awards repeatedly even though Shire was the low bidder.
Shire has been in a series of disputes with the DOT. The company says the projects it was awarded were designed poorly, sometimes so poorly as to be unbuildable. Shire has already filed a series of claims demanding payments for time and money lost while it was waiting for the DOT to deal with the problems. Such claims can be settled informally, go to arbitration or be fought out in court.
The result has been a series of embarrassments to the DOT with long-delayed projects and millions of dollars in settlements caused by design flaws that caused expensive construction delays.
One of the design problems involved the Point Street overpass over Route 95. Water that wasn’t supposed to be present caused a piece of Shire’s equipment to sink in the mud. The state ultimately settled Shire’s claims on the project for $3.1 million in 2005. The new bridge was completed in December 2006.
The DOT also paid Shire $5.3 million in 2006 to settle claims stemming from the design problems on the Barrington Bridge, whose cost so far has more than doubled the bid price of $10.4 million.
In the lawsuit, Shire demanded $15 million in compensation, saying that the DOT’s actions damaged its reputation and improperly cost it millions of dollar in contracts.
Shire, however, has been temporarily barred twice by federal officials from federally financed projects, most recently last fall after one of its employees was charged with illegally rummaging through a DOT computer system.
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