Delay over St. Croix bridge bid could cost millions

  • Article by: Jim Anderson
  • Star Tribune
  • April 30, 2013 - 8:44 PM

Delaying the start of major construction on the St. Croix Crossing project over a bidding dispute could set back the timetable by as much as two years and cost taxpayers millions of dollars, the state argued Tuesday.

In a motion filed in U.S. District Court in St. Paul, the Minnesota Department of Transportation (MnDOT) argued against C.S. McCrossan Construction’s injunction that would halt construction until the dispute is resolved, and defended its decision not to award McCrossan the contract for approach work on Hwys. 36 and 95. The approach work is part of the project’s estimated $626 million total cost.

McCrossan, based in Maple Grove, in February submitted the low bid of $52.3 million for an array of construction work in Oak Park Heights and Stillwater on highways and an interchange leading to the bridge crossing the St. Croix River. However, a joint bid from Ames Construction Inc. and Lunda Construction Co. of $58.1 million — nearly $6 million more — was awarded in April for the work.

McCrossan sued last week, arguing the bid was improperly awarded, and asked for an injunction in federal court to halt the work. McCrossan also is challenging the bid before the Minnesota Court of Appeals.

Delaying the approach work by two weeks would add more than $342,000 to the project’s price, said John Chiglo, MnDOT’s lead engineer on the project, in an affidavit. The longer the delay, the more costs would mount, he warned, reaching nearly $5 million at the 120-day point.

If an injunction delayed work for six months, MnDOT would be forced to cancel the approach work contract, Chiglo added, because it would be too late in the construction season to start work. The state would then have to pay Ames/Lunda nearly $5.4 million in damages, and would set in motion a chain of events pushing completion of the crossing project to the end of 2016 instead of the end of 2014. The rebidding process alone would be costly, and prices of construction materials likely will be higher.

Even though McCrossan submitted the low bid, and also was rated technically the best bid of the three, the company was not awarded the contract because it failed to show it would meet MnDOT’s stated goal of having 16.7 percent of the project’s subcontractors designated a Disadvantaged Business Enterprise (DBE). DBEs are for-profit small businesses that are at least 51 percent owned by minorities or women. It’s common for state and federal agencies to set such targets when awarding contracts in order to give those businesses a fair chance at competing for work.

McCrossan certified in its bid that nearly 11 percent of the work would be done by DBEs, and signed a pledge committing to satisfy the specified DBE requirements as the project progressed.

McCrossan argues in its suit that it showed a good-faith effort to comply; MnDOT officials disagreed.

“McCrossan’s proposal was not rejected because it did not reach the DBE participation goal, but because McCrossan did not make all necessary and reasonable efforts to reach the goal,” said Mary Powell, who directs MnDOT’s Office of Civil Rights.

Ames/Lunda has also joined the fray, with attorneys opposing the injunction request because it would be costly to the firms and their suppliers and contractors. After getting the contract, it has also committed time and money to move forward with the project.

In their affidavit, attorneys for Ames/Lunda call the injunction request “extraordinary,” adding that McCrossan should have raised objections over the DBE requirements sooner.

U.S. District Judge Richard Kyle can either rule on the injunction request based on the filed motions, or hold a hearing before making a decision.

Jim Anderson • 651-925-5039 Twitter: @StribJAnderson

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