This artist rendering released by the Minnesota Department of Transportation shows an aerial view looking west that shows the St. Croix River Crossing being built between Oak Park Heights, Minn., and St. Joseph, Wis.
St. Croix Crossing bid dispute costs taxpayers
- Article by: Charles McCrossan
- May 1, 2013 - 8:04 PM
With just a few weeks left in the session, members of the Legislature are sparring over how to erase a projected budget deficit of two-thirds of a billion dollars.
It is with this as the backdrop that I am exceedingly confused about why the state would allow its transportation commissioner to bypass a $52 million bid for a piece of the St. Croix Crossing project and instead accept a $58 million bid that his own department has ranked as being an inferior design compared to the less expensive option.
My company, CS McCrossan, provided the bid that was rejected. And we feel that legislators and taxpayers deserve to know that we did our best to save the state as much as we could on this project, but that the Department of Transportation was unwilling to accept our assistance.
For nearly 60 years, our Minnesota-based company has done road construction projects around the state. We have become accustomed to how the MnDOT bidding process works, and we have worked closely with the department to complete many major projects.
Since the early 1980s, all construction projects that include federal funding are required to provide a plan for how they will incorporate Disadvantaged Business Enterprises (DBEs) into the projects. DBE is the federal term for businesses in which women or minorities hold a majority ownership stake.
To be clear, our issue is not with this regulation. We have successfully bid a number of contracts where our DBE commitment on the project met the federal requirements.
But for some reason, on this project, MnDOT deviated from standard practice and rejected our proposal based on the number and dollar amount of DBE subcontractors and suppliers we included in our bid.
We spent five months preparing our bid, refining the type and scope of work that in the end would make up this project. But as is common in major design-build projects like this, the final scope of the work is not known when the bid is submitted. As a result, the exact number and type of subcontractors and suppliers we would utilize on the project is impossible to know at this stage of development.
MnDOT previously understood this. On past projects, when bidders fell short of the DBE goal at bid time, they were allowed an opportunity to discuss their plans for achieving the goal after the bid was awarded.
For some reason on this bid, MnDOT bypassed this step and ignored our solicitation of more than 80 DBE companies for $5.5 million in work. Despite the fact that we certified in writing, on a form supplied by MnDOT, that we would continue to provide opportunities to DBE firms throughout the contract period, the department disqualified our bid. As a result, it unnecessarily added $6 million in real tax dollars to the cost of the project.
By continuing past practices, or even by making bidders aware of the plan to change its practices for this bid, the state could have saved $6 million.
We continue to protest this inexplicable decision with the expectation that it will be reversed.
By spending more to get less on this project, Minnesota is going the wrong way when it comes to long-term budget stability. Everyone who works for or with the state should strive to maximize efficiencies. We wanted taxpayers to know we will continue to do so.
Charles McCrossan is CEO of CS McCrossan Inc.
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