A contractor in a bidding dispute with the state over construction work on the St. Croix Crossing is seeking an injunction, threatening the schedule on one of the state’s largest public works projects.
C.S. McCrossan Construction Inc. of Maple Grove in February submitted the low bid to the Minnesota Department of Transportation (MnDOT) for an array of construction work along Hwy. 36 near Oak Park Heights and Stillwater as it approaches where the bridge crossing the St. Croix River is to be built.
But it didn’t get the contract.
MnDOT received three bids for the work: $52.3 million from McCrossan; $58.1 million jointly from Ames Construction Inc. and Lunda Construction Co.; and $68.5 million jointly from Hoffman Construction Co. and Shafer Contracting Co.
Along with the lowest offers for the cost of construction, MnDOT also weighed technical aspects of each company’s bid using a point system. McCrossan scored 87.59, Ames/Lunda 85.08 and Hoffman/Shafer 85.55. McCrossan appears to have had both the lowest bid and the highest technical score.
The issue for MnDOT, according to the suit, was McCrossan’s compliance with meeting the agency’s target of having 16.7 percent of the project’s subcontractors designated a Disadvantaged Business Enterprise (DBE), a for-profit small business that is 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.
But Tom McCrossan, president of the company, said the DBE issue should not have been raised, one reason leading to the decision to sue MnDOT Monday in U.S. District Court.
In its bid, the company certified that nearly 11 percent of the work would be done by DBEs, and as work went on, the company would strive to hit that MnDOT goal.
“And remember: It’s a target, it’s not a quota,” he said. McCrossan had identified 83 DBE subcontractors at the time the bid went out, and had work commitments from 16 of them.
“That’s what’s really the issue here,” McCrossan said. “MnDOT wants to spend $6 million more to get an additional $3 million in DBE participation, when we made it clear to them that we were making a good-faith commitment to increase that participation. What the heck is the matter with that picture?”
McCrossan said the high technical score showed his company was offering some innovative ideas to save the state money — hence the low bid.
Kevin Gutknecht, spokesman for MnDOT, said the agency could not comment since the matter is in litigation — including the potential consequences of bringing construction on the $626 million crossing project to a halt almost before it begins.
McCrossan was tripped up by DBE rules on another high-profile project: the Hiawatha light-rail line. The company was part of a consortium of construction firms that built the line and later was accused by the federal government of falsely claiming to have given sufficient subcontracting work to DBEs. The firms denied the allegations, but eventually agreed to a $4.6 million settlement in 2011. McCrossan is now among the prime contractors on the Central Corridor light-rail project, working in joint venture with Ames Construction.