Dispute over MnDOT's I-35E contract dismissed

A legal dispute that had threatened to shut down a nearly $100 million construction project on a 4½-mile stretch of Interstate 35E has been dismissed — a project that includes the first MnPass lanes in the east metro area.

In an unusual move, three competing contractors — C.S. McCrossan Construction Inc., Lunda Construction Co. and its bidding partner on the project, Shafer Contracting Co. — had jointly asked the state Court of Appeals to review the Minnesota Department of Transportation's decision to award a $98.4 million contract for the project to Burnsville-based Ames Construction.

The Ames bid was the highest among the four proposals submitted to MnDOT, exceeding two competitors by about $10 million.

The bid by McCrossan, of Maple Grove, was $87.5 million; the bid by Lunda, of Black River Falls, Wis., and Shafer, of Shafer, Minn., was just under $89 million; and a joint venture of Edward Kraemer & Sons of Burnsville and Los Angeles-based AECOM USA proposed $97.1 million.

Under the state's "apparent best value" bidding system, agencies don't necessarily have to accept lowest bids for public works projects. The competitive bids can be evaluated on other factors as well, such as technical merit or how quickly the project can be completed.

Those factors are detailed in agency guidelines and state law, and if a low bid is not accepted, the agency has to demonstrate why it wasn't.

The Ames bid had the highest technical score as determined by MnDOT. The two low bidders, however, claimed that MnDOT ignored both state law and its own instructions to the project's bidders by allowing Ames to make several changes in the bid specifications without letting the other contractors know.

When those contractors went through an internal appeals process with MnDOT, an arbiter known as a "protest official" acknowledged that MnDOT made some technical errors and was inconsistent in how it handled the bidding process, but concluded that it was not significant enough to reverse the award.

The contractors disagreed. They took their arguments to the Court of Appeals, and sought an injunction to halt the project.

After the court rejected the injunction, the contractors agreed to dismiss the case.

The long-awaited reconstruction of I-35E between University Avenue and Little Canada Road, with its new MnPass lanes in both north and south directions, is aimed at easing congestion on a key traffic bottleneck into and out of downtown St. Paul. It is set to be completed by late 2015.

The contract includes the construction of the MnPass lanes alongside the three lanes for general traffic, a concrete overlay of I-35E and the reconstruction of nine bridges along the corridor.

Bridges will be replaced from Pennsylvania Avenue to Hwy. 36; the bridge over Maryland Avenue was replaced last year. Also, the freeway will be shifted several hundred feet to the east. The interchange now at Pennsylvania will be replaced with an upgraded one at Cayuga Street to improve access to Phalen Boulevard.