Decision barring Southwest LRT contractors questioned

A decision to bar 36 firms from working on the $1.9 billion Southwest light-rail construction project has raised the ire of two associations that represent engineering firms and specialty contractors.

In an effort to stem possible conflicts of interest, the Metropolitan Council banned the firms from working on the construction stage of the Southwest project because they had worked on its earlier design and engineering phases. The stakes are high: Southwest is the largest public-works project in state history, with some 7,500 construction workers needed to build the line, generating $350 million in payroll related to the project.

The Associated General Contractors of Minnesota and the American Council of Engineering Companies of Minnesota wrote an open letter Monday to Gov. Mark Dayton, the Met Council, the Hennepin County Board and the Minnesota Legislature denouncing the ban as a type of "blacklist." The two groups want the barred firms to have a way to present their case to the council, and a remediation process if a conflict is found.

"This decision violates federal guidelines, contradicts established business operating procedures, upends Minnesota precedent, will cost Minnesota jobs, harms the construction industry, will increase the cost of this and other LRT projects, reduces legitimate and lawful competition in bidding, and slashes the ability of disadvantaged business enterprises from performing work," the letter said.

Met Council spokeswoman Kate Brickman said the agency does not comment on active bids, but said, "as is best practice in public procurement, the council strives to provide full and open competition that is free of real or perceived unfair competitive advantage or conflict of interest."

Southwest is a proposed 14.5-mile LRT line stretching from downtown Minneapolis to Eden Prairie. Construction on the project is expected to begin sometime next year, with passenger service starting in 2022.

The current conundrum surfaced last summer when bids for the construction phase of the Southwest project, which ranged from $797 million to $1.08 billion, came in over budget. (The council has not revealed the construction budget publicly.)

The bids were also deemed "unresponsive" by the council because the 36 firms were included in three of the four bids. The firms vary in size, and not all of them are based in Minnesota.

The council decided in September to reject the bids and reissue a new construction package, delaying the project by four months and adding $12 million to $16 million to the price. New bids are due Jan. 9.

"We feel strongly the 36 subcontractors were not given due process," said Tim Worke, CEO of Associated General Contractors of Minnesota.

An Oct. 25 letter from the organizations addressed to Met Council Chair Alene Tchourumoff and Hennepin County Commissioner Peter McLaughlin, raised similar concerns, but wasn't quite as pointed as Monday's missive. That did not generate a response, Worke said.

Janet Moore • 612-673-7752 @MooreStrib