Agency scrubs $77M contract to build bridge

‘Disadvantaged’ partners data missing, bidder told

A map showing the location of White River Bridge.
A map showing the location of White River Bridge.

The Arkansas Highway and Transportation Department has canceled the award of a $77.5 million contract to replace the Interstate 40 bridge over the White River in Prairie County.

The department also rejected the other bids submitted for the project in January -- they were markedly higher than the $77.5 million bid -- and will re-evaluate how it can make the project more attractive to potential bidders.

"We will rebid the project," said Danny Straessle, an agency spokesman. "We just don't know when."

The cancellation of the low bid by Johnson Bros. Corp., a Southland company of Roanoke, Texas, came after department officials determined the contractor had not turned in the required documentation for the involvement of businesses owned by members of minority groups in the project on time as required in the bid specifications.

In addition to canceling the award, the department's deputy director and chief engineer, Emanuel Banks, also requested the company remit $3,882,974.14, which represents 5 percent of the contract award amount.

All contractors' awards come with a bid bond equal to 5 percent of the contract award and is similar to earnest money when buying a home, Straessle said.

"It ensures low-bid contractors will enter into a contract," he said.

Banks said in his letter, dated Monday, that if the department didn't receive the payment in a timely manner, it would seek compensation from the company's bonding company.

Replacing the bridge has been a long-awaited project.

The state Highway Commission authorized replacing the 48-year-old bridge a few months after May 2011's record rainfall and when White River floodwaters covered the east approaches to the bridge for several days. Engineers had been working on a design to replace the bridge even before the flooding.

The bridge replacement project includes replacing two bridges over the Cache River with ones that are a foot higher, replacing two overpasses in the area and resurfacing some lanes and shoulders.

The area has seen other work already done in the vicinity of the bridge. A $53 million contract was awarded, also in 2011, for work on the interstate approaching both ends of the span totaling 10 miles.

The department has canceled awards and sought bid bonds on projects in the past for various reasons, but in recent years none of the projects approached the scale of the White River bridge replacement, Straessle said.

Efforts to reach the Johnson Bros. Corp. executive involved in discussions over the contract award cancellation were unsuccessful Friday afternoon.

The project had a goal of 8 percent minority-business participation, formally known as disadvantaged business enterprises. The Highway and Transportation Department has a statewide minority participation goal of 8.37 percent, but the precise percentage varies by project, Straessle said.

The U.S. Department of Transportation defines disadvantaged enterprises as "for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51 percent interest and also control management and daily business operations." That could include businesses run by blacks, Hispanics, American Indians, Asian-Pacific and Subcontinent Asian Americans as well as women.

Requiring minority-group participation in projects using federal money is seen as a way to develop a more diverse contracting industry.

The company's bid was opened Jan. 13. When the company submitted the bid, it signed a document certifying it would submit its minority business participation or, as an alternative, documentation of its good-faith efforts to obtain such participation by Jan. 13.

That didn't happen, according to Banks and other agency officials.

"Your documentation submitted in an attempt to support your claim for a good-faith effort was not received until January 28, 2016, with additional information on February 3, 2016," Banks wrote in Monday's letter.

Under department regulations, "if documentation of good faith effort was not submitted with the bid and [disadvantaged business enterprise] participation sufficient to achieve that goal is not provided as required, the proposal will be rejected and the proposal guaranty shall become the property of the department," Banks said.

Frank Renda, president of the Johnson Bros. Corp. operations based in Roanoke, defended his company in a Feb. 2 letter.

He contended that because of the extreme variability of the bids submitted for the project -- the difference between the lowest bid and the highest bid was 134 percent -- the company and the department "were in discussions and therefore instructed to submit [good-faith effort] once it was determined the contract would move forward."

Renda also labeled "incorrect" department assertions that the company didn't contact minority contractors at least two weeks before the bids were to be open and that it took several steps to ensure minority business participation in the contract, including contacting each one by phone a week prior to the bid opening, broke down larger pieces of the project in an effort to attract minority business participation and included every "competitive" minority business "in our bid."

"Johnson Bros has an established history of partnering with [disadvantaged business enterprise] companies to encourage growth in the local economy," Renda said, noting that the company had won two awards from the Florida Transportation Builders' Association for "outstanding effort" in meeting or exceeding minority business goals and a third for "excellence in partnering."

Metro on 02/13/2016

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