An executive team at the Utah Department of Transportation overruled its technical evaluation teams and tweaked the recommended scoring just enough to change the winner of the $1.1 billion Interstate 15 reconstruction contract, the largest in Utah history.
Bid records reviewed by The Salt Lake Tribune show the Selection Recommendation Committee, made up of UDOT managers and budget officials, found enough variances to ultimately swing the contract against Flatiron/Skanska/Zachry (FSZ) and in favor of Provo River Constructors by a single point.
In each case, the several variances the selection committee identified broke in favor of Provo River Constructors, which, UDOT Executive Director John Njord acknowledged, "looked bad" and prompted a $13 million settlement with FSZ, the second-place bidder.
Njord told a legislative committee Wednesday that when FSZ protested the bid, he reviewed each of the selection committee's changes "ad nauseum," interviewing each member of the selection team.
"I became convinced at the end of the process that there was no bias, there was no pattern of bias, but it looked like it, and that scared me more than anything," Njord said. "That looked weird to me. That's risky. That's a little more risk than I think we should take."
UDOT eventually agreed to the $13 million settlement with FSZ, which was approved by the department's counsel from the Attorney General's Office and finalized Feb. 11. It was the only such settlement by UDOT since 2005, but neither Gov. Gary Herbert nor the Legislature were informed.
Herbert learned of the settlement Monday. He said in a statement Wednesday that after meeting with Njord, he has "concluded that UDOT's decision was the most appropriate action on behalf of the Utah taxpayers to keep this vital infrastructure project moving forward."
Senior lawmakers, including Senate President Michael Waddoups, R-Taylorsville, are already discussing changes to the law that would require UDOT to inform lawmakers of future settlements, a move Herbert said he supports.
"I do not believe that UDOT should be held solely responsible for decisions of this magnitude," Herbert said. "John Njord and his team deserve support from my office and the Legislature on these issues, and, in light of this event, I expect an immediate re-evaluation of existing state law to that end."
Rep. Johnny Andersen, R-Taylorsville, said, "The fact this came as a surprise to the governor … is horrible. And the fact that it's a surprise to everyone one of us, and the e-mails we are getting on this are calling for heads to roll, is horrible."
Democratic gubernatorial candidate Peter Corroon's campaign has questioned whether the contract to rebuild 24 miles of I-15 was influenced because partners in the Provo River Constructors have given a total of $87,500 to Herbert's campaign.
But Njord said the governor never pressured him.
"Had I felt that influence had weighed in, it would have come through me. That's how the governor would have done that [and] those discussions never occurred," Njord said. He said his discussions with the governor were only about the scope of the project, not who would do the work. "How could I possibly look in the mirror in the morning knowing I had rigged the bid?"
In the end, all seven members of the selection team were unanimous in their support of Provo River Constructors, a decision that was also supported by Njord and UDOT deputy director Carlos Braceras.
A review of the evaluation team's summary and the final recommendation report by the selection committee show a handful of minor adjustments that ultimately provided Provo River with at least an additional point that made the difference in the outcome.
Most notably, the selection team gave nearly a full point to Provo River's final score because it believed that the evaluation team hadn't given enough credit to the firm for minimizing the closures of on- and off-ramps and maintaining three lanes in the early stages of construction.
The selection team also gave Provo River a boost of a partial point for completing additional miles of road and for finishing the project by December 2012, ahead of schedule.
UDOT did not provide scores by the technical evaluation teams, saying such a tally didn't exist because they ranked the categories within ranges. But a memo by the selection team details each of the variances, which added at least 1.7 points to the Provo River Constructors' score.
After the adjustments, Provo River Constructors had a score of 91.8; FSZ had a score of 90.8. The third bidder, Timpanogos Transportation Constructors, had a final score of 81.
"To us it was a no-brainer. This was absolutely the right contractor to select," said Njord.
But Njord said word had leaked out from the technical evaluation team despite each member having signed a confidentiality agreement that FSZ had won the support of the technical team and had the deal in the bag.
"Flatiron was ready to pop the champagne bottles when I called and told them they had lost. They were devastated," Njord said. "They felt like something was amiss. How could they not have won this contract?"
Njord said he met with FSZ representatives to try to resolve the disagreement without litigation, but the contractor wouldn't relent. Finally, Njord said he agreed that UDOT would pay FSZ's bid expenses so the project could move forward.
He defended that Wednesday as the right decision, saying it staved off potential delays that could have cost up to $70 million and potentially much more if FSZ had prevailed in court.
Rep. Steve Urquhart, R-St. George, a lawyer, expressed some skepticism about there being a long construction delay had the matter gone to court. More likely, he said, was that a judge would have allowed the work to proceed and allowed the parties to sort out monetary damage issues later.
Despite defending the settlement decision, Njord apologized to lawmakers for not having informed them.
"I should have come to this body, I should have come to the governor's office and made full disclosure to everybody," he said. "That was my mistake and we have some pretty significant allegations today as a result of mistakes I made."
Lee Davidson contributed to this report.
The I-15 bid
Utah Department of Transportation records show that several technical teams' evaluations of three bids favored the firm of Flatiron/Skanska/ Zachry. But a selection committee made up of agency managers and budget officials overruled the technical teams on several categories and adjusted scoring in favor of Provo River Constructors, the company that ultimately was awarded the $1.1 billion contract.