The big companies building the Highway 99 tunnel violated their contract by creating barriers to minority- and women-owned small businesses, a state review says.
Payments to Seattle Tunnel Partners could be reduced or withheld unless the firms demonstrate progress toward an 8 percent hiring goal for what are called disadvantaged business enterprises (DBEs).
“If there are not honest and open transactions with the DBE contracting community and with WSDOT (Washington State Department of Transportation), WSDOT reserves the right to proceed with sanctions,” state Transportation Secretary Lynn Peterson said in a letter released Monday.
She struck a more conciliatory tone in a phone interview, saying the contractors are cooperative, and they’ve found upcoming jobs that can bring minority-owned contractor participation to within $5 million to $6 million of the $91 million target.
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That includes an increase in trucking work, for which small companies can be recruited fast.
So far, Bertha’s progress has been delayed three months: by extra testing work in Japan last winter, by a waterfront labor dispute in August, and by a blockage in December.
However, DOT engineers say they can still meet the overall schedule, to open the four-lane tunnel to traffic between Sodo and South Lake Union in December 2015. On its best day, the drill advanced 58 feet, giving the team cause for optimism.
The pace must accelerate once a buried steel pipe or whatever else is blocking the machine’s path is removed. Seattle Tunnel Partners (STP) initially planned to remove excavated soil by barge, but trucking opportunities could increase if the team works extra shifts, or if drilling moves quickly.
“STP has indicated that as mining gets under way in earnest, it is likely that they will need to truck and barge spoils concurrently to keep up with output,” said state spokesman Lars Erickson.
Last fall, a federal civil-rights report put minority-contractor hiring at less than 2 percent, missing the 8 percent goal.
Initiative 200 forbids race and gender preferences by state and local governments, but the tunnel is one-third funded by federal grants, and therefore subject to federal affirmative-action rules.
STP is a consortium headed by the U.S. branch of Spain-based Dragados and California-based Tutor-Perini. Its project director, Chris Dixon, has declined to comment on the DBE investigations.
Peterson said that while Monday’s letter is serious, she thinks it won’t send relations between the state and the tunnel contractors spiraling toward impasse.
The tunnel consortium has already collected more than $700 million in payments, and owns the giant drill in the ground. The state has the power to withhold progress payments, or even end the contract — but such an extreme move would add delays and costs.
The federal civil-rights investigation was prompted by a complaint from minority contractor Elton Mason, owner of Washington State Trucking in Kirkland, who sought a contract to transport dirt.
Mason said Monday’s letter looks to him like another round of process.
“That’s the way WashDOT operates. This is how they sneak by millions of taxpayer dollars, then ask for more,” he said. “It’s like the (big) contractors are running WashDOT.”
Mason said he met tunnel managers twice this winter without a job offer. Mason said he’s moving some loads at a Highway 99 bridge project in Sodo, but that work ends next week.
The federal investigation found local minority contractors faced unnecessary barriers in bidding. For example, small truckers were told to obtain a performance bond, which federal investigators said isn’t normally required, and to file bids using a complicated software system.
The federal report said minority contractors must be used, even if that causes a modest cost increase.
Seattle tunnel executives had awarded a major trucking contract to a larger firm, Grady Excavation, which was later stripped of its DBE certification.
Recently, STP awarded a trucking contract to Hos Brothers Construction of Woodinville, which is retaining a minority subcontractor.
Nationally, the contractor programs have been under scrutiny for errors or fraud. The federal Transportation Department criticized itself in an internal audit that said $124 million in federal funds for women and minority contractors were misspent in 2009 by weak state and local programs.
Mike Lindblom: 206-515-5631 or firstname.lastname@example.org. On Twitter @mikelindblom