Never toy with numbers

Wisconsin’s bid-rigging scandal should serve as a reminder of the negative impacts

Article March 16, 2004
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We should have left the word “Big” in the year 1988.

Tom Hanks certainly knew how to treat it. The word was funny, innocent and charming.
But Boston’s Central Artery/Tunnel project turned “Big” into a maniacal grizzly bear overnight. Since 1992, the “Big Dig” has turned in nightmarish receipts and has stirred up the kind of dinner conversation better served to the family dog.

Now word is the state of Wisconsin has caught a droplet of this doomsday infection. Executives from two highway construction companies—Vinton Construction Co. and Streu Construction Co.—have been charged with bid rigging on the Internet. So am I led to believe that this will be known as the case of the “Big Cheese?” If it is, you did not read it here first.

I wish this chunk of litigation were filled with holes, though. A federal indictment alleges the executives of the two lakeshore firms rigged bids and fixed prices for at least 30 construction projects totaling more than $100 million worth of work since 1997. As of press time, neither party was formally charged.

According to the Manitowoc Herald Times Reporter, a cooperating witness helped the FBI create the following laundry list:

• In late 1996/early 1997 the executives from both companies allegedly met and discussed upcoming highway projects. The cooperating witness was approached following a pre-bid meeting on the Appleton Airport. One of the executives told the witness he could have the Appleton job on the condition that the cooperating witness discuss future bids. The idea was to split them between the two companies;

• In December 2001 the cooperating witness approached co-workers to find out more information on bids, and it was noted for each project all of the paving work seemed to be going to Streu Construction Co.;

• In September 2003 the cooperating witness is confronted by the FBI and admits to being a member of an ongoing conspiracy to submit rigged bids involving highway construction projects let by the Wisconsin DOT and other bidding authorities;

• Over the next three months the cooperating witness met with executives from both construction companies to discuss upcoming projects, and on Jan. 8, 2004, the accused allegedly referred to their history of rigging bids.

The state of Wisconsin is now slipping in its own pile of fiscal mess. On Feb. 9, state Sen. Bob Cowles said he would introduce a bill that would improve financial oversight of key highway projects. The move is in response to an audit that documented cost overruns of up to 262% on certain projects. The bill requires closer accounting of environmental cleanup costs; demands that approved costly changes from design to construction be made public; requires a new annual report of costs on major rebuilding projects; and calls for a detailed list of what the state must pay for real estate it buys as it rebuilds highways.

America’s Dairyland is bellyaching over the effect of firing the two accused construction companies, saying it will disrupt road-building schedules. True, momentum has sprung a leak—but this ship needs to right itself.

The system needs a cleaning, and we’re talking the kind executed by a brush strong enough to clear radioactive spills. First, all projects linked to the black bids need to be re-issued to contractors second on the list. The state also should require Streu and Vinton to find jobs for the 800 employees who are now unfortunate victims of circumstance. And does this scalp the integrity of online bidding? Do all states require contractors to produce the same kind of paperwork during web competition as is needed for the more traditional method? Whatever the case, this greedy glitch must serve as a reminder of the importance of making sure all numbers add up.

But try as they might, the rotten will never reach the bunch in this industry. The contractors are better than that. They’re bigger than that.

About the author: 
Bill Wilson is editor of Roads & Bridges.
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