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Suit Takes Aim at Low Bidder’s Deadly Record

Monday, December 13, 2010

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Should a low bidder’s blemished safety record weigh against its being awarded new contracts? Yes, says a Connecticut contractor that is suing to gain a contract lost to a competitor involved in seven deaths in the last year.

The lawsuit, by SDE Interchange Joint Venture of Secaucus, NJ, seeks to block the Connecticut Department of Transportation from granting the contract for a highway interchange project to O&G/Tutor Perini Joint Venture because of O&G’s part in the catastrophic Feb. 7 Kleen Energy plant explosion in Middletown, CT.

On Oct. 13, the state DOT accepted a $356 million bid by O&G Industries Inc., of Torrington, CT, and Tutor Perini of Sylmar, CA, to reconfigure the interchange of Interstates 95 and 91 and Route 34 in New Haven.

The O&G bid was nearly $23 million lower than the $378.99 million estimate submitted by SDE and well below estimates of $500 million to $600 million for the job, The Hartford Courant reported.

3 OSHA Cases

On Oct. 21, DOT requested O&G’s presence at a “responsibility meeting” on Oct. 25 to discuss the Kleen Energy disaster and the implications for O&G.

As part of its 60-day bid-certification process, DOT also studied O&G’s safety record. The agency eventually reported that the company met the requirements of the law, although it has three “open” Occupational Safety and Health Administration citations: two for Kleen Energy and one for a fatality at Quinnipiac University. In that case, an O&G worker was killed in November 2009 when a forklift backed over him.

The contract was formally awarded Dec. 3. The work is scheduled to begin in June and run until 2016.

Kleen Energy Disaster

In August, OSHA issued 117 willful, 22 serious and three other-than-serious citations and proposed penalties totaling $8,347,000 against O&G, which was the general contractor building the Kleen Energy Systems LLC power plant when a natural gas explosion killed six workers and injured 50 others.

OSHA held O&G most responsible in the disaster. In all, the agency issued 370 citations and proposed $16.6 million in fines to 17 companies on the site. The fine was the third-largest OSHA had recommended in a single accident, reports said.

The explosion occurred during a gas blow operation—a highly risky procedure that OSHA has criticized but has refused to ban. In the operation, natural gas was being pumped under high pressure through new fuel gas lines to remove debris while welding was being performed nearby.

OSHA said the employers “blatantly disregarded well-known and accepted industry procedures and their own safety guidelines in conducting the gas blow operation in a manner that exposed workers to fire and explosion hazards.”

At Issue: Contract Discretion

The case is still pending, and, while it is, should disqualify O&G from receiving this contract, SDE contends.

SDE’s lawyer, David Weiss of East Haven, said in a Superior Court hearing last week that state law prohibited the awarding of a contract to a company “which has been cited for three or more willful or serious violations of any occupational safety and health act … during the three-year period preceding the bid … and not abated … and (not) set aside,” according to The Middletown (CT) Press.

Assistant Attorney General Nancy E. Arnold said the suit should be dismissed because the law on which it is based refers to contract awards, not bids, and because O&G is contesting the citations, The Press reported.

If a contractor was unable to win a contract until the OSHA appeal process was complete, “we’d be putting companies out of business left and right,” Arnold said, according to the newspaper.

Arnold argued that the state had discretion in awarding such contracts; SDE says it does not.

Superior Court Judge Angela C. Robinson asked what would happen if O&G won the contract and then OSHA ruled the company had not abated the violations. Arnold said DOT “then would look at that very carefully and decide whether or not to terminate the contract.”

Weiss argued that there would be “immeasurable harm to the public” if O&G were to start work and then its contract be ruled void. “Once the contract has been awarded, a whole set of negative events can transpire,” Weiss said, according to The Press.

‘Give Me a Break’

In a letter to DOT dated Oct. 21, State Sen. Edith Prague, D-Columbia, co-chairwoman of the Labor and Public Employees Committee, called it outrageous that O&G would be considered for the interchange project.

“Give me a break,” she told the New Haven Register. “They have to have some sense. They have to have some common sense,” she said of the DOT.

Prague said a bill introduced last year, but not voted on, would have banned companies with poor records from being prequalified for state contracts.

She said the issue came up when Barr Co. of Putnam, MA, was given a $1 million contract to rebuild the Comstock covered bridge over the Salmon River in East Hampton, despite being disqualified by the state of Massachusetts.

“Somebody should step in and say, ‘Wait a minute here. Do we want a company that has had 100 OSHA violations doing this kind of work?’ Where is the oversight here?” she said.


Tagged categories: Construction; Contractors; Fatalities; Health and safety; Lawsuits; OSHA

Comment from Tom Schwerdt, (12/14/2010, 8:33 AM)

The ability to have this type of oversight or disqualification has to come through legislation. Under current laws, most agencies must follow low-bid.

Comment from Gregory Stoner, (12/14/2010, 1:28 PM)

Lowest responsible bidder is what we usually see. Unfortunately most agency's are afraid of possible litigation. Maybe this will help agency's do the right thing and look at the whole picture.

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