Potential conflict of interest in Connecticut State Pier construction raises questions
The construction manager tasked with the redevelopment of the State Pier in New London recommended itself for almost $90 million in contracts. Lawmakers — and other contracting companies — want to know why.
WSHU’s Ebong Udoma spoke with CT Mirror’s Andrew Brown to discuss his article, “Manager at CT State Pier recommended itself for $87M in contracts,” as part of the collaborative podcast Long Story Short.
WSHU: Andrew, the State Pier in New London has been developed to operate as a launching point for offshore wind turbines in the Atlantic. Why are lawmakers concerned that there's a potential conflict of interest there?
AB: What's been uncovered through some public records is, kind of the system and the management of how that new pier is being built. There's a company, back in 2020, it was selected to be the manager of the construction effort down there, which was going to be a multi-million dollar build. That company, called Kiewit, was also given the ability to essentially bid on subcontracts under the project. What our reporting shows is that the company is being paid to be the construction manager, and in doing so, they've also recommended themselves to the Connecticut Port Authority for five different subcontracts under the project, that are worth $87 million or so. This was kind of known within the Port Authority prior to these records coming out. But I don't think lawmakers fully understood how the bidding process worked down there, and who was holding the reins of that construction project. After I showed lawmakers some of these records, they said they had some questions in regards to how Kiewit came to be one of the primary contractors on that project.
WSHU: Now Kiewit submitted bids that were the lowest bids on these contracts? Is that why they ended up winning those bids for the subcontracts? Or what was the situation here? What did you find out?
AB: So in three of the five subcontracts that Kiewit won, they were the lowest bidder, according to the records that I reviewed. There were two instances however, for two contracts that were worth a combined $40 million, that Kiewit came in as the second lowest bidder on price. Yet, after reviewing all of the bids, Kiewit employees went to officials at the Port Authority, Department of Administrative Services and the State Office of Policy and Management and sought to convince them that the company that submitted the lowest bid, JT Cleary, would not be the best selection for those jobs. Kiewit, unlike other bidders in the process, had direct access to people at the Port Authority because they were the construction manager. Their job was to scrutinize and review the offers that were submitted by other companies. So it placed them in this kind of awkward situation in which they were telling the Port Authority to set aside another company's bid. And if the Port Authority did that, the primary beneficiary of that decision would be Kiewit itself. So they ultimately convinced the Port Authority to select them for those two contracts over JT Cleary, again, which was a 40 something million dollar win for Kiewit.
WSHU: What did JT Cleary do? Did they complain about this?
AB: Yes, JT Cleary in internal emails complained that Kiewit was essentially pushing them out of the project unfairly. They suggested that Kiewit was not negotiating in good faith with them to formalize one of the subcontracts. And as a result, JT Cleary’s president at the time actually withdrew the bids in protest, the two bids that they submitted. I tried to call that individual and he declined to comment for my story. But the emails clearly show that JT Cleary thought they were being unjustly terminated from the project.
WSHU: Now, what was the position of Kosta Diamantis at the time that this was going on? He was in charge of state construction, and he's under federal investigation right now. Was there any involvement? Was he involved in this in any way?
AB: The emails that I received from the Port Authority clearly show that Kiewit involved Mr. Diamantis in this decision making process. There are emails in which Kiewit employees essentially argued to Mr. Diamantis and other officials at the Port Authority that they were a better selection for this job, and they were ready to perform the duties of those subcontracts immediately if they were hired. I have no indication from the emails that I received whether Mr. Diamantis ever responded to Kiewit in writing, or how he handled that situation. I called him for the story that I wrote. And he directed me to speak with the Port Authority Chairman David Kooris.
WSHU: Now, what does the Port Authority have to say about this?
AB: They say everything was done fairly and by the rules, they gave Kiewit this ability. So it was legal to allow Kiewit to both be the construction manager and a subcontractor on the project. And they argue that Kiewit winning the bids was not a conflict of interest, because they also had another consulting firm by the name of AECOM that scrutinized Kiewit's decisions and recommendations and ultimately made the final recommendation to the Port Authority Board. So their argument is that there was essentially a second level of review being done on top of what Kiewit recommended.
WSHU: Could you just talk a little bit about how much more the project is going to cost than it had initially been estimated? And is that a concern for lawmakers?
AB: Yeah, this project has captured a lot of attention not just from federal investigators, but also from lawmakers. And the reason is, is because it was initially pitched to the public and to lawmakers as a project that would cost a little less than $100 million. And it has now increased to over $250 million, with potential for it growing even larger come December, when the Port Authority Board meets again. There are currently delays in building parts of this new State Pier, largely due to obstructions like large boulders that they are finding as they're trying to drive steel pilings down into the ground. And so those delays and those workarounds are from what the Port Authority said last month, are likely to see costs increase further.
WSHU: And in the meantime, the Port Authority says there is no problem with the process the way it is right now. What are we going to see going forward? There are some Republican lawmakers who are very concerned about this, what is likely to happen?
AB: I really don't know. I mean, there's likely to be discussion at the State Bond Commission, which is chaired by the governor and has Republican lawmakers who sit on it, and it would be a subject of debate there if the Port Authority has to come back in and ask for more money from the state. At the same time, Republican lawmakers are considering asking the State Contracting Standards Board, which has some oversight of the Port Authority, to ask them to take a look at Kiewit’s subcontracts to see if everything was done in conjunction with the purchasing rules and with state law.
WSHU: So the bottom line, there are concerns about how the State Pier project is being executed.
AB: I think that's an understatement, but yes.