The chief executive of an engineering firm that has done work on light rail projects admitted the situation was  awkward.

Jon Carlson, the head of Braun Intertec, was among the construction-related firms that went before a legislative committee on Wednesday to complain about his company’s biggest client. Specifically, Carlson and other contractors were asking the commission, which provides oversight to the Metropolitan Council, to reverse a decision that had disqualified them from working on Southwest Light Rail Transit construction.

That decision — which the Met Council attributed to federal and state bidding rules — cut 36 companies out of the biggest part of the $1.858 billion project, the largest public works project in state history.

“Those of us on this panel come before you today with no small amount of trepidation,” Carlson told members of the Legislative Commission on Metropolitan Governance. “It’s not something that we take lightly when we rather publicly have a dispute with one of our clients.”

Unlike many of the Republican House and Senate members on the commission who think Southwest LRT  is a waste of money, the contractors definitely want it built. After all, the largest chunk of the project, known as the civil construction contract — with 27 miles of track, 15 stations, eight park and ride facilities, seven surface lots, a parking ramp, 117 retaining walls, 29 bridges, six pedestrian tunnels, two tunnels — is worth somewhere in the vicinity of $750 million.

So bringing the complaint to the Legislature, where it might be used by some as another reason to halt the project, had its risks. But unless the Met Council changes its position on the bidding rules, Braun Intertec and 35 other companies won’t be able to bid on the civil construction contract. That’s because they had helped the construction company AECOM do the engineering work to design the project, which the Met Council believes might give them unfair advantage in bidding on construction.

Can’t force Met Council to change decision

The dispute goes back to a decision by the Met Council from last summer to reject all four bids for light rail construction. Not only were the bids too high — although the council hasn’t revealed by how much— they were considered “non-responsive” because all of the bids included at least one of the 36 subcontractors that had helped AECOM design the project.

David Oxley, who as the executive director of the American Council of Engineering Companies represents engineering industry at the statehouse, said the firms think the Met Council is misapplying federal and state conflict of interest rules.

If a subcontractor did work to create bidding documents or developed other information that would help its team win the construction contract, they might have a conflict, Oxley told the commission. But most of the firms on what he termed the Met Council’s “blacklist” did work that does not present a conflict. One firm, for example, did soil testing and turned that information over to all of the potential bidders to help them design their bids. That would not have been considered a conflict under previous Met Council megaprojects, such as the Green Line project between Minneapolis and St. Paul, Oxley said.

Oxley’s argument was echoed by Sam Diehl, an attorney representing the state Association of General Contractors, who said the Met Council is misreading federal rules and state bidding law. “It violates the regulations, and it violates common sense,” Diehl said.

Ann Johnson, president of Professional Engineering Services, said that she and her 10 employees monitor and test the work done by contractors to make sure it meets contract specifications. The company did work on both the design and construction phase of the Green Line without being disqualified, but not Southwest LRT. “I was dismayed to find us on the list of disqualified contractors,” Johnson said. “We need Met Council work for our firm to be viable.”

Met Council officials told the commission that while the council was sympathetic, it still thinks it is following federal guidance that was stiffened in 2015 to assure that contracts are without bias. Mary Bogie, the chief financial officer of the Met Council, told the commission the council has tried to err on the side of caution so as not to risk the project or the $900 million match expected from the Federal Transit Administration.

Bogie said the council staff and AECOM were clear with subcontractors that working on the design phase would prevent them from working on the construction phase. “We feel we communicated that early and often,” she said. And she disputed claims by the contractors that the rules have lessened competition for future work and opened the door for more out-of-state firms to get the work.

So what happens now? Members of the commission of both parties wondered if there was a way to work it out so as to protect the in-state firms who have been disqualified. The problem is that other than passing a resolution expressing the commission’s opinion, there doesn’t seem to be a way to force the Met Council to change.

Vibrations at Calhoun Isles

The same dynamics were in play when the commission took up a second complaint about Met Council, this one from owners of a condominium adjacent to the tunnel being planned for Southwest LRT in south Minneapolis. In this case, Democratic lawmakers are as upset at the Met Council as some of the anti-rail Republicans. Yet after hearing from residents, their lawyer and an engineer, the project director of SWLRT did not seem willing to do what owners of the Calhoun Isles building want: undertake a study to show how construction and operations will impact their homes.

The building was converted from a historic grain elevator and is located at the point where the Kenilworth Trail meets the Midtown Greenway near Lake Street. Owners suffered damage when a nearby apartment complex was being built, and they later reached a settlement for those damages. They fear the same could happen due to construction of Southwest LRT, which will run underground just feet from the building’s foundation.  

Met Council staff believes the expected vibrations from using a less intensive method for placing piles will be tolerated by the building and says additional study will not be able to replicate stresses from a tunnel buried in the ground. Jim Alexander, project director for SWLRT, said the staff has agreed to do pre-construction testing, install meters to measure vibrations during construction and respond if the construction and rail operations exceed limits.

But the state Senator who represents the building’s residents in the Legislature, Scott Dibble, remains frustrated at what he considers the Met Council’s stubbornness on the issue, terming staff’s reaction to his and Rep. Frank Hornstein’s concerns the “stiff arm.” The two Minneapolis Democrats have backed the residents in their request for a study, and Dibble said he doesn’t understand why Met Council wouldn’t do the study; why the staff is so confident they’re right; and so unwilling to consider the consequences of being wrong.

“I am as frustrated as I’ve been all along,” Dibble said.

But as with the conflict-of-interest rules, without legislation there is little the commission can do to address the issue outside of expressing its concerns. And when Dibble and Hornstein tried to pass such a demand last year, it was taken out of the transportation omnibus bill at the insistence of Gov. Mark Dayton.