|McCORMICK PLACE Jacobs won contract illegally, prosecutor says. (Photo by Tudor Hampton for ENR)|
The signature moment in the U.S. attorneys bid-rigging case involving the McCormick Place expansion in Chicago occurred in Sept., 2001, when Jacobs Facilities well-connected Chicago lobbyist told the firm that she had learned the prices submitted by Jacobs competitors for the construction management contract.
"Ive got the numbers," or words to that effect, is the way lobbyist Julie Starsiak informed the head of Jacobs Facilities Chicago office, James Nagle, that she had learned about the price proposals made by Jacobs competitors, according to Nagles plea agreement with federal prosecutors. The message was delivered in a phone call and the information allowed Jacobs to revise its price below that of its competitors.
At that time, Jacobs was on a short list with three other companiesEarth Tech, Bovis Lend Lease and Tishman Realty & Construction Co.to act as construction manager for a fee on the $850-million expansion. One of those firms had submitted a low bid of $12.9 million and McCormick Place officials later allowed second-lowest-bidder Jacobs to revise its price from $18.8 million to $11.5 million. Nagle "received authority through his supervisory chain" to revise the price and said it was based on a eview of contract scope, prosecutors claim.
Nagle and another senior employee in the Chicago office of Jacobs Facilities Inc., a St. Louis-based unit of Jacobs Engineering Group Inc., pleaded guilty earlier this month to making false statements in connection with the investigation into the alleged bid-rigging scheme (ENR 3/15 p. 7). The Metropolitan Pier & Exposition Authority, which operates McCormick Place, terminated Jacobs contract Feb. 11, the day after the indictments were unveiled.
All of Jacobs subcontractors subsequently have been invited back to the project, says Billy Weinberg, the authoritys communication director. He says the authority will seek to recover from Jacobs "on several levels" for the cost of hiring a new construction manager.
Nagle, reached by phone, declined to comment and referred questions to his attorney, who could not be reached for comment.
In addition to Nagle, federal prosecutors last month charged the authoritys former chief executive, Scott Fawell, who currently is serving a prison sentence on separate charges. Also charged were the Ronan Potts LLC lobbying firm and Starsiak, a former officer. She represented Jacobs and prosecutors say her role was to get inside in-formation on the contract from Fawell and his assistant in exchange for her firm providing them with meals, golf, entertainment and vacations.
Fawell is an associate of former Illinois Gov. George Ryan (R), the main target of the federal probe. An associate of Fawells was a principal in Ronan Potts. From the time the lobbying firm was formed in 1998 until July 2001, Jacobs Engineering Inc. paid the firm $4,000 a month and in November 2002, increased the fee to $6,000.
Warren Dean, Jacobs group vice president, declines comment on whether Jacobs often hires lobbyists in negotiated procurements, but says the company sometimes hires consultants. He says Nagle, who no longer works for Jacobs, pleaded guilty solely to lying during the probe and that political officials, not Jacobs, were the focus. The tips Jacobs received did not break any state or federal law and "weve been cooperating with federal authorities," says Dean.