Conflict-of-interest rules are a part of the backbone of public works, eliminating potential corruption, holding down costs and helping to keep up public support. When public-works agencies stand by those rules, everyone benefits. The dispute and uproar over the light-rail extension project in Minneapolis is a good test of the significance of such rules, especially because, in this case, written rules were treated too casually.
Now, a long-planned transportation project is delayed, frustrating area commuters and giving the project’s skeptics in the state Legislature more topics to explore.
The dispute and uproar over the light-rail extension project in Minneapolis is a good example of what can happen when written rules are treated too casually.
Minneapolis’ Metropolitan Council, the regional transportation agency for the Twin Cities area, has admitted that, in previous projects, it was “remiss” in enforcing a clearly stated rule: subcontractors that participated in the design phase of some of its prior light-rail projects should not have been allowed to participate in the construction phase. The council certainly regrets that lapse now, but it probably was trying to benefit local companies—a good cause for a local transportation agency whose mission includes the economic well-being of the region—while keeping as big as possible the pool of bidders for the construction work.
Then, last year, after facing numerous controversies over the 14.5-mile Green Line extension project, the council decided to enforce the conflict-of-interest rule. The council says it was mindful at the time of the federal funds backing the project. To be sure, the Federal Transit Administration abides by the federal rule prohibiting organizational conflict of interest. It states in part that, “in order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals shall be excluded from competing for such procurements.”
Unfortunately, some of the 36 design-phase subcontractors employed under the project’s engineer, AECOM, also had sought and anticipated roles in the construction bids, confident that the restriction would be overlooked again. When the bids for the project came in last August, the council determined that all the bids were too high and “nonresponsive” for failing to observe the conflict-of-interest rule.
To be sure, conflict-of-interest rules are not as simple to enforce as in the days before alternative project-delivery methods were widely employed. But this project was being done through design-bid-build. Interestingly, the unhappy subcontractors in Minnesota asked that their individual contracts be reviewed on a case-by-case basis, instead of all of them being swept into a single category as ineligible. The Florida and California departments of transportation do a good job of answering questions online about what is allowed. The Metropolitan Council can benefit from reviewing that content and Minnesota’s own guidance as it takes a more consistent approach.