Denver city and county officials say they are moving quickly to determine exactly what happened and exactly who’s responsible for “tainting” the proposal process on a $233-million expansion of the Colorado Convention Center. The project will add a ballroom and a rooftop terrace, renovate the lobby, and upgrade the center’s technology.
The city shut down the contractor selection process in early December and terminated a $9-million contract with Dallas-based developer Trammell Crow, its program manager on the job, alleging that project documents were wrongly released to one of the contractor finalists. City officials also said that “improper discussions about the bidding process” took place and that project plans may have been altered.
Trammell Crow released a statement shortly after its termination, saying, “We are cooperating fully with the City and are conducting our own internal investigation. We will take internal actions as the results of our investigation dictate, including appropriate disciplinary measures.”
Trammell Crow confirmed that it has terminated an unidentified employee because of improper communications with a bidder. Long-time Senior Vice President Mike Sullivan’s contact information and bio were suddenly erased from the firm’s website this month.
In a letter posted on the city’s website on Dec. 11, Denver Mayor Michael Hancock wrote, “I was fully briefed by the City Attorney and her team yesterday. We believe this is a significant breach of the public trust and a willful violation of a competitive bidding process. We will never tolerate this type of behavior from our contractors and will continue to address this swiftly and aggressively.”
The city attorney has since asked the Denver District Attorney’s office to investigate the process, which was “irreparably compromised by non-city participants.” The city was preparing to interview finalists Hensel Phelps Construction, PCL Construction and Mortenson Construction when it uncovered the improprieties.
For now, the focus has been on alleged information sharing between Trammell Crow and Mortenson. Mayor Hancock told Denver’s CBS4 that communications between the firms were “brazen.” They were “clearly violating the rules of competitive bidding,” he said.
The city did not offer further details about the allegations, nor have prosecutors charged or indicted any of the companies that may be involved.
However, Dan Johnson, president and CEO of Mortenson, told ENR via email that the company’s internal investigation is ongoing. He also said, “We have confirmed there were communications, initiated by Trammell Crow’s lead representative, with Mortenson team members that clearly were not appropriate when part of a public procurement. Those communications are unacceptable to Mortenson.”
Johnson did not elaborate on the nature of the communication but added, “We take these allegations very seriously and pledge our cooperation with the city or other authorities. … Further steps will be dependent on the conclusions of our review and will include additional training for public procurement.”
The city is requesting a review of Mortenson’s prequalification status for bidding on projects. The mayor said in his letter that Denver also will “seek legislation to enhance the scope of the city’s debarment ordinance.”
That would require action by the city council, according to City Attorney Kristin Bronson, who told ENR that the city must now “restart the design-build portion of [the procurement] process.” The process entails hiring a new program manager, reissuing the RFP and selecting a short list of finalists. “The process has been damaged here, and we need to mitigate those damages,” she says.
Mortenson said by email that no “bid rigging” has occurred. “The contractor selection process for the Convention Center Expansion project was a proposal process, not a bid process,” Johnson said. “Thus, in contrast to some erroneous reports, there has been no ‘bid-rigging.’ ”
But Bronson says that Colorado state statutes define bid rigging “as any knowing participation in a selection process that involves cheating. It’s still bid rigging if that happens,” she says.
“We had sufficient evidence to terminate the program manager contract for cause and to review the prequalification status of Mortenson, and that process is moving forward,” Bronson says.
She says that it could take months to hire a design-build contractor.
Construction on the convention center expansion was slated to begin next year, with completion targeted for late 2022. The city has not yet established a new timeline for the project.