Louisiana's transportation secretary emphatically rejected on Jan. 31 AECOM's appeal of the award of the initial engineering services contract for one of the state's biggest projects to Atlas Technical Consultants, a company owned by Bernhard Capital Partners Management LP.
It is the Baton Rouge-based private equity firm whose founders include former Shaw Group leader James Bernhard Jr.
The project, conceived several years ago and still in its early phases, is planned as a P3 to construct a new Mississippi crossing at Baton Rouge.
Formally known as the LA 1 to LA 30 Connector, the project had an initial pricetag of $1 billion without rail and $2.8 billion with rail, according to a feasibility study completed several years ago. The exact location of the bridge remains undetermined. Financing is not yet in place, either.
Last July, the Louisiana Dept. of Transportation and Development advertised for an engineering and related services contract for the project with a total value of about $2.5 million but possibly higher.
According to the Greater Baton Rouge Business Report, the three finalists for the contract included Atlas Technical Consultants, AECOM and Michael Baker International.
The department's technical team recommended the award go to AECOM, but the transportation secretary picked Atlas.
AECOM appealed last month to the department. According to accounts of the appeal obtained by the Business Report under a freedom-of-information request, AECOM scored higher than Atlas on 10 of 12 evaluation criteria and tied it on another factor.
"In most cases," the Business Report quotes the appeal's argument, "the scoring was not even close."
According to the Business Report, AECOM's appeal stated that it had scored 8.1 to Atlas' 5.1 in in the category called "understand the project," and held similar scoring advantages in the areas of project approach methodology and traffic model development.
But AECOM's workload and backlog of Louisiana projects weighed against the company, with AECOM earning a score of 4 to Atlas' 4.67 in the category "work load."
AECOM's existing state workload and backlog figured prominently in state Transportation Secretary Shawn D. Wilson's rejection of AECOM's appeal. Partly because the Capital Area Road and Bridge District in Baton Rouge had "expressed the desire for interaction with the consultant and project manager that rises to a level greater than the traditional project," he wrote, Wilson preferred Atlas to AECOM.
The choice of engineer also depends on more than technical factors, Wilson emphasized. In this case, he said the project magnitude and unique working relationship between the public sector and the consultant "cannot be discounted."
"While the law gives me latitude concerning the shortlist, I do not make these decisions arbitrarily or within a vacuum," Wilson wrote.
The technical evaluation by his department is not definitive in making a selection. "A selection that differs from a technical evaluation is not required to be a validation of their score, nor a criticism of the team's assessment, but instead it is an expression of the circumstance that I value in a specific selection," he noted.
Wilson said that "the integrity and trust in our process is evident by the fact that only three selections have been appealed in over four years of billions of dollars in selections."
The Capital Area Road and Bridge District is comprised of seven commissioners. Five represent the Baton Rouge area's different parishes. There is one designee from the state Dept. of Transportation & Development and another appointed by the state governor.
Baton Rouge badly needs infrastructure upgrades. A separate organization, MOVEBR, has been advocating for infrastructure improvements in East Baton Rouge.
According to the Business Report article, there was no outward suggestion of favoritism in the state's selection of Atlas for the planned bridge project. Bernhard has been an influential business leader in the area for decades and is well known throughout Louisiana.
On the website for Atlas, the company, which is based in Lafayette, La., says it has greatly expanded since it was founded in 1982.
Bernhard's investment company led a group that acquired Atlas in 2015. Three years earlier the company had been part of Australia-based design firm Cardno, but the Atlas website states, "we broke from Cardno" and were acquired by the group led by Bernhard Capital Partners "to serve as the core of its environmental services portfolio."
The company states that it currently has 1,900 employees and 115 office locations.
Los Angeles-based AECOM (ACM-NYSE) had $11.2 billion in 2018 revenue. It is reported to be in merger talks with Canada-based WSP Global, another huge engineering services company.
This story was corrected Feb. 12 to indicate that Atlas Technical Consultants, and not ATC Group Services, which Atlas owns, won the bridge engineering contract.