The Denver office of Mortenson Construction will pay the state of Colorado a $650,000 fine and donate construction services for a coronavirus-related project, all to settle a suit that arose from allegations of bid rigging on the Colorado Convention Center Expansion project more than a year ago.
The settlement, which totals more than $1.3 million, was announced by Colorado Attorney General Phil Weiser on April 13.
As part of the agreement, Mortenson must provide all services—including construction management, materials, labor and the cost of specialty trades—for a COVID-19-related project in the state, perhaps a hospital rehab or a medical facility upgrade. The agreement does not specify the project.
The settlement says that the contractor's donated services must be worth at least $650,000 and be completed at no cost to the city or the state. Mortenson’s officers and employees implicated in the alleged bid-rigging scheme must be actively involved in the management and work on the COVID-19 project.
Since December 2018, the attorney general’s office has been investigating whether Mortenson violated the Colorado Antitrust Act in its pursuit of a $233-million rooftop expansion project at the convention center.
The AG’s office said in a statement it had “uncovered strong evidence that employees from Mortenson and Trammell Crow, the city’s program manager, exchanged non-public and confidential information” about the project and its procurement—information that was not shared with other bidders.
AG Weiser alleged that the exchange of information violated the Colorado Antitrust Act.
“The communications between Mortenson and Trammell Crow were improper and gave Mortenson an unfair advantage in the competitive bidding process for the Colorado Convention Center expansion project,” Weiser said in his April 13 statement. “The silver lining is Coloradans will benefit from additional resources to respond to needs we have from the COVID-19 pandemic in our state.”
Denver was forced to cancel the initial procurement for the convention center expansion, and the city says the subsequent rebidding process has resulted in undisclosed costs and a substantial delay.
“The integrity of our procurement process is critical to ensuring the public’s trust that their tax dollars are being invested in a manner that is completely above board and for the public’s benefit,” said Denver Mayor Michael Hancock in a statement.
The settlement also requires Mortenson to establish an internal compliance program and disclose the existence of an agreement when it bids on any public projects in Colorado for a period of two years.
Company leaders must make an annual presentation on ethics at a Colorado college or university and complete corporate social responsibility training.
In addition, Mortenson must boost its efforts to work with Minority and Women-Owned Business Enterprises on public projects in Colorado.
Mortenson did not immediately respond to requests for an interview about the settlement but issued a statement from company president and CEO Dan Johnson, which said, “While we have resolved the Colorado Convention Center matter with the Colorado Attorney General without adjudication or finding of liability, our involvement in this matter was neither consistent with who we are as a company nor our longstanding reputation. Simply put, we did not meet our own expectations,” he said.
“Striving to do the right thing means learning from times when we may fall short. We are committed to the assurances outlined in our agreement and have made several changes to our compliance and training programs as a result. We will also share the lessons we’ve learned with others in our industry,” Johnson said.
The agreement resolves all civil and criminal disputes between the attorney general’s office and Mortenson. However, the AG’s investigation into Trammell Crow and its role in the convention center expansion process is ongoing.