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Low Bid Joint Venture Team Files Lawsuit Against MSD in Deer Creek Tunneling Project

in Companies/News

The low bid joint venture team originally awarded a $145.3 million Metropolitan Sewer District (MSD) tunneling project is suing the sewer district for rescinding the award of the project and inexplicably awarding it to the second lowest bidder.  The civil lawsuit was filed May 8, 2017 in St. Louis City Circuit Court by Jay Dee/Frontier-Kemper (JDFK) Joint Venture and by two taxpayers, Eugenia Jones and Peter Pfeifer.

MSD’s professional staff awarded the Deer Creek tunneling project to JDFK as the lowest, responsive, responsible bidder on two separate occasions.  During this process, MSD’s staff, including its executive director, denied multiple protests by the second lowest bidder, SAK Construction, LLC (SAK), and repeatedly concluded that the award of the project to JDFK was proper.  Among other things, MSD concluded: “SAK did not submit the lowest and best bid, but rather it was Jay Dee that submitted the lowest and best bid and met all bid requirements, and therefore, the award in Jay Dee’s favor was appropriate and will stand.”

But, in a series of unexplained decisions, MSD’s board of trustees refused to confirm the contract with JDFK for the project.   As a result, MSD rescinded the award to JDFK and on April 19, 2017 awarded the project to SAK, whose bid was $2.5 million higher than JDFK’s bidJDFK’s protest and appeal were unsuccessful and MSD refused to provide any reason for the board of trustees’ refusal to confirm the contract with JDFK for the Project.

“MSD still hasn’t explained why it rescinded our contract which was based on a thoroughly vetted and validated bid by MSD’s professional staff,” said John DiPonio, vice president of Livonia, Mich.-based Jay Dee Contractors, Inc., one of the joint venture partners.  “We build all over the country and the lack of accountability by MSD in its bidding process is astounding.” The other partner in the JDFK joint venture is Evansville, Ind.-based Frontier-Kemper Constructors, Inc.

The lawsuit alleges that MSD acted in an arbitrary and capricious manner in refusing to confirm the contract with JDFK and asks the court to rescind the notice of award to SAK and instead award the project to JDFK.  The lawsuit also seeks injunctive relief to prevent MSD from taking any steps in furtherance of the award of the project to SAK, including but not limited to precluding MSD from voting to confirm the contract with SAK at a May 11, 2017 MSD meeting.

The JDFK joint venture was one of several contractor teams that invested countless hours to get pre-qualified with MSD and subsequently bid on the Deer Creek Tunnel project.  JDFK was awarded the contract last September after presenting a highly detailed bid that met all of MSD’s specifications including business and workforce diversity, use of a highly skilled and safe workforce, pricing, technical skills and more.  JDFK’s bid was $145.3 million or $60 million below the MSD engineer estimate and $2.5 million less than SAK’s bid.

The Deer Project is one of eight tunneling projects in MSD’s $4.7 billion Project Clear.

Jay Dee Contractors, Inc. (www.jaydee.us) has more than 50 years of experience in proficiently delivering heavy underground tunneling work.  Frontier-Kemper Constructors, Inc. (www.frontierkemper.com) traces its roots to 1907 and is equally proficient in national infrastructure projects.

The civil lawsuit filed in St. Louis City Circuit Court is Case No. 1722-CC01259.

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