MSD Board Set To Award $150 Million Tunnel Project To Second Lowest Bidder

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Would Cost $2.4 Million More 

By: Steph Kukuljan, Reporter, St. Louis Business Journal

The Board of Trustees of the Metropolitan St. Louis Sewer District is set to give final approval this evening to the second-lowest bidder on a controversial tunnel project that will cost $150 million. The second-highest bid is $2.4 million more.

The controversy has gone on since last year when the MSD board rejected the lowest bid of $145,300,000 for a large underground tunnel to be constructed from Clayton to Shrewsbury. The sewer district board is instead going to approve a contract with the second-lowest bid of $147,700,000. It gave preliminary approval last month.

The lowest bid for the tunnel project came from a joint venture of Jay Dee Contractors Inc. of Michigan and Frontier-Kemper from California. The second-lowest bid is from SAK Construction of O’Fallon, Missouri.

Jay Dee then filed a lawsuit against MSD, claiming the board acted in an arbitrary and capricious manner in denying them the contract. The St. Louis Circuit Court ruled against the firm. It isn’t known if the ruling will be appealed.

A second lawsuit against MSD was filed yesterday by A.L.L. Construction, a minority contractor in the Jay Dee bid, alleging MSD had it removed from the bid in retaliation for the firm’s owner questioning the district’s minority contractor program.

A contract for SAK is on the agenda for final approval at tonight’s MSD board meeting.

Tom Sullivan of University City told the board at its June meeting: “Other than giving the contract to the lowest bidder, your only course of action is to reject all the bids and re-bid the project.”

Sullivan also quoted the MSD Charter to the board in the section titled, “Competitive bidding.” It states: “All bids may be rejected. Except for such right of rejection . . . the purchase or contract must be let to the lowest responsible bidder.”

Outside influence caused the board to reject the lowest bidder and go with the second-lowest bidder, said Sullivan. He has been saying a prime suspect is County Executive Steve Stenger. Sullivan noted that trustee Michael Yates changed his initial vote on the tunnel project, from supporting to opposing the contract with the lowest bidder, which killed it.

Yates was just nominated last week by Stenger to the board of commissioners of the Bi-State Development Agency.

The contract came up for preliminary approval at the December 8, 2016 board meeting and was rejected by a 5-1 vote with no discussion. That was surprising as just a single “no” vote is a rare occasion at sewer district board meetings. Rejecting an agenda item is rarer.

The reason for the 5-1 vote was supposedly a problem with a minority subcontractor, A.L.L. Construction, that SAK claimed was not qualified for the work. The contractor was then replaced – which was highly unusual.

The contract came up again at the February 9 meeting this year for preliminary approval. It was approved by a majority of the board with a 3-2 vote. However, for final passage a proposed ordinance requires two affirmative votes from both St. Louis and St. Louis County trustees.

The absent board member, Rev. Ronald Bobo, is a county trustee. It appeared he could have the deciding vote when the contract came up for final approval as one county trustee voted for the contract, one did not.

In addition to the Rev. Bobo, other county trustees are Michael Yates and James Singer. Trustees Yates and Bobo were appointed by County Executive Steve Stenger; Trustee Yates was appointed by County Executive Charlie Dooley.

City trustees are Ruby Bonner, James Faul and Ruby Bonner. All were appointed by Mayor Francis Slay.

The contract came up for final approval at the April 13 board meeting. It was standing room only in the board room. Representatives of the NAACP, MoKAN, civil rights organizations and minority contractor organizations and their workers pleaded with the board to approve the Jay Dee/ Frontier contract. But it was defeated on a 3-3 vote.

The Reverend Bobo voted in favor but board member Michael Yates switched to a no vote. The two county trustees voting no killed the contract. Two city trustees voted in favor; one voted against.

Michael Yates initially refused to say why he switched his vote. He told the Post-Dispatch: “I have my reasons and that’s all I’m saying.” A city trustee, Ruby Bonner, told the Post she is not prepared to make a public statement.

“One thing for sure – the contract could not have been rejected unless one or both appointing authorities agreed,” said Sullivan. “If both Stenger appointees would have voted for the lowest-bid project, it would have been approved.” 

The Deer Creek Sanitary Tunnel Project is part of the $4.7 billion of projects the sewer district must do to meet clean water regulations.

The public portion of this evening’s MSD board meeting will be at 5:00 p.m. at MSD offices, 2350 Market Street in downtown St. Louis.

Tom Sullivan has followed MSD operations for a number of years. His tracking of payments to a former MSD general counsel led to a 23-count federal indictment for fraud, theft, tax evasion, etc. The counsel was sentenced to nearly four years in prison

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