The state Department of Transportation has declared the Highway 99 tunnel team to be in “material breach of contract” because of barriers to participation by small, minority-owned contracting firms.
The DOT threatens sanctions unless Seattle Tunnel Partners (STP) makes rapid improvement and the team leaders participate in meetings with DOT. Disadvantaged Business Enterprises (DBEs) led by minorities and women are supposed to receive 8 percent of the work, but as of last fall, by some measurements the rate was less than 2 percent, according to a scathing federal civil-rights review. The tunnel contractors are led by the U.S. arm of Spanish-based Dragados, and by California-based Tutor-Perini.
Lynn Peterson, the DOT secretary, released a letter Monday that recognizes efforts by STP to improve, but demands more.
What sanctions will mean is not yet clear. The DOT could exert leverage by reducing or delaying progress payments that STP periodically receives for tunnel work. Peterson mentions that as one option in her letter, which follows a state review by attorney Richard Mitchell.
STP has the leverage of already having a tunnel machine in the ground, and already collecting more than $700 million to date. The most extreme outcome, to switch prime contractors, could easily run up tens or hundreds of millions of dollars, and cause delays. Peterson writes that she would prefer collaboration to litigation. An excerpt:
Among other ideas, the state now recommends breaking contracts into smaller pieces so minority and women-led firms have a better chance to compete.
The federal investigation was prompted by a complaint by Elton Mason, owner of Washington State Trucking in Kirkland, who tried unsuccessfully to bid on a contract to transport excavated dirt. STP awarded the prime trucking contract to a larger company, Grady Excavating of Mukilteo, which DOT later disqualified from its DBE status. The KING 5 Investigators have aired several stories about failures in the minority contracting programs for Highway 99 and other projects. Although Initiative 200 forbids quotas in minority hiring, the tunnel job is one-third federally funded, and therefore subject to hiring goals under federal affirmative-action rules.
Mason vented his exasperation Monday at what looks to him like another round of process. Mason said he’s had two meetings recently with state DOT and STP, but not a job offer. All it should take is for Peterson to make a phone call and demand that Mason and other minority contractors be hired immediately, he said.
“That’s the way WashDOT operates. This is how they sneak by millions of taxpayer dollars, then ask for more. The governor needs to clean house. They’ve put people in power that don’t belong,” he said. “It’s like the contractors are running WashDOT.”
Chris Dixon, STP’s project director, has declined comment for weeks, and on Monday a spokesperson directed questions to state DOT. Recently, the team hired non-minority Hos Brothers Construction of Woodinville, whose trucking plan includes a minority subcontractor for a share of the work.
Bertha, the giant tunnel-boring machine, is currently stalled 60 feet underground, while workers try to find and remove steel pipe and other possible obstructions near the cutting face.