The Connecticut Auditors of Public Accounts are flagging practices used during the ongoing construction of the State Pier in New London in their latest report.
Among the highlighted concerns is Kiewit Corporation – which was chosen as the project’s Construction Manager-at-Risk (CMR) – awarding itself multiple subcontracts totaling more than $89 million. Under that practice, Kiewit determined each subcontract’s scope and requirements and assessed the proposals submitted. They were then tasked with recommending bids to the Connecticut Port Authority and its designated administrator.
A 2022 investigation from the CT Mirror found that of the contracts Kiewit had awarded itself, it was not the lowest bidder. The criteria for awarding contracts was based on price as well as qualifications and responsibility. According to the audit report, the Construction Administrator agreed with Kiewit’s assessments of themselves and other bidders and the Port Authority signed off on the decisions.
The report does not go so far as to judge whether these were the best decisions. Instead, it notes that allowing the CMR to bid on its own subcontracts risks creating an unfair environment for other bidders. This is not only because the CMR is potentially able to skew the award process toward itself, but because the CMR sets the criteria for the award.
The report also notes that while there are laws on the books in Connecticut to keep this from happening on projects at the University of Connecticut and the Department of Transportation, no such statutes exist for quasi-public agencies like the Connecticut Port Authority.
Among its recommendations, the Auditors suggest that in the future, for subprojects where the CMR is allowed to bid against other companies, a separate entity should set the criteria for the bid packages. According to the report, the Port Authority has agreed to re-evaluate its practices to better delineate responsibilities to “avoid any appearance of conflict.”
Additionally, the report found that the Port Authority did not properly submit required quarterly reports. The CPA, in its response, noted that it had been subject to financial oversight by the Office of Policy Management (OPM) and that OPM hired outside consultants to assist with on-site financial management. Quarterly reports were not properly submitted for fiscal years 2021 and 2022, but CPA stressed that they did submit independent annual reports.
The Port Authority has been under intense public scrutiny for the past few years as a result of the ongoing State Pier construction. The project, which is intended to build out the pier to heavy lift capacity to be used to assemble and ship wind turbines for offshore wind, has faced an increasing price tag which now sits at over $309 million. Most of that funding has come from the state, with about $100 million coming from private investments.
The Port Authority has argued that most of the price increases came as a result of unforeseen costs and construction setbacks. Most recently CPA Chairman David Kooris told the State Contracting and Standards Board that the project encountered “deep obstructions” which had to be removed or bypassed.
During that June meeting, Kooris stated that the project was 70% completed and that he did not foresee additional price increases.
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