HARTFORD – As the Connecticut Port Authority prepares to ask the state for additional money to finish its $255.5 million (and counting) New London State Pier redevelopment, lawmakers are once again trying to rein in the quasi-public agency’s controversial methods for contracting work.
Despite public denials by authority officials, it’s been clear since at least October that construction setbacks in transforming the pier into a heavy-lift platform capable of handling offshore wind turbines would raise the cost of the project beyond the funding that was budgeted.
Connecticut Port Authority Chair David Kooris also admitted to Hearst Connecticut this month that the authority would likely ask the state for additional money, after promising lawmakers last May when they approved another $20 million in bond funds for the project that it would be the “final tranche” of funding they would ask for.
About $353,000 of the $255.5 million of funding for the project remained in October, a number that the authority says remains the most current figure for the project.
Eversource and Ørsted have deflected in the past questions regarding their willingness to offset the rising costs beyond their initial $75 million investment in State Pier. When completed, the pier is expected to be a hub for their offshore wind partnership to ship out wind turbines for projects off the coasts of Rhode Island and Long Island starting this summer.
As the cost of the State Pier project – initially pegged at $93 million – continues to escalate, some state lawmakers are looking at the authority’s contracting processes that have drawn criticism since the project began.
State Sen. Cathy Osten, D-Sprague, and State Rep. Christine Conley, D-Groton, have filed bills that would prohibit quasi-publics like the Port Authority from charging “success fees” to contractors, and bar construction managers on quasi-public projects from bidding for work on the project’s they’re overseeing.
According to a report from CT Mirror, Omaha-based Kiewit – one of the largest construction firms in the U.S. and the project manager for the State Pier redevelopment – used its position to push the authority to select it as the subcontractor for at least $87 million in work on the project. In some cases, according to the report, Kiewit convinced the authority to select its bids even when they were higher than competing offers.
The final cost of the project is still unclear, and the Port Authority says the “final path forward” to complete the project will depend on ongoing negotiations between the Port Authority and the offshore wind partnership of Eversource and Ørsted, which the Port Authority board will discuss at a Feb. 21 meeting.
But Osten said her main concern is the conflict of interest in having one company as the construction administrator oversee itself as a contractor.
The proposed legislation would bring rules for quasi-public agencies in line with rules for state agencies, whose project managers cannot bid to perform work on the projects they’re overseeing.
“I’ve been told that they do this all the time in the private sector, but this is public sector dollars,” Osten said. “So, if this bill should get a public hearing, it would be to debate whether or not a contract administrator or manager should have the ability to bid on sub-components of a project of which they would be overseeing themselves.”
The proposed ban on “success fees” takes aim at a $523,000 payment the Port Authority paid Seabury Capital in 2018 as part of its contract to find a port operator for the State Pier.
The watchdog State Contracting Standards Board released a report last year questioning the legality of that fee – and also questioning whether the authority had the power to partner with private companies to redevelop the pier.
State law doesn’t allow agencies to pay “finders fees” to contractors, and the board said the fee paid to Seabury amounted to the same thing. The Port Authority argued that it was not subject to the state rules, and that it was common practice in the industry.
But Attorney General William Tong released a written opinion this week concluding that the authority did have the power to sign public-private partnerships when it made an agreement with port operator Gateway, Eversource and Ørsted to outfit the pier for wind turbines. Tong’s opinion said he was not taking a stance on whether any particular agreement was legal. His office has not yet said whether the success fee was allowed under state law.
“My understanding is the Attorney General is going to give a ruling, but as of this moment that hasn’t happened,” Osten said.
This story has been updated to clarify Tong’s opinion on the the agreements