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The Connecticut Port Authority did not seek bids or gain board approval for a nearly $800,000 environmental permit consulting contract, according to a report released Thursday by state auditors.
In its first report since a scathing 2019 audit led to then-Executive Director Evan Matthews being fired and the Office of Policy and Management gaining oversight of the quasi-public agency, auditors said the authority didn’t open bids before awarding a $794,790 contract to AECOM Technical Services in May 2019.
The auditors’ office told CT Examiner that AECOM’s contract was later increased in October 2021 to $2.4 million.
It was the second contract over $50,000 that auditors had found the authority awarded without an open bid. In the 2019 audit, they said the authority had paid a business development consultant $59,463 in 2018 – despite policies stating any contract over $50,000 needs to be awarded in a competitive negotiation.
In its written response to the auditors, the authority said the AECOM contract was awarded in fiscal year 2019, before September 2019 when it signed an agreement for the state Office of Policy and Management to oversee “all financial and procurement decisions” for the authority.
The authority also said it updated its contracting procedures in 2022 after working with the state budget office and the State Contracting Standards Board.
“The authority is confident that it has adequate policies and procedures in place to ensure that procurements are conducted in accordance with the highest standards of best practice and compliance,” it said.
The Port Authority’s contracting practices have been under scrutiny since the 2019 audit report. Lawmakers gave the State Contracting Standards Board authority to review the agency in 2021, and the board issued a report questioning the authority’s power to enter into a “public-private partnership” to redevelop New London’s State Pier, along with other contracting practices.
The Office of State Ethics fined Seabury Capital $10,000 for making “improper gifts” to Port Authority officials, and Attorney General William Tong’s office said it’s still investigating the $523,000 “success fee” the authority paid Seabury as part of a contract to find a State Pier port operator.
The auditors’ latest report also found that Kiewit – the construction manager the authority hired to oversee the State Pier redevelopment – awarded itself six of the 30 pieces of subcontracting work that auditors reviewed.
CT Mirror first reported in 2022 that Omaha-based Kiewit was using its position to push the authority to select it for at least $87 million in subcontracting work. Auditors said they reviewed two pieces of work Kiewit awarded itself – totaling about $64.4 million.
State law doesn’t allow construction managers to bid on projects for UConn and the state Department of Administrative Services. They can bid on their own DOT projects if they are more cost-effective than a subcontractor, but there are no state laws addressing construction managers bidding on subcontracts for quasi-public projects, the auditors said.
State auditor John Geragosian told CT Examiner the auditors weren’t evaluating if Kiewit’s bids were the best value, but whether the authority was following good business practices.
“The contractor can’t monitor its own work, and there’s got to be a transparent process that, if they’re going to do it, they’re showing how they’re either the most economical or the most qualified,” Geragosian said. “Obviously with construction projects, cheaper isn’t always better.”
State lawmakers passed bills this year to ban quasi-public agencies like the Port Authority from charging “success fees,” and ban construction managers from bidding for work on the quasi-public projects they’re overseeing.
“The authority will reevaluate its procedures to ensure that sole responsibility for criteria requirements and conditions in future maritime project contracts are clearly delineated by the authority, particularly in the event that a [construction manager] may be allowed to self-perform, to avoid any appearance of a conflict,” the authority said in its response to auditors.