UPDATE: DRPA to appeal contract ruling

CAMDEN - A federal judge has blasted the Delaware River Port Authority, saying its process for awarding contracts is “deeply and dramatically flawed” and “in need of substantial reform.”

U.S. District Judge Noel Hillman also criticized “a complete lack of transparency” at the DRPA, comparing its unknown decision-makers to the Wizard of Oz working unseen “before the curtain is thrown open.”

“Only here, the curtain remains closed,” said Hillman.

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The judge ruled Friday in a lawsuit brought by a Baltimore firm, Alpha Painting & Construction Co., which alleged the DRPA improperly rejected its $17.9 million bid for a bridge-painting contract.

Alpha's offer was the lowest when seven sealed bids were opened June 16. But the DRPA gave the job to Corcon Inc., an Ohio firm with a bid that was $10,200 higher.

Hillman ordered the DRPA to award the contract to Alpha.

An attorney for the authority vowed to appeal the ruling.

Hillman's 45-page decision also sharply criticized the bi-state authority, saying it had raised spurious objections to Alpha’s bid while giving preferential treatment to Corcon. He asserted the authority’s bidding procedures were "Kafkaesque" and outdated, and that its method for assessing workplace safety is “superficial.”

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And despite hearing testimony from multiple DRPA managers at a three-day trial, the judge said a mystery remains around the contract dispute:

Who awarded the contract to Corcon and how was the decision made?

“There are no emails, no minutes of discussions or debate, no memoranda among decision-makers, no witnesses to take responsibility,” Hillman said.

“All of the discussions and deliberations were conducted in ‘executive sessions’ that excluded public access,” the judge observed. He added the DRPA also repeatedly cited attorney-client privilege to conceal information that did not qualify for that protection.

“This state of affairs is not without consequence,” Hillman said. "Over the next several years, the DRPA will oversee more than $700 million in public contracts.”

The DRPA operates four bridges across the Delaware River and the PATCO Hi-Speedline.

It had invited firms to bid on the second phase of a three-part project to paint the Commodore Barry Bridge between Logan and Chester, Pennsylvania. The contract for the first phase previously went to Corcon.

An attorney for Alpha, Peter J. Torcicollo of Newark, declined to comment.

Raymond J. Santarelli, the authority's general counsel, asserted the ruling "could require the DRPA to jeopardize the safety of our commuters, DRPA employees, and the citizens of Chester …  by awarding this contract, to a firm that has an unproven safety record in New Jersey and Pennsylvania and that the DRPA procurement process concluded was not the lowest responsible bidder."

"We believe, in the strongest possible terms, that such an action would be a breach of our commitment to safety and our duties as stewards of public assets."

In his ruling, Hillman said Alpha learned its bid had been rejected "after an undocumented process shrouded in mystery and obscured from public scrutiny." Similarly, the judge said, the authority gave the contract to Corcon “without any public discussion of the reasons for the selection … or the rejection of the Alpha bid."

According to the ruling, the DRPA contended Alpha’s bid package lacked two required elements — worker-safety records called OSHA 300 forms, and “experience modification factors” that reflected the firm’s worker-safety record in either New Jersey or Pennsylvania over the previous three years.

An Alpha executive insisted he had included the OSHA 300 forms in the bid package, while two DRPA employees said he had not.

Hillman said the disagreement over the missing papers showed the need to modernize the DRPA’s practices.

“It is 2016,” the judge noted dryly, observing DRPA personnel still use “gigantic scissors” to open bids during “a quaint but antiquated unsealing process.”

“The ability of bidders to submit their bids electronically would eliminate tedious litigation as to the location and content of paper documents,” the judge added.

He also determined the missing papers were irrelevant because trial testimony showed the OSHA 300 forms played “no meaningful role” in the DRPA’s selection process.

The authority’s treatment of Alpha’s worker’s compensation experience “was just as arbitrary and capricious," the judge said.

According to Hillman, a DRPA manager, Marianne Staszewski, said she considered Alpha’s safety record to be unknowable — and, thus, disqualifying — because the firm had not worked in New Jersey or Pennsylvania in the previous three years.

But Staszewski also said she would not apply the same standard to new firms and joint ventures, and acknowledged she had not considered Alpha’s favorable safety record in other states, the ruling said.

And when Corcon submitted safety records for just two full years, Staszewski did not view that as a problem. Instead, Hillman noted, she called that company’s insurer for the required information.

Hillman also questioned the value of the safety records, noting they only covered workers' compensation claims against the bidding company.

He noted Staszewski had agreed the DRPA's risk assessment process  would not consider an incident where "a bridge painter dropped a beam into a bus or train car as it crossed the bridge, and it killed all the passengers, as long as none of the bridge painters were injured and none filed workers’ compensation claims."

Hillman also said the DRPA revised a cleanup charge in Corcon’s offer after bids were opened, belatedly dropping the firm’s price below Alpha’s. He said such changes were not allowed under the authority’s procurement manual or in its bid invitation.

And while Hillman said reasons for the DRPA’s actions were unknown, the judge noted the authority’s chief engineer Michael Venuto had acknowledged under questioning “that Corcon and certain DRPA employees had worked on a joint film project concerning the Commodore Barry Bridge that was … being promoted for broadcast either on television or the internet.”

“That line of questioning appeared to be designed to suggest that the motive for DRPA’s preferential treatment of Corcon might be the glamour of media attention in the otherwise staid world of bridge maintenance,” Hillman wrote in his opinion.

The judge noted that view was speculative but said it shows “the importance of transparency and an objective process.

"Ambiguity and opaqueness breed suspicion," he said.

Federal judge rules against DRPA

Jim Walsh; (856) 486-2646; jwalsh@gannettnj.com