DALLAS — Utah officials are facing questions about their role in a $13 million settlement with a losing bidder on the expansion of the Interstate 15 freeway in Salt Lake County, which will be funded with a record $1.25 billion bond issue next week.
The settlement, reached in February with the consortium of Flatiron-Skanska-Zachry, came to light this week when Gov. Gary Herbert and lawmakers said they had never been informed of the deal.
John Njord, executive director of the Utah Department of Transportation, apologized to a legislative committee for keeping them in the dark.
“I should have come to this body,” Njord told a transportation committee hearing on Tuesday. “I should have come to the governor’s office and made full disclosure to everybody. I did not do that and that was my mistake and obviously we have some pretty significant allegations today as the result.”
Herbert, a Republican who is running for re-election against Democratic Salt Lake County Mayor Peter Corroon, denied suggestions that a pay-to-play scheme was afoot. The winning bidder, Provo River Constructors, led by the Fluor Enterprises and Ames Construction, donated more than $80,000 to Herbert’s campaign.
An executive team at UDOT adjusted the recommended scoring on the bids just enough to change the winner of the $1.1 billion contract, overruling its technical evaluation team, according to an investigation by the Salt Lake Tribune. The contract was the largest in Utah history, as next week’s bond deal also is expected to be.
The changes favored Provo River Constructors, which Njord agreed “looked bad,” according to the Tribune. That prompted the $13 million settlement with FSZ, he said.
“I’m apologetic for that and I have no excuse,” Njord told the committee.
Herbert said that he did not know about the settlement but “that UDOT’s decision was the most appropriate action on behalf of the Utah taxpayers to keep this vital infrastructure project moving forward.”
In a prepared statement, Herbert said existing law allows UDOT to reach such large settlements without consulting the Legislature but that the law should be reconsidered.
“Sometimes it is more prudent to settle these protests than to allow them to become mired in the court system, which cost the state, through Utah taxpayers, tens of millions of dollars more — perhaps hundreds of millions of dollars more — and unquantifiable inconvenience and delay of the state’s carefully crafted infrastructure improvement schedule,” he said.
Attorney General Mark Shurtleff, who had to sign off on the settlement, also signed off on the preliminary official statement for next week’s bond sale, asserting that there was no pending litigation. The settlement was not mentioned in the “legal matters” section of the POS. Litigation involving bond proceeds can prevent a debt issuance.