Contract dispute mars highway plan

BOISE – As debate over Gov. Dirk Kempthorne’s $1.2 billion highway-improvement plan intensified in the Legislature last spring, Washington Group International held its annual lawmaker gathering at its Boise headquarters.

The March event has for years given the $2.9 billion defense contractor and engineering company – and its CEO, Steve Hanks – a chance to talk informally about Washington Group’s performance around the world as lawmakers munch smoked clams and shrimp and sip Idaho wines.

Last year was different, several legislators say, because Hanks devoted some of his remarks to the governor’s “Connecting Idaho” plan and its importance to the state economy. The largest-ever state highway project was touted as a way to create jobs and boost over-the-road commerce, and as central to Kempthorne’s effort to cement his pro-business legacy.

“This was the first time he (Hanks) entered the political realm, where he dedicated a good deal of his time to” Kempthorne’s plan, said Rep. Leon Smith, R-Twin Falls, who opposed the package last April. “It certainly opened my eyes to have him get up there and start pushing” the highway package.

Two months ago, Washington Group and Denver-based partner CH2M Hill Inc. won what could be a six-year, $30 million contract to oversee the highway building effort.

Now, Parsons Brinckerhoff, the New York-based company that lost the bid, is suing the state of Idaho, alleging that Washington Group and CH2M Hill got it based on political considerations rather than professional qualifications.

Federal highway officials also have asked Idaho to reconsider the contract, citing concerns that state transportation board members didn’t follow federal law requiring that contract decisions be based on technical merit.

Nine senior state Transportation Department engineers who reviewed the bids recommended Parsons Brinckerhoff be given the contract.

On Oct. 27, however, members of the Idaho Transportation Board voted 4-1 to give it to Washington Group and CH2M Hill, arguing – according to meeting minutes – that considerations including the two companies’ work with Idaho on past projects gave them the edge.

“If you and I bid on something, the people who are examining our proposal are supposed to look at our qualifications, as to who best fits those needs,” said Federal Highway Administration division head Stephen Moreno in an interview.

Washington Group didn’t return phone calls from the Associated Press seeking comment on the controversy.

Now, some legislators who supported Kempthorne’s plan – to sell bonds to finance road building, then repay them with federal highway money the state expects to receive – say they’re concerned this dust-up could cast a pall on “Connecting Idaho” before it’s even started.

“The credibility of it is hurt,” said Rep. Mike Mitchell, D-Lewiston, a member of the House Transportation Committee who voted for the package, which passed on a 47-23 vote in the House and 30-3 in the Senate. “I don’t want to lose what (“Connecting Idaho”) can do for Idaho. But it’s got to be squeaky clean.”

During the 2005 session, one of the selling points for the package was its potential as a stimulus for the state economy.

“The Legislature would, for the most part, prefer to see contracts with Idaho companies that have a significant employment base in the state,” said Sen. Joe Stegner, R-Lewiston. “I don’t think that’s an unreasonable or illogical assumption.”

Kempthorne’s chief of staff, Brian Whitlock, said no pressure was exerted on transportation board members to choose Washington Group and CH2M Hill over rivals.

“The attorneys and all the other folks have been very active in making sure that everything is very meticulous, and following the process,” Whitlock said.

The state Transportation Department has hired a Los Angeles law firm to defend it against Parsons Brinckerhoff’s challenge.

Members of the transportation board defended their decision.

“No political considerations were used in making this decision,” said Chuck Winder, the transportation board chairman. He conceded that those who oppose the project will likely use the contract dispute against it. “They’re going to try anything they can to make it look bad.”

But even if the dispute renews questions some lawmakers have about the highway program, they say the package is not likely to be derailed during the 2006 Legislature.

“Not as long as you’ve got a governor who’s going to protect it, no matter what,” Rep. Smith said.

Last spring, Kempthorne underscored his passion for “Connecting Idaho” by vetoing eight unrelated bills when the highway plan stalled. He allowed the 2005 Idaho Legislature to end its session only after his highway package won final approval.