Federal judge overturns DRPA contract, questions the secrecy of bid process

A federal judge has overturned a $17.8 million contract to paint the Commodore Barry Bridge, calling the Delaware River Port Authority's decision to hire a contractor an "undocumented process shrouded in mystery and obscured from public scrutiny."

The decision issued Friday by U.S. District Judge Noel L. Hillman in Camden also appointed a different contractor - Alpha Painting & Construction Co. - that provided the lowest of seven bids submitted this summer.

After Alpha was rejected for the job this year, lawyers for the company filed a federal lawsuit against the DRPA, accusing the authority of making an arbitrary decision and exercising an "abuse of discretion." Both sides agreed to allow Hillman to decide, rather than demanding a jury trial.

Alpha, based in Baltimore, submitted a bid for $17,886,000 compared with the contractor the DRPA selected, Corcon Inc., based in Lowellville, Ohio, which provided a bid of $17,896,200, a difference of $10,200.

In awarding the work to Alpha, Hillman sharply criticized the DRPA.

"The only thing clear about DRPA's process is that it is deeply and dramatically flawed, Kafkaesque, and in need of substantial reform," he wrote in the 45-page opinion.

"This state of affairs is not without consequence. Over the next several years, the DRPA will oversee more than $700 million in public contracts, most of which involve the four major crossings of the Delaware River in the Philadelphia region and a major rail line," Hillman wrote.

DRPA spokesman Kyle D. Anderson referred questions about the suit to the authority's general counsel and corporate secretary, Raymond J. Santarelli.

"We strongly disagree with the decision in this case and intend to appeal. Throughout the competitive bidding process, the vendor in question could not provide the authority with the information necessary to confirm their ability to complete the scope of work in a safe manner," Santarelli said in a statement Tuesday.

"As a result, the DRPA determined that the vendor was not a responsible bidder," he added.

A woman who answered the phone at Alpha's office, and an attorney for Alpha, both declined comment on Hillman's decision. Corcon and its attorney did not return calls for comment.

The project was divided into three phases to maintain and restore the 14,000-foot bridge that connects Bridgeport, Gloucester County, and Chester. The initial phase on the New Jersey approach span is nearly completed. That contract was awarded to Corcon.

The second phase is the Pennsylvania approach, which is the focus of Alpha's lawsuit. The third phase is to paint the main structure.

Federal law allows the DRPA to exercise some discretion in awarding bids, especially projects in which the safety of workers and the public's safety are issues. It requires qualified workers for the removal of lead-based paint and proper protection for employees working at great heights.

"The impact of the court's decision could require the DRPA to jeopardize the safety of our commuters, DRPA employees, and the citizens of Chester living beneath, around and in close proximity to this project, 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," Santarelli said in the statement.

In May, the DRPA issued an invitation for bidding on the project. A public meeting was held a month later to open the seven sealed bids. The DRPA must award the contract to the lowest bidder who meets all the requirements outlined for the job, or reject all bids, Hillman said in his opinion.

Hillman took issue with the process that began six weeks later, when the DRPA sent an undated letter to Alpha saying it had determined that Alpha "was not responsible" and that the company's bid was rejected.

On Aug. 17, the DRPA awarded the contract to Corcon at a public meeting. The DRPA contends that it followed the law, and that Corcon actually was the lowest bidder after officials corrected a "miscalculation," according to Hillman's decision.

Three of the companies that submitted bids failed to cap the cost of mobilization and cleanup as required by the DRPA. Therefore, the DRPA recalculated project costs for those companies, making Corcon the lowest bidder - $55,710 less than Alpha's bid, that also was recalculated.

The judge, after listening to three days of testimony of witnesses from Alpha and the DRPA, took issue with the way the DRPA recalculated costs, and found that the authority made "arbitrary and capricious" decisions about Alpha's safety record. The determination that Alpha was nonresponsible "was simply an effort to squeeze a square peg in a round hole," Hillman wrote.

Hillman also noted that while Alpha's bid was rejected because it may have provided incomplete documentation of its safety record, Corcon's bid also did not include all the required documentation. During testimony, Hillman wrote, the DRPA failed to identify exactly who decided that Alpha was not responsible.

"This testimony depicts the decision-maker as the apparition of the Wizard of Oz before the curtain is thrown open. Only here, the curtain remains closed tight," Hillman wrote, suggesting the reason for the "iron curtain" was the invocation of attorney-client privilege.

While Hillman recognized the importance of confidentiality in legal matters, he documented a U.S. Supreme Court decision that business communications do not fall within the protection.

"No public agency should be allowed to involve in-house counsel in every business decision in order to shield its operations from the public under the guise of attorney-client privilege," Hillman wrote, adding that it was troubling that there was no public discussion or deliberation in selecting the contractor.

"The evidence has revealed that DRPA's bid review process only presents an illusion, and not the reality, of transparency," Hillman wrote.

Hillman concluded that rejecting all bids and starting the process over would be adverse to the public good and unfair to Alpha.

Santarelli, DRPA's general counsel, disagreed.

"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," the lawyer said in the statement.

bboyer@phillynews.com

856-779-3838 @BBBoyer