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Lone bidder’s offer on I-39 job presents Catch-22 for WisDOT

After a contractor’s lone bid on a Rock County interstate job came in $20 million higher than expected, Wisconsin’s nominated transportation secretary told lawmakers he’s not sure if he’d sign off on the contract.

Craig Thompson, Gov. Tony Evers’ pick to lead the Wisconsin Department of Transportation, appeared at a committee hearing last week to field questions from state senators who will ultimately vote to confirm or reject his appointment. During the hearing, Howard Marklein, R-Spring Green, pressed Thompson on a project to rebuild part of Interstate 39 near Janesville.

In the state’s December letting, a joint venture named I-39 Constructors — formed by Black River Falls-based Hoffman Construction and Janesville-based Rock Road Companies — submitted the only bid, a $126.6 million offer, to rebuild a stretch of I-39 in Rock County. In an interview Tuesday, Marklein said he was concerned that only one company had bid on the project, and that the bid had come in over the agency’s estimated cost of about $100 million.

“There was one bidder, 20 percent over cost. So, I mean any time that happens, it raises questions,” he said. “If it had been one bid and they had been under budget, I don’t think we’d be raising the question.”

The contract in question calls for expanding a 13-mile stretch of the interstate from County Highway O, south of Janesville, to the Dane County line. The road will have eight lanes from County O to the Wisconsin Highway 26 interchange and six lanes from there to the county line. Work is expected to begin in spring if WisDOT ultimately approves the contract.

James Hoffman, president of Hoffman Construction, declined to comment on the project on Tuesday.

Thompson told the committee that the higher-than-expected bid wasn’t unique among projects last year. Most bid lettings in 2018 — 11 of 12 — came in higher than WisDOT officials expected, thanks to inflationary pressures and under-anticipated mobilization costs, among other things, Thompson said. Pricier bids in 2018 followed savings in the state’s bidding process in 2016 and 2017, he said.

Because WisDOT underestimated the cost of some projects last year, agency engineers don’t believe that the offer from I-39 Constructors is “out of line,” Thompson said. In a statement, a WisDOT spokesperson said “many factors” contribute to the number of bidders who pursue projects. As of Tuesday, the agency was still evaluating the contract and had not executed it.

So it’s still unclear whether Thompson would sign off on the contract or put it out for bid again. He said the choice was something of a Catch-22. Awarding the contract outright could deprive the state of savings that might come from a more competitive bid. But bidding the project again would put it on hold for months and would further delay the highway project.

As an example of the roadway’s deterioration, Thompson told the committee that the agency had to call in a contractor to perform emergency repairs to a 2-mile section of I-39/90 after pavement there buckled, shutting down a southbound stretch of the roadway in mid-February.

Wisconsin State Patrol officials said the closure was caused by “extreme road failure.”

“The engineers at (WisDOT) are skeptical that the numbers would come in much different if we (re-bid the project), but if we do rebid that it would delay the project on I-39/90,” Thompson said “That is a difficult decision to make.”

Marklein, who met with Thompson privately to discuss the I-39/90 contract ahead of last week’s hearing, said Thompson gave a “thoughtful” response to his question about the contract. He said it’s not “farfetched” to think a dearth of bidders on the job could have been caused by a shortage of workers and a busy season ahead.

But asked if he thought Thompson would win confirmation, he said he didn’t know.

Thompson has faced intense criticism in recent weeks as he pursues confirmation from the Republican-controlled Senate. Some prominent lawmakers have pointed to his work as executive director of the Transportation Development Association, an industry group, as evidence that he’s cozy with road builders and would advocate for higher taxes and more transportation spending. During the hearing last week, he disputed that he was beholden to industry interests.

“At the secretary level we don’t get involved in who wins contracts,” Thompson said.

About Nate Beck, nbeck@dailyreporter.com

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).

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