The plan for toll lanes on America’s busiest freeway is attracting corruption allegations – with a multinational corporation saying Orange County politicians changed the rules of a competitive bidding process to steer a nearly $200 million contract to a lower-ranked firm that hired lobbyists who donated to their campaigns.
The controversy centers on who will build and run the payment systems and customer support for the upcoming 405 toll lanes, under a contract with the Orange County Transportation Authority (OCTA).
After a months-long competitive bidding process – using evaluation criteria set by OCTA’s board – the engineering firm WSP USA was ranked highest for the job. It was then recommended for approval this summer by agency staff, the bid evaluation committee and a board committee.
But when it came before the full OCTA board on Aug. 9 for a decision, a 10-6 vote by board members scrapped the competitive bidding altogether, WSP says – awarding the contract to the lower-ranked firm, Cofiroute USA.
“The Board of Directors departed from the rules established to ensure a fair playing field,” WSP wrote in its formal bid protest, which goes before OCTA’s board at their next public meeting Monday morning.
WSP alleges that when it was clear Cofiroute had lost the bidding competition, it “unleashed” lobbyists on the OCTA board – lobbyists who gave campaign contributions to several board members that WSP says were not disclosed in the bidding process.
WSP alleges the failure to disclose contributions violates OCTA’s own bidding rules and should disqualify Cofiroute from the work.
[Click here to read the bid protest.]
Cofiroute didn’t return a phone message for comment.
OCTA staff said they properly performed their duties in the bidding process that recommended WSP for the job.
“From the staff’s perspective, our procurement process was followed in a proper manner including the release of the request for proposals, the evaluation of those proposals and the recommendation to the board,” said OCTA spokesman Joel Zlotnik.
Through agency staff, Voice of OC sought comment from all 17 OCTA board members about the allegations, and called 13 board members for whom direct contact information was available.
Board member Katrina Foley, who voted for Cofiroute, said she wasn’t lobbied and that she voted for what she thought was best after listening to both sides.
“I think that [WSP’s] understanding of the rules is inaccurate. So the board has discretion at the end of the day to pick whichever vendor they want to,” Foley said in an interview.
“For me, the persuasive argument on the call at the time was that [Cofiroute] was an entity that was local,” she added.
“I have prioritized supporting our local businesses in Orange County, because as part of our economic recovery for Orange County, that was the priority for me…As far as the qualifications, I feel like they were negligible differences. And [my decision] had nothing to do with any donation.”
As for whether there’s any merit to the bid protest, Foley said there isn’t – “at least as it relates to me.”
“I can’t speak to everybody else’s reasoning,” she added.
Board member Brian Goodell voted against awarding the contract to Cofiroute, but said he doesn’t have an issue with how the board picked the company.
“I think it was fine, people evaluated the bids and chose what they thought was [best],” he told Voice of OC in a brief interview.
“I raised similar questions [as in WSP’s bid protest], and I think it’s just how those things go in terms of, we have a large board and…those things can happen.”
Board member Tim Shaw, who was the only board member not participating in the decision, said Cofiroute has done a “fantastic job” working for OCTA managing the 91 freeway toll lanes.
But it was “kind of unusual” for the board to go against staff’s recommendation for a contract, he said in an interview.
“I can understand [where] people’s hearts were…for 20 years you’ve been a wonderful operator of a toll road…so you can understand the desire to stick with the people you know,” Shaw said.
At the same time, it’s important for OCTA to make sure it gets competitive bids, he said.
“Having that free and fair competition is really important for the agency. I think everyone should agree with that,” Shaw said.
“So it’s important the industry feels OCTA is a fair place to do business,” he added.
Shaw said he can’t comment specifically on this project because he has to recuse himself due to Cofiroute lobbyist contributions he received last year in his run for county Board of Education. The recusal is under a state law called the Levine Act.
The other board members didn’t return messages or declined to speak on the record.
The events that unfolded underscored the competition was unfair, according to WSP.
After a “comprehensive” review of the proposals, OCTA’s evaluation “unanimously found WSP USA’s proposal to be superior to [Cofiroute’s],” WSP wrote.
Yet the board “changed the rules of the race,” the company wrote.
The board “abandoned required selection criteria, gave weight to misinformation presented by [Cofiroute’s] lobbyists, and took the remarkable action to vote to award the Contract to [Cofiroute],” wrote WSP.
That’s despite what the firm calls “black-letter federal and California law that in public procurements, the evaluation criteria set forth in the [bidding process] are mandatory.”
While OCTA’s contracting rules prohibit giving preference to existing contractors, WSP cited in their protest filed with OCTA several examples where multiple board members said out loud that’s exactly what they were doing when they awarded the contract to Cofiroute.
“I think I would like to have the comfort of going with a vendor that has worked for us for so long,” board member Doug Chaffee said just before the Aug. 9 vote, according to the bid protest.
“I think what we have today, what we have enjoyed from Cofiroute, like I said, close to 20 years of good experience should count for something,” said board member Andrew Do, according to the protest.
“My inclination is to stick with people that we’ve had positive experiences with,” added board member Mark Murphy, according to the protest.
When it came time to vote at the Aug. 9 meeting, board member Mike Hennessey motioned to pick top-ranked WSP, but it failed on an 8-8 vote.
A majority of the board then voted to pick Cofiroute, with yes votes from Do, Chaffee, Mark Murphy, Katrina Foley, Steve Jones, Tam Nguyen, Joseph Muller, Vicente Sarmiento, Harry Sidhu and Don Wagner.
Opposing were Hennessey, Lisa Bartlett, Barbara Delgleize, Brian Goodell, Patrick Harper, and Gene Hernandez.
Shaw was absent, telling Voice of OC he had jury duty and also has to recuse himself because of the lobbyist contributions
This isn’t the first time in OC these kinds of allegations have come up.
In 2017, county supervisors awarded a major airport lease to the firm that ranked fifth out of six in the competitive bidding process, without publicly explaining their decision. The company had given supervisors twice as much in campaign donations as the incumbent vendor.
Another aviation company filed a federal complaint alleging the supervisors had a “bias towards its campaign donors,” citing more than $23,000 in contributions to supervisors from supporters of the firm they chose.
The Federal Aviation Administration later dismissed the complaint, saying supervisors were acting within their authority.
In 2019, county supervisors also overruled a competitive bidding process for a lucrative food spot at John Wayne Airport – picking the company that ranked last out of five.
And Cofiroute’s lobbying firm – Faubel Public Affairs – itself has won work at OCTA and from county supervisors after not being rated the highest in competitive bidding for the projects.
In its protest, WSP warns it’s prepared to take OCTA to court if it doesn’t change course and award it the contract.
“The Board of Directors undid the intensive work by the [bidders] and comprehensive analysis by the subject matter experts who evaluated the parties’ proposals against the established evaluation criteria,” the company wrote.
“On August 9, the Board changed the rules of the race after it was already run.”
Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.