$100 million water and sewer contract decision due in Miami-Dade

By Francisco Alvarado, BrowardBulldog.org 

Miami-Dade Water & Sewer repaired this water main break along NW 15 Avenue and 36th Street in Miami in 2012.
Photo: CBS 4

A global engineering firm with a problematic track record has one final shot at winning a coveted Miami-Dade County government contract worth nearly $100 million.

For close to a year, Denver-based CH2M Hill has been trading accusations with rival AECOM of Los Angeles as both firms vie for the job of managing a crucial and federally mandated $1.2 billion overhaul of the county’s decaying water and sewer system.

On Tuesday, CH2M Hill lobbyists will try to persuade the Miami-Dade County Commission to disregard Mayor Carlos Gimenez’s recommendation to go with AECOM.

CH2M Hill has won $28 million in Miami-Dade contracts since 1996 and provides management and engineering services in other Florida cities and counties, including Broward. It remains in the running for the water and sewer job despite a troubled work history that’s peppered with criminal investigations and allegations of bribery, kickbacks, and overtime fraud at different projects across the country.

Most recently, former CH2M Hill employee Grace Randazzo sued her former company claiming she was fired because she tried to stop her supervisor from hiding and destroying evidence sought by Department of Justice investigators.

Federal agents ultimately discovered rampant overtime fraud by scores of CH2M Hill workers and supervisors hired to clean up a shuttered nuclear bomb production site in Hanford, Washington. Court records say that between 1999 and 2008 the employees billed the Department of Energy for thousands of overtime hours they did not work during a nine-year period between 1999 and 2008.

MILLIONS PAID TO AVOID PROSECUTION

CH2M Hill agreed to pay an $18.5 million fine to avoid criminal prosecution in March 2013. But 10 former managers and supervisors now face federal criminal charges, including conspiracy, submission of false claims, and major fraud against the United States. Nine hourly workers have cut plea deals and await sentencing.

When the company settled its case, CH2M Hill spokesman John Corsi issued a statement saying it had acted swiftly to cooperate with federal authorities.

“It goes without saying that we are very disappointed by the conduct that made the settlement necessary,” he said. “This conduct is not consistent with CH2M Hill values, but it happened on our watch and we should have rooted it out sooner.”

Yet Randazzo’s lawsuit, filed in federal court in Denver on Dec. 6, claims the scam reached all the way to corporate headquarters, where she worked as a paralegal for nine years until her termination in 2011, midway through the federal investigation. She had been assigned to prepare responses to government subpoenas.

“The TC (timecard) subpoena represented enormous potential exposure to the company, and the legal department knew it,” her complaint says.

Randazzo claims her then-boss, CH2M Hill in-house attorney Dudley Wright, ordered her to withhold and hide documents from Justice investigators. She also alleges Wright told her the information implicated CH2M Hill executives “in a larger scheme and would cost the company hundreds of millions of dollars and not just the few million the company was trying to negotiate in the Hanford settlement.”

Randazzo declined comment through her attorney.

CH2M RESPONDS

Corsi told BrowardBulldog.org that Randazzo’s lawsuit is without merit, incoherent and lacks facts to support any of its claims.

“CH2M Hill has cooperated and continues to cooperate with the Department of Justice,” Corsi said, “including making a full and complete production of documents in response to subpoenas.”

CH2M Hill plans to vigorously defend itself against Randazzo’s suit, Corsi added.

Timecard fraud wasn’t CH2M Hill’s only serious problem at Hanford.

In March 2005, CH2M Hill paid a $316,250 fine for failing to prevent employees from being contaminated with radioactive waste during two incidents at the Washington nuclear production site.

Six years later, in a separate case involving the Hanford site, the company’s subsidiary CH2M Hill Hanford Group paid a $1.5 million fine to settle accusations that it knowingly submitted false claims and paid kickbacks on a contract to operate and manage mixed radioactive waste at the Hanford nuclear site.

In the false claims investigation, the government alleged that between 2003 and 2005, two subcontractors, Paul Kempf and Gregory Detloff, improperly made more than 200 purchases on government purchase cards and charged substantially marked-up costs to the Department of Energy.

Both men were later convicted on federal wire fraud charges. Kempf was sentenced to 46 months in prison; Detloff drew three years probation.

CH2M Hill has also been in trouble with other jurisdictions.

In 2006, CH2M Hill settled with federal prosecutors for violating the Clean Water Act at a wastewater treatment facility in Connecticut. The firm agreed to contribute $2 million to community projects.

In 2009, CH2M HILL settled a federal lawsuit in Los Angeles alleging $2.6 million in overbilling.

CH2M Hill’s Corsi says the incidents were isolated scandals among the 100,000 global projects that represent the company’s body of work.

“We do not condone any misconduct by employees, individuals, or subcontractors,” he said. “The incidents raised are not indicative of CH2M Hill or how we do business.”

LOBBYISTS ON THE JOB

AECOM and CH2M Hill were the only two companies to bid on the Miami-Dade management contract, which arose from a consent decree between the county and the state and federal environmental protection agencies to repair the county’s more-than-50-years-old water and sewer system.

Both firms have hired individuals with ties to county administrators and politicians. AECOM counts Pete Hernandez, a former assistant county manager and ex-Miami city manager, as one of its subcontractors. CH2M Hill brought aboard Rafael Garcia-Toledo, a general contractor who served as chauffeur and political campaign finance chairman for Gimenez. The mayor declined comment.

In addition, both firms retained lobbyists with close ties to the mayor.

Jorge Luis Lopez, who worked with Gimenez at the defunct law firm Steel, Hector & Davis, represents AECOM. Former state legislator Marcelo Llorente, who backed Gimenez against ex-Hialeah Mayor Julio Robaina in the 2011 county mayoral run-off, represents CH2M Hill.

Since August of last year, their lobbyists have lodged complaints against one another with the state ethics commission and the state’s inspector general.

For example, one inquiry found that another CH2M Hill lobbyist, attorney Mitchell Bierman, had improper communications with a selection committee evaluating both firms. Gimenez convened a new committee to re-rank the firms.

That led to AECOM being ranked number one and another round of accusations by CH2M Hill, claiming that its rival’s team misrepresented their credentials and should be disqualified.

In late April, Miami-Dade Inspector General Mary Cagle issued a report concluding that most of CH2M Hill’s allegations were baseless. She faulted AECOM for overstating the professional experience of one of its proposed project managers, but said that individual would still be qualified for the job.

Cagle questioned CH2M Hill’s motives regarding its complaints.

“The amount and ever changing nature of the allegations caused the (Office of the Inspector General) to question whether CH2M was really serious about each and every allegation or just trying to build a case through volume,” the report said.

Corsi said CH2M Hill stands by its accusations and that AECOM should not be awarded the contract.

“Based on principle, and to protect our industry, we decided to bring our competitors’ misrepresentations to the county’s attention,’’ Corsi said.