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Massive tollway contract screwup leads to TRO

Tuesday, Jun 25, 2024 - Posted by Rich Miller

* Illinois Tollway press release from November of 2023

November construction contracts awarded include:

    • A $323.9 million contract to Judlau Contracting Inc., College Point, NY, to reconstruct and reconfigure the southbound side of the I-290/I-88 Interchange on the Central Tri-State Tollway (I-294) between the Cermak Toll Plaza and St. Charles Road

* Chicago Tribune last month

A contractor that says its $323 million contract for work on the massive Interstate 294 reconstruction project was improperly terminated has sued the Illinois Tollway.

Judlau Contracting, a New York-based company, says in its lawsuit that it had started work on the interchange of Interstate 290 and Interstate 88 when its contract was terminated by the Illinois Tollway on May 16. The lawsuit, filed in DuPage County Circuit Court, says the action was without proper legal basis and harmed the company’s reputation and overall business.

The company also says the sudden halt in the project could cost taxpayers millions of dollars extra and create safety risks for drivers on the interchange. […]

Judlau said the state agency cited two specific provisions for ending the contract. One specifies that termination can only occur if “there are changed circumstances, the effects of which were not known to the Tollway at the time of execution of the contract, and, for these reasons, the Tollway determines that termination is in its best interest,” according to the complaint. The other provision allows the Tollway to “cancel or alter any or all portions of the work” due to “circumstances either unknown at the time of bidding or arising after the contract was entered into.”

Judlau said it knows of no factors that satisfy those provisions, and that the Tollway did not provide further explanation, responding only several days later by saying “at this time, we do not have any additional information to convey regarding the termination.”

More from the Daily Herald

Judlau was chosen as the lowest bidder in 2023 to reconfigure the southbound side of the tangled interchange for about $323 million, the lawsuit states.

The company had hired subcontractors and laborers, moved equipment to the site, secured materials, and was about six weeks into construction when it was dismissed “in a cursory two-sentence letter.”

Pulling the plug on the work will impact hundreds of jobs, Judlau contends, and also create traffic hazards. Workers “left the site in a safe condition via use of temporary barriers — but this is not a permanent solution.”

The tollway has steadfastly refused comment.

* But now we’re finally getting some answers. Marni Pyke

Tollway officials said in an affidavit they did not initially realize they had to apply a 4% preference, or reduction, to Illinois companies bidding for the job. Judlau is based in New York.

The 4% preference is a relatively new change to the state procurement code that went into effect in December 2023.

The tollway board awarded the contract to Judlau, which was the low bidder over [Walsh Construction], in November.

But in April, “I reviewed the bids submitted … and discovered that the tollway had not allocated a 4% bid preference to the base bid submitted by Walsh, which was and is an Illinois business,” Chief of Procurement Peter Foernssler said, according to court documents.

The tollway misunderstood the mandatory nature of the change in procurement policy, he added.

*Facepalm*

According to Pyke’s story, a DuPage County judge has now issued a temporary restraining order preventing the tollway from hiring another firm.

       

29 Comments »
  1. - Lakeview Looker - Tuesday, Jun 25, 24 @ 11:30 am:

    Insane that a $323 million contract was summarily suspended IN THE MIDST OF CONSTRUCTION with a two sentence email. What in God’s name is going on at the Tollway office??

    Marni Pyke’s coverage offers a great glimpse into their illogical and frankly scarily stupid rationale. A mistake of such magnitude has to be resolved carefully and thoughtfully–not with haste and zero aforethought. Wow.


  2. - Sue - Tuesday, Jun 25, 24 @ 11:32 am:

    Don’t the lawyers for the Tollway know that any such lawsuit is removable to the Illinois Court of Claims where things take so long plaintiffs normally find a settlement is more attractive?


  3. - DuPage Saint - Tuesday, Jun 25, 24 @ 11:33 am:

    Maybe the tollway could rent that warehouse METRA bought to store equipment while this drags through court. Thank goodness it is just taxpayer mine no one will notice


  4. - Excitable Boy - Tuesday, Jun 25, 24 @ 11:35 am:

    - The tollway misunderstood the mandatory nature of the change in procurement policy -

    It would be better to say you didn’t know anything about the change. This is like admitting you don’t know how to read.


  5. - fs - Tuesday, Jun 25, 24 @ 11:36 am:

    I guess I’m confused as to why the change to law in December regarding treatment of bids would apply to a bid already granted….that type of retroactive application seems like a disaster waiting to happen


  6. - Donnie Elgin - Tuesday, Jun 25, 24 @ 11:38 am:

    “The tollway misunderstood the mandatory nature of the change in procurement policy, he added”

    Such incompetence on the part of the Tollway - and let’s not forget Walsh Construction a clout-heavy firm would benefit from the cancellation

    https://chicago.suntimes.com/news/2012/6/21/18532062/the-watchdogs-clout-builder-settles-whistleblower-suit-for-6-4-million


  7. - Thinking - Tuesday, Jun 25, 24 @ 11:47 am:

    Tollway could not have approved the contract unless the independent Chief Procurement Officer (different from Tollway’s Chief of Procurement) approved it so the Chief Procurement Office also must have missed this.


  8. - Dupage - Tuesday, Jun 25, 24 @ 11:54 am:

    Speaking of the tollway, lawmakers should direct the tollway to build the Illinois portion of the Illiana expressway I-57 to I-65 by-pass. It would save countless man-hours of drivers stuck in traffic jams on I-55 and I-80 and reduce CO2 pollution.


  9. - Friendly Bob Adams - Tuesday, Jun 25, 24 @ 11:56 am:

    As someone who often had to deal with the snooty, nit-picking procurement people, I’m very much enjoying this exposure of their incompetence.

    If you can’t tell which bidders are from Illinois or not, you need to get another job.


  10. - Three Dimensional Checkers - Tuesday, Jun 25, 24 @ 11:56 am:

    If yesterday’s events tell us anything, it is “whatever, don’t read the statute or guidelines.” You feel statutes in your gut, that’s where the real legal reasoning comes from.


  11. - thisjustinagain - Tuesday, Jun 25, 24 @ 12:01 pm:

    Pretty bad when a state agency doesn’t know the law or rules governing its actions.

    As for the Illiana Expressway comment above mine, the legislature is as incompetent as the Tollway at getting things right the 2nd…no, 3rd time.


  12. - Anon62704 - Tuesday, Jun 25, 24 @ 12:05 pm:

    ==I guess I’m confused as to why the change to law in December regarding treatment of bids would apply to a bid already granted==

    Reporting is inaccurate. The ‘22 procurement omnibus contained the bid preference. Effective Jan 1, 2023.


  13. - Lurker - Tuesday, Jun 25, 24 @ 12:15 pm:

    I’m sorry (not really) but I am really enjoying this story. I also like how karma works.


  14. - Thinking - Tuesday, Jun 25, 24 @ 12:26 pm:

    ==Pretty bad when a state agency doesn’t know the law or rules governing its actions.==

    It’s even worse when the Chief Procurement Office, which is supposed to make sure agencies are following/applying the purchasing laws doesn’t know it or flag it before it approved the Tollway to issue the contract to Judlau.


  15. - P. - Tuesday, Jun 25, 24 @ 12:28 pm:

    IDOT and the Tollway are terrible and their responsibilities and influence far exceed their abilities send Tweet


  16. - Arock - Tuesday, Jun 25, 24 @ 1:05 pm:

    Should have paid the Illinois firm a fee for the mistake and continued construction with the New York firm to get the job completed in a timely manner. They will be open for lawsuits if the current signage and barricades or lack of cause accidents especially those with injuries. Also personnel changes appear to be in order.


  17. - Anyone Remember - Tuesday, Jun 25, 24 @ 1:06 pm:

    Several questions. First, who is the CPO for ISTHA? Do they fall under IDOT’s? Second, where are the “Notices” on the IDOT CPO and/or ISTHA’s websites? Are they even on the website?

    The CPO for General Services actually posted a notice about this (link at end, page 3, “45-105 (new)”). Can’t find in on Transportation CPO (IDOT) nor the ISTHA website. So it can’t be found on the construction CPO websites, but it can be found on the General Services CPO website?

    Bueller? Bueller?

    https://cpo-general.illinois.gov/content/dam/soi/en/web/cpo-general/documents/cpo-notice-2023.05-public-act-102-721.pdf


  18. - Thinking - Tuesday, Jun 25, 24 @ 1:43 pm:

    ==First, who is the CPO for ISTHA? Do they fall under IDOT’s?==

    ISTA has the CPO for General Services (Ellen Daley); ISTA does not fall under CPO for Transportation as they have to follow federal contracting requirements in addition to Illinois laws. CPO for Transportation is appointed by IDOT with concurrence of the Ethics Commission.


  19. - Anyone Remember - Tuesday, Jun 25, 24 @ 2:25 pm:

    ===ISTA has the CPO for General Services (Ellen Daley)===

    Since Daley did issue the Notice, and in my experience emails with the Notices attached were mailed to agency SPOs, am I hearing a “Rut Roh” from Downers Grove?


  20. - Frida's boss - Tuesday, Jun 25, 24 @ 2:53 pm:

    So how long will this extend this project and probably add cost overruns due to delays?

    The new rule went into effect in Dec, the bid was awarded in Nov.
    Why would the new rule apply post-bid awarding? Did all the companies know this rule would impact the outcome? Is a post-bid requirement allowed for an awarded contract? If the NY company didn’t have this knowledge but Walsh did then it’s an unfair bid. It will probably have to go back for re-bid due to the new rules because that changes the bid requirements for all bidders. There will need to be compensation for the NY firm that has already started the project and a very long delay.


  21. - Thinking - Tuesday, Jun 25, 24 @ 3:20 pm:

    The new rule went into effect January 1, 2023 (the article referenced an incorrect date). The notice that bidding was open was published August 8, 2023 (so law was in effect for 7 months) and bids were opened on October 20, 2023. The ISTA board approved the bid at the Novemner 2023 board meeting. The Notice of Award giving final approval to ISTA that it followed the law correctly and could sign the contract was signed by Chief Procurement Office on January 25, 2024.

    https://www.bidbuy.illinois.gov/bso/external/bidDetail.sdo?docId=24-557THA-ENGCO-B-38356&external=true&parentUrl=close


  22. - maybe - Tuesday, Jun 25, 24 @ 3:50 pm:

    Sometimes I feel its easier to ask for forgiveness than permission. Even if a power to be discovered this, why bring it up if no other bidder is filing litigation?


  23. - Business as usual. - Tuesday, Jun 25, 24 @ 4:39 pm:

    OIG should look into Tollway procurement office and players involved. Sounds like someone is getting strong-armed.


  24. - Anyone Remember - Tuesday, Jun 25, 24 @ 5:17 pm:

    The Plot thickens … CPO Notice of Electronic Submission came from General Services CPO Ellen Daley. Thinking’s link shows postings occurred in 2023, contract signed in 2024 … yet … my earlier post shows Daley’s 12/22/2022 Notice about PA 102-721 takes effect 01/01/2023. While there may be a “little known codicil” about laws in effect at time of “planning not signature” … unless there is some sort of unknown federal law, this doesn’t even pass the smell test.


  25. - DMC - Tuesday, Jun 25, 24 @ 6:30 pm:

    To be clear. This isn’t tax payer money. It is money from users of the tollway. Big difference.


  26. - Anyone Remember - Tuesday, Jun 25, 24 @ 9:30 pm:

    ===This isn’t tax payer money.===

    We went through this when Arthur Philip, Pate’s brother, told Blago’s people they were exempt from Blago’s Ethics Requirements and compliance with the Rutan Ruling. They are covered by government rules and regulations, even if no tax $ is used.


  27. - Rich Miller - Tuesday, Jun 25, 24 @ 10:39 pm:

    ===To be clear. This isn’t tax payer money.===

    It’s somebody else’s money. And it’s supposed to be spent wisely.


  28. - Rich Miller - Tuesday, Jun 25, 24 @ 11:17 pm:

    …Also a toll is just a tax by a different name. So, spare us the sophomoric mansplaining.


  29. - Carry - Thursday, Jun 27, 24 @ 1:59 pm:

    If the tollway was not aware of the new law, I am sure they did not notify any of the companies about it. Also, why did Peter Foernssler wait until April to review the submitted bid? If I remember correctly, the tollway hires a third party to audit the bids before they are awarded.


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