For at least three months, John Renfrow, director of the Miami-Dade Water & Sewer Department, knew about the $18.5 million fine CH2M Hill had to pay the federal government to avoid being prosecuted for time card fraud. Yet Renfrow didn't stop the Colorado-based firm from bidding on a lucrative contract to oversee the massive and desperately needed $1.6 billion overhaul of the county's sewage system after receiving assurances from company officials that the scam was an isolated incident involving rogue employees, according to a June 4 letter.
On Wednesday, a team of county evaluators ranked CH2M Hill's $79 million bid first, ahead of the only other competitor, Los Angeles-based AECOMM. However, after Banana Republican wrote a post detailing the CH2M Hill scandal, Miami-Dade officials say they will thoroughly vet CH2M Hill before it is declared the winner.
A water and sewer spokeswoman provided Banana Republican with the June 4 letter from CH2M Hill's Florida Operations Manager Matt Alvarez thanking Renfrow for meeting with him to discuss the company's troubles with the U.S. Department of Justice. CH2M Hill settled with the feds in March four years after the feds busted a company subsidiary brazenly allowing employees to file for false overtime pay at a shuttered nuclear bomb testing site in Hanford, Washington, where the firm was cleaning up hazardous waste.
In his letter, Alvarez noted that the Department of Energy never canceled CH2M Hill's contract, allowing the company to finish the job. He added that no corporate officers or employees of the firm were criminally prosecuted. The indictments were limited to people who worked at the subsidiary.
"The events that formed the basis of the settlement of the Hanford Tank Farm site are inconsistent with our history of ethical business practices," Alvarez wrote.
CH2M Hill spokesman John Corsi has refused to comment after complaining that Banana Republican did not give him enough time to answer questions for our post on Wednesday. "I have been in this business for 20 plus years and this is new low for unethical journalism," Corsi said.
He told the Miami Herald on Thursday that the Hanford, Washington, debacle is "not indicative of us as a firm at all...I don't think it has anything to do with our ability to serve the citizens of Miami-Dade County."
Now the selection committee must go through a due-diligence phase before passing along a final recommendation to County Mayor Carlos Gimenez. In addition, the Miami-Dade Internal Service Department -- which is in charge of vetting county vendors -- is reviewing CH2M Hill's settlement with the justice department "to determine if the firm is responsible to continue to perform the county contracts that are currently in place," according to a statement provided by Water & Sewer Department Spokeswoman Jennifer Messemer.
The statement also says that "any future award recommendations are subject to a thorough responsibility review to include the firm's capacity and integrity."
Should CH2M Hill pass the county's vetting, Gimenez will then authorize staff to negotiate final terms of the agreement, including how to break down the payments to the bid winner. A final vote on the contract would likely go before county commissioners in December, according to the Herald.
Coincidentally, CH2M Hill has surrounded itself with close allies of Gimenez. The company's lobbyist Marcelo LLorente, who told the Herald the time card issue was raised "by people trying to circumvent the process through the media," was one of the losing candidates in the 2011 mayoral special election who endorsed Gimenez in the run-off against ex-Hialeah Mayor Julio Robaina. Staffers for the former state legislator's failed mayoral bid also went on to work for Gimenez in the run-off and his reelection campaign last year.
Llorente is not the only Gimenez hanger-on on the CH2M Hill team. One of the firm's subcontractors is G-T Construction Group, which is owned by Rafael Garcia-Toledo, who served as finance director for Gimenez's reelection campaign and chauffeured the mayor to events during the campaign.
If CH2M Hill wins, Garcia-Toledo's firm, which has no experience providing engineering services for water and sewage systems, stands to get eight percent of the management work, or about $6 million. Not too shabby, eh?
Follow Francisco Alvarado on Twitter: @thefrankness