DENVER (CBS4) — The City and County of Denver agreed to receive $4.5 million each from Mortenson Construction and Trammell Crow Company for violations of the city’s public procurement rules which occurred during the early stages of planned renovation work at the Colorado Convention Center.
CBS4’s Brian Maass first broke the story in December 2018. The $233 million expansion of the Convention Center was approved by voters three years earlier.
The violations happened during discussions between a Trammell employee who reached out to Mortenson personnel and received guidance on proposals. The guidance, according to investigation with the Colorado Attorney General’s Office, included “estimations for the preliminary design and interview questions for the project.”
That employee misrepresented the information obtained from Mortenson as his own, the state claimed, and also relayed confidential information about the bidding process back to Mortenson personnel – information which Mortenson’s competitors did not receive.
“The blatancy of what we saw and how brazen these people were to communicate the way they were, clearly violating the rules of competitive bidding … just blew me away,” Denver Mayor Michael Hancock told CBS4 in Brian Maass’s initial report.
Maass identified the Trammel employee as Senior Vice President of Development Management Mike Sullivan. The company fired him before CBS4’s story aired.
To date, he is the only identified employee from either company.
“This settlement means we’ve made taxpayers whole, our well-established procurement rules have been fortified and this critical public project is moving forward to support our post-COVID economic recovery,” Mayor Michael B. Hancock stated in a press release Wednesday. “This case involved a serious breach of Denver’s well-established procurement rules by companies that should have known better. The watchful efforts of city employees in this administration uncovered the breach and it is because of their efforts, the leadership of Executive Director Eulois Cleckley at the Department of Transportation and Infrastructure and the tireless work of the City Attorney, Kristin Bronson, and her team, that Denver’s reputation for ethical bidding and procurement remains intact.”
Each company was required to issue a public apology as a result of the city settlement:
“Mortenson’s actions in the procurement of the Colorado Convention Center project were contrary to who we are as a company and were completely unacceptable,” Mortenson CEO Dan Johnson wrote. “We recognize in addition that our actions caused significant harm to the City. We are truly sorry, and we accept responsibility for our actions.”
“We are pleased to have resolved all matters related to the Colorado Convention Center expansion project. We deeply regret the disruption that was caused to the expansion project and apologize again to the City and the people of Denver,” Trammell Crow Company Senior Managing Director Bill Mosher said. “We now look forward to devoting our full energies to helping our great city, and our clients who do business here and elsewhere in Colorado, to prosper in the years ahead.”
State prosecutors investigated whether Mortenson and Trammell violated the Colorado Antitrust Act. But the two companies’ earlier separate settlements with the state, and together with Wednesday’s announcement of the companies’ combined settlement with the city of Denver, resolve all current civil and criminal complaints in the matter.
Mortenson also agreed to donate construction costs equal to the state fine’s value toward a city of Denver project, cost-free. The selected project was the Womens Village At Clara Brown Commons, a collection of tiny homes for homeless women. That project has been completed. Its grand opening was earlier this month.
Lastly, Mortenson is barred from bidding on City of Denver projects for three years.
Trammell must make presentations on ethics and compliance issues to construction management and business students at the University of Colorado-Boulder and Colorado State University, as well as to fellow professionals attending with the Colorado Association of General Contractors.
In July, Hensel Phelps was recommended by city staff to complete the Convention Center expansion project. The design expands the rooftop to add another ballroom and technology improvements. Construction is set to begin mid-2021 with a tentative completion date in late 2023.