NEWS

November 18, 2010
Chicago builder to keep Fort Madison prison project

An administrative law judge has upheld a decision by state officials to award a $116.9 million contract to a Chicago construction firm to build a new state prison in Fort Madison.

Master Builders of Iowa, representing about 2,000 Iowa businesses, and the Weitz Co., a Des Moines construction company, had contended that Walsh Construction of Chicago submitted incorrect bidding forms and the contract should be rescinded. State officials had maintained the contract was properly awarded.

Administrative Law Judge Kerry Anderson ruled that Master Builders lacked standing to challenge the contract award because it was not a losing bidder. She also determined Walsh Construction was not required to disclose information about Illinois' labor preference law on its bidding form, eliminating a key challenge made by Weitz.

"Walsh is the lowest responsible bidder on the Iowa State Prison project. The result of this ruling is that it will be awarded the contract for that project," Anderson wrote. Weitz was the lowest Iowa bidder, offering to construct the 800-bed maximum-security prison for $121.5 million. Scott Norvell, CEO of Master Builders of Iowa, said Wednesday he was disappointed in the ruling.

He said the contract award to Walsh Construction will result in the loss of hundreds of jobs and employment opportunities for Iowa workers on a project funded by state taxpayers. No decision has been made on whether to appeal the ruling to Polk County District Court, he added. Mike Tousley, executive vice president of the Weitz Co., said Wednesday the company also is studying the administrative law judge's decision and is considering its options.

Walsh has hired 55 subcontractors for the Fort Madison project. They include 20 from Iowa, 11 from Illinois, six from Missouri, five from Wisconsin, and other subcontractors from Minnesota, Texas, Tennessee, Indiana, South Dakota, Ohio, Pennsylvania and Nebraska. That situation has raised questions about whether a majority of the estimated 300 to 500 construction workers employed on the prison project will be from outside Iowa.

Robert Bailey, a spokesman for the Iowa Department of Administrative Services, said state officials have asked Walsh Construction to hire as many Iowa workers as possible. The state will maintain weekly reports on the number of Iowans employed on the project, he added. The prison is being built using a project labor agreement negotiated with Iowa trades union leaders.

Union officials and the Culver administration contend the agreement will assure that Iowa workers will be heavily represented in the project's work force. General construction work on the Iowa State Penitentiary project is scheduled to begin the week after Thanksgiving. Site preparation work has been under way since spring. The new prison is scheduled to open in July 2013.

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