Seattle Tunnel Partners agrees to reform minority contracting practices

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by KING 5 News

KING5.com

Posted on March 20, 2014 at 5:09 PM

Updated Thursday, Mar 20 at 10:35 PM

The Washington State Department of Transportation announced Thursday that the main contractor on the Seattle tunnel project is now contractually obligated to provide $96 million in work to minority and women-owned businesses.

WSDOT also said it has entered into an agreement with the federal government on how it will ensure that Seattle Tunnel Partners follows through on its commitments to minority contractors.

"We've made great strides in recent months to ensure a level playing field for those small, disadvantaged businesses qualified to work on WSDOT projects, both on the AWV Replacement Program and throughout the agency," said Transportation Secretary Lynn Peterson.

At issue was Seattle Tunnel Partners' failure to meet goals set by the federal government for subcontracting a portion of work to so-called disadvantaged business entities (DBEs) -- small construction companies owned by minorities or women. Federal law requires projects funded with federal funds to provide some work to DBEs.

A series of stories by KING 5 last fall showed that STP was failing to meet DBE goals, including the fact that it had provided just $7 million to minority firms, even as the project itself was more than 50 percent complete.

The Federal Highway Administration conducted its own review of WSDOT's DBE efforts and found that the state's mishandling of the program allowed STP to discriminate against small, minority-owned businesses. Failure to address the federal government's concerns could have put funding for the tunnel project in jeopardy.

In January, WSDOT told STP that the contractor's failure to recruit minority subcontractors meant that STP was in breach of its contract with the state.

WSDOT has now withdrawn that finding, but the agency said that if STP does not meet the terms of the new agreement, the state "may either reinstate the finding or implement other appropriate contract actions."

Prior to today's announcement, STP was not legally required to provide a set amount of subcontracts to DBE firms, only to make a good faith effort. In addition to writing the $96 million DBE amount into STP's contract with WSDOT, the company will be required to hire "a third-party independent program coordinator to review their DBE subcontracting activities and procedures and to verify that their actions are in compliance with the appropriate federal and state regulations as well as WSDOT contractual requirements."

WSDOT also said it is hiring a DBE program administrator to oversee STP's compliance and to conduct outreach to minority contractors.

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