The Game of UDOT | Cover Story | Salt Lake City | Salt Lake City Weekly

February 26, 2014 News » Cover Story

The Game of UDOT 

Retire from state. Get job with private firm. Land state contract. Collect taxpayer millions. You win!

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For being so vital to the Beehive State, the Utah Department of Transportation is an agency that’s largely invisible to Utahns. UDOT is, after all, everywhere and nowhere at once, as anonymous as the 6,000 miles of roads it’s tasked to keep safe and pothole-free for every Utahn who’s behind a wheel or about to cross a road. Usually, the name only spills from the lips of Utahns (accompanied by an expletive) at the sight of a flashing sign warning of construction or a traffic jam around the bend.

But the agency is also a major conduit for state and federal cash, and City Weekly has learned through a number of public-records requests that millions of dollars in contracts have been paid to third-party firms that had the good sense to hire former UDOT employees and top-level managers.

City Weekly found that in multiple instances, former UDOT employees took the express lane from public service to the private sector, where they assisted their new employers in winning contracts with UDOT to help do their former government jobs.

The cost of these taxpayer-funded contracts are considerably more than what it would cost for UDOT to hire new full-time employees. In two contracts that City Weekly found, UDOT paid $639,601 combined to help replace the work of four employees, whose salaries—including benefits—had totaled $307,670.

UDOT argues that it’s smarter to pay more for tech-savvy and innovative contractors to come in on specific projects than to hire and train full-time staffers who might cost the state more in the long run. In a written statement to City Weekly, UDOT spokesman John Gleason says the agency’s hand-in-glove work with the private sector delivers results.

“A great example of this is the I-15 CORE project, the fastest billion-dollar public highway project completed in U.S. history—and $260 million under budget,” he says.

But though third-party contractors may in some cases be quicker, smarter and more creative than civil servants, firms that invest in hiring retired civil servants also seem to gain the upper hand against their competitors when bidding on lucrative contracts.

And speaking of that billion-dollar I-15 CORE Project, City Weekly also found through records requests that some of UDOT’s top staff overseeing the CORE project left UDOT to join firms that then turned around and snatched up some particularly juicy contracts worth more than $5.4 million combined.

While the major dollars passing from UDOT to contracts involving their former employees can raise eyebrows for taxpayers, the practice is not illegal, and UDOT says the contracts have all followed state and federal guidelines. UDOT, like any state agency, operates in a political climate that emphasizes smaller, leaner government working with the free market and not against it.

But for David Irvine of Alliance for a Better Utah, a political-ethics advocacy organization, taxpayers should be concerned about civil servants forming close ties with private companies.

“I don’t know specifically what UDOT represented to you, but I can imagine that it would be some kind of explanation that ‘in the long run this saves money and blah blah blah,’ ” Irvine says. “But basically what this is about is a way for people who leave government to continue to earn [in the private sector] by playing off the expertise and the information they were privy to as government employees. That ought to raise a question as to whether there is some influence-peddling going on.”

click to enlarge udotroundabout.jpg

Retirement Roundabout
As City Weekly reported in September 2013, UDOT has an informal policy of deciding that contract work ought to, in some cases, replace the work of employees whose positions with the agency could be upended by a sudden fluctuation in federal cash.

Before her retirement, Leone Gibson was the head of UDOT’s Public Transit Team, which administers federal funds to state public-transit projects. After retiring in September 2012, she was hired by H.W. Lochner—a firm to which she’d awarded a $149,769 contract in 2012, according to public records.

Gibson helped H.W. Lochner with its pitch for a UDOT contract to do the work of Gibson’s former assistant, who had also left the agency and had been making a salary of $39,707 (not counting benefits). Lochner won the $518,841 contract, and Gibson not only came back to UDOT full-time as part of the contract to replace her former assistant, but also got an office there, where she resumed work assisting the Public Transit Team in awarding federal grants.

Gibson had not responded to requests for comment by press time.

Though UDOT told City Weekly in September 2013 that the contract was to replace the work of Gibson’s assistant, UDOT said in response to questions for this story that the contract was to replace Gibson’s assistant and two other employees who had left the Public Transit Team, including one who left in 2011 and was never replaced.

“Through contracting, UDOT significantly reduces risk and has the ability to modify or cancel a contract if federal funding fluctuates significantly or if the contractor is not performing,” UDOT spokesman Gleason wrote in an e-mailed response. “For example, in the public-transit department, there has been significant turnover, which creates challenges that make it more difficult to manage a project of this nature and complexity, and ultimately impacts the quality and service provided to the public.”

Paying half a million dollars for one year of contract work to replace lost staff was, Gleason says, the best fit for the circumstances. The contract was flexible enough to respond to possible dips in federal funding while also efficiently delivering services. The high price tag, UDOT says, also accounts for the contractor’s overhead.

In the long term, Gleason says, not having to micromanage contractors and not having to pay costs like holiday pay, sick leave, overtime and other benefits just makes outside help a better alternative to hiring new staff.

Two others who left UDOT in 2012 were also hired by private firms that went on to nab contracts aiding the departments that the individuals had called home when they were state employees.

Steve Nielsen, who was active in construction engineering for UDOT, retired on June 15, 2012. Less than two weeks later, he was included on a $103,033 contract for the firm Stanley Consultants and was approved June 21, 2012, to do the same work he’d done when he was a state employee.

Lee Theobald, a planning engineer, also said adieu to UDOT in 2012, only to come back later that year, working half time as part of a 22-month, $120,760 contract with WCEC Engineers.

These two firms were selected out of large pools of potential bidders from two different areas of expertise—construction engineering and planning. Qualifying firms are placed in the pool with the top three all-around most qualified candidates ranked by the agency.

In both of the above cases, Stanley and WCEC were not listed in the top three overall contenders.

Gleason says that the top three firms don’t necessarily win every contract; other qualified bidders might be best suited to certain contracts. The selection for a specific project is an “entirely different process and the rankings in the pool were not relevant,” he says.

Angela Richey, spokeswoman for Stanley Consultants, says that Nielsen was an excellent addition to their team. “Yeah, we have a few former UDOT employees,” she says. “They are great to have on your team.”

A representative for WCEC did not return comment for this story.

Richey says that not every former UDOT employee is fit for contract work, but that skilled candidates who know UDOT’s standards make good employees. She adds that all “the leaders in the industry” have former UDOT employees on staff.

“From a business-development perspective, it certainly brings value to your team,” she says.

Rep. Johnny Anderson, R-Taylorsville, the chairman of both the Legislature’s House Transportation Committee as well as the appropriations committee that’s responsible for funding transportation in the state, says there is nothing wrong with former state employees working in the private sector. When it comes to laws covering government procurement, he says, the only concern is making sure that a state employee doesn’t work to secure a contract for a future private-sector employer while punching the clock for the state.

Gleason says that in all the cases of the retired employees detouring into private firms and then coming to work at UDOT, there were no attempts by any outgoing employees to set up their own contracts while still working for the state.

That includes some former UDOT bosses who have left public service and taken the express lane straight to top positions in the private-transportation game.

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