Miami-Dade County

County water-and-sewer contractor paid federal-fraud settlement

The firm Miami-Dade County is considering using to oversee a massive overhaul of its decrepit water and sewer system agreed to an $18.5 million settlement with the federal government earlier this year for time-card fraud.

On Wednesday, a county selection committees looking at firms to run the project ranked CH2M Hill’s $79 million proposal for the project slightly ahead of competitor AECOM.

Whichever firm wins the contract will oversee the renovation of the Virginia Key wastewater treatment plant, the replacement of hundreds of county pump stations and the installation of miles of new lines leading to those stations.

Colorado-based CH2M is one of the world’s leading management companies for hazardous and radioactive waste removal. It has 30,000 employees.

Now the ranking is passed on to Mayor Carlos Gimenez. The mayor will then authorize the county 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 probably go before county commissioners in December.

CH2M’s problems with the federal government surfaced publicly just prior to Wednesday’s selection committee vote, when the Miami New Times blog Riptide reported the timecard fiasco.

Company lobbyist Marcelo Llorente said the timecard issue was raised “by people trying to circumvent the process through the media.”

“We followed the process,” Llorente said. “We notified the department months ago about the issue.”

Late last year the U.S. Department of Justice intervened in a lawsuit filed by a whistleblower named Carl Schroeder, who claimed that CH2M employees regularly overstated the hours they worked while cleaning underground storage tanks for the U.S. Department of Energy. Schroeder and seven other employees pleaded guilty to felony charges. DOJ later agreed not prosecute the company, instead settling for the substantial payment.

John Corsi, CH2M’s public relations director, said the settlement stems from timecards signed from 2004 to 2008 by workers for a subsidiary called the CH2M Hanford Group. They were hired when the company signed a contract with the DOE to clear out radioactive waste from 177 underground storage tanks in Washington state.

“It’s not indicative of us as a firm at all,” Corsi said. “Since then, we’ve put in many corrective actions. Took full responsibility and taken proactive steps to make sure it won’t happen again. I don’t think it has anything to do with our ability to serve the citizens of Miami-Dade County.”

CH2M’s proposal includes the hiring of 11 local smaller firms and 350 local employees to help with construction during the water and sewer overhaul. Corsi said the county was informed of his company’s settlement with the Justice Department almost three months ago.

He produced a June 4 letter from CH2M Florida Operations Manager Matt Alvarez to county Water & Sewer Director John Renfrow that explains the Justice settlement in detail, and how the company was required to hire “a substantial portion of the existing workforce” when it took over the Washington tank farm project in 1999.

The letter explains how despite the settlement, the Department of Energy made no changes to the contracted work in Washington.

“Further, there were no charges filed or indictments obtained that involved CH2M Hill Ltd., or any of its officers, directors or employees,” Alvarez wrote.

In May the county ended more than a year of negotiations with the federal government and avoided a federal lawsuit when it agreed to a consent decree with the U.S. Environmental Protection Agency. The agreement has yet to be signed off by a judge.

If the decree receives final approval, the county would spend $1.6 billion to shore up its antiquated sewage treatment plants and replace deteriorating underwater piping that, in some cases, is 100 years old. The system has been plagued by large spills.

Gimenez’s office did not comment Thursday on the CH2M bid, citing the county’s so-called cone of silence, which prohibits staffers from discussing a company while it is involved in a bidding process.

CH2M's history could come into play further along in the process.

“The county conducts due diligence before recommending a firm for award, which can include references and litigation,” said Miriam Singer, assistant director for county's Internal Services Department.

The bid for the $1.6 billion water and sewer project has been controversial from the start.

Earlier this year, after commissioners complained about the published solicitations for bids, Gimenez took the unusual step of overriding his own administrators and canceled the solicitations for the overhaul. The mayor ordered the county staff to draft new requests for proposals and again put the contract up for bid.

CH2M has prior history with the county. Since 2008, the firm has completed $5 million worth of work for several county departments. It is currently involved in a six-year, $8.8 million engineering and construction management program for the South Dade wastewater treatment plant that may get a two-year extension.

The company contributed $13,500 to the mayor’s political committee, Common Sense Now, from June 2011 to August 2012, county campaign-finance records show.

Miami Herald Staff Writer Patricia Mazzei contributed to this report.

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