Lawsuit claims Hudson Tunnel project bidding rule unfairly blocks contractor
One of New Jersey’s biggest construction firms alleges that the Gateway Development Commission illegally shut it out from bidding on early work for the planned rail tunnel between New York and New Jersey.
The Farmingdale-based company George Harms Construction Co. filed a lawsuit on Nov. 18 in the U.S. District Court for the District of New Jersey challenging the bidding rules.
In a written statement sent to The Jersey Vindicator, the company claims that the commission, which oversees the federally funded $16 billion project, has adopted an illegal and discriminatory labor deal that excludes qualified bidders, favors select unions, threatens to delay a key facet of the program, and wastes taxpayer funds.
“The [commission], excluding the contractors it would affect, secretly drafted and negotiated the [project labor agreement] with only the trade unions it was designed to benefit,” company head Rob Harms said in the written statement sent to The Vindicator.
“The commission’s actions unlawfully shrink the pool of qualified contractors and labor,” he continued. “The result is higher costs for critical infrastructure projects at a time when taxpayers can least afford it.”
The Gateway Program is a sweeping, multibillion-dollar series of rail infrastructure upgrades intended to modernize and expand the train system between New Jersey and New York City and improve public transit up and down the East Coast. Its centerpiece is a new two-tube tunnel that would double trans-Hudson rail capacity while enabling the rehabilitation of the 114-year-old existing tunnel damaged during Superstorm Sandy.
Harms’ suit seeks to halt bidding on what is known as the New Jersey Surface Alignment Project, which will build a 7,500-foot-long viaduct and berm alongside the Northeast Corridor rail tracks.
The viaduct is a crucial piece of the larger project because it will let construction workers build tracks connecting the corridor’s existing New Jersey line with the entrance of the proposed Hudson Tunnel.
Harms’ roughly 200 union workers are represented by the United Steelworkers — a group the company says was “unlawfully excluded” from the commission’s project labor agreement, even though Harms is one of only four prequalified firms that can do the work.
“The project labor agreement prevents Harms, and other similarly situated contractors, from bidding because Harms cannot recognize another union as the representative of its workforce under its [collective bargaining agreement] with the [United Steelworkers] and therefore cannot sign the letter of assent,” according to the lawsuit.
That means the union can’t sign onto the project, and George Harms Construction Co. is out of luck.
The lawsuit, which names as defendants every member of the commission as well as the Federal Transit Administration and the U.S. Department of Transportation, also seeks to revoke the project labor agreement that it said “favors a group of hand-picked trade unions in violation of state and federal laws.”
The Federal Transit Administration referred press inquiries to the U.S. Department of Justice, which did not respond to a request for comment.
Harms’ attorney, Kevin Coakley, said the firm didn’t want to sue but had no choice after the commission blew off the construction firm’s attempts to find an “amicable solution that benefits all stakeholders and preserves fair competition.”
“Why wouldn’t the [commission] want to have a competitive process that considers all qualified bidders and saves taxpayer money?” Coakley said.
For now, the federal government is paying about $12 billion toward the Gateway tunnel project, while local sources contribute another $4 billion, according to the lawsuit.
The commission declined to comment on the litigation. But commission spokesman Stephen Sigmund wrote in an email that no bidders have been excluded, and “any successful bidder can work on the project, regardless of which unions they have agreements with, as long as those unions assent to the [labor agreement].”
He added that project labor agreements are an “important part of ensuring our projects have consistent and predictable work rules that benefit workers and the project.”
Bids for the New Jersey Surface Alignment Project are due by Dec. 10.
Editor’s note: The first paragraph of the original story said the firm claims that the Gateway Development Commission rigged bidding for preliminary work. The communications director for the commission took issue with the words “rigged bidding” and argued that bid rigging is an illegal conspiracy where competing parties collude to manipulate the outcome of a competitive bidding process. “The argument by Harms isn’t that we illegally colluded with competing parties. It’s that by Hudson County Building Trades (who our PLA is with) excluding USW from the PLA, Harms can’t ultimately bid on the project,” the spokesman wrote.
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Steve Janoski is a multi-award-winning journalist whose work has appeared in the New York Post, USA Today, the Associated Press, The Bergen Record and the Asbury Park Press. His reporting has exposed corruption, government malfeasance and police misconduct