October 17, 2018
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New LePage bond spat threatens $600 million in transportation projects

Gabor Degre | BDN file
Gabor Degre | BDN file
Interstate 395 between Bangor and Brewer
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AUGUSTA, Maine — Approximately $600 million earmarked for Maine infrastructure projects is held up in an arcane dispute between Gov. Paul LePage and State Treasurer Terry Hayes over a contract with lawyers hired to work on a bond sale set for June.

The latest spat involving the Republican governor and state bonding has been simmering since March in Augusta’s bureaucracy, but the consequences could be dire for Maine’s construction industry, which a key official said is “wild” about a delay risking 4,500 jobs in the state.

Nearly two months ago, Hayes, an independent, awarded a contract to Locke Lord, an international law firm with a Boston office, to represent the state in its normal June bond sale, which could include $100 million approved by Maine voters in 2016 for transportation projects that would trigger $500 million in federal, local and other matching funds.

But the LePage administration has flagged several perceived problems with the request for proposals. In a Wednesday letter to Hayes, LePage said the agreement with Locke Lord wasn’t approved by an executive branch panel that reviews contracts because it “appears designed to preclude” Maine firms from bidding.

He suggested a new, modified request for proposals that get “a better value contract.” But in a Friday interview, Hayes ruled out crafting another request for proposals on the contract that would pay $70,000 for this summer’s bond sale.

She said while she signed a letter saying the contract required panel approval, it doesn’t appear that it was needed. Hayes also said that the language interpreted by LePage — which asks for references from three other state treasurers — as not letting Maine firms bid was similar to language used before by other treasurers and doesn’t keep state companies from bidding.

However, she said that there is “no dispute” on bonding from her perspective and that she’s waiting on LePage to give her a figure for the bonds that he wants sold this year, saying “if somebody wants to do the treasurer’s job, they can run for treasurer.”

“Until somebody else is elected treasurer, this is my job,” Hayes said. “I feel like I’ve done it and I’m ready to continue doing it.”

Locke Lord won the contract — which is capped at $142,000 for three years — over Maine law giant Preti Flaherty. In a letter after the award, Hayes told Preti that it “may have violated” rules that restrict a bidder’s communication on the bid to one point of contact in the treasurer’s office.

James Pitney, a Preti lawyer, didn’t respond to messages on Friday. LePage spokesman Peter Steele said “we don’t know who the treasurer is talking about” in her warning, but that “several Maine firms reached out” to LePage “expressing dismay” that they couldn’t bid.

Maine Transportation Commissioner David Bernhardt broke news of the dispute at a Maine Better Transportation Association event in Freeport on Thursday, sending shockwaves through the state’s construction industry.

Many construction firms have already geared up for Maine’s short season and bid openings have been delayed as a result of the dispute over the past month. Matt Marks, the CEO of the Associated General Contractors of Maine said his members are “through the roof wild” about it.

He said some are considering not bringing workers back from seasonal layoffs or shutting down for weeks, saying the state needs to “move beyond this quickly” and “somebody’s got to be at will to move.”

One of those companies is Pike Industries. Jim Hanley, the company’s head of sales in Maine, said $11 million in jobs are tied up and that 20 people scheduled to come back from a seasonal layoff on Monday have been told to stay home.

“I understand both sides of this issue,” Hanley said of LePage and Hayes. “However, I don’t think either one of them should be allowing it to get to a point where people are sitting at home and not working and companies are losing money — lots of money — every day.”

 


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