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Investigation of 22 road contracts sought
Bids accepted in spite of objections by state experts

By Tom Loftus

FRANKFORT, Ky. -- The state's top highway engineer said yesterday that the Transportation Cabinet's inspector general is investigating 22 road contracts awarded in 2006 and 2007 over the objections of department experts.
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"When (the experts) were asked to look at it, they said, 'No, we can't recommend award,' " said Gilbert Newman, the engineer. "But it was awarded."

Transportation Cabinet Secretary Joe Prather confirmed yesterday that the agency's inspector general is looking at matters that occurred during the administration of former Gov. Ernie Fletcher. But he declined to say what they are.

The inspector general, David Ray, also declined to comment on the investigation.

The matter that Newman said was referred to Ray's office involves recommendations by a group of department engineers called the Awards Committee.

In an interview, Newman said he discovered recently that the committee concluded the 22 bids in question should be rejected. But those recommendations were overridden, and he said he was unable to determine why.

Newman said he was particularly curious about a bid opening on July 27, 2007, when the committee made 16 recommendations to reject bids because they were well above cost estimates. He said he was told that the committee then held a second meeting and approved 15 of the bids -- though no minutes of the second meeting exist.

"That whole (bid) letting was just very suspect to me," Newman said. He said that during his eight-month tenure he has "never done anything contrary to the recommendation of the Awards Committee."

In 2006 and 2007, the committee made its recommendations to then-Highway Commissioner Marc Williams, who reported to Transportation Secretary Bill Nighbert and had the authority to override the recommendations.

Williams could not be reached yesterday. Nighbert's attorney, Howard Mann, did not respond to a message left at his office.
Nighbert, Lawson

Nighbert is a focus of an FBI probe into alleged leaks of confidential cost estimates on projects to road contractor Leonard Lawson.

An FBI affidavit filed in federal court last week alleges that former cabinet engineer Jim Rummage -- operating at the direction of Nighbert and Lawson -- helped get such estimates for Lawson. The affidavit alleged that Lawson paid Rummage $20,000 in cash during the same time period.

Rummage is cooperating with investigators, his attorney has said.

Nighbert has said through his attorney that the allegations are false. Lawson's attorney has said the affidavit contains nothing more than innuendo and suspicions and should not have been released.

A grand jury has heard evidence in the case, but no charges have been filed.

Last month The Courier-Journal filed a request under the Kentucky Open Records Act and obtained minutes of Awards Committee meetings dating to Jan. 1, 2006. The newspaper also sought any records that documented decisions of top cabinet officials to override the committee, but it was told that no such documents exist.

The newspaper reviewed the committee's minutes and compared its recommendations to the Department of Highways Web site, where final actions on contract awards are listed. The review revealed 22 instances in 2006 and 2007 in which a contract was awarded when the committee recommended rejecting the bid.

In all of those cases, the low bid was at least 7.78 percent above the department's cost estimate. The department has an unwritten policy to reject the low bid -- particularly if it is the only bid -- when it is more than 7 percent over the estimate.

Of the 22 contracts on which the minutes reflect the Awards Committee was overruled, 21 of them had only one bidder.

Newman said he asked Ryan Griffith, the cabinet engineer who oversees the process of making estimates, about the July 27 bid opening. He said Griffith told him that the Awards Committee reconvened after the meeting and recommended awarding 15 of those 16 contracts. However, Newman said Griffith could find no minutes for the reconvened meeting.

The one bid that was rejected at the second meeting was from Bizzack Construction for a project in Carter County estimated to cost $9,684,980. Bizzack submitted the only bid -- $11,680,284, 20.6 percent above the estimate.

The Department of Highways Web site shows that the contract was awarded on Aug. 15, 2007.
Bizzack's Lawson ties

Bizzack Construction is a business that is controlled half by Bizzack Inc. and half by Mountain Materials Inc. Bizzack Inc.'s directors are Leonard Lawson and his son, Steve, according to records of the Kentucky secretary of state's office.

Newman said Mountain Materials is an affiliate of Oldcastle Materials, an international construction firm that bought some of the Lawson family's construction interests in 2005.

Lester Wimpy, president of Bizzack Construction, said in an interview yesterday that the company submitted what it believed to be a reasonable bid for the Carter County project.

He said he could not recall if he was ever told that the Awards Committee recommended rejecting the bid. But he did say he wrote a letter to the department explaining why he thought the bid was reasonable.

He said the project is under way now. And after starting the work, he said, he is certain the Bizzack bid was reasonable.