The Michigan left at North Oracle and West Grant roads generated a fair amount of controversy after it was finished in the fall of 2013.
Roughly 80 percent of respondents to an online poll told the Road Runner back then that the novel intersections, which research shows are generally safer and more efficient, were a bad idea, though those opinions have since softened.
What wasn’t as clear at the time was that the actual construction of the intersection was also not without controversy.
The local Falcone Brothers & Associates firm won the roughly $7.5 million contract in the summer of 2012 and, as company President Gaetano Falcone tells it, the work did not go as they had anticipated.
“Pretty much the whole job needed to be edited,” he said.
“During the course of construction, (the company) encountered and was forced to contend with plan errors, utility conflicts, discovered subterranean structures, and other design changes in the project,” issues that “had an adverse impact on the length of time and amount of resources (the company) had to use,” a complaint filed by the company in Pima County Superior Court in May 2015 reads.
Among the unexpected items found underground were a septic tank and a staircase, Falcone told the Road Runner.
To make up for what the company felt were extra costs and delays, the Falcone Brothers filed a notice of claim with the city in early 2014 seeking $2.2 million. As per the terms of the city of Tucson Department of Procurement’s dispute resolution process at the time, that claim was evaluated by a city contract officer, who denied it, then a hearing officer hired by the office, who also denied it. That decision was reviewed by Procurement Director Marcheta Gillespie, who issued a final decision denying the claim in April 2015, according to a recent ruling from the Arizona Court of Appeals.
In the hearing officer’s decision, Harold Merkow wrote that the Falcone Brothers inadequately documented their claim, among other shortcomings.
“(The company’s) lamentations about delay, inefficiency, working out of sequence, and loss of productivity can be directly attributed to its lack of an orderly, clear, rational, and logical schedule from which it could perform its work,” he wrote.
But whether the city or the contractor is correct in this case is not the meat of the matter. Rather, the dispute process itself is a large part of what is being contested, and that appeals court ruling came down forcefully in favor of the Falcone Brothers’ claim that it is unfair — at least as it existed when the claim was first filed. Because every step took place under the auspices of the procurement office, Falcone criticized it for making that office the “judge, jury and executioner” in his case.
Gillespie disputed that criticism, and said some changes to the process that address the concerns raised by the appeals court have already been implemented.
In its motion to dismiss in June 2015, the city claimed the company’s case should not proceed because the Falcone Brothers had not “exhausted” all administrative remedies available to it.
Additionally, because the procurement office had issued a ruling on the case and the company was presenting the same case again in superior court, the suit violated several legal principles.
The Arizona Court of Appeals begged to differ, overturned the Pima County Superior Court dismissal and sent the case back for “further proceedings.”
In its Aug. 25 ruling, written by Chief Judge Peter Eckerstrom, the court points to the fact that the office appoints the hearing officer “without any apparent constraints on this appointment power” and its director ultimately OKs or modifies the decision.
“Such a one-sided scheme is invalid because it denies the other party a neutral, unbiased decision maker,” the ruling reads. That “flaw” is part of why the court felt the city had no right to try and stop the Falcone Brothers from seeking recourse in superior court.
Gillespie took issue with that characterization, saying she doesn’t “appoint anyone,” is not personally involved in the selection of hearing officers, and those officers are hired using the same process the city uses for purchasing any service.
Furthermore, in 2015 the procurement code was updated to take away the director’s ability to review or modify the hearing officer’s decision, which is now considered final. That change was not prompted by the Falcone case, and the rest of the dispute process remains the same, Gillespie said.
But that isn’t good enough, at least in the eyes of the Falcone Brothers.
In the company’s July 2015 response to the city’s motion to dismiss, David Sandoval, their attorney, wrote that hearing officers hired have a “pecuniary interest in continuing that business relationship,” implying that there could be a bias to frequently rule in the favor of their periodic employer, the city.
Gillespie said that hearing officers’ recommendations “have not always been in the favor of the city,” and she could not recall an instance during her roughly 25 years with the city of a procurement director going against those recommendations.
Nevertheless, Gillespie said her office is “going to look into” the possibility of finding other ways to select hearing officers.
“This office is here to ensure the integrity of the procurement process,” she said. “We always want to ensure that we have a code and a process that is best for all parties.”
