County reaffirms vote, rejects lowest bid for road project

By Jeff Pope

Tuesday, July 21, 2009 | 6:51 p.m.

Construction on widening 2 1/2 miles of the northern 215 Beltway was supposed to have started last month. Instead, the project is going to court.

An attorney for Fisher Sand and Gravel has said his company should have been awarded the contract because it was the lowest responsible and responsive bidder.

But county commissioners said Tuesday that tax fraud convictions of former employees and environmental violations are reason enough to deny awarding the construction contract to Fisher, even though the company submitted the lowest bid.

Commissioners voted 5-2 Tuesday to award the project to Las Vegas Paving, whose bid is $4.6 million more expensive.

It was the second time the commission approved the $116.8 million bid from Las Vegas Paving. In April, commissioners threw out Fisher’s $112.2 million bid, saying the company was non-responsive because its subcontractors lacked appropriate licenses.

Commissioners based their earlier decision, in part, on a bid protest from Las Vegas Paving. But last month, a District Court judge ruled that that protest was filed too late and could not be considered in their decision.

On Tuesday, commissioners called Fisher a “non-responsible bidder” citing convictions of three former employees on tax charges in North Dakota, a discrimination suit filed in New Mexico and allegations the company violated water and air quality laws on projects in Arizona.

The transgressions were raised by Commissioner Steve Sisolak, who also replayed a news report from a Phoenix TV station about 1,368 violations levied by the Arizona Department of Air Quality during a 20-month period.

Commissioners Rory Reid, Tom Collins, Chris Giunchigliani, Lawrence Weekly and Sisolak voted in favor of giving the contract to Las Vegas Paving.

“The fact that your company has so many issues in the other states is more than adequate and more than a justification for us to make a decision,” Collins said.

Attorney Stanley Parry, representing Fisher, called the allegations “superficial” and said they failed to meet the statutory criteria for being an irresponsible bidder.

After the commission’s decision, Parry said the vote was politically motivated and accused the commission of kowtowing to unions. Fisher is a non-union contractor that does use union subcontractors, he said.

“The truth was slayed today. The truth was suppressed,” he said. “The union decided to exercise their political influence to dirty up Fisher and get this bid awarded to a union contractor, Las Vegas Paving.”

Parry said the company will take its complaint to court.

“We have never been charged with destroying or harming in any way a project or any mismanagement of malfeasance of any project we have done,” he said.

An attorney representing the International Union of Operating Engineers Local 12 also spoke Tuesday, saying Fisher showed a history of deceiving government agencies. The union’s local shop is headquartered in Pasadena, Calif., with offices in Las Vegas.

“The public interest is not served by awarding the contract to an entity, which in and of itself may become the subject of public scrutiny,” attorney Lewis Levy said.

Levy said the union became involved following the judicial decision and raised the issue of responsibility.

Joe Miller, Fisher’s project manager, released a statement Tuesday saying the company was slandered during the commission meeting.

“This was the Union Operating Engineers Local 12’s second attempt to discredit Fisher Sand and Gravel and we are disappointed in the decision today by the Clark County Commission,” he said. “We believe it would have been in the best interest of the public to allow a continuance so that we could have responded to the allegations and charges brought against our company.

“It is unfair to have double standards within the construction industry based on union preference. Non-union craftsmen should have the right to work in Clark County on prevailing wage projects in a right-to-work state. It is disconcerting that Las Vegas Paving was not placed under the same scrutiny or investigation as endured today by Fisher Sand and Gravel. Yet, Fisher -- the lowest responsive, responsible bidder with the best bid -- was slandered in a public hearing.”

Owner Tommy Fisher defended the company his father started in 1952 in North Dakota. The company operates in 10 states and has worked in Nevada for more than a decade.

Tommy Fisher and the company cooperated with the Internal Revenue Service during a two-year investigation that resulted in minority owner Michael Fisher, chief financial officer Amiel Schaff and comptroller Clyde Frank pleading guilty to tax fraud in April.

Authorities said Michael Fisher used company profits to pay for personal expenses, then deducted the payments on corporate tax returns. He also failed to report all of his income on his individual income tax returns.

Tommy Fisher was never implicated and took over full ownership of the family business after he learned of the allegations against his brother.

The company paid nearly $1.17 million in restitution and fines and is in compliance with an agreement with the Department of Justice.

On April 1, the Equal Employment Opportunity Commission filed a lawsuit alleging Fisher Sand and Gravel subjected female employees in New Mexico to sexual harassment and fired one of them for complaining about it.

The case has not been settled.

Tommy Fisher said the suit was filed by a disgruntled former employee.

In March, the Arizona Department of Environmental Quality filed two separate violations of state water quality statutes against the company for a contracted project near Sedona.

The violations allege that Fisher was responsible for a sewage spill into a creek and the company failed to report it.

A spokesman for the Arizona Department of Transportation said at the time that the alleged violations were an administrative issue and the spills did not cause any damage to the waterway.

In May, the U.S. Environmental Protection Agency fined Fisher’s subsidiary, Southwest Asphalt, $18,200 for failing to provide annual chemical hazard reports for its gravel pit near downtown Phoenix. The company has since corrected the violations.

The Maricopa County Air Quality Department cited the same gravel pit for violating standards between January 2007 and August 2008. On June 24, the agency filed an additional eight notices of violation, bringing the total to 1,368.

The alleged violations include exceeding emission limits, exceeding daily asphalt production limits and failure to provide accurate and complete records.

Tommy Fisher said Tuesday that many of the violations were redundant and caused by poor bookkeeping. The company has started new procedures to correct the mistakes and is working with Phoenix and Maricopa County to address complaints, he said.

Fisher couldn’t provide answers to a couple of allegations, saying he would have to investigate them.

“If I had known this was going to be on today and I could have been prepared, I probably could have been prepared for all the good things we’ve done in the community,” he said.

The Arizona Department of Transportation has not been scared off. ADOT awarded Fisher a $21.8 million freeway contract this month over similar protests made by the second-lowest bidder.

Fisher said his company is highly qualified to do the work, citing its experience building the largest contracted NDOT project, the I-580 freeway extension connecting Reno and Carson City; and the largest private grading and paving project in the state, the Crystal Ridge/Ascaya residential development in Henderson.

“There is no question that we can perform the work that you need. In my heart, I think I can do it better than the competition and quicker,” he said.

Commission Chairman Rory Reid said the allegations wouldn’t bother him so much if they had occurred years ago.

“This is not a cavalcade of what was done over the past decade. This is what happened this year,” he said. “I think that’s a basis for this board to be very concerned.”

Commissioners Larry Brown and Susan Brager voted against awarding the contract to Las Vegas Paving. Brager said she needed more time to review the allegations and Brown tried to delay a decision for two weeks but failed to garner enough support.

“I’m not even sure if the applicant was given the opportunity to see all the charges against him,” Brown said. “But I am not going to base a decision on some investigative reporter from Phoenix.”

Brown also warned that the county was headed down a slippery slope by denying contracts to companies with rocky histories with government agencies. There are many good companies that have completed billions of dollars of work for governments in the valley that also have sued those governments, he said.

“If we start turning over rocks for local companies, out-of-town companies, all companies, contractors, subcontractors, boy, you better be ready to see some crazy things under those rocks,” Brown said.

Even Las Vegas Paving is not immune to government sanctions. The company agreed to pay $82,500 in 2000 for alleged violations of the Clean Air Act at its Lone Mountain and Apex rock crushing and asphalt batch processing plants that occurred in the mid- to late-1990s.