Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary


Special Review

Department of Transportation

Contract for Highway 55/62 Bypass


Background

We have conducted a special review of the Minnesota Department of Transportation (MnDOT) supplemental agreement with Minnesota Transit Constructors to design and construct a temporary bypass at the intersection of Minnesota Highways 55 and 62. Department of Administration staff questioned whether MnDOT's decision to contract with Minnesota Transit Constructors for the bypass work violated state contracting requirements.

Key Conclusions

We found no evidence that MnDOT violated state statutes in acting to address a safety concern at the interchange of Minnesota Highways 55 and 62. However, MnDOT did not show adequate consideration for the oversight role of the Department of Administration when selecting a contractor to build the temporary bypass. Also, in authorizing Minnesota Transit Constructors to begin work before a contract was reviewed and approved, MnDOT did not comply with certain aspects of contracting and accounting policies established by the departments of Administration and Finance. In addition, the Department of Administration was left with few options regarding approval of the agreement, and the state was exposed to potential legal and financial risks.

MnDOT's failure to promptly consider contracting alternatives may have contributed to the need for emergency action. We found inadequate communication between MnDOT's field personnel and its contract management personnel, as well as with staff of the Department of Administration. MnDOT engineers did not discuss possible contracting alternatives with the department's Contract Management Office or with the Department of Administration before directing Minnesota Transit Constructors to begin work on the project. MnDOT could have avoided criticism had it informed the Department of Administration of the situation earlier and requested assistance in evaluating contract alternatives that would have satisfied each agency's objectives.

We think MnDOT's choice of Minnesota Transit Constructors to build the bypass was reasonable in that it was based on the department's assessment of the firm's ability to design and build the bypass before winter, and MnDOT's desire to mitigate potential state liability if the bypass design caused delays in the light rail project. However, we also think the Department of Administration raised valid concerns regarding MnDOT's decision to initiate a supplemental agreement to the light rail contract for highway construction work. Administration officials were appropriately concerned that MnDOT's actions did not provide an open and fair process for awarding road construction work.

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155