BALTIMORE – Democratic candidate for governor Jim Shea has submitted a letter (found below) to the Board of Public Works with inquiries about a potential conflict of interest in a state transportation contract.

As first reported by Bryan Sears of The Daily Record, the Maryland Department of Transportation, under Secretary Pete Rahn, has nominated the company HNTB to receive a $69 million state contract to oversee toll lanes on I-270 and I-495. HNTB is Rahn’s former employer, where he served as Senior Vice President for 5 years before being appointed transportation secretary by Larry Hogan in 2015.

The regular procurement process for the contract was waived and expedited, apparently to speed up the project’s timeline. HNTB emerged as the frontrunner in a presentation portion of the abbreviated process, after coming in second in the written proposal. According to Sears, Rahn only sought approval from the Maryland Ethics Commission weeks after HNTB was awarded preliminary approval on the contract.

Shea’s letter to the Board of Public Works comes ahead of BPW’s vote on the contract on Wednesday morning. In the letter, he calls on Governor Hogan, Treasurer Nancy Kopp, and Comptroller Peter Franchot to evaluate questions regarding Rahn’s stake in HNTB and release those answers to the public before voting on the award.

“It is concerning that Secretary Rahn and MDOT waived the formal bid process and then apparently pushed Rahn’s former employer to the top of the application pool. When this much taxpayer money is at stake, the public deserves to know whether the state has unethical and costly conflicts of interest,” Shea said in a statement.

Questions in the letter include whether Rahn stands to benefit financially from HNTB’s award, and how involved Rahn was in the procurement process.

Shea has previously called for Secretary Rahn’s resignation after reports that the Maryland Department of Transportation knew for over a year that Baltimore Metro failed safety standards, yet continued to allow it to operate, posing enormous risks to passengers. The MTA abruptly shut down Metro overnight for a month of repairs in February.

Jim Shea’s letter to the Board of Public Works

“Dear Board: 

I am writing to express concern regarding the Board of Public Works’ consideration of the $69 million contract between the state of Maryland and HNTB. Given Secretary Rahn’s close relationship with HNTB, including his previous employment at the company, I am asking that you postpone the vote and allow time to address a number of questions that have arisen in recent days.

As The Daily Record and The Washington Post have reported, the contract to oversee the expansion of roads and the implementation of toll lanes is being offered to HNTB with a waiver of the state’s traditional competitive bid process in a highly unusual fashion. The waiver was authorized by Secretary Rahn, and he himself has admitted that his close participation in the procurement process is atypical. Given Secretary Rahn’s previous five-year stint as a Vice President at HNTB, the Hogan Administration must present legitimate assurances and evidence that the waiver was necessary. I am not aware of any adequate explanation.

Further, the process by which the contract was granted to HNTB was murky. Rather than engaging in a routine technical proposal phase, the department instead opted for a series of letters of interest and presentations. Even so, after the letters of interest, HNTB was not the best candidate, as the Maryland Department of Transportation acknowledges. The presentation phase, which is much more intangible and qualitative, is what apparently separated HNTB from the others.

Yesterday, The Daily Record reported that Secretary Rahn sought an ethics clearing after the decision to award the contract was made. This action suggests that the Administration itself recognizes a potential ethical conflict. Rather than receiving an ethical clearance before the process began and before the waiver was authorized, Secretary Rahn waited until after the agency’s recommendation was finalized to seek an opinion. This development adds yet another layer to an already questionable process.

Before moving forward with approving the contract, I ask that the Board of Public Works require the Maryland Department of Transportation to adequately answer the following questions:

1. What was Secretary Rahn’s involvement in the procurement process?
2. Does granting the contract to HNTB give Secretary Rahn any financial benefit personally?
3. Before Rahn participated, were his financial disclosure forms properly reviewed?
4. Why was the competitive bid process curtailed?
5. Has the Attorney General’s Office confirmed that the process has adhered to all relevant state law?
6. Who initiated the process to waive the typical competitive bid process?
7. What material differences existed between firms in the presentation phase that handed HNTB the contract?
8. Were there written evaluations of the various stages of the bid process? Have they been reviewed, and can they be made public?
9. Who was present at each of the presentations of the four entities that submitted a letter of interest?
10. What external communications did Secretary Rahn or other members of his staff have with any entity that participated in the bid process?
11. What other contracts or awards have gone to HNTB during the Hogan Administration?
12. When was Governor Hogan made aware of the curtailed process and Secretary Rahn’s close relationship with HNTB?

Secretary Rahn and the Hogan Administration have boasted about creating the largest public private partnership in the country, and they have the details they need to move forward with a
$69 million contract and calculate how much the projects will cost, yet they have not released to the public how much Marylanders will have to pay to drive on the roads. The failure to release relevant pricing information and gather public input must also be considered before voting on the proposed contract.

The combination of a lack of transparency, disregard for normal processes, and an appearance of impropriety necessitates a fuller review before the contract is considered.

Regards,

James L. Shea”

About Jim Shea

Jim Shea is the former Chair of the Board of Regents of the University System of Maryland, the Empower Baltimore Management Corporation, and the Downtown Partnership of Baltimore. He is also the former Chair of Venable LLP, the largest law firm in the state of Maryland.