Conspiracy, Fraud Charges In Multimillion Dollar Contract

A federal grand jury indicted a local FAA contracting officer on fraud charges Friday for conspiring to unfairly award a $4.3 million contract for a new runway lighting system at Seattle-Tacoma International Airport (Sea-Tac).

FAA contracting officer Robert Ferrell was indicted last week on illegally providing confidential bidding information to PCL Construction Services and subsequently awarding PCL a contract to build a lighting system at Sea-Tac, according to The Seattle Times.

The manager of the FAA's Acquisition Management Branch in Renton and Ferrell's former supervisor, Vicki Olson, pleaded guilty earlier this month to one count of conspiracy and one count of procurement fraud in connection with the same contract award.

Ferrell is charged with one count of conspiring with Olson to award the contract to PCL; three counts of procurement fraud; one count of filing a false document; one count of concealment of material facts; and one count of making a false statement to an FAA attorney.

Both are on administrative leave by the FAA, but are still collecting their salaries, said FAA spokesman Allen Kenitzer.

"We are considering all options with regard to these two employees," Kenitzer said. "Until we've reviewed all the documents, we can't comment in detail."

In April 2002, the FAA solicited bids to install a high-intensity approach lighting system at the airport, according to court papers.

After the first round of submittals, PCL and Donald B. Murphy Contractors (DBM) were deemed the only two qualified bidders and asked to submit more detailed proposals.

FAA engineers said the technical merit of the proposals was similar and recommended the project go to the lower bidder.

DBM's best and final offer was $50,700 lower than PCL's. According to reports, an FAA contracting officer wrote a June 10, 2002, memo indicating the deal should go to DBM.

Two days later, according to court papers, Olson took that contracting officer off the project and replaced her with Ferrell.

Olson and Ferrell each then contacted PCL and instructed the company to lower its proposal, according to the government, while DBM was not given a chance to revise its bid. PCL submitted a new bid of $4.2 million and Ferrell falsified documents so the FAA could accept the lower number, the indictment said.

On June 14, 2002, Ferrell awarded the contract to PCL. The work has since been completed.

PCL Construction Enterprises' President and Chief Operating Officer Peter Beaupré said three employees in the company's Seattle office "may have received some information, unknown to them and unwitting to them, that they shouldn't have had." PCL Construction's US headquarters are in Denver.

According to Beaupré, there was nothing dishonest about the intentions of either the PCL or the FAA employees.

"Everything I know says that the only reason why they did it is because [the FAA] was so satisfied with the work we had done in the past that they wanted us to get the contract," Beaupré said.

PCL has agreed to a civil settlement that includes a $1 million payment to the government and a restitution payment, currently under negotiation, to Donald B. Murphy Contractors.

The company will not face criminal charges.

FMI: www.plc.com, www.faa.gov