UPDATE: MWH Remains Embedded in Los Osos Project


To paraphrase Mark Twain, reports of MWH’s exit from the Los Osos sewer project have been greatly exaggerated.


To paraphrase Mark Twain, reports of MWH’s exit from the Los Osos sewer project have been greatly exaggerated.

Despite an earlier public statement by a San Luis Obispo County Public Works project manager John Waddell indicating that MWH Americas Inc. was no longer participating in the Los Osos sewer project, Waddell wrote in an e-mail one week later that MWH is still on the shortlist for construction of the treatment plant.

In addition, according to County Public Works director Paavo Ogren, MWH has not been excluded from bidding on construction of the collection system or on design and construction of the treatment facility.

On March 15, answering questions before the Board of Supervisors and the public, and prompted by Supervisor Bruce Gibson, Waddell revealed that MWH Americas had declined to bid because of controversy swirling around the Broomfield, Col.-based company’s history in Los Osos. Waddell did not explain that MWH declined to bid on only one small facet of the project, design services for the collection system.

Waddell said then that MWH’s desire not to propose was a “business decision… Ultimately, in the last few days, actually before the proposals were due, two firms said they had decided not to propose. They did cite the overall controversy in Los Osos as one of the reasons.”

The second firm that opted not to propose is believed to be Lake Forrest, California-based ARB Inc., leaving MWH and Sacramento-based Sundt Construction as the two lone competitors for the same gravity-only system.

The Rock learned that MWH was very much in, not out, from a March 22 email to a Los Osos resident seeking further clarification about MWH’s status, in which Waddell wrote that MWH remains active in the project:

“The County requested proposals for engineering design (professional consulting) services for the collection system. MWH did not submit a proposal, so they will not be completing the design/redesign of the collection system. After the design is completed, the collection system construction contracts will be put out for low bid and contracts awarded to the lowest responsible bidders.

“The pre-qualified short-list for the treatment facility under a design-build process includes MWH, CDM, and Auburn Construction.”

Many in Los Osos, including The Rock, took Waddell’s unqualified remarks as signaling MWH’s complete withdrawal from the Los Osos project, believing that the “overall controversy” wasn’t limited to one portion of the project, but the whole project itself — and could not be separated or sectioned off. Waddell’s comment seemed to leave very little if any room for any other interpretation.

In the past two weeks, however, Los Osos citizens reported that MWH was still deeply involved in the project, and that MWH’s decision not to bid on collection system design was a minor concession and largely symbolic. And while its withdrawal was leaked to the public in a confusing manner, the main reason given for MWH bowing out of collection design was clear: controversy in Los Osos. Ogren’s response to one resident seeking further clarification was cordial but evasive, in that it lacked a definitive answer to the question of MWH’s overall status, which led to additional speculation and further efforts to clarify the facts amid a possible smokescreen.

The March 22 e-mail from Waddell to a Los Osos resident only came to The Rock’s attention on April 5.

Commented one Los Osos MWH critic about MWH’s continued involvement in the project, despite the still-ongoing, publicly-acknowledged controversy that caused them to abandon bidding on collection design:

“MWH is still in for the part of the project where they stand to make even more money with less controversy about their potential violations. They already designed the collection system, so if they back out of that, then they have more of an argument that they should be allowed to bid on treatment.

“It still doesn’t take away from the fact that the County’s project review panel was loaded with their former business partners — (John) Wallace and (Lou) Carella (of Carollo Engineering) – and that should toss their bid right out the window… They also all worked together on Lopez Dam project — all of them, Paavo Ogren, MWH, Wallace and Carella — one happy family on the taxpayers extended payroll.”

Tracking MWH’s activities in Los Osos may now have become even more difficult. Wrote another Los Osos MWH watcher:

“MWH has already designed the project (collection system). All they have to do is sell the design to a third party and the big (all) money gets kicked back to MWH for design and construction.”

Public relations has never been one of the County’s strong suits, and the Public Works Department has been a particular source of public criticism and embarrassment, having wasted millions of Los Osos taxpayer dollars on a project that had to be relocated and conditioned, then delayed by the Coastal Commission to further ensure compliance with key conditions. In April 2009 the County dropped any and all alternatives from the final project competition, costing the taxpayers millions by limiting the choice to only the most expensive and least environmentally friendly technology. Ogren later confirmed that gravity collection was always the County’s technology of choice.

Though Ogren has vigorously denied conflict of interest allegations regarding his relationship with MWH, he has been less forthcoming about the extent of MWH’s full involvement with the Los Osos project, preferring not to go on record responding to questions about MWH, which is currently under scrutiny for its business practices in Cape Coral, Florida, and now in Morro Bay, where it has become a serious issue.

As Los Osos project manager, Waddell has been designated by Ogren with the primary responsibility of delivering updates on the project to the Board of Supervisors, and has issued confusing statements and explanations in the past. He did not clarify his public comments of March 15 until asked directly one week later by a Los Osos resident via e-mail.

It is unclear at this time why “the Los Osos controversy” has only affected MWH’s participation in the bidding process for collection design, but not for collection construction or treatment design-build; apparently the controversy is non-transferable. MWH has a lengthy and checkered history in Los Osos, and Ogren is part of that history. It is also unclear why Waddell and Ogren do not appear to be on the same page with the same information; Waddell, the project manager, not knowing or revealing that MWH was still up for collection construction and treatment design-build.

MWH apparently made no effort to ask the County to clarify MWH’s status for the media and public, whose concerns have only been heightened as a result of the confusion, as it turns out, understandably. MWH has not issued any statement or press release on its controversial decision not to bid on collection design and, as Waddell did for them, blame the ongoing controversy in Los Osos for it, now a national controversy that both the County and MWH have done more than their share to fuel.


A Controversy in Los Osos, MWH Circles the Wagons in Nearby Morro Bay


An in-depth report for the first time links MWH’s questionable business practices in Cape Coral, New Orleans and Los Osos to the suspect Morro Bay sewer project.


MWH Americas Inc. may have been scared away from Los Osos by a fistful of local critics, but less than five miles up scenic South Bay Blvd. from Los Osos, they are digging in for a fight by the sea in Morro Bay.

When San Luis Obispo County Public Works revealed March 15 that construction/engineering giant MWH had backed out of bidding for the Los Osos Wastewater Project because of the controversy surrounding their prior and present involvement in the project, the local controversy did not carry over to the rest of the county. Yet, MWH is under a similar, if not the same cloud of suspicion in Los Osos’ sister city of Morro Bay as it was or is in Los Osos, New Orleans and Cape Coral, Florida.

In a new, eye-opening special report published on Morro Bay’s Slo Coast Journal, “Allegations, Accusations and Denials – MWH and Its Customers in New Orleans, Cape Coral, Los Osos, and Morro Bay,” investigative writer Kari Olsen draws clear comparisons between MWH’s dubious business practices in Cape Coral, Florida, New Orleans and Los Osos with unfolding events in Morro Bay and its contentious sewer project heavily favoring MWH.

Writes Olsen: “MWH business practices in Cape Coral and New Orleans have been reviewed by highly-trained professionals. Allegations of wrongdoing in those cities are detailed and extensive, and have been presented in formal audit reports. Los Osos and Morro Bay residents have not yet had the benefit of a professional investigation of their concerns, but have conducted their own research, documenting and reporting the results in complaints to the authorities and in local news sources.

“Most of the key problem areas identified are common to all four cities,” writes Olsen, “and include RFP and contract award issues, allegations of billing irregularities, problems obtaining records for independent audit and review, and allegations and implications of inappropriate ties between MWH and city officials and staff members.”

Olsen cites allegations of improprieties in Cape Coral, New Orleans and Los Osos in the manner MWH was awarded contracts. “In all cases, concerns regarding possible public employee bias and favoritism have been either implied or directly stated,” she writes. “In addition, there are concerns regarding the way in which MWH has brought subcontractors into its projects.”

Olsen raises key potential conflicts of interest in Morro Bay. “Dylan Wade, the city’s Capital Projects Manager, is a former MWH employee. Yet, he was allowed to be on the committee that selected MWH for the WWTP design contract. Residents also noted that one of the MWH subcontractors listed in the firm’s proposal as a ‘teaming partner’ was local firm RRM Design Group.  The Chief Financial Officer of RRM Design Group is Gregory Peters, brother of Janice Peters, who was Mayor of Morro Bay at the time the contract was awarded.”

Olsen also reports that the city has been unable or unwilling “to produce completed evaluation forms showing how the selection committee evaluated the five bidding firms, and the fact that MWH’s bid was not the lowest, but the highest bid received from five qualified firms.”

Meanwhile, MWH’s work on the Morro Bay treatment plant design has been suspended, writes Olsen. “The California Coastal Commission (CCC) unanimously found substantial issues with the project’s Draft Environmental Impact Report, and no further work can be done until the issues are resolved to the CCC’s satisfaction.”

To read the complete report visit Slo Coast Journal or click here on http://www.slocoastjournal.com/docs/news9.html