City of Pittsburgh officials Wednesday defended a process that led to the award of a $1.55 million park improvement contract to a company linked to a contractor that later made improvements to Mayor Luke Ravenstahl's house.
The city provided documents related to R&B Contracting & Excavation Inc.'s soccer field work days after news reports tied that contractor to another firm that is renovating the mayor's house. R&B's president, William J. Rogers, also runs Allstate Development, which has a 2012 building permit to work on the mayor's house.
When the city in 2011 sought firms to prepare a site at Riverview Park for a new soccer field, R&B was the lowest of four bidders, edging out rival BKG Industries, Inc. by around $70,000.
But Gary Kisow of BKG said the city allowed R&B to skirt a bid specification that ultimately priced out at least one other contractor, a specification that he believed effectively required any contractor that got the job to buy fill from his company.
City operations director Duane Ashley said Mr. Kisow misinterpreted a memo from the city.
"The city got the lowest responsible bidder. We got a bidder that does incredible quality work," Mr. Ashley said. "We're very satisfied with the product and project to this point."
BKG began corresponding with the architect on the site, Jim Sauer, in 2010 to provide fill for the project. BKG also has a borrow site, a piece of land that dirt for construction projects can be drawn from. And the Riverview Park project needed a lot of it -- around 50,000 cubic yards. BKG Industries sent a letter to Mr. Sauer in May of that year estimating to haul the dirt to the soccer field site for $8.50 per cubic yard, but that price did not include installation costs. The city then tested BKG's dirt to make sure it met the state Department of Environmental Protection's Clean Fill standards and that it was suitable for the job. The city found it was.
The following year, when the city put out a request for bids, eight contractors expressed interest and attended a pre-bid meeting at the Observatory Hill park. On Oct. 20, 2011, the city issued an addendum in a memo, saying "fill material used for [the project] must be approved by the Pennsylvania Department of Environmental Protection prior to bid opening."
The memo went on to state that BKG Industries' fill had already been approved by the DEP and provided directions to the company's site off Bilmar Drive. If a contractor wished to use an alternative borrow site, they were asked to submit proof of DEP certification.
Mr. Kisow interpreted the memo to mean that contractors would be forced to buy his fill material if they did not submit an alternative borrow site. When none did, and when R&B was awarded the project, he assumed he would get the company's business.
Instead, R&B used two other sites, both of which were ultimately shown to meet DEP standards -- one site in Ross belongs to B.R. Holdings, a company also headed by Mr. Rogers; another site is in Sewickley.
But Mr. Ashley said Mr. Kisow misinterpreted the memo. The city never intended to restrict contractors to BKG Industries' dirt.
"We put that addendum in the packet as a resource only," he said.
At least one other contractor interpreted the memo as saying the fill had to come from BKG Industries.
Angelo Cilenti Sr., of Cilenti Construction, said he understood that BKG's dirt was "the only material that was approved, and you had to use it, and there wasn't any way around it." But for him, it was too costly to haul it to the site. So he decided not to submit a bid.
R&B did contact Mr. Kisow in February to get a price for the fill and he said he increased his prices, but could not recall by how much.
In the spring of last year, after Mr. Kisow learned that R&B was not using his fill, he had his attorney Robert J. Garvin draft a letter to the city inquiring as to why clean fill from his site wasn't being used. Mr. Garvin pointed out that R&B hadn't submitted an alternative borrow site.
"... It is our position that R&B Contracting was required to obtain borrow material from the BKG Industry property as set for in the contract specifications," he wrote in a letter to Charles McClain, an engineer in the city's department of public works. On Monday, Mr. Kisow filed a right-to-know request seeking more information about the project.
"I'm just mad at the fact that the city kind of brushed us aside," he said.
R&B's dealings with the city are under the microscope because federal investigators appear to be interested in the mayor's remodeling project. Mr. Ravenstahl's attorney, Charles Porter Jr., said Tuesday that investigators had copies of the contract between the mayor and Allstate, and of a down-payment check of around $12,000.
Mr. Porter said the mayor was not receiving free work from the contractor.
The ongoing federal probe of the city has involved the FBI, IRS and U.S. attorney's office. Last week two of the mayor's security detail members and his senior administrator testified before a grand jury. City solicitor Dan Regan reiterated Wednesday that the city is cooperating with the probe.