Martin Army Community Hospital: Judge orders corps to give back firm’s contract

Five months after the U.S. Army Corps of Engineers revoked a $333 million contract to replace Fort Benning’s Martin Army Community Hospital, a federal judge has ordered the corps to restore the contract to its original holder.

Turner Construction Company Inc. of Hunstville, Ala., and its design partner, Ellerbe Becket of New York City, won a contract last September to design and construct a state-of-the-art, 745,000-square-foot medical facility on post.

On Feb. 16, the U.S. Government Accountability Office, or GAO, upheld two protests against awarding the contract to Turner/Ellerbe, finding two organizational conflicts of interest. The GAO recommended both companies be eliminated from the competition and that the corps award a new contract.

In a release dated March 19, the corps said it would implement the GAO’s recommendations, a decision that brought work on the new hospital to a standstill.

Ruling favors Turner/Ellerbe

A recent ruling by a United States Court of Federal Claims judge appears to have brought the situation closer to a resolution. In a 36-page report filed July 8 and unsealed July 16, Judge Bohdan A. Futey laid out the facts, claims and arguments in the case and ultimately determined the corps too hastily implemented the GAO’s recommendation by stripping Turner of the hospital contract. Futey granted Turner’s request for a permanent injunction and ordered the corps to give the contract back to the plaintiff.

“Turner has succeeded on the merits of its claim that the Army was arbitrary and capricious in implementing the GAO recommendation, since the GAO failed to adhere to the appropriate standard of review,” the ruling said.

Shannon Hines, vice president and general manager of Turner Construction Company, has maintained Turner “won the project fairly and on the basis of its superior proposal.” In a statement e-mailed Tuesday to the Ledger-Enquirer, he expressed satisfaction with the court’s decision.

“Last week’s ruling by the court in Turner’s favor energized and encouraged our entire team,” Hines said. “At this time, we are awaiting direction from the Savannah District Corps of Engineers regarding resuming work on this important project ... The judge’s decision brings us one step closer to realizing our objective.”

Billy Birdwell, a spokesman for the Savannah district, said the corps is “studying” the court’s ruling.

“The case is actually still in the hands of the Department of Justice,” Birdwell said. “They’re the ones that argue these things for us in court. We don’t send our own lawyers to court. We depend on the DOJ for that. They are also evaluating the judge’s ruling to determine what the government’s next step is and what the way forward is on this to get the hospital built for the troops.”

Department of Justice spokesman Charles Miller said Tuesday the department had no comment.

U.S. Sen. Saxby Chambliss said in a statement e-mailed Tuesday to the Ledger-Enquirer that the clock is ticking for all parties involved to come to an amicable agreement as Armor School soldiers and families move to Fort Benning as a result of the Base Realignment and Closure initiative.

“With the anticipated arrival of several thousand soldiers to Fort Benning from Fort Knox, it is imperative that we have a medical facility that can accommodate them and their families with the best care available,” Chambliss said.

Contract revoked

Turner/Ellerbe was stripped of its contract after the GAO sustained allegations that the companies had unequal access to information and organizational conflicts of interest. The protestors in this case were B.L. Harbert-Brasfield & Gorrie of Birmingham, Ala., and McCarthy/Hunt of Atlanta, Ga., two of the three construction firms competing for the hospital contract. During its investigation, the GAO found that in June 2007 the corps awarded a contract to HSMM/HOK Martin Hospital to help prepare a design concept for the hospital and review submitted proposals. The GAO also found that HSMM/HOK’s parent company, AECOMM Technology Corp., was in negotiations to purchase, and eventually did acquire, Turner’s design subcontractor, Ellerbe Becket, which had expressed interest in the hospital project. Finally, the GAO ruled that because of its ties to HSMM/HOK, Ellerbe Becket “had access to competitively useful, non-public information” and that HSMM/HOK “provided procurement development services to the agency that put it in a position to affect the competition in favor of the acquired subcontractor.”

The government argued that Turner/Ellerbe hid a conflict, damaging the integrity of the contract procurement process. In contrast, Futey found no evidence to support the government’s assertion, and added that the Corps was kept apprised of all negotiations between AECOMM and Ellerbe Becket.

Injunction granted

Before granting Turner a permanent injunction and ordering the Corps to reinstate its contract, the court considered four factors:

Ÿ If the plaintiff had succeeded on the merits of the case

Ÿ If the plaintiff would suffer irreparable harm if the court withholds injunctive relief

Ÿ If the balance of hardships to the respective parties favors the granting of injunctive relief

Ÿ If it is in the public’s interest to grant injunctive relief.

Because the court found all factors favored the plaintiff, it granted Turner a permanent injunction. The third factor, which took into consideration the hardships suffered by both parties should injunctive relief be granted, looked at how costly and time-consuming re-procurement of the contract would have been:

“The Administrative Record shows that re-procurement of the contract could be quite costly; the South Atlantic Division of the Army Corps of Engineers estimated that re-procurement to McCarthy/Hunt or Harbert/Gorrie would likely incur additional costs of between $84 million and $125 million, as well as delay the project for 16 months.”

When Turner lost its contract in March, Hines told the Ledger-Enquirer the corps’ decision to cut Turner from the competition and delay the project would negatively affect soldiers, their families, retirees and the Fort Benning community as a whole, and cost U.S. taxpayers more than $100 million.

In response to Turner’s assertion that a construction delay would be detrimental to patients and costly to taxpayers, the corps in March released the following statement: “The U.S. Army Corps of Engineers is implementing the GAO recommendations on the contracting for the new Martin Army Community Hospital. While the renewed contracting process is under way, it would be inappropriate to speculate on potential cost or schedule impacts.”

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