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The company awarded the contract for the Los Alamos Middle School construction project will have to appear at a formal hearing before the state Taxation and Revenue Department.
The hearing will determine whether or not the company’s in-state preference certification was justly received. A date for the hearing has not been set.
That’s the latest the in an ongoing investigation into whether McCarthy Building Companies received the certification from the department in error.
Albuquerque-based contractor Bradbury Stamm Construction, which also submitted a bid for the middle school project, initially raised the issue. The company protested the award stating that the company should’ve never received the in-state perk in the first place.
McCarthy received its in-state preference certification Jan. 19, and is a multi-state business with offices in many parts the country including in Dallas, Phoenix and Albuquerque.
Department spokesman S.U. Mahesh said multi-state companies could receive the perk as long as they still met the certification requirements, which include paying property taxes or rent on real property in the state for the last five years, having a least one vehicle registered in the state and paying unemployment on at least three full-time employee who are residents of the state.
The certification allows for in-state companies to receive additional “bonus” points over its out-of-state competitors when bidding for jobs in the public sector.
And Los Alamos Public School District bid documents indicate that had McCarthy not received those extra “bonus” points, the middle school construction project would’ve been awarded to Bradbury.
According to the June 7 notice from the department to McCarthy, the department claims there may be enough evidence demonstrating the company might have provided false information to receive in-state preference and is not otherwise eligible for the certification.
The notice requested that McCarthy respond to the department to set up a formal hearing to review McCarthy’s certification – which, as of last week, the company had done, but a date for the review had not been set, Mahesh said.
“Our local team is based in Albuquerque and has always complied with New Mexico’s preference rules,” McCarthy Southwest Regional President Bo Calbert wrote in a prepared statement. “We are pleased to be part of New Mexico’s construction industry, and hope to continue bringing high-quality building practices to communities throughout the state, which are led by our local employees, local subcontractors and vendors. We are confident that when we have the opportunity to review the compliance criteria with the state Taxation and Revenue Department that we will be found to be in compliance.”
McCarthy faces becoming ineligible to bid on public contracts in the state for the next five years and $50,000 in penalties for each violation, the notice states.
As part of the investigation, Bradbury attempted to halt construction at the middle school pending a decision by the department, but LAPS officials refuted that protest and have since moved forward with construction, which began last week.
School Superintendent Gene Schmidt said the district awarded the bid with the knowledge that McCarthy’s in-state preference certification was valid.
And as of Tuesday, the Taxation and Revenue Department’s website indicates as much.
Schmidt argues that should the department determine that McCarthy’s in-state preference certification was awarded in error then a revocation of that certification should only affect future projects, and not those already awarded.
McCarthy was also awarded a construction project for Los Lunas Public Schools, which Bradbury is also protesting, and a Santa Fe Public Schools construction project, which Jaynes Corporation is protesting.
Coming tomorrow in the Los Alamos Monitor... Learn why the state attorney general may negate LAPS teacher pay raises.