CT Construction Digest Friday February 25, 2022

McCaw Expected to Depart Lamont Administration

Kevin Rennie

Office of Policy and Management (OPM) Secretary Melissa McCaw’s departure from the Lamont administration is imminent, Daily Ructions has learned. McCaw has held the job of budget chief since Lamont took office in January 2019. McCaw previously served as Hartford’s finance director. She leaves under fraught circumstances of a federal criminal investigation of two programs she oversaw in her agency and her charges of abuse by Lamont’s inner circle.

The Middletown resident made a serious error when she insisted that Kostostinos Diamantis be appointed as her deputy budget director and–in what may turn out to be a destructive decision for Lamont himself–insisted he be allowed to bring his school construction portfolio with him from the Department of Administrative Services (DAS). At least one close adviser to Lamont raised serious and specific objections to the appointment of Diamantis to a position in the heart of the administration, directly beneath McCaw in chain of command. No one would listen. The school construction program, the State Pier project in New London, and Diamantis are the focus of a federal criminal investigation. Diamantis has denied any wrongdoing.

Diamantis left both his state jobs at the end of October 2021, weeks after I revealed in my Hartford Courant that Chief State’s Attorney Richard Collangelo had hired Diamantis’s daughter as a $99,000 a year executive assistant. Diamantis claimed he was the target of Lamont’s inner circle because he defended McCaw against attacks from the governor’s office.

As revelations of alleged corruption in the school construction continue, it has become clear that McCaw failed in her fundamental responsibility to supervise Diamantis in any meaningful way.

McCaw provided an effusive welcome to Diamantis in an email to OPM employees in 2019:

I am pleased to announce the appointment of Konstantinos “Kosta” Diamantis as Deputy Secretary for the Office of Policy and Management.

Kosta brings a unique and diverse background and skillset to his position as Deputy Secretary, with over 30 years of experience combined in the public and private sectors; practicing law, serving in the state legislature, and most recently, working at the Department of Administrative Services. Throughout these experiences, he has developed a deep understanding of the legal, legislative, policy, financial, and operational functions of state government and his role in strategic negotiations makes him uniquely qualified to support me and the Office of Policy and Management.

“Uniquely qualified” may take on a new meaning as targets of the school construction corruption investigation begin to enter into pleas as the investigation begins to reap its harvest in public.

OPM Secretary Melissa McCaw to leave; Lamont ‘turning the page’

Mark Pazniokas

Gov. Ned Lamont is expected Friday to announce the departure of Melissa McCaw as the secretary of the Office of Policy and Management.

Lamont, back in the country after a week-long trade mission to Israel, said in a telephone interview Thursday night he will make a statement Friday afternoon about “turning the page.”

Hearst Connecticut reported news of her pending departure Thursday evening, which was confirmed to the CT Mirror by sources.

Lamont declined to say if her departure was voluntary. McCaw could not be reached for comment.

Her status has been in question for weeks. It was disclosed on Feb. 2 that the FBI had subpoenaed records of projects overseen by her former deputy, Konstantinos Diamantis, and Diamantis had alleged McCaw had been disrespected by Lamont’s top aides.

McCaw opened a budget briefing Wednesday on Feb. 9 with an unusual statement saying her relationship with Lamont was constructive and respectful — while pointedly saying nothing about his staff.

In an interview last weekend, she distanced herself from the school construction program Diamantis ran before Lamont removed him on Oct. 28, but she declined to disavow his description of her standing with the governor’s chief of staff or his former chief operating officer.

“As the deputy secretary, he was privy to interactions and the work of the agency. He saw a lot. He certainly was a witness to what it has been like for me as the first Black female OPM secretary,” McCaw said. “And I’ll leave it at that.”

State releases new guidelines for hazardous waste removal contracts

Dave Altimari

Just days after state officials canceled a contract that provided more than $29 million in hazardous waste projects to a select list of four companies, they released new guidelines Wednesday that sharply limit when municipalities can make use of the process for school construction.

Two companies named in a federal grand jury subpoena investigating former state official Konstantinos Diamantis were the primary beneficiaries of that contract before it was canceled, records show.

Diamantis’ team was in charge of the contract, which was initially supposed to be limited to emergency work, state officials have said.

The grand jury investigation has raised questions about whether Diamantis pressured municipalities to hire specific contractors, construction managers and hazardous waste and asbestos removal companies.

The guidance released Wednesday from the state Department of Administrative Services places restrictions on when towns can hire the companies on the state’s approved list. They can now only be used for minor rehabilitation projects that cost less than $500,000 and “emergency projects,” defined as work that needs to begin within 24 hours. Demolition projects are explicitly excluded from the contract.

“DAS has clarified with other towns through, for example, conversations, website updates, contract updates and more to ensure towns have accurate information about the school construction grants process,” DAS spokeswoman Lora Rae Anderson said.

The original DAS contract, “16PSX0110,” was designed to be an on-call emergency list for towns to use for hazardous waste abatement ranging from asbestos removal to mold remediation in state buildings.

But under Diamantis, the former deputy secretary at the state Office of Policy and Management, many municipalities started using the list to bid for hazardous waste removal and demolition on school construction projects.

Diamantis also ran the Office of School Construction Grants & Review — first at DAS and then at the Office of Police and Management — until late October, when he was fired from his OPM job and retired from the OSCGR position.

Asbestos Abatement and Insulation Services (AAIS) Corporation of West Haven and Bestech Inc. of Ellington got all but 15 of the 284 purchase orders issued by the state for hazardous waste disposal and demolition from fiscal year 2017 through 2022 — contracts that are paid for by the state and not tied to school construction jobs.

Diamantis was in charge of the roughly 20-member OSCGR team, which approved school construction projects. In October, a federal grand jury issued a subpoena seeking Diamantis’ emails and text messages from January 2018 through October 2021.

They later sent DAS a list of search words that included several construction management companies and general contractors who have been awarded school contracts in the last four years. Among the search words were AAIS and Bestech.

Local officials from Groton to Bristol have said that Diamantis or Michael Sanders, a member of the OSCGR team that specialized in asbestos abatement, pressured them to give contracts to either AAIS or Bestech rather than to companies not on the state list.

Sanders died suddenly in December in Old Saybrook. The state medical examiner has ruled his death an accidental drug overdose.

The new contract, “20psx0154,” was put into place after New Haven attorney Raymond Garcia, on behalf of his client Stamford Wrecking Co., complained to several state officials, including Attorney General William Tong, that Diamantis and his team were improperly using the so-called emergency contract list for school construction jobs.

The discussions among Garcia and state officials, including Diamantis and Assistant Attorney General Margaret Chapple, led to the issuing of a new directive to municipalities on March 2, 2021.

The directive, signed by Diamantis, clarified when municipalities should use the state’s hazardous materials abatement contractors list for their school projects.

The directive states that if municipalities planned to use one of the companies on the so-called emergency contractor list, they needed to solicit a minimum of four bid proposals in order to be eligible to get state funding.

Anderson said the new guidance issued Wednesday replaces that directive.

Republicans: Inquiry Demands ‘Not Going to Go Away’

Hugh McQuaid

House Republicans continued Thursday to demand a legislative inquiry into the ongoing scandal involving the role of a former state official in influencing which companies received contracts in school construction projects.

During a state Capitol press conference, House Minority Leader Vincent Candelora called for an eight-member committee to investigate how the state awards contracts for construction jobs in response to an ongoing federal investigation of Kosta Diamantis, the former head of the executive branch office that had overseen school building projects.

Candelora made a similar request last week and said legislative Democrats had responded with “crickets.”

“This is not going to go away. It is going to overshadow the entire session and Republicans want to make that clear,” Candelora said. “Even though this building may be closed, we are still going to fight for good government.”

Democratic leaders of both legislative chambers said Thursday it was appropriate for the General Assembly’s relevant committees to ensure the transparency of the expensive school construction program. Candelora said the program has spent $1 billion over the past three years.

Senate President Martin Looney and Majority Leader Bob Duff said a review of the details of the program was a fitting response by the legislature. But they called “naive” or “deliberately misleading” any suggestion that lawmakers could launch a criminal investigation on par with the one currently being conducted by the FBI, which in addition to school projects is examining the renovation of the State Pier in New London.

“We trust the law enforcement professionals in the federal government to complete their investigation thoroughly and effectively and will not play politics or encourage unrealistic expectations of incendiary revelations,” Looney and Duff said.

House Speaker Matt Ritter said the committees of cognizance were already preparing to hold hearings, which he expected to occur sometime next month. He said it was important for lawmakers on both sides of the aisle to ensure the legitimacy of the school construction program and make any necessary statutory changes before the session concludes in May.

However, Ritter was not inclined to form the sort of eight-person inquiry into Gov. Ned Lamont’s administration that Candelora had requested.

“The committee that’s being talked about is what was formed for an impeachment inquiry. I just don’t think this is where we are,” Ritter said. “I’m open to suggestions but the announcement today was not in the spirit of ‘Let’s work together.’ It was trying to elect [Republican gubernatorial candidate] Bob Stefanowski.”

During Thursday’s press conference, Candelora also said the scandal around contracting did not currently warrant talk of impeachment, but he was candid about the political ramifications of an investigation into the administration of a Democratic governor. He pointed to the scandals that led to the resignations of former Republican Gov. John Rowland and former Senate Minority Leader Lou DeLuca.

“Democrats were chomping at the bit to take down a Republican governor. With Senator DeLuca, I was newly elected and quite astonished that they were collapsing over themselves to persecute a man of 30 years of public service,” Candelora said. “So yes, there’s overtones to politics to all of that and I don’t deny it.”

Candelora said the legislature should dedicate $5 million to investigate how the state directed as much as $1 billion in school construction funding. Rep. Holly Cheeseman, R-East Lyme, said all Connecticut taxpayers should want answers.

“It’s their money that may have been wasted, misappropriated,” Cheeseman said. “If I know that there was a bid where someone was paying above what they should have done, that’s coming out of my taxpayers’ pocket.”

Max Reiss, Lamont’s spokesman, said the governor was open to a legislative investigation.

“The Lamont administration would welcome public hearings into the school construction program by the General Assembly’s committees of cognizance. Additionally, the Lamont administration has and will continue to be cooperative with federal authorities in a separate investigation,” Reiss said. “Governor Lamont took swift action to remove Mr. Diamantis when ethical improprieties were brought to his attention. It was also Gov. Lamont’s initiation of an independent review which led to additional accountability. Gov. Lamont has zero tolerance for the types of actions which have been exposed.”

Republicans Make Push For Workforce Training Programs

Katie Cerulle

HARTFORD — Senate Republicans made a last-minute push Wednesday to encourage a handful of committees to raise their job growth and workforce development proposals.

The Republican agenda focuses on initiating multiple training programs at Connecticut high schools that include apprenticeship support, establishing health care workforce training, and growing state defense.

Sen. Paul Cicarella, R- North Haven, said that many Connecticut students who obtain a bachelor’s degree enter a field that does not require it. He also said that receiving a diploma is not necessary to get a high paying job.

“We want to allow students to realize that they don’t have to go to college and they don’t have to go through all of that debt,” he said.

One of the proposals that’s already made it into legislation is a requirement to get school guidance counselors to talk about the trade schools, in addition to traditional two and four-year colleges with students.

The legislation also includes a summer jobs program for high school students in at-risk communities. The purpose of the program would be to connect high school students to summer employment opportunities with local 14 businesses, hospitals, municipalities and other organizations

Sen. Gary Winfield. D-New Haven, said in a press avail on Tuesday in response to the legislation that he is in agreement with the two proposals included, but there is room for conversation.

Sen. Republican Leader Kevin Kelly, R- Stratford, said another proposal is a Healthcare Academy program. This program would allow high school students to complete certifications and course requirements at Connecticut hospitals while completing their high school diploma. This program would be open to any high school.

“We are facing a healthcare workforce shortage,” he said. “We want to train current students to fill these jobs.”

Other proposals that are part of the Republican agenda include an apprenticeship program and a tax credit to businesses that hire any registered apprentice who completes a program. Vocational program recruitment and developing a task force to study occupational licenses were also mentioned.

“We must encourage the defense industry to work with in-state suppliers whenever possible to grow Connecticut jobs,” he said.

Kelly concluded by including both the defense and insurance as two flagship industries in Connecticut that can supply jobs to residents.

“We need to grow the insurance industry,” he said. “We are the insurance capital of the world, and we’d like to stay that way.

Democrats don’t necessarily disagree with the goal of the Republican proposals.

“Senate Democrats are open to any and all ideas to grow Connecticut’s economy and strengthen our state overall. I am looking forward to learning more details about these ideas,” Senate President Pro Tempore Martin Looney said.

Despite Biden PLA order, non-union contractors can win federal projects

Zachary Phillips

With the stroke of a pen, President Joe Biden doubled down on his support of unions on federal construction projects.

On Feb. 4, Biden (pictured above at the signing) issued an executive order instituting a project labor agreement requirement on federal construction projects worth more than $35 million.

The move aligns with one of Biden's chief policies — strengthening unions at a time when membership in organized labor has declined for decades. Construction's union membership is higher than the nationwide average, but numbers still have steadily dropped since the 1970s.

The order coincides with the Infrastructure Investment and Jobs Act (IIJA), which will infuse billions in long-awaited spending for infrastructure projects and upgrades across the country. The White House predicts the order will affect $262 billion in federal contracts and impact nearly 200,000 workers.

"This helps projects get completed on time and helps the government get the best value for taxpayers' dollars," a White House statement said.

What is a PLA?

A PLA is similar to a collective bargaining agreement between a union and its employer, but differs in that it applies to a single project and is agreed upon by all parties: general contractors, subcontractors and labor groups.

Typically, the areas a PLA covers include:

Wages and benefits.

Apprenticeship and training programs.

Jobsite rules, like alcohol and drug policies, harassment policies and break rules.

Work hours and overtime.

Jobsite safety.

A PLA will also cover procedures for resolving any employment disputes and prohibit strikes or work stoppages for the entirety of the agreement, Liz Cappiello, attorney for Washington, D.C.-based law firm Miller & Chevalier, told Construction Dive.

Typically, the GC and trade unions initially agree upon the PLA, under guidance from the agency or owner. Then other subcontractors agree to abide by the PLA when they join the project, according to Chris Bailey, attorney for St. Louis-based firm Greensfelder.

"A PLA will generally be in place before bidding on the project begins, so that contractors considering submitting their bids are aware of the requirements of the project," Bailey said.

In recent years, some public agencies have progressed toward Community Workforce Agreements (CWA), a specific type of PLA that promotes public policy, such as prioritizing training, employment or hiring of businesses run by women and minorities, Mark Johnson, labor relations consultant for Seattle-based labor consulting firm M. L. Johnson & Associates, told Construction Dive.

With the Biden order, some PLAs on these federal projects will also be CWAs, Johnson said.

What's in the executive order?

Labor groups say PLAs protect workers and prevent work stoppages to help deliver projects better, but builders and employer groups claim they disadvantage contractors that don't typically work with unions.

However, the executive order requires organizations to allow all contractors and subcontractors to compete for work, regardless of their collective bargaining experience, according to Cappiello.

"This executive order is not requiring you to be a union contractor, it's requiring you basically on a one-off basis to agree to a pre-hire collective bargaining agreement," said James Terry, partner at New York City construction law firm Zetlin & De Chiara.

Biden's executive order stipulates that all federal projects worth more than $35 million must form PLAs that:

Bind all contractors and subcontractors on the project.

Allow all contractors and subs to compete for work regardless if they are otherwise parties to collective bargaining agreements.

Guarantee against strikes, lockouts and other similar job disruptions.

Set forth mutually binding procedures for resolving labor disputes.

Provide other labor-management mechanisms to ensure cooperation on quality of work, health and safety.

Comply with all statutes and regulations.

Notably, only projects that receive money directly from federal procurement will fall under the executive order, meaning construction projects financed through grant dollars to non-federal organizations such as states will be exempt.

That doesn't mean, however, that other entities won't require PLAs, Terry said. Some agencies and groups can still require them on projects funded indirectly, or under the $35 million cost threshold.

"That would be a blue state inclination," Terry said of agencies requiring PLAs even when exempt.

It's still unclear whether the federal government will mandate uniform aspects of the PLAs, or if stakeholders will decide details on a project-by-project basis.

Getting ready

For a contractor with no familiarity or experience entering a PLA, "the scariest thing is you won't know what you don't know," Bailey said.

"Obviously, you'll want to read the PLA carefully before entering into it to see if it’s something that works for you and your company because those are the rules under which you’ll be operating for the duration of the project," he said.

GCs will need to carefully document their adherence to the PLA terms from all subs on the project.

When it comes to determining wages, Terry said, look to the Davis-Bacon Act. Contractors already must meet prevailing wage requirements for public works projects. With a PLA, expect wages slightly higher than the area's prevailing wage, he said.

Terry encouraged builders without PLA experience to "sharpen their pencils" to find ways to save money, especially because trade unions may add riders that benefit their skilled workers. For example, a group may try to secure wages for their graveyard shift workers higher than those wages agreed upon in the PLA.

"Every PLA I've been involved with — and I've been involved with a lot — have a lot of riders, that are trade-specific riders that affect the PLA," Terry said.

Favorability

Opponents of the PLA enforcement say non-union builders would have to drop more cash than usual to staff these projects.

"By mandating PLAs on these large-scale projects, the EO gives an advantage to union contractors because those contractors' labor costs are unlikely to change and those contractors are already familiar with unions and operating under such agreements," Bailey said, indicating non-union builders are less likely to bid on projects.

But Johnson said that non-union builders can, and likely will, bid on and win projects that fall under this executive order.

Terry echoed that idea, and emphasized the prevailing wage issue.

"You can continue to be a non-union company, just realizing that this is the way the federal government intends to do business from now on, with the discretionary aspects," he said. "My primary advice is to appreciate the Davis-Bacon aspect, this is not tremendously dramatic."