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Lawsuit Filed Over Bidding On Trash Plant Contract

Jon Lender

December 09, 2010

The Connecticut Resources Recovery Authority is mishandling the bidding process for a lucrative 5- to 10-year contract to run its trash-to-energy plant in Hartford, the Metropolitan District Commission says in a new lawsuit.

The CRRA denies the claim. A preliminary hearing has been scheduled Dec. 20 in Superior Court in Hartford over the MDC's request for an injunction to block the awarding of a contract until legal issues are resolved.

The MDC is Greater Hartford's water and sewer agency, and the CRRA is the state's trash-disposal and recycling authority. The clash of the two quasi-public giants has erupted as the CRRA plans later this month to select a bidder for a contract worth tens of millions of dollars to operate its Mid-Connecticut Project plant near the Connecticut River. The plant burns shredded garbage to produce electricity.

Bids were received in September for a five-year deal with options for five one-year extensions, year by year.

For about a quarter of a century, the Hartford-based MDC has had the contract to run the front end of the plant, where garbage is shredded and fed in for burning. That contract runs out Dec. 31, 2011.

The power-generating end of the plant is run under a separate contract — expiring next May — by Covanta Energy Corp., which has offices in New Jersey.

Each of the two existing contracts has cost $17 million to $20 million annually, and the CRRA, also based in Hartford, has been negotiating with bidders in hopes of settling on a single contractor.

But now the MDC claims in its lawsuit that the CRRA "is about to disqualify the MDC from consideration for the new Mid-Connecticut Project contract." The MDC says the jobs of 80 public employees hang in the balance.

"No, we are not disqualifying them," CRRA President Thomas Kirk said. "This process isn't complete. They're still a bidder for the project." But Kirk said that even though the issue can easily be resolved, he thinks the MDC will come up with some new complaint now that it's gotten the matter into court.

The two agencies have clashed before. The MDC's lawyer, R. Bartley Halloran, harks back to the CRRA's loss of more than $200 million eight years ago by entering an energy-sales deal with Enron Corp., which then went bankrupt. That sparked a legal war between the CRRA and 70 mid-Connecticut towns that contended they had to pay higher fees to the agency for trash disposal because of the financial loss. The CRRA later recovered most of the money.

Halloran invoked the specter of Enron by saying that the CRRA, in requesting proposals for the new contract, "required that any bidder bid on operation of both sides [of the plant], knowing that MDC had not operated an energy generation plant, and further knowing that MDC will not engage in private-public partnerships, for reasons well demonstrated in the Enron fiasco."

He added, "MDC overcame this obstacle by cooperating with its union employees and finding a public partner to sell the energy, [but] there is no logical reason why bidders were disqualified if they could only operate one facility."

CRRA says it wants a single contractor to operate both ends of the plant, even if the contractor operates only one part of the plant itself and then subcontracts to another, Kirk said. That, he said, would eliminate "the finger-pointing" that he said goes on between the MDC and Covanta when a problem arises.

The MDC also has filed a complaint with the state Freedom of Information Commission, saying the CRRA has illegally refused to disclose the names of other bidders or the prices and terms of their bids.

But the CRRA's Kirk says the state's FOI law provides an exemption because it is in the public interest for the trash-disposal authority to press bidders in negotiations to charge less. If one bidder knows what another bidder's price is, it will reduce its bid only so far, Kirk said.

"When our board concludes the bid process in December, as planned, the information they want will become public and their complaint will become moot," Kirk said.

Halloran said that by making that statement, Kirk is essentially admitting that "they intend to award without following the mandates of the statute, which requires waiting periods and an ability to protest if other-than-competitive bidding is used."