A federal judge dismissed a construction firm’s claims that the V.I. Public Finance Authority violated territorial procurement and conflict of interest rules when it awarded a $137 million disaster recovery contract in 2024.
Hill International sued the authority and the V.I. Disaster Recovery Office after the PFA awarded the three-year contract to a rival bidder — CH2M — whose bid was nearly $107 million higher than Hill’s. The company also alleged that the PFA’s evaluation committee had a conflict of interest because three of its five members worked for the V.I. Public Works Department, which also employs two people who work for CH2M’s parent company. Further, Hill claimed that the government’s request for proposals indicated that a minimum of two contracts would be awarded.
Last week’s decision by U.S. District Court Judge Juan Sanchez was in line with a federal magistrate judge’s recommendation to dismiss the claims last March. U.S. Magistrate Judge Alan Teague wrote that it was “purely speculative” whether the award was impacted by the PFA handling the procurement rather than the V.I. Property and Procurement Department and that there were “simply no facts alleged in the complaint” to indicate that the award “was the result of unfair competition, favoritism, or collusion.”
“As Judge Teague rightfully points out, Hill does not allege the evaluation committee members and these employees worked together, exchanged information, or in any way improperly influenced each other,” Sanchez wrote. “Hill’s allegation is only supported by ‘mere conclusory statements’ and speculation.”
Sanchez also agreed with Teague’s finding that Hill failed to provide evidence that the award was arbitrary and capricious, other than the $107 million price difference.
“He determined that the RFP constituted a best value procurement which did not require VIPFA to choose the lowest bidder,” Sanchez wrote. “The Court also finds this RFP was a best value procurement and that Hill has not alleged sufficient facts to show the award was arbitrary and capricious based on price alone.”
In their response to Teague’s recommendation, Hill’s attorneys argued that the PFA used a price realism analysis to determine whether Hill’s bid was “unreasonably low” and that this criterion wasn’t disclosed in the RFP or by the evaluation committee. Sanchez wasn’t convinced, and he noted that the claim wasn’t part of Hill’s initial complaint.
“Judge Teague was correct in disregarding this new argument,” he wrote. “Second, even if Hill could bring this unstated evaluation criteria claim, a plaintiff must show that the agency used a significantly different basis in evaluating the proposals than was disclosed and that it has been prejudiced as a result.”
Citing sworn statements by evaluation committee members, Sanchez said the committee’s concerns about Hill’s bid appeared to be about the firm’s allocation of labor and resources as well as a “lack of detail in the construction management portion of the proposal” rather than price.
