MMSD Denies Unfair Contracting Practices

Jones Island Water Reclamation Facility, 700 E. Jones St. Photo taken July 21 by Graham Kilmer.

The wastewater company Veolia Water Milwaukee alleges the Milwaukee Metropolitan Sewerage District (MMSD) unfairly favored a competitor in recent contract bidding. MMSD denies it. They both agree, though, that a community organization, Common Ground, was trying to affect the contracting process for the sewerage district, which is heavily dependent on a private contractor’s management of its system.

Common Ground launched a public campaign in April calling for an audit of Veolia Water Milwaukee, a subsidiary of the French transnational company Veolia that had a huge contract with MMSD. Common Ground was working with anonymous whistleblowers telling them Veolia was mismanaging the critical wastewater plants to save money, contributing to flooding and basement backups in recent years.

MMSD has spent the past two years working through the procurement process for the 10-year operations and maintenance contract for the Jones Island and South Shore water reclamation facilities. The contract was valued at approximately $700 million. In August, it was recommended that the next contract not go to Veolia, which has operated the facilities since 2008, but to the Texas-based engineering firm Jacobs Solutions.

Veolia responded by filing a lawsuit in federal court alleging MMSD did not follow its own procurement rules, unfairly favored Jacobs’ lower bid on the contract and allowed Common Ground to manipulate the contracting process.

In a lengthy response filed in federal court Wednesday, Sept. 30, MMSD went through Veolia’s allegations one by one and denied any suggestion the procurement process was intentionally manipulated or unfairly weighted to Jacobs’ advantage. MMSD did, however, agree with Veolia’s allegation that Common Ground was “raising concerns about [Veolia] outside of, and intended to influence, the procurement process.”

But Bob Connolly, a Common Ground co-founder, dismissed Veolia’s allegations. “Here was our ‘influence.’ We never said Veolia or Jacobs should get it. We said a performance audit needs to be done so that the commission knows what is going on in the plants,” Connolly noted. “Our work is not done. The audit is about to come out and we are going to see if some of the recommendations need to be in the new contract with Jacobs. Our goal is to keep crap out of our lake and our basements.”

Part of Veolia’s evidence of Common Ground’s influence was private meetings between organizers and MMSD officials and commissioners. Common Ground has publicly stated it met with MMSD officials to tell them of their whistleblower allegations.

“MMSD admits only that it in good faith engaged with constituents on matters of public concern, that it takes seriously any allegations of wrongdoing by MMSD contractors and has committed in earnest to an investigation of the claims alleged through Common Ground,” the sewerage district said in its court filing.

An ad hoc committee of former MMSD commissioners recommended Veolia’s competitor, Jacobs, for the new contract largely based on the price of Jacobs’ bid, which was approximately $54 million lower.

MMSD’s recent legal filing shows the lower bid was driven in part by a huge discrepancy between how much the company estimated it cost to clean a linear foot of sewer pipe. Jacobs’ bid said it would cost $5.54 per linear foot. Veolia bid $54 per linear foot, or $48.46 more per linear foot.

The sewerage district also disagrees with Veolia’s suggestion that Jacobs was unfairly allowed to amend its proposal. The Texas-based firm agreed to remove the data analytics and artificial intelligence firm Palantir from its contract bid. MMSD said Veolia also had the opportunity “to negotiate its own proposal.”

Palantir’s involvement as a subcontractor led local community and immigrant rights activists to protest Jacobs over Palantir’s work with U.S. Immigration and Customs Enforcement (ICE).

In September, U.S. District Judge Brett Ludwig ordered MMSD to pause finalization of a contract until the lawsuit is settled. MMSD will negotiate a final contract with Jacobs, but will not sign it until the suit is settled.