Coming on the heels of Monday night's Academy Awards, the atmosphere in the State Office Building auditorium had a Hollywood flavor Wednesday as a hundred or so contractors, civil servants and news media awaited the announcement of the winning bid for the massive I-15 reconstruction project.
There was no envelope to rip open dramatically, but when Thomas R. Warne announced that Wasatch Constructors had won the $1.325 billion contract, the group erupted in cheering and shouting as though they'd just won an Oscar.In a sense, they had. Wasatch Constructors, a joint venture of three companies - Kiewit Construction Co., Granite Construction Co. and Washington Construction Co., which last year merged with Morrison Knudsen Corp. - beat out two other consortiums, Lake Bonneville Constructors and Salt Lake Constructors, for the contract, the largest ever issued in Utah.
Officials at Wednesday's announcement were crowing about the fact that details of the 15-month-long process remained confidential - no leaks, even on the morning of the announcement. Even UDOT's own public information team didn't know which consortium had won until the last minute and thus worked into the night preparing press materials on all three of the groups.
"We sacrificed a few trees for the good of the state," said Kent Hansen, head of public information for the project.
Wasatch Constructors spokesman Greg Brooks marveled at the tight lid of secrecy. "I'm convinced no one had any idea who would win," said Brooks. "We certainly didn't. We've been vacillating between raw panic and a Zen-like state of being."
The players in Wasatch Constructors are used to doing big projects. Their resume includes the recent completion of a $790 million design/build freeway in the San Joaquin Hills of California (completed 3 1/2 months ahead of schedule) and the recently completed $126 million project to add four lanes to SR-91 in Orange County, Calif.
But those projects pale in comparison with the I-15 project, said Conway Narby, principal-on-site for Wasatch Constructors and a veteran executive of Kiewit Construction Group, a 103-year-old construction company based in Omaha, Neb. Kiewit will be the lead contractor in the project.
"This is a big, big deal, by far the largest undertaking I've ever been involved in," Narby said.
Kiewit, owned 100 percent by its 12,000 employees, provides construction services to a wide range of industries, from transportation and commercial buildings to the military and mining sectors. Last year its operating revenues topped $2 billion, and it had a backlog of anticipated revenue from uncompleted projects of $2.4 billion.
Engineering News-Record, a trade publication, last year ranked Kiewit first in the North American highway construction market. It was also cited as the ninth-largest contractor in 1995 revenues and 11th in terms of new contracts awarded in 1995.
The company has 19 operating offices with local managers, such as Narby, having full authority for project management, said spokesman Brooks, while still having the financial and operations resources of the whole company at their disposal.
Lost in the media scramble Wednesday to squeeze out every last quote from the victorious Wasatch Constructors were the Salt Lake and Bonneville groups. Asked if any of their services would be required by Wasatch, Brooks said it hasn't been discussed and if such a possibility existed, he hadn't heard about it.
In other words, it's not likely that the two losing bidders will have a role to play in the project. Brooks noted that in order to make the bid, Wasatch had to have a complete team in place, capable of completing the entire project using only its own resources. Some 100 to 150 white-collar people and some 600 to 1,000 "craftsmen" will be involved.
Warne said the two unsuccessful bidders will be paid a "stipend" of $950,000 each, a figure he says will not begin to pay them back for the costs of their bids, estimated at $2 million to $3 million each.
But the stipend isn't just to make them go away quietly. Warne said the payment means the state will own all of the innovations and ideas the two unsuccessful consortiums presented in their bids and can use them as it sees fit.
The other two-thirds of Wasatch Constructors are Granite Construction Inc. and Washington Construction Co./Morrison Knudsen. Design work will also be done by highway design firms Sverdrup Civil Inc. and De Leuw, Cather.
The major players in the reconstruction project are all based outside Utah, but the consortium will be working with a number of local companies, including Gilbert Western Corp., a Kiewit subsidiary that has been active locally for some 15 years and recently completed work on the City Creek Park project.
Gibbons and Reed, a subsidiary of Granite, is a Utah company that has been active in local construction since 1916 and last year did $130 million in work for the Utah Department of Transportation. Washington Construction Co. has worked locally at the Kiewit mines for many years.
Other local subconsultants and subcontractors include MK Centennial; Sunrise Engineering; US/Greiner; HW Lochner; Eckhoff Watson and Preator; Terracon; Woodward-Clyde Consultants; JHK Inc; Monroc and Okland Construction.
Although the size of the project will require use of engineers and specialists from around the country, Brooks said the companies comprising Wasatch Constructors have a history of using local labor. He estimates 40 percent to 50 percent of the actual work will be done by local contractors and suppliers.
Headquartered in Watsonville, Calif., Granite Construction, the second member of the Wasatch team, is the nation's third-largest transportation contractor and is a large producer of sand, gravel, asphalt and other aggregates. Launched in 1922, it is also one of the largest civil contractors in the United States, employing 4,000 people and with 1996 revenues of $928 million. Its projects have included dams, freeways and sub-ways.
Granite is organized into two divisions, the Branch Division, the larger of the two, is composed of branch offices providing construction services and materials to local communities in California, Nevada, Utah and Arizona.
The Heavy Construction Division does large, technically complex infrastructure projects nationwide in both the public and private sectors, from homeowners and Fortune 500 companies to small towns and the U.S. Army Corps of Engineers.
Long privately held, Granite went public in 1990 on the NASDAQ exchange, but about 32 percent of the company's shares are still held by its employees through its Employee Stock Ownership Plan.
The third leg of the Wasatch Constructors tripod is Washington Construction Co., a highway and heavy civil engineering contractor that merged last year with Boise-based Morrison Knudsen Corp. and now operates as part of MK's Heavy Civil Construction Group.
Founded in 1912, MK serves a wide array of construction markets with 8,500 employees worldwide. It underwent a Chapter 11 bankruptcy reorganization filing last summer when more than 7,000 MK shareholders were asked to give up their shares to save the company from going out of business.
MK struggled after former chief executive officer William Agee tried to move the company into mass transit and railcar manufacturing. Agee resigned early in 1995.