Wednesday, July 18, 2012

IDOT Ordered To Pay McDonough $2 Million And Lift Suspension

When a controversy about accounting treatment of certain design firm expenses factored into contract overhead rates turned up after IDOT neglected to audit the billings of consultant McDonough Associates for nine years, IDOT’s chief Procurement Officer Bill Grunloh suspended the firm for three years in a fit of pique, and held back nearly $2 million in contract payments billed by McDonough. Now a Chicago U. S. District Judge Milton Shadur has ordered IDOT to cough up the money and lift the suspension.

Describing the suspension as violating the procedures provided for in the Illinois Administrative Code for contractor suspension, Judge Shadur said “Grunloh’s actions were in clear absence of jurisdiction and exceeded his authority.” Last Friday Judge Shadur chided IDOT’s lawyers for the agency’s suspension of McDonough for “an illegitimate reason.” He went on to say “this is the way the agency performs on a continuing and regular basis … If applied to every project … we would still be operating with horse and buggy because IDOT would never get anything done.”

Judge Shadur’s orders put an end to what McDonough’s lawyers describe as “an abuse of power,” and yesterday IDOT began paying out the $2 million owed to McDonough.

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