By Jacq Lacy

The recently completed Tillamook North Jetty project was awarded to an out-of-state company over local bidders, raising questions about the future use of federal stimulus funds awarded to Oregon projects.

On Friday afternoon, Vancouver, Wash.-based Kiewit Pacific Co. placed the final boulder at the tip of the North Tillamook Jetty. The Army Corps of Engineers Portland Division awarded Kiewit the Tillamook project in July of 2009 and paid the company more than $16 million.

In addition to being an out-of-state company, Kiewit also submitted the highest bid. Four companies submitted bids for the project last year: Kiewit for $16.1 million, KERR Contractors of Woodburn for $11.4 million, Tapani Underground of Battleground, Wash. for $12.4 million and an unknown company undisclosed by the corps. The corps granted the project to Kiewit, using funds designated for Oregon projects through the American Recovery and Reinvestment Act of 2009. The corps received the ARRA dollars for the project before the agency requested bids.

One of the goals of ARRA funding is to create local jobs by working with local companies. But only a fraction of the money paid local Oregon contractors to work on the project, providing small rock, a fence, concrete slabs and trucking. The majority of the funds went to Kiewit, who gathered 11,000 boulders from Northern Washington quarries and trucked them all the way to Tillamook. 

KERR challenged the contract between Kiewit and the corps in September of 2009 in federal court, arguing that selecting the higher bid was unfair to taxpayers and that local companies and subcontractors could perform the Oregon job cheaper.

"We didn't believe that taxpayers should pay this premium, especially funds specifically for an Oregon project," said Alan Aplin, vice president of KERR.

The judge dismissed KERR's complaint and sided with the corps.

"The company has to have the right supplies for the project. We have technical specifications that have to be followed," said Kathryn Warner, corps project manager.

Senator Ron Wyden's office also supported the decision, stating that the project saved Oregon jobs.

"It saved Oregon jobs along the coast," Tom Towslee, state communications director for Wyden, said. "They're not just piles of rock in the ocean. Without them there would be no coastal economy. There would be no commercial shipping or commercial or recreational fishing."

According to the Port of Garibaldi, the South Tillamook Jetty also needs repair. Matt Rabe, spokesman for the corps, said that the South Jetty Project is a high priority for the corps.

Kevin Greenwood, Port of Garibaldi manager, estimates the South Jetty job will cost $31 million: $600,000 for planning, $25 million for rock procurement and delivery, and $5.4 million for actual work and repair.

The corps intends to use the same criteria for selecting a contractor for the South Jetty as it did for the North Jetty. The same procedure applies for the stimulus projects that the corps has yet to award.

Jacq Lacy is an associate writer for Oregon Business.

As the corps and other ARRA agencies begin to solicit more bids for stimulus projects statewide, should Oregon companies and jobs receive priority?