Trial questions Pit remodeling

SANTA FE — A string of defense witnesses testified Friday that the University of New Mexico had received great value for the work performed on the massive $60 million remodel of the Pit in 2009 and 2010.

Witnesses called by Flintco, the contractor on the project, took the stand in the courtroom of 1st Judicial District Judge Sarah Singleton.

The case, brought by a group of trade unions including the New Mexico Building Trades and Construction Trades Council on behalf of taxpayers, calls into question expenditures on the project, in particular a series of change orders. Named in the suit is Flintco West LLC.

It is the first Fraud Against Taxpayers case to go to trial in New Mexico. Under such state “qui tam” actions, a person knowledgeable about fraud involving public money sues on behalf of taxpayers and shares in any recovery.

The jury trial, which began Monday, is expected to wrap up early next week.

Among other claims, the lawsuit alleges then-President David Schmidly had developed a relationship with the Tulsa-based Flintco during his prior tenure as president of Oklahoma State University.

Former UNM Regent Mel Eaves testified he was familiar with and thought well of the work of losing bidders Jaynes Corp. and Bradbury-Stamm, which partnered with a larger firm, Hunt, to bid on the Pit renovation.

What Eaves, project architect John Q. Pate of Molzen-Corbin Architects and UNM Executive Vice President David Harris told jurors was that Flintco rose in scorers’ estimation during interviews about the project. While the other bidders did well in explaining who they were as a firm, Flintco excelled in outlining ideas about how to phase the project. The building presented inevitable difficulties because of its age — it was built in the 1960s — and poor documentation, the architects said.

Pate said Jaynes initially ranked first because it had “a very good proposal.”

But Flintco “came in with a plan to sequence the project” so that construction could continue during basketball season.

“As you may or may not know,” he told the jury, “UNM was not in the mood not to have a basketball season. … As I recall, that was a big asset Flintco brought to the table.”

Witnesses testified that the project was the first in the state to be bid under a new procedure called Construction Manager at Risk, or CMAR, which had been approved by the Legislature in 2007. It set up a process for the construction to take place, capped by a Guaranteed Maximum Price contract amendment at the end. Any costs beyond that would be paid by the contractor.

The lawsuit takes aim at change orders and alleges Flintco handled subcontractor bids in a way that turned the “maximum into more of a minimum.”

Also testifying Friday was Brian Schmidly, the former UNM president’s son, who was hired as part of the Flintco management team on the Pit.

Now the president of Rio Grande Solar, he said he believed his experience and education, including a master’s in business administration, earned him the job with Flintco.

The lawsuit alleges Brian Schmidly was hired in a quid pro quo after Flintco got the contract.

Eaves testified earlier that when he learned of Brian Schmidly’s hiring, he engineered passage of a conflict-of-interest policy that excluded the then-president from approving any contracts with Flintco because he wanted everything to be “on the up-and-up.” Harris signed off on paperwork instead.
— This article appeared on page A1 of the Albuquerque Journal