By Christopher Cole

Law360 (April 14, 2020, 4:00 PM EDT) -- Colorado's attorney general unveiled a settlement with Mortenson Co. over allegations of bid-rigging for a Denver convention center expansion, with the commercial builder paying out $650,000 and pledging to donate construction work at the same value, ideally to help fight COVID-19.

The agreement announced Monday stems from a yearlong investigation by Attorney General Phil Weiser's office into Mortenson and several employees for their alleged roles in a bid-rigging scheme related to the city and county of Denver's plans to upgrade and expand the Colorado Convention Center.

Mortenson employees allegedly took part in improper discussions with the city's project manager, Trammell Crow Co., which remains under investigation along with its representative for the convention center project.

The probe uncovered "strong evidence" that employees from Mortenson and Trammell Crow exchanged nonpublic and confidential information about the project and procurement process that was not shared with other prospective bidders, according to Weiser's office.

"This egregious behavior caused Denver officials to cancel the procurement process and delay the project at significant cost to the city and to the residents of Colorado," Weiser said in a statement Monday.

Weiser said the communications between Trammell Crow and Mortenson unfairly benefited Mortenson and disrupted the procurement process, violating the Colorado Antitrust Act. The agreement , which legal papers indicate was signed Friday, fully resolves all of the civil and criminal disputes between Weiser's office and Mortenson.

The agreement calls for Mortenson to pay $650,000 to the Colorado Department of Law and to donate construction services for a project in the state related to needs that have arisen from the COVID-19 emergency, the details of which have not been determined except it will be for a value of no less than $650,000.

Mortenson will pay all of its own costs of service and construction, including building materials and any subcontractor and design services contracted to complete the project. According to the settlement papers, the donation could also go toward a larger project, or be split among two or more smaller ones.

Weiser called that aspect of the deal "silver lining" from the alleged bid-rigging because "Coloradans will benefit from additional resources to respond to needs we have from the COVID-19 pandemic."

Mortenson will be required, among other things, to adopt policies in Colorado to encourage minority and women-owned business enterprises to work with Mortenson on public projects in Colorado.

In Monday's statement, Denver Mayor Michael Hancock called the integrity of the procurement process "critical to ensuring the public's trust that their tax dollars are being invested in a manner that is completely aboveboard and for the public's benefit."

"When companies attempt to circumvent that trust, it's in the people's interest that they be held accountable. This agreement not only secures our process and creates opportunities for our local women- and minority-owned businesses, it will also support our entire community during this public health crisis," he said.

The settlement requires Mortenson to establish a comprehensive, internal compliance program and disclose the existence of the agreement when it bids on any public construction projects in Colorado for two years.

Officers and employees of Mortenson implicated in the alleged bid-rigging plot will be actively involved in the management and work of the COVID-19 project. They must also make a presentation on ethics and antitrust compliance issues related to public projects to a large construction conference within a year of the deal's effective date.

Those officers and employees must also make an annual presentation on ethics and "lessons learned" from the convention center expansion project at a four-year college or university in Colorado as part of an ethics, corporate social responsibility, or business management program or class. And they must enroll and complete the Certificate in Corporate Social Responsibility offered by the University of Colorado within two years.

They must also participate in an informational open house or forum for minority and women-owned businesses to learn about maximizing opportunities in public projects, which the company is required to host.

Dan Johnson, president and CEO of Mortenson, said in a Monday statement, "We hold ourselves to high ethical standards at Mortenson and how we conduct business is essential to our customers, business partners, team members and the communities where we live and work."

Johnson noted the company didn't admit liability, but said the situation was not "consistent with who we are."

"Striving to do the right thing means learning from times when we may fall short," he said. "We are committed to the assurances outlined in our agreement and have made several changes to our compliance and training programs as a result. We will also share the lessons we've learned with others in our industry."

Johnson added that Mortenson has served Colorado and been a part of the Denver community for nearly 40 years.

"The most immediate example of how important this relationship is to us is our commitment to the attorney general that Mortenson will donate construction services support to help Colorado's efforts to battle the COVID-19 pandemic," he said. "Our focus will be on our commitment to our customers and continuing to serve as a leader in the local community. We believe that is the right thing to do."

Trammell Crow did not immediately respond to a press inquiry Tuesday.

--Editing by Orlando Lorenzo.

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