Ansaldo, State Reach Deal On Licensing Violation

Adrienne LaFrance/Civil Beat

Talk about trying to hide a story on a Friday evening.

The state Department of Commerce and Consumer Affairs issued a press release at 7:22 p.m. on Friday. It made public an embarrassing fact about the Italian company Honolulu is giving a $1.4 billion contract to design, build, operate and maintain the city's rail project.

Ansaldo Honolulu JV has agreed to pay the state $150,000 to settle two cases alleging that the company didn't have a contractor's license — as required by law — when it bid for the rail contract.

As the state acknowledges in its press release: "According to the Contractors License Board, a contractor’s license is required to submit a bid on contracting work. Submitting a bid without a contractor’s license constitutes unlicensed contracting. The fine for unlicensed contracting activity ranges from $2,500 and can run as high as 40% of the total contract price."

An email sent to an Ansaldo spokeswoman was not immediately returned.

When governments or companies want to bury a story, they typically release the information late on a Friday. Now the company has quietly cut a deal with the state that avoids what could have been a punishing penalty and the state made the fact public at a time when it might be least noticed.

Two firms that would have worked with Sumitomo, a losing bidder, brought the case against Ansaldo.

The issue was raised by Sumitomo in its unsuccessful July appeal to a state hearing officer of the city's decision to award the contract to Ansaldo even though Sumitomo said its bid would have saved taxpayers money over the long run.

Chapter 444 of the Hawaii Revised Statutes, Section 444-1, defines a "contractor" as "any person who by oneself or through others offers to undertake, or holds oneself out as being able to undertake, or does undertake," any construction or demolition work. Section 444-9 says, "No person within the purview of this chapter shall act, or assume to act, or advertise" as a contractor without first obtaining a license.

The state admits in its press release that "although Ansaldo was licensed prior to submitting Best and Final Offers and before a contract for the Rail Project was awarded, the company was not licensed when the bidding process initially began."

“As with similar cases RICO has handled in the past, RICO took into consideration that, in these cases, no consumers were harmed and a contractor’s license was in hand before a contract was signed or ground was broken,” RICO Supervising Attorney Daria Goto said in the press release. “The amount of the fine reflects the size of the project and the fact that Ansaldo was in the beginning stages of the bidding process when it obtained a license.”

The settlement is "a reminder that a contractor’s license is required to bid and perform contracting work in Hawaii,” Verna Oda, executive officer for the Contractor’s License Board said in the release.

It's also a reminder that some companies might get special treatment from the state in terms of when announcements of negative news are made.


DISCUSSION: What do you think about the way the state has handled the licensing case against Ansaldo? Join the conversation below.

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