For years, Kosta Diamantis, the former director of the Connecticut School Grants Program, has advocated for a policy that would allow certain construction companies to claim a greater share of the profits from school construction projects, while potentially bypassing the normal state bidding process.
According to documents obtained by the Connecticut Mirror, Diamantis used his influence to push forward contracts and, ultimately, legislation that would allow construction management firms to ‘self-perform’ some of the work on schools in using their own construction crews.
These construction management companies traditionally aren’t paid to dig sites, pour foundations, erect walls, wire buildings, or install plumbing for school projects in Connecticut. Instead, they are hired to review designs, create construction schedules, and generally oversee the project for municipalities and the state.
Physical construction work for schools has always been put out to tender so that other contractors can compete for that work and the millions of dollars that come with it.
But Diamantis wanted that arrangement to change, and to achieve that goal, he convinced lawmakers to change state law so that school projects could use a so-called “hybrid” building model. And although the implementation of this law has been repeatedly delayed, it is expected to come into force in July.
Diamantis, who previously served as the state’s Democratic lawmaker for 14 years, said he asked the legislature to add language to an emergency funding bill in 2019 so that management companies construction can use their own employees to build parts of state-funded schools.
This law allowed state officials and local school building committees to award parts of a construction project to a construction management company if they decided it was “more profitable than a subcontractor”.
In an interview this week, Diamantis said allowing parts of school projects to be built by construction management companies would save the state and municipalities money and help prevent orders modification, which can increase the overall cost of construction.
“There is value in that, both for the community taxpayer and for the state taxpayer investing in these projects,” he said.
The hybrid setup, Diamantis said, would allow contractors such as O&G Industries and D’Amato Construction to serve as managers on the projects while using their experienced construction crews to build parts of the new schools.
Diamantis resigned from his position overseeing the school construction program on October 28, 2021, after being placed on paid administrative leave.
Around the same time, the state received a federal grand jury subpoena for cases related to the state school grant program.
Diamantis and several of the state’s largest construction management companies are named in those subpoenas, but it’s unclear whether Diamantis’ push for new legislation is of interest to federal investigators.
Construction companies pushed back immediately
The bill that Diamantis convinced lawmakers to pass, however, drew numerous complaints from Connecticut construction industry officials.
Several industry groups have argued for more than three years that the law would allow construction management companies to circumvent normal bidding procedures for state construction projects.
The legislation, Diamantis said, was never intended to overturn the public bidding process on school building projects.
“Absolutely not,” he said. “That was never the intention of the language.”
But that’s not how the new leadership of the Department of State Administrative Services and the Office of School Building Grants and Review explained the situation this week.
Michelle Gilman, the new DAS commissioner, asked lawmakers at a March 7 legislative hearing to pass a new bill this session that would ban the “hybrid” building model that Diamantis has repeatedly advocated.
Noel Petra, who took over the scholarship program last year, explained that the language Diamantis helped introduce in 2019 could allow a construction manager to carry out work on a project without ever asking for help. offers to other companies.
“They actually wouldn’t be required to bid,” Petra told lawmakers.
Petra’s statements to lawmakers, Diamantis said, were misleading and intended to create a false “narrative” about him and the school scholarship program he ran for more than six years.
“Noel Petra doesn’t understand the school building program, and he certainly doesn’t understand how it works,” Diamantis said. “The school construction program is an exceptional program, and it should not be used as a tool for laying down dirt.”
DAS spokeswoman Lora Rae Anderson said no construction company the agency knows of has ever been allowed to operate a new school and build part of the same project.
But it wasn’t for lack of trying.
Even before the law passed in 2019, Diamantis was pitching its new construction model to the municipalities.
In early 2018, he emailed Bristol officials informing them that he had a new construction plan, which he said would significantly limit price changes and delays at the new Memorial Boulevard Arts Magnet School in the city. town.
“I think this will take over…and cut costs and time,” Diamantis wrote. “We think as a team here you should use it given the nature of the work involved.”
The city and state would benefit, Diamantis argued, if Bristol let the construction manager do a significant portion of the work on the school’s more than $60 million renovation project himself.
But those plans came to an abrupt halt in the fall of 2018, as Bristol prepared to choose a construction manager for the project.
Roger Rousseau, Bristol’s purchasing agent, told Diamantis that the city had received a ‘variety of questions’ from contractors about the new requirement that 20% of the project should be built by the main contractor. .
“The city requires the (construction manager) to self-execute with his own employees,” wrote one of the contractors. “Is there a state or other requirement for the city to do this?”
In an attempt to answer these questions, Rousseau asked Diamantis to provide some examples where other cities have allowed a construction management company to build part of a school.
The city also sought legal opinions from Diamantis to confirm that the new “hybrid” model would comply with state auction laws.
Those emails went unanswered, according to city officials.
Instead, Bristol hired Donald Doeg, a lawyer specializing in construction law, to provide the city with its legal opinion on the matter.
Doeg, who is well known in the state’s construction industry, pointed out that state law requires that all physical construction work on school projects be awarded to the lowest qualified bidder.
And he warned that automatically awarding 20% of that work to the city’s chosen construction superintendent would open the city to legal challenges.
Diamantis said he disagreed with the legal advice Bristol had received, and the following year he presented his proposals to the Connecticut legislature.
The language that Diamantis helped put into legislation in 2019 didn’t get much attention when it was passed.
It was little more than a footnote to an annual appropriation bill that also approved more than $160 million in public funding for eight different school building projects.
With several school bills in play, the bill passed through the House and the Senate in less than a day and was signed by the governor shortly thereafter.
But in the years since, those legal changes have prompted several groups to issue warnings to state lawmakers and Governor Ned Lamont’s administration.
Talking points that were drafted in preparation for a meeting with Lamont in July 2020 show that state building trades leaders were deeply concerned about the law and the influence Diamantis was asserting over school projects.
“We have emails between the (Office of School Building Grants and Review) and city officials stating that they are creating this ‘hybrid’ method,” they wrote. “It’s beyond orthodoxy.”
But opposition to the 2019 law was not limited to a single meeting with the governor.
Similar complaints continued to be shared with Diamantis and other state officials through the summer of 2021, shortly before Diamantis left his position at the Office of Building Grants and Review. schools.
Groups like the Associated General Contractors of Connecticut have warned state officials and the legislature that allowing construction management firms to use their own crews to build parts of projects could be problematic.
This was especially true, they argued, if there were not more adequate protections put in place to ensure that every company had an equal opportunity to perform work on school projects.
John Butts, the executive director of Associated General Contractors, wrote numerous letters and legislative testimonies, protesting the “ill-conceived” legislation that Diamantis was championing.
The General Contractors Association and other groups successfully lobbied lawmakers in 2020 and 2021 to block any municipality from using the “hybrid” model until the law could be reformed. It is expected to come into effect in July.
And they provided legal recommendations to lawmakers that would ensure that all aspects of a school project would be put out to tender and that construction officials would not have an advantage over subcontractors in this bidding process.
Diamantis said he has no objection to the protections these groups want to add.
But he said it would be a mistake to ban construction management companies from building part of the schools in the future. It would only cost taxpayers more money, he argued.
The new leaders of DAS do not see it that way.
Policies adopted by Diamantis should be repealed, the agency said, to level the playing field and ensure that every contract for school construction projects is competitively tendered.