Tuesday, April 2, 2024

'Straight-up collusion' drives O'Hare cost overruns

   

"The Rock," by Peter Blume (The Art Institute of Chicago)

    This ran in the paper yesterday, but I held it for a day here so I could run my annual April 1 spoof. It's a bit out of my usual range — "punching above my weight class" was how I described it — but the couple reached out to me, had a legitimate story to tell, and I felt obligated to air their concerns.

    The devil is in the details.
     Before getting lost in the delays and cost overruns at O'Hare International Airport's expansion project, meet Cristina and John Beran. The couple is not rich, powerful or well-connected. They run Chicago Voice & Data Authority, installing fiber-optic cables.
     "I have been in business with this company since 2015," said Cristina. "A small company, but we've been growing a lot and able to hire more people. We're 70% diverse, women and minorities."
     Not that small — with up to 60 employees, depending on the workload, and some $10 million in revenue, CV&DA has worked on Lincoln Yards and the O'Hare 21 Project's Terminal 5 expansion.
     "We've done a large amount of work out there," said John, Cristina's husband and vice president of business development, though, "she's 100% the owner. I work for Cristina."
     The Berans would like to do some of the work installing hundreds of miles of fiber-optic cables at the global hub at O'Hare, should construction ever begin. But that won't be happening, due to a Catch-22.
     "To bid, you have to have a manufacturing partner. But for that partner to approve you, you have to have a relationship with the Chicago Department of Aviation," said John. "Small diverse companies like Cristina's don't have long-term relationships with manufacturers or the CDA." 
     The manufacturers are a choke point for the contractors, who, in the Berans' case, are required to use Corning fiber-optic cable.

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23 comments:

  1. ALWAYS nice to wake up in the morning and read an article about good ol' fashioned Chicaguh corruption. Made me forget about Agolf Shitler for five minutes...

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  2. Very trumpie of the powers that be.

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  3. I have a small company that operates in the city of Chicago. Very small, usually just two or three employees. We have been on a number of projects awarded by the federal government state government city government over the years .
    I am somewhat familiar with the hoops you have to jump through in order to satisfy the terms of an RFQ for RFP.
    Most times I'm a subcontractor for a subcontractor because I just don't have the bonafides to be awarded a contract directly
    It's like this on every project. It doesn't really sound like the Berans are being singled out.
    I've certainly been through the dance of being unable to purchase specified products because I don't qualify in some way as far as the company is concerned Corning undoubtedly guarantees their products and wants certified installers or experienced installers only to purchase it. Though I read in the article that that's not the case here. So I went online and Corning seems willing to sell to just about anybody with a debit card. So I don't know if this is some specialty product that they're providing for the airport project. And while I don't discount that there is a system in place that benefits certain companies over others, that's the marketplace and capitalism is a b**** especially when it involves public works. Projects in the government is involved but there's a whole 500 page document detailing all of the requirements that contractors have to meet and sometimes being a woman-owned business isn't enough. I wish them the best of luck but was this really the hill they want to die on?

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    1. That was my thinking — I try not to allow the column to be an accessory to professional suicide. But they contacted me two months ago, and no matter how I dragged my feet, they wanted their perspective shares. I might not have, but they seemed legitimate — Crain's spotlighted them just last year.

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    2. Interesting rebuttal.

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  4. I'm shocked, shocked I tell you that there's corruption & collusion in any city of Chicago contracting.
    Obviously that was sarcasm, as that's been the way of the city since even before Long John Wentworth was mayor in the 1850s!

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  5. St Louis was the main center of commerce for the midwest, more booming than Chicago. The city fathers were approached by the railroad barons and declined to be part of their plans - because the future was river boats. The barons turned their interests to Chicago. Chicago is now 3 million people, St Louis 300,000. Mistakes echo across time.

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    1. Anthony Trollope was so impressed with the hustle and energy of Chicago that he predicted that Chicago would be a more important city than St. Louis even though at the time he visited, St. Louis's population was twice that of Chicago.

      john

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    2. Anthony Trollope was in Chicago? Why is this the first I've heard of it.

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    3. According to his autobiography (which killed his reputation--he listed all his novels with the amount of money he made, or didn't make, on each), he and his wife did a tour of the U.S...in the middle of the Civil War. Whether he actually visited Chicago I couldn't discern from doing a Google search and I don't think I know how to look it up in my KIndle, but somehow he got the impression that Chicago was an up and coming city and St. Louis was not. By the way, his mother lived in Cincinnati for a year or so and found it "utterly dreary."

      john

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    4. Well, my curiosity was piqued by this exchange. I knew nothing about it, but here's something:

      From "The Project Gutenberg eBook, North America, Volume I (of 2), by Anthony Trollope"

      If one goes to "CHAPTER XI. CERES AMERICANA.", there are only 4 paragraphs about Chicago, but they're pretty great.

      "From Dixon we went to Chicago. Chicago is in many respects the most remarkable city among all the remarkable cities of the Union. Its growth has been the fastest and its success the most assured. Twenty-five years ago there was no Chicago, and now it contains 120,000 inhabitants. Cincinnati on the Ohio, and St. Louis at the junction of the Missouri and Mississippi, are larger towns; but they have not grown large so quickly nor do they now promise so excessive a development of commerce." ... "And within her own bosom there is a boast that even yet she will be stronger than Mars."

      This is after an interesting chart showing how transportation affects the cost of corn being shipped from Bloomington to Chicago to Buffalo to New York, ending up in Liverpool, England.

      Then Trollope is off to Cleveland, "another pleasant town, —pleasant as Milwaukee and Portland."

      I think it's safe to say that most Englishmen arriving in Chicago have always come by way of Dixon! ; )

      https://www.gutenberg.org/files/1865/1865-h/1865-h.htm#c11

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  6. oh yeah blame it on the birds ;-)

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  7. On another subject I love "The Rock"

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  8. Thanks for Blume's "The Rock", one of my Art Institutes favorites, though currently off display, I think. It could be interpreted as germane to the subjects of the column.

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  9. Maybe I'm cynical, definitely skeptical, about the way John insists that it's his wife Cristina's company, then he does all the talking. Maybe the actual interview was different.

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    1. No, that thought did cross my mind. Having minority- and woman-owned business figureheads is also an issue — I'm not saying that is the case here. But it does occur. A lot.

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  10. What a great column, you might even move the "give me mine" bureaucracy" with this one!

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  11. I've worked with Corning for over 20 years as a partner. They require a certification process to make sure it's installed the correct way. Much like a Mechanic at a Dealership be certified or a Dentist to work on teeth. Corning accepts new partners, however they do require that the technicians installing their product are trained, certified and knowledgeable of their brand. After all, we contractors will be the first to run to a manufacturer if something doesn't work. This safeguards the 25 year warranty that Corning offers. Corning and other providers use a partner program to help with this. If CVDA bid the project with the Corning solution before they were certified, that's on CVDA. If Corning attempted to certify CVDA before they won this project and they didn't comply, also on CVDA. I wonder if CVDA just thought that " hey I will bid this project and be the lowest bidder, then go to Corning to make them certify me" Also, who is checking this proposals to see if the Certifications are in place? If they didn't do the work to become a partner after Corning outlines the specific criteria to become a partner, that is also on them. I wonder if other manufacturers have had similar scenarios with John Berran? I'm also wondering why you didn't do more research on this before you went to print?

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    1. I guess because I didn't consider that Corning would reply.

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  12. Having some knowledge of this company and it's owners, maybe you should check the credibility of the people you interview. You can start by searching Cook County 1st District Court Case# 2018-OP-73893 Mayorga v. Beran.

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    1. Exactly. They’ve done this to at least 5 other manufacturers.

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