It's NOT Better To Ask Forgiveness . . . Why The Assembly Shouldn't Settle With Roger Hickel

Roger Hickel's construction company filed suit against the Municipality of Anchorage.

"In its lawsuit, Hickel says it wants to be paid for the nearly $2.5 million of work it did last year, plus damages to be determined."  (From Alaska Public Media)

He claims he had a contract with the Municipality to do the work and now he's not getting paid.  

The problem is that his contract wasn't valid because it had never been approved by the Assembly.

"It started last year when the administration authorized Hickel to begin construction without Assembly authorization. That came to light last fall, and the Anchorage Assembly suspended the project." (same APM article.)

Last September, the Mayor brought a contract amendment to the Assembly.  

"On March 21, 2022, MOA Purchasing approved a Contract with RHC for Pre-

11 Construction Management (CM) services for the MOA Navigation Center as the

12 result of Request for Proposal 2022P007. Of the two proposals received,

13 reviewed, and evaluated, RHC received the highest score. The contract amount

14 was $50,000.00 and the period of performance was through December 31, 2022.

15 M&O is now requesting approval of the addition of General Contractor (GC)

16 construction services at a Not to Exceed (NTE) cost of $4,900,000.00 and a

17 contract extension through June 30, 2023. This will increase the contract amount

18 from $50,000.00 to $4,950,000.00."

But the Assembly rejected the extension of the contract:

"In a 9-3 vote, members rejected the administration’s request for $4.9 million so the city could proceed with the project. Assembly members Randy Sulte, Jamie Allard and Kevin Cross voted to approve it."

Why?  Because the Mayor had earlier secretly approved the contract without getting the Assembly's approval for the contract extension, which is required.  

"The vote came weeks after the revelation that, against city code, Bronson officials authorized millions in construction work over the summer without first getting the required Assembly approval to increase the contract with Roger Hickel Contracting by the $4.9 million. Work had begun weeks before Bronson officials in early September sent a request to the Assembly to change the contract."

“The municipality and the contractor have both been operating in good faith based on no less than three Assembly actions that appropriated to the tune of $9 million towards this project,” Municipal Manager Amy Demboski said. “It was our intent — we thought we were collaboratively working with the Assembly.” 

 About that 'good faith.'  Amy Demboski is the City Manager who a short time later, after she was fired by the Mayor, published a 'scathing letter' with a long list of things the Mayor had done very much in bad faith.

"It's better to ask forgiveness than permission" is a phrase often uttered in large bureaucracies when someone is proposing to skip over the rules.  The most positive spin would be that the complication of such organizations often frustrates folks to the point that they think it's easier to just plow ahead, without jumping through all the hoops to get permission.  But on the negative side, it's interpreted to mean 'since we aren't likely to get permission, let's just do it and it will be too late for them to do anything about it.'

The latter would seem to be what happened here.  There weren't that many hoops at the Municipality.  They just had to get the Assembly's approval.  But the Assembly had serious misgivings about the Mayor's project and there was a good chance they wouldn't approve it.  

We know the Mayor's office had to know they needed the Assembly's approval.  Contract approval is a very important and frequent part of running the Municipality.  The requirements for contract approval are one of the first things a Mayor needs to know.   There were still some pre-Bronson era employees who knew the rules and would have mentioned this.  At the very least, the Municipal Manager, Amy Demboski, a former Assembly member, knew well that the Assembly's approval was required.   

And Hickel?

Roger Hickel's LinkedIn Page says he's been doing construction in Anchorage for 28 years.

His construction company's website identifies over a dozen civil projects done for the MOA and the State of Alaska.  (I couldn't fit them all in one screen shot) And over 28 years he's done many, many such projects.

He also has the MOA and State of Alaska on his list of repeat customers among other government entities like the School District and the University of Alaska Anchorage. 

A FEW OF OUR REPEAT CLIENTS

Walmart

Nordstrom

Home Depot

Lowe’s

United Parcel Service

Federal Express

Army and Air Force Exchange Services

Food Services of America, NC Machinery

Providence Alaska Medical Center

Anchorage School District

Alaska Pacific University

University of Alaska

State of Alaska

the Municipality of Anchorage

Alaska Native Tribal Health Consortium

Alaska Regional Hospital

As an Anchorage contractor for over 28 years with numerous contracts with the MOA of various sized projects, there is no way that Hickel didn't know that the contract extensions over a certain amount required the Assembly's approval.  You don't do this many government construction projects without knowing the rules of the Muni and the State, without knowing the cost limits that require additional approval, without experts in your office who do this routinely.  

And he knew the project was controversial.  That it might not get the approval.  He and the mayor may have convinced themselves the project was critical to solve the Anchorage homelessness situation, but they still knew it required the Assembly's permission.  

The Assembly should call their bluff.  Let them go to court.  Let them explain why they went ahead without the Assembly's approval before a judge and a jury.  My guess is that the judge and jury will understand they were taking a calculated risk.  That the project was controversial and not likely to get the Assembly's approval.  That they were betting that moving the project ahead would force the Assembly to approve a project that they had serious questions about.  

I'm not a betting man, but I take the rule of law seriously.  I urge the Assembly to be firm.  To hold the Mayor and the contractor accountable for breaking the Municipal ordinance.  To let a jury decide.  I'm fairly confident that going to court will cause Hickel to settle for a much lower sum from the Muni.  And that a jury would side with the Assembly.