It was sadly predictable that only a few days after a story about how the City of Whitewater violated federal law in awarding a contract under a multi-million dollar federal grant, City Manager Kevin Brunner would attempt to distort & minimize the nature of the violation, with a tale that’s simply incredible.

Sure enough, he’s right on schedule, in remarks published on October 9th in a story entitled, “Tech park project continues after EDA violation.”

(I’ve written about federal rules violations at the Whitewater Innovation Center before. See, Whitewater’s Innovation Center: Economic Development Administration Sends ‘Cease and Desist’ Letter Over Alleged Violation of Competition in Construction Requirements, and later at Wisconsin State Journal: Work was stopped on Whitewater technology park due to federal rules violations. For the State Journal story, see Work was stopped on Whitewater technology park due to federal rules violations.)

I’ll address the city manager’s remarks, below.

“A misunderstanding on how to apply the federal law.” Brunner brazenly contends that the violation was simply a “misunderstanding on how to apply the federal law.”

No, and no again. The violation was that Brunner didn’t comply with federal law. Brunner’s remarks make this all seem like a matter of interpretation. That’s nonsense, as the letter from the Economic Development Administration plainly states:

It has come to the Economic Development Administration (EDA) attention that the construction contractor for the Whitewater Technology Park building portion of the Project has not been awarded per EDA Standard Terms and Conditions. The construction contractor is also working as a construction project manager developing specifications, requirements, statements of work, and invitations for bid and/or requests for proposal. This is a clear violation of the Grant Award Terms and Conditions and in particular, CFR 15 sec. 14.43 Competition. This unauthorized action subjects the grant to possible termination for cause.

The City of Whitewater, Community Development Authority and the University of Wisconsin-Whitewater, as co-grant Recipients, are hereby advised to cease and desist, all construction activities associated with this EDA investment….

A full accounting of this matter by the EDA will be required before it will authorize any additional Project activities….

See, full letter from the Economic Development Administration to the City of Whitewater, among others:

Brunner’s reference to state and local law is risible: it was a federal grant, worth millions; the least that he could expect is that he would need to comply with federal law. Not only is it obvious that a federal grant must comply with federal legal requirements, but as the EDA letter makes plain, these requirements were set out clearly in the Grant Award Terms and Conditions.

Talking about state and local law is irrelevant to the violation. (After all, that’s why the EDA stopped the project and the architect has had to assume oversight duties.)

Overlooking the Obvious. Even assuming a world without any law of any kind, it should be clear to someone that the company that manages a construction project shouldn’t be awarding itself contracts. That this didn’t even occur to Brunner — by his own admission — speaks poorly about his actual understanding of the project, and projects, generally.

About that ‘Scrutiny.’ Brunner’s quick to shift the focus from his own responsibilities to an agency’s scrutiny: “Obviously there’s a whole other level of scrutiny, and once we were made aware of that we wanted to comply.”

No, and no again. Brunner should have been aware of the basic terms and conditions without any agency’s needing to issue a cease-and-desist letter. He, and others, were responsible for this project. They freely applied for the grant; no one forced Brunner into this position.

As for wanting to comply, well, there was no alternative, if Brunner wanted to continue with the project. The best way to demonstrate a desire to comply with the terms of a federal grant is to read thoroughly the terms of the federal grant.

Financial Impact on the Project. The story notes that “Brunner said he doesn’t expect the violation to have any financial impact on the project.”

That’s impossible, of course. The only way a work stoppage could have no financial impact is if there were no value — none at all — to any alternative uses of workers’ time. In the world in which we all live, one of finite resources, and choices between opportunities, there’s a cost to any use (or non-use) of resources. It cannot be otherwise.

It’s almost too funny that Brunner, as a leader in a project that also involves a university, is apparently ignorant of (or disingenuous about) a truth that any undergraduate in economics would easily comprehend.

There are other consequences, too.

Brunner may contend that there’s no financial impact, but there’s also a cost to credibility to parties who cannot comply with plain requirements for millions in federal grants. (A violation like this is so rare that it’s remarkable, and that’s why it became a newspaper and an Associated Press story.)

Brunner may contend that there’s no financial impact, but there’s also a cost to credibility to a city manager who wants to propose a city budget, with possible hardships to others, when he cannot comply adequately with simple requirements.

The Real Timeline. There’s been a striking lack of candor in all this. The cease-and-desist letter was stamped with the date for 9/28/10, but it’s likely some local officials were aware of its contents earlier. That means that in remarks at a Community Development Authority board meeting of September 27th, and at a Common Council meeting on October 5th, Brunner was not candid about the extent the federal rules violations that the project faced.

Worse — for all this, he’s spinning a new, deceptive tale about these violations.

It’s all predictable, if embarrassing and irresponsible.

There’s a story on Whitewater’s Technology Park and Innovation Center, from the Wisconsin State Journal. See, Work was stopped on Whitewater technology park due to federal rules violations.

Reporter Dee Hall writes that

Work on the Whitewater University Technology Park was temporarily halted last week when the federal government notified officials with the city and UW-Whitewater that they violated federal rules when awarding a construction contract at the park….

The problem revolved around a $2.9 million contract awarded in April to Janesville-based J.P. Cullen & Sons. Cullen was in charge of reviewing the bids and recommended itself for the main construction contract.

As construction manager for the project, Cullen also is charged with overseeing construction and making sure subcontractors meet deadlines and budget. As part of the agreement with the federal government, Brunner said, Cullen’s work is now being overseen by the project architect, Eppstein Uhen Architects of Milwaukee.

In commenting on the temporary stoppage, Brunner remarked that

…. he had no idea until a few weeks ago that the arrangement didn’t comply with federal rules. He said Whitewater officials were able to demonstrate to EDA that it had held “an open and competitive bidding process” that met state and local laws.

Added Brunner: “We really truly believed we were doing the right thing.”

For my original post on the federal violations, see Whitewater’s Innovation Center: Economic Development Administration Sends ‘Cease and Desist’ Letter Over Alleged Violation of Competition in Construction Requirements.

I have written critically about the project before, but a stoppage for a federal rules violation — and a change in required oversight as a result — speaks poorly of this project. (I’ve contended that the project is both over-hyped and a misdirection of resources from Whitewater’s more significant needs.)

There are very few places that commit this sort of federal violation and experience this sort of work stoppage. Grandiose claims and serial groundbreaking ceremonies for the project should be the least of Whitewater’s concerns.

Note: Originally posted 10-7 at 10:30 p.m.