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KFOX14 Investigates: EPISD bond contractor bidding controversy

KFOX14 Investigates: EPISD bond contractor bidding controversy

The El Paso Independent School District is getting to work on some of the $660 million worth of bond projects you’re paying for.

But questions are now being raised as to how certain contractors are being awarded your tax dollars. A

KFOX14 chief investigative reporter shows us the controversy over construction contracts.

Two big projects, totaling more than $70 million, have already been awarded to the same firm.

Local contractors said they're not getting a fair chance.

"It's very frustrating. A lot of the community isn't aware of this situation. We feel taxpayers should be aware of it,” said Adam Pacheco, the executive director of the El Paso Association of Contractors.

EPISD awarded its first two big bond projects -- renovations at Irvin High School and consolidation of Hughey Middle School and Ross Elementary School -- to the same company: HB Construction.

According to the bid documents, HB wasn't penalized for being an out-of-state firm.

“This is our big concern,” said Pacheco.

HB Construction is based in Albuquerque, and New Mexico penalizes out-of-state contractors during a bidding process.

Texas law calls for equal reciprocity to be applied.

That means New Mexico contractors are supposed to receive the same amount in penalties that Texas contractors receive there.

“They are not getting penalized the reciprocity,” said Pacheco.

EPISD said it didn't penalize HB Construction because it bid under the company name Harrington ConstructionLLC in Lubbock, Texas. Harrington Construction also has an office in El Paso.

“We did not apply it to HB Construction because, in all the paperwork they submitted, and we verified with secretary of state, they are Harrington Construction LLC,” said Carlos Gallinar, EPISD’s executive director of facilities and construction.

KFOX14 Investigates went to the secretary of state's website and this is what we found: Harrington Construction is an LLC established in 2014, and a

ll of its principals live in Albuquerque, New Mexico.

According to a 2010 Supreme Court ruling, a company's headquarters determines its "nerve center” when it comes to deciding where it is a resident contractor.

“It is clear to see they are not based in Texas,” said Pacheco.

Local attorney Steve Blanco reviewed the case. He outlined the state laws and Supreme Court rulings that apply.

In his letter, he says that, while Harrington Construction has been operating in Texas since 2014, i

ts nerve center remains in Albuquerque, where it is known as HB Construction.

In this case, a company would need to have offices in Texas for five years to be considered a resident contractor.

“They haven’t been here for five years,” said Pacheco.

EPISD doesn’t see it that way.

“It's the same company,” said Gallinar.

A few months prior to winning the Irvin and Hughey/Ross contracts,

HB Construction bid for the rights to build and renovate EPISD’s headquarters.

HB Construction was penalized the reciprocity at that time.

“We did apply that because that particular entity was a New Mexico firm,” said Gallinar.

But a few months later, when the company bid under Harrington Construction, reciprocity was not applied. We asked EPISD what changed in those few months

“It's not that they changed. It's what they presented to us at that time,” said Gallinar.

HB wasn't even the lowest bidder on either project, but EPISD saidthat's not the only factor considered.

The district said it looks for the best-qualified firm and stands by its decision.

“We feel 100 percent comfortable that we have followed the law,” said Gallinar.

But they weren't happy to answer our questions.

“I think your questions are being skewed and you're not being objective,” said Gallinar.

With more bond projects on the way and millions of dollars at stake, El Paso contractors say they just want an equal shot.

"We just want it to be a level playing field,” said Pacheco.

The El Paso Association of Contractors sent a letter to the board, alerting them to this situation. They say they are hopefulthat reciprocity will be applied fairly for the remaining bond projects.

EPISD said that it is unrealistic to expect that all the bond projects would go to Texas companies, given the volume of work that needs to be done.

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