SANDAG OKs $50M contract for company flagged for inflated costs, favoritism

Noon, Oct. 31: This story was updated to include details about the board’s approval of the contract.

Regional officials on Friday voted unanimously to award a not-to-exceed $50 million contract to a company that internal auditors flagged earlier this year for cost overages and enjoying preferential treatment.

The San Diego Association of Governments awarded a construction management contract for the new Otay Mesa East Port of Entry project — the third border crossing near San Diego that officials anticipate will generate billions of dollars in toll funds. 

SANDAG’s evaluation committee recommended awarding the contract to AECOM Technical Services, a global infrastructure consulting firm based in Los Angeles. But SANDAG has recently faced scrutiny for how it hands out contracts for the region’s infrastructure projects.

Earlier this year, an internal audit revealed a lack of oversight in the agency’s contracting process that ultimately led to inflated contracts — with some projects seeing increases of 1,500% and 3,300% — and raised questions about preferential treatment with a handful of vendors. AECOM, which already manages construction projects with SANDAG, was one of the companies flagged in the audit.

SANDAG officials previously awarded AECOM a sole-source contract — which means it was given to the company without a bidding process — to rehabilitate the Buena Vista and San Dieguito lagoons. Both projects — initially awarded $900,000 for Buena Vista and $700,000 for San Dieguito — ended up costing nearly three times their original budgets. Those increases were approved by SANDAG.

The audit also says SANDAG officials awarded a sole-source contract to AECOM’s subconsultant based on a recommendation from the company without any due diligence or competitive review.

AECOM was one of two companies that bid on the future border crossing and both were deemed qualified, according to a SANDAG staff report.

Officials with SANDAG and AECOM did not respond by deadline.

The future Otay Mesa East Port of Entry is lauded as “innovative,” deploying “state-of-the-art technology to provide secure, predictable and efficient crossings for passenger and commercial vehicles,” the staff report says. SANDAG expects it will open late 2027.