Response to article on Highway Specialties and KT Contracting

Rep. Kim Thatcher

An Oregonian article earlier this month about my highway businesses certainly set the stage for accusations to be levied and sensationalized about my businesses. I find it necessary to clear up a few things.

The story was based on just that; “accusations” on litigation that, years ago, was resolved and closed. My companies have never been convicted of any crime or wrongdoing, but you would not be able to tell that based on the story.

I won’t go into all the details, but working on a contract from state agencies can often be complicated…especially when it comes to public works.

Almost a decade ago, my businesses subcontracted on a highway project for ODOT. The project was completed late. According to ODOT’s own report to the legislature, it was because of “consultant design errors” which would create obstructions in the middle of the freeway. That’s kind of big problem, and we did not create it. They go on to say, “Correcting these issues caused fabrication issues which delayed the project.” On that much we agree: their change caused a cascade effect that delayed the project.

Among other things, these changes also cost my companies additional expense, as well as caused the project to finish late. But, ODOT refused to pay for a majority of the cost of these changes that had been made at the department’s request. Not only that, they assessed over $200,000 in late charges against my company.

Eventually, my company took ODOT to court (through the contractor) to seek payment for the extra work that, without question, was performed. After years of litigation nearly exhausting company funds, we eventually dropped the case, and took a related settlement. However, a part of the post trial motions required my company to pay $200,000 for the delay in the completion of the project, which was actually ODOT’s fault in the first place. We also paid only $63,000 in legal expenses to cover ODOT’’s defense of the case, instead of the $188,000 ODOT originally submitted to the court as their due.

At one point in the legal battle, my companies were accused of destroying computer files. Even though a hard drive was wiped out after technical problems occurred, hard copies of the documents were submitted in the court proceedings. All documentation relating to the project was available. Every bill submitted to the state was for work actually performed for the project and materials actually provided.

The buck stops with me. These are my small businesses and I have learned many valuable lessons from this incident. Yes, mistakes were made and there were unfortunate bookkeeping and technology challenges as well. Did my companies rip-off taxpayers? Absolutely not! My conscience is clear.

I am proud of the fact that my businesses have been providing jobs to hundreds of Oregonians, and quality service to contractors for over 20 years. Sadly, due to all that has happened with ODOT, I only allow about 20% of my contracting business to remain in this state.

One of the reasons I ran for the legislature 10 years ago was to help small businesses like mine that were struggling with all the bureaucracy and red tape in state government. Over the years I have helped change some state laws to improve the business climate in our state. However, it is also obvious to me that we still have a long way to go.