By Tom Larson
Employees of Riley Bros. Construction are soliciting signatures on a petition they hope will allow the company to continue bidding on local, state and federal projects and, in turn, keep 140 people employed by the embattled company.
In November 2009, Riley Bros. founders Joe Riley and John Riley were charged and pled guilty to felony conspiracy to defraud charges related to business operations and failure to provide accurate financial information to the Internal Revenue Service and the Minnesota Department of Revenue.
State and federal laws prohibit contractors from bidding on local, state and federal projects if the contractors have been placed on suspended or debarment lists because of the convictions.
Riley Bros. has not been officially debarred from bidding on government contracts but the company is under a 60-day suspension and listed on the Minnesota Department of Administration's Suspended/Debarred Vendor Report and the federal government's Excluded Parties List System. The suspension expires in mid-March, according to Chris Riley, Riley Bros. construction manager.
State law provides for a suspension period before an official judgement is made regarding debarment. Companies under suspension have the opportunity to contest debarment, and can appeal in court a decision by the Department of Administration.
The company is working with attorneys to contest debarment, and the future direction of the company won't be known until that issue is cleared up, Chris Riley said.
"It's still up in the air," he said. "We're trying to get over hurdle one before we move on to hurdle two and hurdle three."
A large share of Riley Bros.'s work involves county, state and federal projects, and the loss of that work and subsequent income could lead to layoffs of at least some of its 140 employees.
The petitions are being circulated throughout the area, and letters explaining Riley Bros.'s situation have been sent to state and federal representatives, including Minnesota Gov. Tim Pawlenty, Minnesota Senators Amy Klobuhar and Al Franken, Congressman Collin Peterson and President Barack Obama.
The employees contend that Joe Riley and John Riley, not the company, committed the felonies personally and that the company should not be negatively impacted by their actions. The company and the area economy could be harmed should the suspensions evolve into a full-scale debarment.
Debarment could keep the company from bidding on almost all local, state and federal projects for between one year and three years. With national unemployment at almost 10 percent, Riley Bros. employees are convinced their jobs will be gone if the state doesn't offer an exemption to debarment or suspension.
However, state law indicates that Minnesota does not tend to reverse suspensions and debarments outside of emergency situations.
Riley Bros. has long been a contractor for projects throughout the region, Minnesota and the Dakotas. Not having the ability to bid on government contracts would place in jeopardy the jobs of about 140 workers, according to letters addressed to the lawmakers and officials.
"Not only will we as employees of Riley Bros. have to endure this, the entire economy of Morris and the surrounding areas will feel the impact," the letter states.
Chris Riley said that the prime bidding time for spring and summer work is fast approaching.
"This is not a good time to be sitting on the sidelines," he said.
Stevens County Highway Engineer Brian Giese said bidding for spring and summer work begins soon. The potential absence of Riley Bros.' bids could be felt more intensely if a debarment dragged on.
"Initially, I don't see it having too much impact (on the county)," Giese said. "But if they're not able to accept bids for, say, three years, that limits our ability to get competitive bids, and I suspect prices will go up."
For more information on the petitions, contact Dana Nelson (320-287-1906), Craig Schnitzler (320-287-1915), Joel Siegel (320-589-2500) or Jerry Lembcke (320-287-1903).