City Hall

Amid Controversy Over Hi-Line Connector Trail Project, Construction Company Sues Dallas

In April, Dustin Gadberry, owner of Gadberry Construction, asked the city attorney to investigate why his company wasn't chosen for work on a local trail project.
In April, Dustin Gadberry, owner of Gadberry Construction, asked the city attorney to investigate why his company wasn't chosen for work on a local trail project. City of Dallas
A North Texas construction company is suing Dallas, claiming the city didn't give it a fair shot to work on a local trail project.

The Gadberry Construction Co. threw its name in the hat to get hired for work on Dallas’ Hi-Line Connector Trail Project, which is meant to connect Victory Park and the Design District, which are now divided by Interstate 35E and a rail line.

John Reynolds of the Dallas Park and Recreation Department contacted Dustin Gadberry, owner of the construction company, in mid-January to ask more about the company’s experience, qualifications and overall financial ability to perform the work. Reynolds told Gadberry he was reaching out for more information because his company was the lowest bidder, according to the lawsuit.

Gadberry sent the requested information, but the city eventually disqualified the company from the project. The reason? The company wasn’t responsive enough, nor did it have enough experience, according to the city.

But Gadberry thought the disqualification letter was vague and didn’t offer a detailed explanation for why the company was turned down for the project. The letter said only that Gadberry had failed to meet requirements in a section of the bidding process. So, Gadberry protested the decision, sending the city a list of all the reasons why the company shouldn’t have been disqualified.

Gadberry said in the bid protest that he wasn’t provided information about the section of the bidding process for which he apparently failed to meet the requirements. He also said he wasn’t notified that he had to submit previous work done within the past three years. Gadberry said the qualifications he provided were timely and that he was just abiding by the bidding protocols the city gave him. But the city went with the second bidder, whose bid was $775,000 higher than Gadberry's.

“I’ve been doing this for 20 years. We have never been disqualified for a low-bid project." – Dustin Gadberry, Gadberry Construction

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The city denied Gadberry’s bid protest at the end of March, claiming the project was awarded to the most “responsive and responsible bidder.”

Not so, Gadberry’s suit claims. “The city’s disqualification of Gadberry is in clear violation of its obligations,” according to the suit. “The city failed to specify the requirements Gadberry was required to meet, and then retroactively imposed those requirements in its Disqualification Letter.”

In April, the city reached back out to Gadberry, asking the company to submit “experience of the firm in work of the same nature and similar magnitude as that of the project for which bids have been received, and such experience must have been on projects completed within the last three years prior to the date on which bids are received.”

Gadberry sent all the requested information, but when it came to a vote by the City Council, the project was still awarded to the second bidder, the Fain Group.

“$700,000 is about to be wasted of taxpayer money on what could best be described as a complete violation of procurement standards here or, at worse, a backroom deal that needs further investigation,” Gadberry told City Council ahead of its vote on April 27. “I’ve been doing this for 20 years. We have never been disqualified for a low-bid project.”

You may have heard about this at the time from D Magazine, which stirred up some controversy and ethical concerns about the project in late April, after the vote. Three council members wanted to delay a vote that would approve the Fain Group for the project. They said it should be delayed because of questions about whether the bidding process was up to snuff, according to D. The three council members, who included Omar Narvaez, wanted to make sure Gadberry was given a fair shot.

The reason some had ethical concerns is that Gadberry is Narvaez’s campaign treasurer, which wasn’t mentioned during the meeting when the vote took place. Narvaez later told D that he didn’t do anything wrong and even ran his relationship with Gadberry by the city attorney, who said he was in the clear.

“The city attorney said that as long as I had no financial interest with Gadberry Construction and Dustin Gadberry, I did not have to recuse myself,” Narvaez told D in April. “I always check with the city attorney. I’m probably the No. 1 city attorney person.”

At the end of the meeting, the City Council approved the Fain Group's bid for the project, so Gadberry sued. His suit also names all but three council members – Narvaez, Jesse Moreno and Paul Ridley. They were the three who supported delaying the vote in April.

“Given all of the facts and circumstances, there is no reasonable basis to disqualify Gadberry, and the City’s actions were plainly in violation of the Texas Government Code,” according to the lawsuit.

On May 11, the court granted a temporary restraining order that prevents the city from doing any more work on the trail project.

In his suit, Gadberry claims the city of Dallas and elected officials relied heavily on “false statements of Defendants SWA Group and Circuit Trail Conservancy in evaluating Gadberry’s qualifications.”

SWA Group and Gadberry had worked on a trail project together in Houston several years ago. The suit claims that a flaw in SWA Group’s design caused a “minor failure in a trail.”

Gadberry didn’t know this, but SWA Group blamed the construction company for the error and “maintained an extraordinary grudge thereafter,” according to the suit.

The Circuit Trail Conservancy was the entity that raised the private matching funds to pair with Dallas’ debt funding to build a version of the project that was proposed in a 2017 bond program. The organization has been working with SWA Group on a larger project called The LOOP, aiming to connect several disconnected pieces of the city’s trail system, the suit claims. The Hi-Line Connector Trail is part of this bigger project.

Gadberry claims in his suit that the city essentially handed over the Hi-Line Connector Trail Project and the bidding process for it to SWA Group and the Circuit Trail Conservancy. “From that point on, Defendants SWA Group and Circuit Trail Conservancy made multiple false representations about Gadberry in an attempt to disqualify it from the project,” according to the lawsuit.

The city of Dallas has since appealed Gadberry’s injunction. Philip Kingston, Gadberry’s attorney, told the Observer that the city’s appeal is laughable and will only add to further delays. “They have no chance, but the result will be many months more delay before the project starts, which is the opposite of what the park board and council wanted,” Kingston said.

Neither the city nor SWA Group responded to requests for comment.

In an emailed statement, Philip Hiatt Haigh, executive director of the Circuit Trail Conservancy, said, "We have secured $85 million for projects needed to complete The Loop and remain focused on connecting the Dallas trail system. Because this is in active litigation, I am unable to say more than that we will vigorously defend the Circuit Trail Conservancy in this matter.”

Through his suit, Gadberry hopes to stop the project until the city issues a new request for bids. Kingston said his client is anxious to bid on the project again, but the company also fears that a new request for bids will be written unfairly. Kingston said he’s not sure how the process can be fair as long as SWA Group and Circuit Trail Conservancy are involved.
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Jacob Vaughn, a former Brookhaven College journalism student, has written for the Observer since 2018, first as clubs editor. More recently, he's been in the news section as a staff writer covering City Hall, the Dallas Police Department and whatever else editors throw his way.
Contact: Jacob Vaughn