It’s a reminder to be careful what you wish for.
A couple of years ago, Alessandro Salvo, owner of a smallish water main construction company, fought Atlanta City Hall and won.
His company, GS Construction, was the low bidder for a lucrative annual contract for water main replacement and repairs, but it got turned down by the city on technicalities. Salvo appealed and something crazy happened — he won and got the work. In fact, he shamed the city into doing the right thing (with a little help from The Atlanta Journal-Constitution).
But now 20 months into the contract, the city is waaaay behind in payments, like more than a year in arrears as of Friday afternoon. That figure was about $3.1 million at the end of June, according to an attorney’s demand letter to the city. But it has now grown to about $5 million, according to Salvo’s calculations.
So, you might be asking, what’s new about some contractor not getting paid in time by the city of Atlanta? According to Salvo, the other two companies performing water main work for the city are also getting stiffed by the city. For that reason, there has been a slowdown of hooking up the water mains to new businesses and high-rises, he said. Who wants to be busting into streets now if you’ve got to wait until sometime deep in 2022 to finally get paid?
Salvo’s case has cast a light on the inner workings of how the city does business. Or, more precisely, how it doesn’t.
Sure, there has been a long-running federal investigation into corruption at the city, and the procurement director ended up going to prison for bribery. But this is not that. This even goes deeper than that kind of skullduggery.
This is the city not being able to perform the rudimentary business of governance: paying bills to get necessities done. After all, people in new $3,000-a-month luxury apartments like to brush their teeth.
Credit: Bill Torpy
Credit: Bill Torpy
“It’s like they have nine levels of bureaucracy so you don’t get paid,” Salvo said. “The administration is like a black hole. You write them and hear nothing. And now they’re retaliating against us for having the gall of getting a lawyer.”
A city spokesman said Atlanta does not discuss contract disputes but is “currently working with GS Construction to resolve all issues surrounding the contract and payment.”
Seeing that, Salvo said, “If working with us means refusing to process invoices and forcing me to get an attorney to force them to follow the contract, then they are working with us.”
Salvo’s company has about 60 employees with 10 to 12 crews and does work for several counties and municipalities in metro Atlanta. “We’re supposed to have these crews humping in Atlanta for the next three years, but I’m trying to send them elsewhere or we’ll be insolvent,” he said. “I’m stretched thin. I’m using my kids’ college funds to stay afloat.”
I first met Salvo in 2015, when his company corked a massive water main break that had almost all of DeKalb County boiling water for several days. After getting called in to repair the mess that DeKalb crews couldn’t fix, county officials then blamed Salvo for the screwup because there were 700,000 unhappy customers and someone had to take the heat.
Salvo determined his best defense was a good offense and publicly blew his stack. “Every time I help DeKalb County, the answer from the county is to punch us in the face,” he said at the time.
It was a refreshing bellow of honesty. Usually, those working for the government as employees or as contractors must bite their tongues to avoid bureaucratic backlash.
But that’s how he rolls. In 2011, a couple of crooked DeKalb inspectors threatened Salvo and his father to phony up work orders for some illegal cash or they’d shut them down. Instead of conspiring, the Salvos went to the FBI, wore wires and busted the scoundrels.
But remember, no good deed goes unpunished. A year later, in 2012, Salvo was the low bidder on a big water main project in DeKalb. But his bid was tossed out on a clerical error and the work was awarded to higher bidders.
Salvo went to court and a judge ordered the work to go to his company, noting that DeKalb “frustrates the purpose of protecting the public coffers from waste and assuring that taxpayers receive quality work for the lowest price.” (This was a precursor to Atlanta.)
He later was reupped for another contract in DeKalb and still does work there.
Salvo has complained about DeKalb bitterly in the past. But when I asked how Atlanta compared to DeKalb, which once was the lead standard of ineptitude, he guffawed, saying: “They make DeKalb look like the most well-run, well-oiled machine.”
Part of the problem for the long-delayed payment of bills is that Atlanta is challenging the cost of some of the work last summer, saying “laborers” should be used on some projects rather than “pipefitters,” who are paid more. Or that Salvo’s firm is asking to be paid too much for “exploratory excavation,” the task of trying to find water mains whose location is uncertain, even to the city.
There are several other disputes. Salvo said he has asked to be paid for work not in dispute and then they can work out reimbursement on the disputed charges.
“First, they do that, they beat you up and you say, ‘OK,’ and then they still don’t pay,” said Salvo. “Then they give you more steps, more runaround.”
Salvo hired attorney Michael Egan, the same guy he hired two years ago when Atlanta stiffed him on his contract bid.
“This all points to a picture of a government grinding to a halt, of not providing the basic services that they are supposed to provide,” Egan told me. “And putting in water and sewer mains is pretty basic services. This is rank inability to do what other counties and cities do regularly.”
“What bothers me most is that GS (Construction) has been told on site (by city employees) that ‘if you get a lawyer, that’s really going to slow you down,’” Egan said. “So there’s a slow line and now we’re going to put you in the really slow line.”
The complaints about City Hall’s inaction are nothing new. In late July, Midtown Alliance CEO Kevin Green wrote the city to say it was dragging its feet on transportation infrastructure projects and was in danger of losing millions of dollars in federal funds.
“The level of city inaction and dysfunction we are experiencing is the worst we have seen in two decades,” Green wrote. “The current situation is untenable.”
The Midtown Alliance is a self-taxing district that uses the extra funds to work with government to get projects done more quickly. “Despite this, the City continues to needlessly delay our projects and duplicate effort,” Green wrote. “The waste of time, effort and resources is enormous for all concerned.”
Credit: Alyssa Pointer/Alyssa.Pointer@ajc.com
Credit: Alyssa Pointer/Alyssa.Pointer@ajc.com
In his letter, he added, “Take a hard look at how our city is procuring projects. Is anyone reviewing city solicitations from the vendor’s perspective?”
I should give him Salvo’s phone number.
In an interview, Green told me nearly $40 million in projects slated for Midtown “aren’t moving,” adding: “There are a lot of internal processes that bounce desk to desk and nothing happens. Ten people can point to each other and say why it doesn’t get done.”
“What will happen if you have a federal infrastructure bill and all sorts of projects come here?” he asked. “If they can’t get the regular projects done, what happens?”
Probably nothing good.
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