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Clout-heavy engineering firm fights ban on state business

James J. McDonough is chairman Board CEO McDonough Associates.

James J. McDonough is chairman of the Board and CEO of McDonough Associates.

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Updated: July 28, 2012 6:25AM

A politically connected engineering giant is firing back for its three-year suspension from state work, accusing a procurement officer of a “calculated series of acts” to put the company out of business.

The state imposed the ban earlier this month on McDonough Associates, a 45-year-old engineering firm with ties to the Daley family and dozens of other politicians, accusing the company of overbilling the state.

According to a report from Bill Grunloh, a chief procurement officer who oversees IDOT contracts: “The overbilling took place over the majority of the last decade and ended in a multimillion-dollar overbilling balance.”

McDonough filed a lawsuit Monday in U.S. District Court but also filed a motion for a temporary restraining order and preliminary injunction on Tuesday, both against Grunloh and IDOT Secretary Ann L. Schneider.

U.S. District Court Judge Milton I. Shadur issued a ruling Tuesday requiring the department to process $2 million in payments that were owed to the company, McDonough spokeswoman Jayne Thompson said.

The suit alleged Grunloh violated the company’s due process rights by stopping payments to the company for work it had already completed.

The suit also alleges Grunloh ignored a written recommendation from an IDOT-appointed hearing officer who cited only minimal discrepancies in the company’s 10-year IDOT billings, instead imposing a three-year ban on IDOT business. The suit calls the suspension a “death knell” for the firm.

Since Grunloh’s ruling, the city of Chicago, the CTA and the Illinois Tollway also have imposed work bans on the firm, the company said.

“Bill Grunloh broke the law,” said Daniel Curley, McDonough senior vice president. “He maligned us, and he vastly distorted our record. We will not stand for this erroneous and unjust outcome.”

The suit calls Grunloh’s ruling a “diatribe of invective, not supported by the record or the law. . . . There can be no doubt that it was written to accomplish a pre-ordained result.”

On Tuesday, Grunloh said he stands by his final determination based on the results of an IDOT audit.

“They were given a lot of due process —­ a lot of meetings and a lot of deliberations were done,” Grunloh said. “That would give them plenty of due process, and they’ll get more due process.”

An IDOT spokesman declined to comment on the suit.

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