Caltrans Ends Private Sector Design Pacts : Compliance: The decision is expected to put hundreds of professionals out of work, force small companies out of business.

Caltrans, the state highway agency that froze all contracts with outside design consultants a month ago, has decided to discontinue its four-year effort to let the private sector handle part of its workload.

The decision by the California Department of Transportation is expected to put hundreds of architects, engineers and surveyors throughout the state out of work and force many small companies--especially those run by minorities and women--out of business.

Caltrans said it will not immediately halt contracting but intends to phase out the program over the next three to six months. The agency said it will allow existing contracts to be completed or to continue until they reach a point where the work can be handed over to state employees. Contracts not yet signed but authorized by the Legislature for this year will also go forward, the agency said.

After December, Caltrans will hire outside consultants only for special situations, it said. Meanwhile, the agency plans to start hiring part-time employees and paying current workers overtime to pick up the slack.

James W. van Loben Sels, Caltrans’ director, said in a statement Tuesday that his decision treads between violating strict contracting guidelines from a May 18 court order and “immediately stopping all contracting.”

He said the plan to gradually eliminate most contracts is an attempt to avoid further delays in the agency’s huge highway improvement plans while it trains state employees to take over jobs the private sector has been doing.

But the Professional Engineers in California Government, the Caltrans employees union that challenged outside contracting in court, accused Van Loben Sels of talking out of both sides of his mouth.

“His words say he’s phasing out contracting, but the numbers say he isn’t,” said Bruce Blanning, PECG’s executive assistant. Blanning pointed out that Caltrans still plans to sign contracts covering the maximum amount of work the Legislature had authorized for outside consultants.

That’s not how private companies see it, though.

“I had four contracts canceled as of June 1,” said Adriana Long, president of Tri-Star Surveying in Chino. She has four others that state employees will take over.

“About 85% of my work comes from Caltrans, and I have to try to find work elsewhere now so I don’t have to lay off nine union surveyors,” Long said.

She is angry because the Legislature and Caltrans encouraged minority- and women-owned businesses to work with the highway department after a 1989 law authorized the agency to let contracts to the private sector. A companion law also required, in effect, that 20% of the contract work be given to so-called disadvantaged business enterprises.

A number of women and minorities left the agency to start companies that specifically work with Caltrans.

PECG, however, has successfully tied up the law in court, and Van Loben Sels faces criminal contempt--jail time and a personal fine--if he continues to contract based on the law’s provisions.

Sacramento Superior Court Judge Eugene T. Gualco has viewed the law restrictively, giving wide latitude to a state constitutional provision that, as interpreted by courts, says state work must be done by state employees. Gualco previously has invalidated Caltrans contracting plans, most recently on May 18.