Caltrans Directive Ignores Court Order : Contracts: Memo from an official calls for a continued reduction in the use of consultants despite a judge’s order to the contrary.

A Caltrans official has told his branch chiefs in effect to ignore a temporary court order that requires the agency to honor existing highway design contracts with outside consultants, according to an internal memo obtained Monday by The Times.

The memo, written Friday, acknowledges that last week’s court order requires the state Department of Transportation to reinstate contracts that the agency had frozen two months ago with outside engineers, architects and surveyors.

“However, this does not mean we will change our present plan to reduce the number of persons on board under our contracts,” William R. Klemens, chief of the Caltrans construction office in San Francisco, wrote in his memo.

“You are to proceed on the schedule you were previously given to transition your work to the newly assigned state staff,” the memo said. The aim, Klemens wrote, is to replace all consulting engineers with state workers.

The memo has angered many of the nearly 600 engineering and surveying firms certified to do Caltrans work. Many are minority- and women-owned businesses that could be bankrupted by the agency’s June cancellation of outside contracts.

Sacramento Superior Court Judge Ronald B. Robie, who issued the reinstatement order, has scheduled a hearing for Aug. 27 to decide if a more lasting injunction should be issued.

John H. Findley, a lawyer for two engineering trade groups and six companies that sued to obtain the order, said, “If we find that Caltrans is not honoring the temporary restraining order, we’ll take immediate action to bring the agency to court.”

Jim Drago, a Caltrans spokesman, said that about 150 contracts of the 440 outstanding involve work that may be completed before Robie rules again and that reinstating outside contractors in many of those cases isn’t practical.

“We are not ignoring the order,” Drago said. “But we have a commitment to keep these highway projects on track.”

Largely with the help of the private sector, he said, Caltrans has increased its ability to complete its annual workload. Four years ago, it completed only half the work it was supposed to do, but last year it finished 89%, Drago said.

The memo is the latest flap in the long-running controversy over Caltrans’ use of outside consultants to help with some of its highway design and inspection work.

The state agency’s own 8,000-member design staff has blocked an effort to use a 1989 law that permits outside contracting.

The Professional Engineers in California Government, the union representing Caltrans employees, charges that Robie’s order conflicts with decisions by another Sacramento judge, Eugene T. Gualco, who has presided over the conflict for the past three years.

Gualco has sided with the staff, ruling that state work should be done by state employees and that the agency will have to hire more employees if the workload increases.

In a separate action Monday, Gualco decided that the agency’s plans for using outside contractors for the fiscal year ending next June 30 “substantially” complies with his past orders.

Gualco told the agency to provide progress reports every three months until mid-April on the dollar amount of outstanding consulting contracts, plans to hire more civil servants and plans to contract out under any new state laws.

State Sen. Marian Bergeson (R-Newport Beach) is sponsoring a bill that has cleared the state Senate and would give the agency wider authority to use outside consultants.

The agency plans to phase out all outside contracts, except those that require expertise that Caltrans employees don’t have, by the end of December.