A heated debate is set to unfold at the Omaha City Council over a roughly $547 million wastewater treatment expansion that ranks among the largest infrastructure investments in the city’s history.
At the center of the dispute is a proposed $411 million agreement between the City of Omaha and McCarthy Building Companies for the second phase expansion of the Papillion Creek Water Resource Recovery Facility. The project is designed to meet the metro area’s wastewater treatment needs through 2050.
Omaha-based Hawkins Construction Company, led by CEO Chris Hawkins, is sharply criticizing the city’s handling of the contract.
CEO Chris Hawkins sees it as a case of people who “likely fell asleep at the wheel.”
“The nicest thing I can say is they got snookered,” he said of city officials.
Hawkins insists the concern is not about “nefarious” motives but about what he views as a flawed and insufficiently transparent process. His company claims it can complete the work for approximately $78 million less than McCarthy’s proposed guaranteed maximum price.
To reinforce that claim, Hawkins developed what he described as an “unsolicited” alternative bid in December — before seeing the McCarthy agreement. He called it a “binding offer for the full scope of work,” and said it was about $78 million less than McCarthy’s “guaranteed maximum price.”
However, the Omaha City Law Department advised officials not to open Hawkins’ submission, stating it could not legally be considered under the procurement process already underway.
Omaha Mayor John Ewing Jr.’s administration maintains the project is on solid footing. Public Works Assistant Director Jim Theiler said a team that included the City Law Department, HDR, and consulting firm Jacobs “carefully scrutinized” decisions tied to the agreement.
“Not approving … would likely result in significant delays, additional costs and a lack of transparency that is included in the contract with McCarthy,” Theiler wrote in a memo to the council.
Theiler emphasized that the project uses a Construction Manager at Risk delivery model, or CMAR, which Omaha adopted for complex, time-sensitive projects. Under CMAR, McCarthy was selected in September 2024 for design and pre-construction services after competing against Hawkins and Kiewit Construction.
The “at-risk” model means McCarthy assumes financial responsibility for delivering the project within a guaranteed maximum price.
“The way we like to say it, ‘We agree to a fair profit but not the ability to profit off of the city,’” Theiler said.
Beyond the $411 million construction agreement, additional project costs include $88.5 million for specialized aerobic granular sludge equipment from Aqua-Aerobic Systems, plus a new substation from Omaha Public Power District and engineering expenses. The city’s Capital Improvement Plan authorizes up to $565 million over multiple years.
The facility expansion is funded through sewer use fees collected from residents and businesses. The Metropolitan Utilities District bills customers but returns the funds to the city, which manages the sewer system.
Officials describe Omaha’s regional wastewater system as serving about 800,000 residents. The Papillion Creek facility primarily handles post-1970 development and growing Sarpy County areas, while the older Missouri River plant near L Street treats combined sewer flows from older parts of the city.
Hawkins outlined several areas of concern:
Theiler disputes those claims, placing the self-performed work closer to 33% and noting that local firms such as Commonwealth Electric are participating.
“I just don’t understand why it was approached by Hawkins in this manner,” Theiler said.
He added: “I am convinced it’s the right way to go.”
Hawkins counters that his company was interested in subcontracting work but was effectively sidelined.
“There is a check and balance in our system for a reason,” Hawkins said, referring to the City Council vote. “It’s not too late to stop and pivot to a more cost-effective approach.”
The seven-member Omaha City Council is scheduled to vote on the McCarthy agreement on March 10 following a public hearing.
If approved, the project would move forward under the existing CMAR framework, locking in the guaranteed maximum price and advancing construction timelines. If rejected, the city could face delays and potentially revisit the procurement strategy.
With nearly half a billion dollars at stake, the decision represents a major test of Omaha’s project delivery strategy, oversight mechanisms and commitment to balancing cost control with long-term infrastructure needs.
Originally reported by Cindy Gonzalez in Nebraska Examiner.
