As road construction season approaches, uncertainty remains over contractor with ties to Palumbo family

With another road construction season fast approaching, a suburban contractor with ties to the Palumbo family is still not allowed to work on Illinois Department of Transportation projects.

But not for a lack of trying.

Builders Paving LLC continues to pursue IDOT road contracts — even though the agency won’t formally award them to the company when it’s the apparent low bidder or allow ground breaking.

Recently, Builders submitted what appears to be the best proposal to handle four projects IDOT is overseeing or otherwise involved in:

• Maple Avenue from Brookfield Avenue to 31st Street in west suburban Brookfield.
• U.S. 45 from Illinois 176 to Woodlawn Drive in far north suburban Mundelein.
• Illinois 43 from U.S. 14 to Oakton Street in near north suburban Niles and Morton Grove.
• Mittel Boulevard from Thorndale Avenue to Devon Avenue in west suburban Wood Dale.

Their collective price tag is around $5.7 million.

That’s atop more than $50 million in projects Builders already believes it’s entitled to but hasn’t been awarded since late 2024.

That’s when IDOT “paused” new contract awards to the Hillside business as it launched an internal investigation, trying to figure out whether Sebastian “Sam” Palumbo was secretly involved in the company and, if so, how.

Palumbo was forever banned from state and federal projects after he and several other construction firms were caught up in a massive fraud case in the 1990s that revealed taxpayers, and employees, were ripped off. Palumbo, a brother and their father did prison time.

If Palumbo is found to have violated that ban, the potential repercussions for him or Builders aren’t clear.

An attorney for Palumbo and Builders has insisted Palumbo has nothing to do with Builders, whose executives include a Palumbo daughter and her husband.

Builders sued IDOT last year to try to force the agency to lift the brick on the contracts, saying the company “has a clear legal right” to the ones on hold, with IDOT “legally required to award” them “to Builders Paving within 45 days of bid submission.”

“There is no justification under the Illinois Procurement Code or applicable regulations for IDOT to withhold awarding the Contracts,” and Builders could suffer “irreparable injury” if there’s “an indeterminate, unexplained and unjustified delay in the award of millions of dollars in Contracts to Builders Paving.”

Last month, a Cook County judge ruled otherwise, writing: “The Court finds that the provisions highlighted by IDOT negate the existence of a ministerial obligation to award the contracts by providing that no bidder has a right to a State contract absent execution, that the State is under no obligation to issue an award, and that IDOT retains authority to reject any or all bids or cancel a solicitation in the State’s best interests.”

Builders attorney William Dwyer Jr. told the Chicago Sun-Times that the company hasn’t filed an appeal, but has filed paperwork signaling the intent to do so “to preserve its right to appeal the judge’s ruling."

“Builders’ goal has always been to resolve any issue with IDOT by responding to any questions IDOT has and supplying any information requested. Builders has done so and will continue to do so in the hope that all issues can soon be resolved.”

Neither Builders nor IDOT would answer questions about whether a settlement is possible to resolve this dispute.

Road construction season traditionally begins in April, which is also when local asphalt plants often start reopening, an IDOT spokeswoman says.

The start dates on the four projects Builders was the apparent low bidder on “are unknown until the contracts are executed,” she says. “However, presumably a late spring/early summer start.”

Brookfield’s village engineer, Derek Treichel of Hancock Engineering, says of his community’s resurfacing project: “We were hoping to start work in April.”

“Right now we have no estimate” of a launch date, “we don’t even know if it’ll happen this year.”

Besides being an inconvenience, Treichel says “the risk of increased cost” associated with any delay “is a real concern.”

He said IDOT resisted the suggestion that — to get the Brookfield project rolling — the agency scrap the Builders bid and go with the next-best proposal, which was around $14,000 higher.

A Niles municipal official says, “We have not received any information from IDOT regarding the anticipated construction schedule or any changes to the project.”