The Milwaukee Metropolitan Sewerage District awarded $700 million, 10-year operations and maintenance contract on September 28 to Dallas-based Jacobs Solutions, but its longtime contractor, Veolia Milwaukee, has filed a lawsuit against the agency seeking a temporary restraining order and a preliminary injunction before the contract is executed.
The lawsuit, filed in September in U.S. District Court in Milwaukee, alleges that the agency’s competitive hiring process, which took place over two years, was predetermined and unfairly structured to favor Jacobs for the new operations and maintenance contract, scheduled to begin in March 2028.
U.S. District Judge Brett Ludwig this month halted the termination of the contract pending resolution of the lawsuit.
In the lawsuit, Veolia claims has managed operations and maintenance for the district since 2008 in what it calls the largest public-private water partnership in North America. The scope includes the operation and maintenance of two water reclamation facilities with a combined capacity of 630 million gal per day, a 361-mile collection system, biosolids production and the 500 million gal deep tunnel storage system. Veolia’s current contract is valued at $500 million.
Veolia’s complaint argues that the district’s RFP process did not actually select the winning bidder according to the stated criteria. Instead, it claims that the application was used to give the appearance of competition while implementing a decision that the defendant had already made or was prepared to make. In addition, the company alleges that advocacy groups and elected officials began campaigning against it in early 2026 and tried to influence the hiring.
Common Ground of Southeastern Wisconsin, a nonpartisan advocacy group, says on its website that it investigated allegations of mismanagement of the wastewater management system by Veolia and interviewed current and former employees of the company and the district, reviewed hundreds of pages of public records and consulted with experts, stakeholders and public officials. Former District Director of Intergovernmental Relations Steve Jacquart, who held the position for 19 years, later identified himself as the first whistleblower and joined the Common Ground campaign, and other former agency and company employees filed allegations about the company’s management of the wastewater system.
Common Ground alleges that Veolia failed to properly maintain equipment, falsified water quality reports, conducted inaccurate sewage discharges, failed to provide safe conditions for workers, failed to maintain adequate staffing levels and employed unqualified people. Likewise, the organization alleges that district staff did not adequately monitor the management of Veolia’s facilities.
In response to those allegations in May, Veolia senior vice president Adam Lizberg said in a statement that “the company strongly supports the performance and integrity of our team, operating an extremely complex system under strict regulatory oversight to meet [agency]state and federal standards,” according to Urban Milwaukee.
He added that “Veolia encourages all employees to report any workplace concerns, even anonymously, either directly to their supervisors or through additional channels we have established to report issues without fear of retaliation.”
The district has denied allegations by Veolia that it rigged its hiring process to favor Jacobs Solutions.
In response to the lawsuit, the district says the RFP established four criteria for evaluating proposals: price (60 percent); overall company focus (25%); personnel, training and corporate culture (10%); and regional collaboration (5%).
The district confirms its ad hoc committee recommended Jacobs on Aug. 17, giving the firm 96.8 points compared to Veolia’s 84.9. It also recognizes substantial differences in proposed sewer cleaning prices. For one category, Jacobs proposed $5.54 per linear foot compared to Veolia’s $54. MMSD says it evaluated Jacobs’ rates against recent bids for similar work and found his price to be reasonable.
Jacobs’ overall bid was $54 million lower than Veolia’s.
At a meeting in 2025, Veolia says so District Executive Director Kevin Shafer told the committee that he would compare the proposed line-by-line prices specifically to rule out unrealistic, below-market rates: “So if someone undercuts one or overshoots one, we’ll compare the line items, to make sure we’re comfortable with who we select,” he said.
Wisconsin law does not allow an unsuccessful bidder to recover damages for the loss of a public contract, meaning its only meaningful remedy is to stop the award before the contract is signed and work begins, Veolia notes.
The district argues that Veolia’s lawsuit should be dismissed because the hiring decisions involve discretionary government functions protected under Wisconsin law. He says Veolia has failed to identify a law the district violated, that Wisconsin law does not prohibit public participation in government hiring decisions, and that no law requires the district to restart the hiring process.
Jacobs Solutions’ bid for the contract also didn’t go down well after its relationship with Palantir Technologies became a point of contention..
Jacobs initially proposed using Palantir technology, but later agreed to withdraw the company after objections from community organizations over Palantir’s work with the US Immigration and Customs Enforcement (ICE), including providing technology used in immigration enforcement.
The district serves 29 communities in an area of 423 square miles in southeastern Wisconsin.
Jacob Solutions did not respond to a request for comment.
