A Schoharie based construction firm alleges the State Department of Transportation unlawfully mishandled the bidding process for a reconstruction project. Our CJ Spang was at the Capitol with more on this story.

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NEW YORK STATE -- The project in question is the reconstruction of exit 122 on Interstate 86 and Route 17 in Orange County. And the issue is the negotiation of a project labor agreement which requires the contractor to hire union employees.

Despite having a bid $4.5 million less than the closest competition, Lancaster Development says it did not win a Department of Transportation reconstruction project because of an illegally negotiated project labor agreement, or PLA, requiring companies to hire union employees.

"It's nothing short of extortion. Any other way to put it would be untrue. Its flat out, 'if you don't give me this job, I'm going to make your life miserable,' and that is not the American way," said Mark Galasso, Lancaster Development, Inc. President.

The DOT points out that Lancaster would not sign the PLA as required in the bid.

In a statement, the DOT said, "We understand that Lancaster Development was disappointed that it didn't get this job. But the company submitted a non-responsive bid that was rejected, as we are required to by law. All bids must conform to New York State Department of Transportation specifications. We take all allegations very seriously and we are reviewing their complaint."

Lancaster claims the PLA was negotiated to save money, but the company's bid proves it doesn't as they were the lowest without the PLA. The company also believes the PLA itself was illegally negotiated. The company says it has concerns the DOT will begin requiring PLAs on all work, forcing companies that don't have union employees, out of business.

"There seems to be a pre-selection in the administrative processes within DOT and I would say an abuse of authority, that is boxing out efficient, capable businesses, that can get quality jobs done at the best cost to the taxpayer," Senator Peter Lopez said.

Lancaster says it will file a complaint with the State Comptroller's office.