Subcontractor attempts to price gouge for rock salt

Rock salt used for treating icy roads has become a hot commodity – so much so that the Georgia Department of Transportation officials say their supplies were delayed by an unscrupulous subcontractor’s attempt at price gouging earlier this week.

Some details about the exact timing of the event and the parties involved were spotty on Wednesday as GDOT was still prioritizing its handling of icy roadways.

What is known is that GDOT contracted to pay a fixed price of $129 per ton for salt coming out of the port of Charleston, S.C. One delivery of about 270 tons was expected late Monday or early Tuesday, said Russell McMurry, chief engineer for GDOT. But it was held up for several hours because a subcontractor hired to deliver the salt in 13 trucks offered to deliver the supply first to at least one other county in Georgia, possibly two, in an attempt to barter for a better price.

“It’s a scarce resource and it’s in high demand,” said McMurry. “These people are entrepreneurs, right?”

Both that county and the state had placed orders for salt, which is used to break up ice on the roads, but GDOT’s was scheduled to be delivered first, said McMurry. When the driver picked up the supply, he had a GDOT purchase order. But when the driver got to the scale at the port to weigh it, the driver declared that the salt load was scheduled for delivery to another county that was willing to pay a higher hauling cost.

Ultimately, the driver did take the supply to another county first, but GDOT was still able to get its expected supply in time for the storm. GDOT officials say they have enough salt on hand to continue treating roads Wednesday and Thursday.

But that didn’t stop GDOT Commissioner Keith Golden from chafing over the opportunistic behavior of the subcontractor. He said he will be alerting other construction contractors around the state about the situation to deter them from working with this subcontractor, and following up with the Governor’s office to see if anything should be done to penalize them.

“We were counting on getting those supplies, and it cost us time,” Golden said.

McMurry declined to identify the hauler or the other county it propositioned because he said that the department was considering taking action against the company. When a state of emergency has been declared, penalties for price gouging range from $2,000 to $1,500 per violation.

But the Governor must identify the specific goods and services to which the “price gouging” law applies. These can include food, lodging, gasoline, propane gas, lumber and other supplies, according to the law.

A spokesman for Gov. Nathan Deal did not immediately respond to a request for comment on the situation Wednesday.

Mary Kay Warner, a spokeswoman for International Salt, said demand for rock salt nationwide is incredibly high because there have been back-to-back storms across the country this winter. She said the company is continually refreshing its stockpiles from a salt mine in Chile that has enough salt to meet worldwide demand for the next 5,000 years.

Warner said she did not have any knowledge of the attempted price gouging in Georgia.

“We have no control over what someone is going to do with that salt once they pick it up from our salt pile, but it certainly is a sad situation when people try to take advantage of those in need,” Warner said.

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