Serving Gogebic, Iron and Ontonagon Counties
Serving Gogebic, Iron and Ontonagon Counties
By RICHARD JENKINS
Ramsay — The project to replace a significant amount of the water and sewer pipes in the city of Bessemer recently hit a roadblock, as the Gogebic Range Water Authority was informed the United States Department of Agriculture-Rural Development had an issue with the way the bid for the project was awarded.
Charles Lawson, a project manager with the engineering firm C2AE and works with the authority, told the authority board at its Thursday meeting that Andrew Granskog — a USDA state engineer in Lansing — sent the authority and city of Bessemer a letter explaining the agency felt the decision to waive the irregularities in one of the two lowest submitted bids but not the other was unfair.
“The gist of his letter is, he felt we were splitting hairs too finely,” Lawson said. “That we should have rejected both irregular bids, and we didn’t show sufficient cause to reject one and not the other.”
The two bids in question — one from Snow Country Contracting and the other from Ruotsala Construction — came in at $4,520,792 and $3,832,286 respectively to replace 24,600 feet of sewer line and 15,700 feet of water main throughout the city, including Yale Location.
Authority administrator Jean Verbos told the Daily Globe after the meeting that the work was focusing on the “worst of the worst” of the city’s pipes.
According to Granskog’s letter, both companies submitted bids that were “significantly below (the) engineer’s estimates,” with the irregularities in Snow Country’s bid being waived but not Ruotsala’s — resulting in Snow Country receiving the contract.
Lawson said the USDA was giving the authority several options to proceed — it could provide additional information to explain its decision, it could award the contract to the lowest bidder after Snow Country or it could reject all the bids and re-bid a reconfigured project.
He explained the authority’s attorney, Tim Dean, was working to explain the reasoning behind waiving Snow Country’s irregularities — which, Lawson told the Daily Globe after the meeting, in essence was due to the fact it provided “better documentation after the fact” to explain how it reached its bid figure than Ruotsala did.
Lawson explained the irregularities between the two low bids and the other submitted bids appear to be due to the fact the two companies didn’t include using sand as a fill material and came to a different figure for the amount of rock excavation required for the project.
While most authority projects don’t require sand as the fill material, this bid did stipulate that — leading to a higher expected cost.
“I think the concern is, we’re not convinced they were all bidding the same project. We had a detail in the packet that showed granular fill above the utilities,” Lawson told the board, referring to the use of sand as fill. “We have not done that in the past, so Snow Country and Ruotsala did not include it in their bids, but it was part of the documents ... so the other bidders did. That’s a significant amount of sand in a county where sand is hard to find.”
If the USDA wasn’t satisfied by the additional information provided in Dean’s letter, Lawson recommended the project be re-bid, with the highlighting of the use of sand as a fill material be one of the changes in the reconfigured bid.
The authority voted to draft a resolution that would follow Lawson’s recommendation, and as two members of Bessemer’s city council — Doug Olsen and John Frello — were in favor of the idea, Bessemer is likely to take similar action in the future.
Authority members Bernie Brunello and Darren Pionk voted against the motion.
The technique of using different calculations than what is in the engineering estimates is a technique that can be used to allow the submission of an unrealistically low bid, Lawson said, and is a gamble for a company.
If the extra material or work isn’t needed, he said the company gets lucky — but it can be quite costly if the gamble doesn’t pay off and they have to do work they don’t get paid for.
He discussed rejecting future bids that use this practice, saying that while the authority has had the power to do this in the past, it hasn’t acted on it.
Preliminary work is already under way on preparing a redesigned bid, Lawson said, and a bid could be ready to be sent to contractors as early as January — which would allow a spring start date for the project to remain feasible.
In other action:
— The authority board elected its officers for another term. Walt Rickard was re-elected chairman, new member Steve Boyd was elected vice chair, John Frello was elected secretary and Jerry Grenfell was re-elected treasurer.
—The board also elected Grenfell to replace former Ironwood Township Supervisor Alan Baron on the authority’s three-person executive committee. Rickard and Olsen also serve on the committee. The committee meets to discuss various issues that require large amounts of detail and discussion — primarily water rates — and makes non-binding recommendations to the authority board as a way to shorten the official meetings.
