A divide has developed among Poplar Bluff City Council members over a decision that will impact sewer rates for Municipal Utilities customers for the next 20 years.
The matter will be discussed Monday by the city council. It was not listed as an action item on the agenda published Friday.
Council members have made several failed attempts since March to select the lowest, most responsible and responsive bidder on an approximately $19 million upgrade to the city’s wastewater treatment plant.
The split involves a debate over the apparent low bidder, Brockmiller Construction of Farmingtom, and what some council members say is the most responsible and responsive bidder, Robertson Contractors of Poplar Bluff.
Allegations of backroom deals, threats of higher sewer rates for customers and other accusations have been made.
A vote by the council May 6 was 4-3 against accepting the Brockmiller bid, with council members Barbara Horton, Shane Corman, Lisa Parson and Steve Davis voting ‘no.’
Davis motioned that the next lowest bidder, Robertson, be accepted. His motion was amended prior to the vote, with a request by council member Ron Black to hold another workshop session on Robertson.
Council members voted 4-3 in favor of holding another workshop session, with Horton, Black, Ed DeGaris and Robert Smith supporting the measure.
Prior to arriving at the council, the Brockmiller bid was reviewed and approved by Municipal Utilities General Manager Bill Bach, the Municipal Utilities Advisory Board and Smith & Company engineers.
__BID QUESTIONS__
“There are still questions in my mind in reference to some of the bid items concerning this project,” Davis said this week, adding that he normally agrees with recommendations from boards. “I’m not comfortable with voting yes for the recommended low bidder. There are also several questions by some of the council that were never answered.”
In April, Cornman asked Brockmiller during a council meeting and in a written list about the difference in unit costs (see sidebar for figures) for the replacement and reconfiguration of blowers between Brockmiller and the next lowest base bid, Robertson.
By upgrading three blowers and adding two, this will allow for more airflow at the lagoon, according to engineers.
Cornman asked Brockmiller what the city would be charged if the quantity of blowers, mixers and air headers changed; and if the unit price for eight line items included equipment that meets contract specifications. Cornman does not feel the April 10 letter from Brockmiller was sufficient to answer these questions.
Brockmiller has bid $5,000 per unit for both replacement and reconfiguration of blowers. Robertson’s bid has $171,900 and $58,500 per unit, respectively for these line items.
The contract for this work was never intended to be a unit price contract, an attorney for Brockmiller responded in the April 10 letter.
Brockmiller President Bill Giessing also told the council during an April meeting that the line item for blowers represents labor costs, while the part costs are part of a lump sum line item for lagoon covers.
“The price that governs is the total lump sum price,” Richard Hardcastle of Greensfelder Attorneys At Law wrote April 10. “That price represents the contractor’s commitment to perform the designed scope of work for a fixed dollar amount.
“Unit price bids are used when quantities cannot be accurately established or may change due to differing site conditions. That is not the case with this project, as the design engineer has repeatedly stated.”
Greg Bell of Smith & Company confirmed this week that he does not believe the quantity of blowers will change. If quantity changes were required, they would be looked at on a case-by-case basis, because the project was bid as specified, Bell said, which means it was for the quantities included.
Cornman says no lump sum bid includes 43 line items, adding that a lump sum bid would only specify one or two items.
Change orders are outlined in the bid manual. Engineers would want to see material costs provided by the supplier, estimated labor cost and the overhead and profit within a breakdown of any proposed change order, Bell said. The profit is typically a maximum of 15%, but could be less depending on the situation, he explained.
__BID PROCESS__
An attorney representing Robertson has also spoken to the council and corresponded with city officials.
“… the issue is whether or not the low bidder has actually conformed to the bid process and requirements as well as whether or not Brockmiller Construction is the lowest responsive and reasonable bidder,” Attorney Danny Moore wrote in an April 4 letter.
Article 14 of the project manual states how bids are to be submitted, he said.
“Brockmiller Construction failed to comply with that as they did not bid actual line items that included the overhead and profit, thus their bid should be disregarded,” Moore contends.
Bids are governed by a 126-page bid manual. The submitted bids are good through early June.
Under article 14, “basis of bids; comparison of bids,” it states “14.01 A. Bidders shall submit a Bid on a lump sum basis as set forth in the Bid Form.; 14.02 The Bid price shall include such amounts as the Bidder deems proper for overhead and profit on account of cash allowances, if any, named in the Contract Documents …”
Article 19 also describes the evaluation of bids, giving the owner the right to reject any bids it finds “nonconforming, nonresponsive, unbalanced, or conditional.”
The contract also gives the owner the right to change quantity amounts, Cornman said. Brockmiller was asked how they would handle quantity changes, and they said it would be conditional, Cornman said.
The way the line items are listed make the Brockmiller bid unresponsive, said Parson.
“It seems out of balance,” she said, adding people she has spoken to say a line item should include more than the labor costs.
Everyone would love to see the contract go to a local company, said DeGaris, but the utility and engineers have all said Brockmiller is qualified.
“The bids are what they are and on those types of things, we’ve always had to choose the lowest bidder,” he said, and questioned if it would be better for choices to be made without knowing the company name and only seeing the bid amounts.
Brockmiller failed to answer all of the council’s questions, said Horton, referring to the list sent to Brockmiller prior to the company’s April 10 letter.
“I’m unhappy they decided a $20 million plus job was not important enough to find time to answer questions of the people who make the final decision,” Horton said.
__RATES__
Brockmiller has done this job before and has met all of the bid requirements, according to the city’s advisors, Black said.
While he also wishes a local company had won the bid, Black said he does not want to see increased costs for residents if a higher bid is accepted or if the city is unable to explain to DNR’s satisfaction why the low bid was not accepted.
Black cited an April 2 letter from Municipal Utilities which stated sewer rates could increase by 10 percent if Robertson was selected (see sidebar for specific figures). The estimate was based on the difference in the total bids by both companies, and a higher interest rate.
The city has planned to pay for the project with up to $20 million in bonds from a low interest state loan.
DNR has said the city can pick a different bidder and provide a letter of explanation, Cornman said, without being penalized.
Smith said he had no comment on this matter.
Brockmiller has also been accused of front loading their bid, placing a disproportionate amount of the project expenses at the front half of the work.
Their attorneys deny this, saying the lagoon floating covers would occur in the second half of the project. Engineers have also supported this assertion.
__LAWSUIT THREAT__
In a letter sent to the city this week, Brockmiller questioned a decision by the council in April to ask Robertson’s attorney to speak in a closed session, about matters which were not on the agenda.
“… the fact that the council would entertain such arguments, particularly without notice to Brockmiller (or the public), appears to be nothing more than a backroom deal in the making,” Hardcastle wrote.
Brockmiller will challenge this matter in court, if the council awards to Robertson, Hardcastle said.
At the meeting in question, Robertson’s attorneys requested to speak in the open session but were directed to the closed meeting by then-Mayor Susan McVey.
A response sent May 15 by city attorney Mark Richardson encouraged Brockmiller representatives to attend and speak Monday.
“At this time, the recommendations of the project engineer, the utility department and the city administration, as well as myself as city attorney, remain that the award be made to your client,” Richardson told Hardcastle. “However, as you know, these are only recommendations and the ultimate decision rests with the seven duly elected council members.”
Opponents of the Brockmiller bid have also cited mathematical errors in the original bid as a reason they should be excluded from consideration.
Three of the four bids had mathematical errors, according to engineers. Robertson was the only bidder without an error.
The errors were mainly due to rounding a subtotal to the nearest dollar value, Bell said. The errors included: seven from Brockmiller, in the amount of $198; two from River City in the amount of $3.20; and one from KAJACS, in the amount of 1-cent.
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What does it mean? Here’s a break down of the points of contention between council members, contractors and other officials.
__Base bid__
Engineers say the apparent low bidder is determined by the base bid.
Brockmiller $17,044,198
Robertson $17,560,249
River City $17,594,997
KAJACS $17,895,000
__Bid alternates__
The utility department also asked companies to quote an alternate, which the city may also complete, with the replacement of one pump.
Brockmiller $1.12M
Robertson $1.35M
River City $1.18M
KAJACS $1.36M
__Total__
The base bid and bid alternate make up the possible total cost of the project.
Brockmiller $18.17M
Robertson $18.91M
River City $18.77M
KAJACS $19.25M
__Contested line items__
Some council members have questioned two specific line items relating to the replacement of two blowers and the reconfiguration of three blowers. Ward 4 representative Shane Cornman has said the cost difference between Brockmiller and the other companies represents an imbalance. Brockmiller contends the line item represents only labor costs and that part costs are included under a separate line item.
__New blowers, per unit__
Brockmiller $5,000
Robertson $171,900
River City $176,500
KAJACS $89,000
__Reconfigured blowers, per unit__
Brockmiller $5,000
Robertson $58,500
River City $55,000
KAJACS $30,333
__Brockmiller response__
Brockmiller President Bill Giessing told the council April 1 his company received one bid from a single supplier, Ressler & Associates, for a variety of items, including the blowers. He says parts for the blower line items are included under the line item for lagoon floating covers.
__Lagoon floating covers__
Brockmiller $8.7M
Robertson $5.75M
River City $4.24M
KAJACS $4.68M
__Sewer rates__
This project was approved by voters in 2012 under a bond measure.
Plans are to pay for it with up to $20 million in bonds. A rate increase will be used to repay the debt over a 20-year period. A rate hearing was held in April 2018 to discuss this.
The city has applied for a low interest loan from the Missouri Department of Natural Resources State Revolving Fund.
In an April 2 letter, Municipal Utilities General Manager Bill Bach told the city manager the following average monthly bills are expected under the low interest loan:
Residential $28.46
Class 2 Commercial $28.30
Class 3 Commercial $71.30
Class 4 Commercial $223.10
Class 5 Commercial $1,532
Bach said if the city fails to meet criteria or deadlines for the low interest loan, rates could increase by an additional 10%. The increase was calculated based on the difference in the total project costs between Brockmiller and Robertson, and with a higher market interest rate.
Those rates, according to the letter, would be:
Residential $31.41
Class 2 Commercial $31.13
Class 3 Commercial $78.69
Class 4 Commercial $246.20
Class 5 Commercial $1,685
Council members who oppose the Brockmiller bid believe the city is not in danger of losing the low interest loan.
In an April 15 email from DNR legal counsel Joel Reschly to Cornman, Reschly said DNR’s commitment is good through Sept. 30. After that date, a new commitment is based on re-application.