Councilor Raises Concerns Over Bidding On City Contracts


Wednesday, May 01 2013
From utility upgrades to new roads, Unalaska is gearing up for a jam-packed construction season this summer. But before the work can get under way, the city has to award about $40 million in contracts.
As KUCB’s Lauren Rosenthal reports, one city councilor is expressing concern about a possible lack of interest in local construction projects from Outside companies.
Last week, city council was presented with a $626,000 contract for paving and repairs at the Unalaska Marine Center dock. Ten contractors requested bid information from the city, but Northern Mechanical was the only bidder. The company came in almost $200,000 under the engineer's estimated cost for the job.
Even so, councilor Dennis Robinson voted against the contract. Here's what he said at the meeting:
Robinson: "I’m not gonna support this. Just because it’s a single bid. I spoke about this before. I know this is a timing issue, but I just don’t like the idea of getting ourself in a position of awarding bids when there’s just a single response on them."
This week, Robinson told KUCB he's concerned about the lack of interested bidders -- and he wants to keep Unalaska from falling back into an old pattern.
Robinson: "I've seen it happen where our community got into the situation where we only had a single bidder responding to all the bids and it cost the city a lot of money in the long run."
More than that, it created the appearance of wrongdoing.
Robinson: "It got to the point where you could almost say, 'There's no sense in putting out the engineer's bids because we know this is going to be the only bidder,' and quit wasting money on engineers' estimates. But it's a bad situation overall for the city to get into."
City manager Chris Hladick says he understands the concern. He says staff tries to ensure that the city gets a fair amount of bids for every contract:
Hladick: "We advertise. We do our best. It’s obvious that it’s a good idea to have more than one bidder, but we can’t control it."
A few different factors might be discouraging contractors. For one, Hladick says it's expensive to prepare bids. It's also expensive to transport equipment to and from Unalaska. And the city takes special steps to cut down on risk when contracting private companies:
Hladick: "Because we’re a municipal government, you have to have a bond to ensure that the project gets finished -- and not everybody can get those bonds."
Another complicating factor? A lot of the city's rules for contracting aren't codified. There is no minimum limit, at which a project is automatically sent out to bid. Unofficially, it's about $50,000 -- but Hladick says the city considers each project individually.
Hladick: "What’s the timing on it? When does it have to be done? And whether we think anyone would bid on it anyway."
Even small projects that cost less than $50,000 can be opened up to the public.
Hladick: "[If it] started getting complex or something, you’d need to put it out to bid. Just to be sure you get the best price available."
When it comes to change orders, though, the city doesn’t typically take bids. A change order occurs during a project, when a contractor uncovers extra work that has to be done, but falls outside the scope of their contract. They bring the work back to the city as a proposal.
As long as it’s still within the total project budget, the city will authorize the change order. But if the work is very expensive, exceeding the budget, Hladick says he'll bring the order to council. That's what happened with a cliff stabilization project that popped up last month.
The work almost went to bid -- but city council eventually authorized a $1.5 million change order for Advanced Blasting of Anchorage, which was originally contracted to prepare the wastewater treatment plant site for construction.
Even though these contracting rules have come under scrutiny lately, Hladick says he sees no need to write them into the city code.
Hladick: "I suppose I’d bring forward something if it were a problem or keeping us from doing business. The other reason you would put something in code is if somehow, somebody is doing something they shouldn’t be doing, you know?"
The issue will keep coming up: Right now, Unalaska is getting ready to put millions of dollars in contracts out to bid -- for the wastewater treatment plant construction, and extensive paving projects, among others.
Hladick says the path forward is obvious:
Hladick: "In our case, we have this $40 million in projects going on at one time. It’s pretty clear they all need to be put out to bid."
As for Robinson? He’s pledging to stick to principle:
Robinson: "Yeah, in regards to any contracts in the future that come up, I will more than likely vote against them if there’s a single bid responder."
There are limits, though. Robinson says he wouldn’t vote against contracts for federally-mandated projects, like the wastewater treatment plant, if it would delay construction. Delays mean federal fines.
Robinson says that if he introduced new legislation on bidding and contracting, he wouldn’t do it until after the city has finished handing out the $40 million in contracts that are currently on the table.
That’s because he hasn’t started lobbying his fellow councilors for their support -- and with so many other projects on the council’s plate at the moment, now is not the time.
Pam on Thursday, May 02 2013:
I am glad a local company with local residents working got the work to do. I have had work done by Northern Mechanical and was very happy with the work.