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HomeMy WebLinkAbout4.f. Receive Bids / Award Contract - Section 31, Trunk Sanitary Sewer Facilities, City Project #233CITY OF ROSEMOIINT EXECUTIVE 'SUbBIARY FOR ACTION CITY COUNCIL MEETING DATE: November 3, 1992 AGENDA ITEM: Receive Bids/Award Contract AGENDA SECTION: Section 31, Trunk San Sewer Facilities_, Prj233 Consent PREPARED BY: Bud Osmundson AGENDITEM # LF City Engineer/Assistant Public Works Director 1I11,, ATTACM1ENTS: Bid Tab, Resolution, Protest, AP RO D BY: City Attorney Memo, Letter to R.K.I. �, On Friday, September 25, 1992 bids for the referenced project were received and read aloud publicly. Ten bids were received and are listed for your review on the attached bid tabulation. The low bid received is from Richard Knutson, Inc., (RKI) 12505 Rhode Island Avenue So., Savage, MN 55378, in the amount of $315,465.70. The engineer's estimate was $336,000 based on 1992 construction costs. Staff had originally scheduled that these bids be received at the October 6, 1992 regularly scheduled City Council meeting. However, a protest was received by the second low bidder on that date so the item was pulled from the agenda. The City Attorney has reviewed the protest and made his recommendation to go forward with the award of the contract as stipulated in his memo. Based on that recommendation and dialogue with both the low bidder (RKI) and the second low bidder (Arcon), Staff recommends award of City Project No. 233 to Richard Knutson, Inc., in the amount of $315,465.70. RECOMMMED ACTION: MOTION TO ADOPT A RESOLUTION RECEIVING BIDS AND AWARDING CONTRACT, SECTION 31, TRUNK SANITARY SEWER FACILITY, CITY PROJECT #233. COUNCIL ACTION: 3 .• BIDS RECEIVED FRIDAY, SEPTEMBER 25, 1992 ENGINEERS • ARCHRECfS • PLANNERS 10:00 A. M. CLIENT ROSEMOUNT , MN CLIENT PROD. NO. 233 SECTION 31 TRUNK PROJECT SANITARY SEWER FAC. SEH PROD. NO. 92442 ENGINEER'S ESTIMATE RICHARD KNUTSON INC ARCON CONSTRUCTION S.M. HENTGES & SONS KENKO CONTRACTORS BARBAROSSA & SONS RYAN CONTRACTING S.J. LOUIS CONSTRUCTION BROWN & CRIS NORTHDALE CONSTRUCTION WIDMER INC BID BOND -I BID AMOUNT $336,000.00 $315,465.70 $335,000.16 $339,692.00 $341;907.10 $351,425.00 $365,862.50 $386,139.20 $388,343.75 $407,914.95 $415,947.50 CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 1992 - A RESOLUTION RECEIVING BIDS AND AWARDING CONTRACT FOR SECTION 31, TRUNK SANITARY SEWER FACILTIES CITY PROJECT 233 BE IT RESOLVED, by the City Council of the City of Rosemount, Minnesota, as follows: 1. All bids for the construction of Section 31, Trunk Sanitary Sewer Facilitieslmprovements are hereby received and tabulated. 2. The bid of Richard Knutson, Inc., in the amount of $315,465.70 for the construction of said improvements in accordance with the plans and specifications and advertisement for bids is the lowest responsible bid and shall be and hereby is accepted. 3. The Mayor and Clerk are hereby authorized and directed to enter into a contract with said bidder for the construction of said improvements for and on behalf of the City of Rosemount. 4. The City Clerk is hereby authorized and directed to return forthwith to all bidders the deposits made with their bids, except that the deposit of all successful bidder and the next two lowest bidders shall be retained until a contract has been executed. ADOPTED this 3rd day of November, 1992. ATTEST: Susan M. Walsh, City Clerk Motion by: Votedinfavor: Votedagainst: Seconded by: E. B. McMenomy, Mayor J (pity O Rosemount PHONE (612) 4234411 2875 - 145th Street West. Rosemount, Minnesota MAYOR FAX (612) 4235203 Mailing Address: Edward S. McMenomy P.O. Boz 610. Rosemount. Minnesota 550664)510 COUNCILMEMBERS Sheili Ktassen James (Red) Smats October 23, 1992 Harry Willcox Dennis Wippennann ADMINISTRATOR Stephan Jilk Richard Knutson, Inc. Attn: Fred Chase 12505 Rhode Island Avenue South Savage, MN 55378 Re: Award of Contract Section 31 Trunk Sanitary Sewer City Project #233 City of Rosemount, Minnesota Dear Mr. Chase: Attached is a memorandum from Mr. Mike Miles, the City Attorney, regarding the bid process for the referenced project. R.K.I. had the low overall bid of $315,465.70. The second low bidder was Arcon Construction with a bid of $335,000.16. Counsel for Arcon Construction challenged the award to the low bidder on the grounds that R.K.I.'s failure to acknowledge Addendum #1 is fatal to its bid. Mr. Miles analysis and recommendation to us is that we award the contract to R.K.I., but since the failure to acknowledge the Addendum did occur, we must add that R.K.I. utilize Class 52 pipe instead of the Class 50 required by the Addendum. He further recommends that we liquidate R.K.I.'s bid bond and consider awarding the bid to the second low bidder if R.K.I. is unwilling to execute the contract. We are planning to award the contract to R.K.I. at the regularly scheduled City Council meeting, Tuesday night, November 3. If you are objecting to the stipulation or have other questions, please call me at 322-2025. Sincerely, l J (94IV44,*� Bud Osmundson, P.E. City Engineer/Assistant Public Works Director cc: Ron Wasmund, Public Works Director/Building Official Steve Jilk, City Administrator Mike Miles, City Attorney (Sverylking s coming (Up RosemounlY FLUEGEL MOYNIHAN & MILES, P.A. ATTORNEYS AT LAW Donald J. Fluegel Shawn M. Moynihan J. Michael Miles M E M O R A N D U M TO: Bud Osmundson, Rosemount City Engineer FROM: J. Michael Miles DATE: October 16, 1992 RE: City Project No. 233 1303 South Frontage Road Hastings, MN 55033 Telephone: (612) 438-9777 Fax: (612) 438-9775 As you are aware, the lowest bidder on the above -referenced project failed to acknowledge Addendum No. 1 to the bid specification. That addendum had the effect of lowering overall project costs since it reduced the piping to be used in the project from Class 52 to Class 50. Counsel for the second low bidder, Arcon Construction Company, has challenged any award to the low bidder, Knutson, Inc., on the grounds that Knutson's failure to acknowledge Addendum No. 1 is fatal to its bid. My analysis of this situation is that Knutson's failure to acknowledge the addendum as required by the specification is an informality which the City can waive in order to enjoy the approximately $20,000.00 lower price bid by Knutson. However, I - believe that Knutson's failure to acknowledge the addendum must require them to put in Class 52 pipe instead of the Class 50 counterpart. If Knutson is unwilling to so perform, I would recommend that you liquidate its bid bond and consider awarding the bid to -the second low bidder. After our discussion earlier this afternoon, I conveyed our decision to the attorney for the second low bidder and he indicated that his client does not intend to file a bid protest regarding Project No. 233. Please contact me if you have any questions regarding this memo. JMM:dso RICHARD A. MOORE (191.19911 MARVIN J. PCRTZIK A. PATRICK LEIGHTON HAROLD H.ROYSCH RONALD.E MARTELL* WILLIAM M. BEADIE' UENIS L. STODDARD LARRY A HANSON .1. PATRICK PI I INKFTT JOHN M. HARENS DAVID A. KASTLLIC PHYLLIS KARA$OV CHRIS R. KABELLA' MALCOLM G. MCDONALD MARY GIULIANI STEPHF•NS LLONARU W. GLEWWL' Via Telecopy MOORS, COSTELLO & HART ATTORNEY5 AT LAW SAINT PAUL OFFICE IAOO NORWLST CENTER `;j LAST FIFTH STREET SAINT PAUL. MINNESOTA 55101-1792 1 ELEPHONE 16121 227-7663 TELECOPIER 15121290-1770 MINNEAPOLIS OFFICE* 1350 701 nUILDING 701 FOURTI I AVCNUE: SOUTH MINNEAPOLIS, MINNESOTA 55418-Is23 TELLPHONE 161216721-01148 TELLC:OPIFP 16121376-17.10 Writer's Direct Dial No. (612) 290-1757 October 6, 1992 JOHN G. PATTERSON TIMOTHY C. COOK KATHRYN A ORAVLL' MICHAEL B. MOONING BASH DEBORAH S. MALL131ZCK STEVEN 0 SNELLING .ARA D. MATTESSICH LISA R. PERSZYK• W11 I IAM F.ORME I. REU W. FISHER OF COUNSEL IWITM ATTORM[YS AUTMORILLU 10 PNACTIC[ lAW IN MINN(Y.OTA. IOWA. WISCONSIN AND GEORGIAI Mr. Michael Miles Honorable City Council Members Rosemopnt City Attorney Rosemount City Council 1303 South Frontage -Road 2875 - 145th Street West Hastings, MN 55033 Rosemount, MN 55068 Re: PUBLIC BIDDING PROCEDURES/REQUIREMENTS My Client: Arcon Construction Company Project: Section 31/Trunk Sanitary Sewer Facilities Rosemount City Project No. 233 Bid Opening Date: September 25, 1992 MC&H File No. 5077-3 Dear Mr. Miles and Honorable City Council Members: We represent Arcon Construction, Inc. ("Arcon") in connection with various of its construction and public contract related matters. This letter is submitted on Arcon's behalf for your consideration regarding bids and contract award for Section 31/City of -Rosemount ("City") Trunk Sanitary Sewer Facilities, Rosemount City Project No. 233 ("Project"). Arcon maintains that it submitted the lowest responsive bid and therefore, as a responsible bidder, should be awarded the Project contract. On or about September 1, 1992, the project Engineer, Short Elliott Hendrickson, Inc. ("SEH"), issued a Project Manual which, among other things, included an advertisement for bids. Paragraph 12.6 of the "Instructions to Bidder" section specifically provided that "[tjhe Bid shall contain an acknowledgement of receipt of all Addenda (the numbers of which must be filled in on the Bid Form)." (Emphasis added). In addition, paragraph 17.1 of the "Instructions to Bidder" section provided in part as follows: "Owner reserves the right to reject any or all Bids, including without limitation, the right to reject any or all nonconforming, nonresponsive, or unbalanced or conditional Bids and to reject Mr. Michael Miles Honorable Council Members Page 2 October 6, 1992 the Bid of any Bidder if Owner believes that it would not be in the best interests of the Project to make an award to that Bidder, whether because the Bid is not responsive or the Bidder is unqualified or of doubtful financial ability or fails to meet any other pertinent standard or criteria established by Owner. Owner also reserves the right to waive all informalities not involving price. time or changes in the Work and to negotiate contract terms with the Successful Bidder. (Emphasis added). On or about September 21, 1992, SEH issued Addendum No. I for, the Project, which addendum again specifically instructed bidders that it[r]eceipt of [the] addendum shall be acknowledged in the appropriate space on the Bid Form." (Emphasis added). The addendum revised specifications for the class of pipe to be utilized on the Project and, as such, involved changes in the work and pricing on the Project. Following bid opening on September 25, 1992, SEN determined that Arcon's bid in the amount of $335,000.16 was in conformance with all bid_ solicitation requirements, including a proper acknowledgement as to receipt of Bid Addendum No. 1. In addition, SEH found that the bid submitted by Richard Knutson, Inc. ("Knutson") in the amount of $315,465.70 failed to contain any acknowledgement as to receipt of Bid Addendum No. 1 as expressly required by the bid solicitation. SEH referred the bids and issue regarding Knutson's bid responsiveness to the City's attorney for evaluation. The Project specifications expressly reserved to the City the right to reject any and all bids, to waive irregularities and informalities therein, and to award the contract in the best interests of the City. However, this right to waive informalities and irregularities specifically and ambiguously extends only to those informalities or irregularities not involving-pricee time or changes in the work. (See paragraph 17.1 of the Project Manual, instructions to Bidders.") Because Bid Addendum No. 1 in fact involved a change in the work, specifically the class of pipe to be utilized on certain aspects of the Project, and because that specification change also affected pricing, the City cannot waive Knutson's nonresponsive bid as a mere informality or irregularity. To do otherwise would be in violation of public contracting principles and would impermissibly afford Knutson an unfair competitive advantage not enjoyed by Arcon or any other bidders who submitted bids in strict compliance with the Project specifications. Under the Minnesota Uniform Municipal Contracting Law, all municipal contracts over $15,000 must be received by sealed bids solicited by a Mr. Michael Miles Honorable Council Members Page 3 October 6, 1992 public notice "in the manner and subject to the requirements of the law governing contracts by the particular municipality or class thereof." Minn. Stat. Section 471.345 (subd. 3). Under public bidding principles, a bid must conform in all substantial respects to the advertised plan and specifications. A public contracting authority has "a plain duty" to reject bids which have a "substantial variance" from the plans and specifications. Coller vs. City of St. Paul, 223 Minn. 376, 385, 26 N.W.2d 835, 840 (1947). Courts have recognized that while public authorities may waive certain minor bid defects, they "have no authority to waive defects which affect or destroy competitive bidding." Telephone Associates vs. St. Louis County, 364 N.W.2d 378, 382 (Minn. 1985). The test of whether a variance is substantial is "whether it gives a bidder a substantial advantage -or benefit not enjoyed by other bidders," Id., -citing Duffy vs. -Village of Princeton, 60 N.W.2d 27, 29 (Minn. 19T3). Here, the City =st determine the extent of Knutson's bid responsiveness at the time of the opening of the bid. The City has no authority to make.any material changes or modifications after the bid has opened, nor may it allow Knutson to acknowledge receipt of the addendum after bid opening. Collar, at 387, 26 N.W.2d, at 841. These strict requirements are designed "to deprive or limit the discretion of contract -making officials in the areas which are susceptible to such abuses as fraud, favoritism, improvidence and extravagance." Griswold vs. Ramsey County, 242 Minn. 529, 536, 65 N.W.2d 647, 652 (1954). Here, Knutson's refusal or failure to include an acknowledgement as to the receipt of Bid Addendum No. 1 on its Bid Form has given it an unfair competitive advantage or benefit not enjoyed by Arcon or any of the other Project bidders. Specifically, Knutson has placed itself in a position where it can recant its bid if, following bid opening and review, it discovers that it had made a "losing bid," i.e. its bid was too low in comparison to the other bidders and it would run the risk of losing money on the job. In other words, Knutson's bid omission, whether made intentionally or inadvertently, permits it to avoid the consequences of its mistakes should it so choose. While Knutson may ultimately decide to reaffirm its bid or attempt to belatedly acknowledge receipt of the Addendum, and while Knutson may agree to be bound to the City by the terms of its bid as submitted, such a situation would afford Knutson the precise substantial competitive advantage which Minnesota courts have repeatedly stated cannot and should not be allowed to stand in the competitive bidding arena. (see, e.g., C. Bollander & Sons vs. City of Minneapolis, 451 N.W.2d 204 (Minn. 1990) (held that contract officer had no authority to determine responsiveness of bids following bid opening and that apparent successful bidders failure to specify woman -owned business as required rendered bid materially nonresponsive). Mr. Michael Miles Honorable Council Members Page 4 October 6, 1992 While Arcon does not suggest or imply that collusion, fraud or favoritism is being extended to Knutson in this particular case, the key issue is the continuing preservation of the integrity of the competitive bidding process. It is essential that this process be conducted fairly and impartially and on a level playing field. The process must provide equal opportunities to all bidding participants and must ensure that the appearance of improprieties, inequities or unfair advantages be avoided at all costs. Only through strict adherence to these principles will public contracting authorities be repeatedly assured of having full and vigorous competitive bidding by a number of responsible bidders so as to allow Public authorities and its taxpayers to obtain quality materials and workmanship for the lowest available prices. For each of the foregoing reasons, Arcon respectfully submits that Knutson`s bid must be rejected as being nonresponsive and that the Project should be awarded to Arcon on the basis that it is the lowest responsive, responsible bidder. Arcon looks forward to a sound working relationship with the City and its Project engineer and a successful completion of the Project at the earliest possible time. Should you have any questions, you may contact the undersigned at 290-1757 or Mr. David Baum with Arcon at 1-679-2244. TCC/lr cc: Arcon Construction, Inc. (via Mr. David Simons/Short Elliott very ;truly, 1 _ OGRE, COSTELLO a AR TimothyC Cook telecopy) Hendrickson, Inc. (via telecopy)