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)