Contractor survives scrutiny
Keller Paving & Landscaping snagged a couple of city improvement projects Monday as the Minot City Council backed away from its tough stance on contractor performance.
Keller Paving representatives presented a good case in seeking to change council members’ minds, but a major factor in swaying the council was the expense of bypassing Keller’s low bids. Going with the second lowest bidder on the two projects in question would have added $115,000 to the city’s cost.
At a committee meeting last week, council members voted to recommend awarding the bids on 2018 street patching and on a 2018 sidewalk, curb and gutter project to the second lowest bidders. The decision to reject Keller Paving’s low bid was based on liquidated damaged assessed to the contractor for delayed completion on the downtown infrastructure project in 2016 and extension of 36th Avenue North in 2017.
Justin Thurn, estimator with Keller Paving, said liquidated damages have followed a small number of Keller Paving’s projects, and those projects were multi-phase, multi-million dollar projects.
“What we are talking about today is patching and curb and gutter work,” he said. “The two projects are not rocket science. Keller Paving has completed a lot of this type of work in 2016. We did this exact same street patching project and also a street improvement project, which were both completed on time.”
Thurn reminded the council that Keller Paving has been there when the city needed help after the flood.
“We’ve been the go-to company for miscellaneous patching, paving, snow removal and countless other tasks. Your city departments call on Keller often when projects are out of the norm that no one else wants to do because we are not afraid to tackle any type of project,” Thurn added.
On the 2016 downtown project, there were underground infrastructure issues not covered in the original scope of work, and the time added to the project by the city to accomplish the extra work was less than needed, Thurn explained. On the 36th Avenue project, a subcontractor who went bankrupt was difficult to replace mid-year.
“We do agree that it’s good to make contractors accountable with liquidated damages, and we at Keller are accountable,” he said. Keller Paving is a Minot company and reports having about 50 employees during the summer construction season.
“Those delays, I think, echoed economically well beyond just the late pieces of those completion dates,” council member Shaun Sipma said. “The question I would pose to any contractor is, if we are going to take a stand, in terms of making sure that the responsibility matches the low bid, where is that line in the sand drawn?”
“There’s a lot of other places where that money can go,” Keller’s attorney, Reed Soderstrom, said of the $115,000 city savings in choosing Keller. “Where do you draw the line? Probably you would want to be very, very careful on a multi-level, multi-phasing, multi-million project. You would be very careful on those. But again, this is street patching. This is curb and gutter.”
City Engineer Lance Meyer acknowledged the 2018 projects are less complex. However, he added, “When I review bids, we take a look at the fact that not only can the contractor perform the work but do they have the management capability in-house to perform that work, manage subcontractors and contracts, and can they do that over and over again. From our standpoint when we look at this contractor, we are kind of all over the board. Sometimes they are right ton target. Sometimes we are not. From the city’s standpoint, either you are a responsible bidder or you are not.”
Meyer said it is a contractor’s responsibility to make sure deadlines are met and do what it takes to accelerate a schedule to finish on time. It’s their job as general contractor to keep a project on track even if a subcontractor defaults, he said. His recommendation was to deny contracts to Keller at least for this year.
“What we are trying to get across to this contractor is they need to do some things internally to make sure that this sort of issue doesn’t affect the city and its citizens any more,” Meyer said.
At last week’s committee meeting, Mayor Chuck Barney had supported awarding the bids to Keller at committee because of the lower cost but was out-voted 6-1. By Monday, some council members were having second thoughts.
“I am always in favor of taking the low bid wherever possible, wherever there’s a reasonable expectation that we are going to get performance that is adequate,” council president Jantzer said.
Council member Stephan Podrygula cited the cost difference but also noted the lack of previous notice given to contractors about the city’s performance requirement.
“But I think from here on out, we need to say that very clearly to every contractor. You do the work on time, and if you don’t, there’s going to be consequences,” Podrygula said.
Council member Josh Wolsky agreed, while supporting the creation of a more solid database of contractor performance.
“I think we have some improvements to make on our methodology, the way we try to use this past information and use it consistently and use it to the benefit of the taxpayers,” he said.
Council member Shannon Straight said he appreciated the recommendations of engineering staff to deny Keller the bid awards, although he was receptive to granting the projects this time.
“I hope you get the message this body is no longer the pass through. We are looking at every aspect of it,” he told Keller representatives. “I think the line has been drawn. I think those recommendations going forward are going to have a lot more sway.”
Council member Lisa Olson joined Sipma in voting to award the street patching project to Minot Paving. When the vote failed, the council voted 6-1 to award the project to Keller Paving.
Sipma cast the only vote against the awards to Keller.
“For me, this is my line in the sand – looking back at the past consistency and sending that message that it is not only going to be just that rock bottom dollar but that consistency,” he said.
In other business, the council voted to establish late fees on accounts with the city that are overdue. Beginning June 1, the city will charge 1.75 percent on all accounts, including commercial landfill accounts, that are more than 30 days past due. The city will terminate any commercial landfill use privileges on accounts more than 60 days overdue. Reinstatement of privileges would require full payment of money due.
Subdivision homeowners demand
on building issues
Residents of a northeast Minot subdivision were back before the Minot City Council Monday to continue to request help in addressing construction issues on their homes.
Some residents of Heidrich 1st Addition, whose houses were built by Heidrich Homes around 10 years ago, say building code violations occurred in construction that were not identified by city building inspectors before the houses were certified for occupancy.
“As a community, we rely on the building department to make sure that structures meet the applicable building code,” said resident Jon Newman. “We feel the city has a responsibility to help us now in our time of need as well as ensure that this doesn’t happen to anyone again.”
Affected homeowners are requesting city inspectors do a thorough inspection of every home and certify they meet code or identify needed fixes. If repairs are needed, the city should take responsibility to provide for the repairs at no cost to the homeowners.
Homeowners also ask that the Board of Appeals be convened to determine whether certificate of occupancies should have been issued. They ask that the builder be denied any future zoning approvals or building permits until repairs are completed and that the city require all contractors go through a certification process to ensure they are competent.
Newman said homeowners will be at the city council meeting in April to receive the council’s plan of action.