Council Minutes
17489
March 26, 2001
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
March 26, 2001
The city council of the city of Grand Forks, North Dakota was called to order during the committee of the whole meeting in the council chambers in City Hall on Monday, March 26, 2001 at the hour of 7:00 o’clock p.m. with Mayor Brown presiding. Present at roll call were Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Christensen, Klave, Kreun - 9; absent: Council Member Glassheim, Lunak, Bakken, Martinson 4; 1 seat vacant..
CONSIDER BIDS FOR PROJECTS NOS. 4648.2 AND 4948.1
TRANSMISSION PIPELINES AND RESIDUALS FORCEMAIN
PHASE I, INDUSTRIAL PARK TO SOUTH 34TH STREET
Mayor Brown announced that the item for consideration was consideration of bids for City Projects Nos. 4648.2 and 4948.1, transmission pipelines and residuals forcemain, Phase I, Industrial Park to South 34th Street, with department recommendation to approve award of a contract to the lowest responsible bidder from bid opening on March 22, 2001 at 2:00 at City Hall; and asked for discussion from council.
The bid submitted by Barbarossa Incorporated did not acknowledge addendum 1 and 2 in the outer envelope; that the bids of Molstad Excavating, Inc. and Dakota Underground did not include MBE/WBE subcontractor solicitation information in the required bid bond envelope. Charles Grotte, assistant city engineer reported that they did inadvertently open the Dakota Underground envelopes and one of the documents was missing, the segregated facilities document was not in the outer envelope.
Council Member Brooks moved that we reject the bid of Barbarossa, Incorporated and to open the bids of Dakota Underground and Molstad Excavating, Inc. with the stipulation that they contain the required documents. Council Member Christensen seconded the motion.
Council Member Gershman stated that the party that was low bidder was not here for discussion.
Council Member Klave stated that we need reason for opening the other two bids, that it was a minor irregularity that we’re allowing that, and the mover and second included as a friendly amendment to the motion.
Charles Grotte, assistant city engineer, stated that he discussed with Charlie Vein, Advanced Engineering, on the bid packages and that he had talked with Barbarossa and they did assure him that they had acknowledged amendments 1 and 2 inside the envelope, and for council’s information if waiving one minor irregularity because of an envelope issue, the other contractor assures us that he too has the information in the envelopes. Council Member Brooks stated he wanted to stay with his motion because he didn’t believe that was a minor technicality because it’s a standard procedure on all bid openings that that addendum has to be acknowledged on the outside and it relates to the dollar figure that you will be considering and to stay with his motion.
Council Member Hamerlik stated he has a concern the way motion is stated, that we’re declaring it a minor technicality if that report is included, and should also be stating that if it’s not included, be declared not to be in the bidding process because not a minor technicality. Council Member Brooks stated the bid would be considered non-responsive and would go with that as a friendly amendment to the motion; and clarified the motion - that if Dakota Underground and Molstad’s bids do not have those documents re. MBE/WBE inside that envelope then they will be considered non-responsive and incomplete. He also stated that typically when the council does approve opening bids, those bids would be opened tonight; the city auditor stated that would be correct.
Charles Vein, Advanced Engineering, stated that Dakota Underground was only missing the segregated facilities which they know is inside, and if pass this, theirs would be valid.
Council Member Kreun stated this is why we have regulations and bidding procedures - and questioned what is a minor irregularity or major irregularity, and puts us in difficult position of determining that, and if we open two, believes we should open all three bids; that we’re still relying on verbal contact that other information is in the second envelope. Council Member Brooks stated if it isn’t included, those bids are non-responsive and rejected, and the reason for not considering Barbarossa’s bid is that it could impact dollar amount of the bid; Council Member Kreun stated they indicate verbally that it’s in there; and that should follow letter of the law and not open the bids.
There was a questions as to the risk to the City; Mr. Swanson stated he was not able to quantify council’s risk, that the decision as to whether they waive or do not waive irregularities of this nature because you’re not dealing with the bonds or licenses is a discretionary act - that he does take some exception to the opinion from counsel for North Dakota Association of General Contractors, that opinion doesn’t go far enough, it only addresses what is required by statute, the items you are referring to here are not required by statute but the general bidding law would indicate that a bidder is to follow the instructions. As to the question of what is or is not a minor irregularity - typically a minor irregularity will have some relationship to the ability of one bidder to gain an advantage over another bidder - that in the case of addendums, he agrees with Mr. Brooks that there may be instances in which the failure to identify an addendum may call into suspect the bid, as to whether or not they’ve included subsequent changes in plans, equipment, etc.; and that the Mayor has asked him if we do have greater exposure by determining an irregularity exists and by waiving that irregularity in opening the bids, he thinks that is true, that the most conservative route would be to follow specifically the instructions, that he knows of no law that would hold you at risk for following the printed instructions provided that those instructions are clearly stated; as to attempting to quantify that risk, wouldn’t be able to do that and doesn’t seem to be significantly different but the most conservative route would be that way. He stated that the motion as made does include a factual finding that at least with respect to the MBE/WBE requirements that those are minor irregularities, and thinks it is within council’s discretion to take what action you deem is appropriate. He stated that earlier there were some questions as to whether or not EPA would likely be able to provide us with a formal opinion by next Monday or within a shorter period of time, that his experience with EPA does not lend credence to that.
Mr. Grotte addressed the risk issue - there are two risks by opening these bids: 1) that EPA may choose not to participate in the funding, and 2) the contractor who had the apparent award will protest and delay the project which could be significant, those are things that could happen and are what they see as the risks.
Council Member Christensen asked what the procedure is for the protest. Mr. Grotte stated he thinks it might go to the EPA in this particular case since they are the funding agency and would have to rule on whether or not we followed procedure or not, that their procedure says that we don’t open the bids. Mr. Swanson stated there are two potential appeals that any of the bidders could take and would not be limited to the apparent low bidder, 1) would be to State District Court, and more likely approach would be directly to the EPA; that this is more of a legal issue and a factually intensive issue, and in this case it’s fairly clear what the issues would be, and how long that would take in the event of an appeal, not sure, and doesn't disagree that there’s an EPA risk and a litigation risk but thinks the latter risk to the EPA exists regardless of who potentially would file that appeal.
Mr. Swanson stated with respect to the MBE/WBE, what is required of the bidder is information with respect to their solicitation of a WBE or MBE, they have a stated goal that they should try to have MBE (Minority Business Enterprise) or WBE (which is a Women Business Enterprise) involved in, but are not required to have those, what they are checking though is to insure that the bidders did in fact offer that type of work or those types of subcontracts to those WBE’s or MBE’s; that should not have the ability to impact any price bid or the scope of the bid whereas the lack of an addendum may. He stated that typically what you should do in analyzing any bid is absolutely ignore any oral comments any bidder makes, should never entertain that whatsoever as to a promise whether it is or is not in the envelope or whether they may or may not be able to provide it in the future so you look for indications such as identification of addendum on the outside. He stated that purely is a discretionary item for council to decide.
Council Member Burke moved an amendment to the motion to include all three of the bids to be opened and examined to see if they meet the requirements whether they were inside or outside and proceed with the review of those bids if they meet the requirements for the addendum acknowledgements and the Minority and Women Business Enterprises requirement, and if they do meet them to consider those bids and to declare the shortcomings were minor technicalities. Council Member Christensen seconded the amendment.
Upon call for the question and upon roll call vote the following voted “aye”: Council Members Burke, Christensen, Kreun - 3; voting “nay”: Council Members Brooks, Bjerke, Stevens, Hamerlik, Gershman, Klave - 6. Mayor Brown declared the motion defeated.
Council Member Hamerlik and Brooks moved for the question and upon voice vote, the motion carried.
Upon voice vote the motion carried 7 votes affirmative; Council Members Bjerke and Stevens voted against the motion.
Mr. Grasser stated that the discussion shows the difficulties once they start changing from the written instructions or written procedures, staff considered all the arguments that were made tonight in making our staff recommendation and believes it’s in the best long term interest of the City to try to be strict on the interpretation of bidding process and the AGC has supported that in the past; that council has the discretion to make the findings that they did, but wanted to reiterate what the recommendation was from the staff and thinks it’s appropriate from their technical aspect to give that recommendation.
CONSIDER BIDS AND QUOTES FOR WASTEWATER
TREATMENT PLANT, PROJECT NO. 4371
Mayor Brown announced that the item for consideration was consideration of bids and quotes for the Grand Forks Wastewater Treatment Plant, Bid Packages #10 and 10A-Medium Voltage Electrical Distribution Equipment, City Project No. 4371, with department recommendation as follows: 1) reject Bid Package #10 bids from Wesco and Cooper as non-responsive; 2) reject Resco’s GE transformer bid with Bid Package #10 as non-responsive; 3) award contract for items #1 and 2 for Bid Package #10 to Resco for Pauwels transformers in the amount of $62,669.25, contingent on approval by the North Dakota State Health Department; and 4) award contracts for items 1 and 2 Bid Package #10A to the lowest responsive, responsible bidder contingent on approval by the North Dakota State Health Department, and asked for discussion from council.
Mr. Grotte stated that timing is critical; that he talked with Mr. Hanson of KBM, Inc. who stated we do need to get this moving to get the transformers in time. Mr. Grasser stated their recommendations are as stated on their report, and in light of the exceptions they just made, not sure if all of those will stand.
Casey Hanson, KBM, Inc., stated there are more issues at hand here, more so than just the MBE worksheet; there are on the original bid package 4 items, and bid package set up so that they could accept any of those items from any of the bidders; that they received bids on two of those items on transformers, received 3 bids, opened 1 and tabulation is included with staff report; the second one they opened, the bid security envelope but no MBE/WBE worksheet and similar to the ones the council just addressed; and third bid there was no separate envelope, single envelope with no outside markings and that did not indicate that it was a bid security envelope or that there was another envelope inside, and that bid was not opened. He stated that they did not get bids on two of the four items, and then took quotes from other sources on the other two bids (bids submitted but in the unopened envelopes), and now have quotes for those items as well that have been opened and that there is also a bid tabulation, one of the quotes is from same person that submitted an original bid - that the reason they went to quotes was because when quote, if quote in smaller packages, not required to follow the WBE/MBE requirements, and the whole package of 4 was large enough to force them to do so, package of two was not. It was noted that there were no addendum to the bid.
COUNCIL MEMBER CHRISTENSEN EXCUSED
Mr. Swanson stated one item that was specifically cited in the correspondence from counsel for AGC is the statute that requires a separate envelope containing bid bond and license, and it is his advice that you not attempt to waive that or determine that to be a minor irregularity.
Council Member Brooks moved that we do not open the bid that did not have a bid security envelope attached and that regarding the MBE/WBE requirements, we follow our previous motion which was to open and if the worksheets are inside to consider the bid and proceed, and if not included bid is non-responsive. Council Member Klave seconded the motion. Upon voice vote, the motion carried 7 votes affirmative, Council Members Bjerke nd Stevens voted against the motion.
ADJOURN
Mayor Brown declared the special council items considered and reconvened to the committee of the whole.
Respectfully submitted,
John M. Schmisek
City Auditor
Approved: __________________________________
Michael R. Brown, Mayor