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Bidder: Sound Transit disqualification for Tacoma project will cost taxpayers $800,000

Post by Lewis Kamb / The News Tribune on July 26, 2010 at 4:50 pm with 4 Comments »
July 26, 2010 5:06 pm

Last week, we wrote about the progress of the long-awaited commuter rail line slated to connect south Tacoma to Lakewood. Sound Transit officials briefed Tacoma City Council members, telling them the project likely will kick off early this fall.

But there was one hitch, Sound Transit officials said: Due to a protest to the bidding process, there was a delay in the formal award of the contract for the construction work on the so-called “D to M Street” project in Tacoma’s Dome District.

In all, Sound Transit received seven bids for the project, with the lowest — a $40.8 million bid from MidMountain– coming in well below the agency’s $66.4 million estimate for the project.

But ultimately, Sound Transit disqualified that bid — on the grounds that MidMountain did not properly submit all required paperwork. Officials for the regional transit agency have said its board plans to award the contract instead to the next lowest bidder, PCL Construction Services, which came in with a $41.6 million bid.

A recommendation to award the contract to PCL will go before the board for official authorization at its meeting on August 26, Sound Transit spokeswoman Kimberly Reason said today.

But MidMountain hasn’t given up the fight. The Kirkland-based firm is poised to file its second formal protest to Sound Transit tomorrow (the company lost in its first appeal bid filed to the agency last week). The company is also now working with Seattle public relations firm, Firmani + Associates, Inc., to make their case: That ultimately it’s the taxpayers who stand to lose — to the tune of $800,000 — due to what MidMountain complains is little more than a minor paperwork snafu.

According to a press release issued today by PR consultant Mark Firmani, MidMountain was 20 minutes late in providing Sound Transit officials with a required form that certifies the company didn’t (and won’t) use federal money to lobby for the bid.

Firmani also told me in a phone call today that the form actually had been prepared as part of the firm’s bid packet, but was overlooked by a company representative who submitted the paperwork.

“It’s really the nightmare for anyone who’s ever turned in a homework assignment late,” Firmani said. The company staffer who submitted the bid accidentally “failed to empty out the entire brief case, leaving one form inside,” Firmani added.

After catching his error, the staffer waited for a break in the bid-opening process to present the form to officials, Firmani said, but that break didn’t happen until 20 minutes after the bid deadline.

In the press release, MidMountain president Mark Mills is quoted as describing Sound Transit’s decision to nullify the bid as “bad public policy.”

“We know we missed the deadline on this one document,” said MidMountain President Mark Mills. “However, we don’t think such a small error should end up costing the taxpayer $800,000. Sound Transit is a steward of the public trust and has a fiduciary duty to make sure taxpayers’ money is spent in a wise and efficient manner.” …

“For an agency that’s won awards for outstanding procurement practices, Sound Transit’s decision to nullify the lowest bid at the cost of $800,000 to the taxpayer over a single page of documentation is a bit of a head scratcher to me,” he said. “We intend to appeal what we think is a poor decision and bad public policy.”

Reason, the Sound Transit spokeswoman, said while the disqualification is unfortunate, those are the rules.

“Regardless of the reason why a required document was not submitted, we have to maintain and follow our contracting policies to ensure fairness and integrity in the process,” she said.

Reason noted Sound Transit has recently won national recognition for its bidding procedures.

“It’s unfortunate their failure to submit all required paperwork has resulted to (Sound Transit) going to the next lowest bidder,” she added. “Certainly we would have liked to have advanced the lowest apparent bidder. However, we are very clear about what our contracting procedures are, and it would’ve been unfair in the very least to make an exception.”

MidMountain expects to file another appeal tomorrow. Here’s the full press release:

News Release
For Immediate Release
July 26, 2010
Sound Transit Ruling May Cost Taxpayers $800,000
Local contractor loses protest over commuter rail project bid
SEATTLE, July 26, 2010 – In a move that could cost taxpayers $800,000, Sound Transit rejected the lowest bid for a $40 million commuter rail project because the bidder – Kirkland-based MidMountain Contractors Inc. – was 20 minutes late delivering a supporting document.
The contract may end up being awarded to PCL Construction Services Inc. of Denver, a national contractor whose bid was nearly $800,000 higher than MidMountain’s.
According to Sound Transit, the bid was disqualified because MidMountain’s staff person didn’t submit a supplemental document along with the bid packet. When the staff person realized his error, he waited for a break in the bid-opening process to avoid interrupting the public meeting. The break occurred about 20 minutes after the 3 p.m. deadline.
“We know we missed the deadline on this one document,” said MidMountain President Mark Mills. “However, we don’t think such a small error should end up costing the taxpayer $800,000. Sound Transit is a steward of the public trust and has a fiduciary duty to make sure taxpayers’ money is spent in a wise and efficient manner.”
The document in question – known as IBF Form 6 – is a one-page form that certifies that bidders did not and will not use any federal money to lobby for the award of a bid.
“Sound Transit would have been well within its rights under state law to waive what amounts to a minor issue with the bid,” said Bob Marconi, an attorney at Ashbaugh Beal. “In addition, federal case law clearly establishes that a bid can’t be disqualified because Form 6 wasn’t initially included.”
MidMountain filed an official bid protest with Sound Transit on July 14 and received word on July 21 that the protest was rejected. MidMountain plans to appeal the rejection to Sound Transit CEO Joni Earl.
MidMountain’s Mills expressed disappointment in Sound Transit’s decision.
“For an agency that’s won awards for outstanding procurement practices, Sound Transit’s decision to nullify the lowest bid at the cost of $800,000 to the taxpayer over a single page of documentation is a bit of a head scratcher to me,” he said. “We intend to appeal what we think is a poor decision and bad public policy.”
According to Sound Transit, the Commuter Rail D to M Streets Track & Signal Project includes a 1.2-mile section of rail corridor connecting Tacoma Dome Station to existing rail. When completed, the project will extend Sounder commuter rail service to stations in South Tacoma and Lakewood.
“We’ve been doing work like this in the Puget Sound region for more than 50 years with engineers, builders and workers from this area,” Mills said. “These aren’t low-paying jobs we’re talking about. These are good-paying jobs that employ local people.”
About MidMountain Contractors Inc.
MidMountain Contractors is a commercial and residential development construction, utility installation, roadwork and heavy civil projects for diverse public and private clients. First founded in the 1950s, the company is based in Kirkland and has worked on such large capital projects as the Lincoln Reservoir at Seattle’s Cal Anderson Park, the South 277th Street improvements project in Kent and the White River Amphitheatre in Auburn.
CONTACT: Mark Firmani, Firmani + Associates Inc., 206.443.9357 or mark@firmani.com.
MidMountain Contractors
The $800,000 Question
On July 8, 2010, Sound Transit disqualified a $40 million bid submitted by MidMountain Contractors, a local construction company. As a result, Sound Transit may award an important public project to the next lowest bidder. The reason? MidMountain delivered a supplemental document 20 minutes late. MidMountain believes federal and state law, as well as Sound Transit’s own bid documents, require Sound Transit to ignore minor irregularities in the bid process.
The result of Sound Transit’s actions will cost Puget Sound taxpayers $800,000. In a world of multi-billion dollar city and county budgets, $800,000 may seem like just a drop in the bucket, but it’s not.
Here are a few examples of what some struggling local governments could do with $800,000:
• Hire Eight Additional Police Officers – The City of Seattle announced it is abandoning plans to hire 21 new police officers to save an estimated $2.1 million. (Capitol Hill Blog)
• Hire Much-Needed Jurors – Pierce County Superior Court cut the number of jurors called to felony criminal trial for five weeks to save $400,000. (NewsTribune)
• Maintain School Bus Service – The Everett School District cut bus service to 1,400 students in early July to save the district $400,000 in a tight budget year. (The Everett Herald)
• Maintain City Parks and Services – Seattle Parks and Recreation closed several wading pools to save $203,000 in mid-year budget cuts. (Capitol Hill Blog)
• Maintain Library Collections, Technology and Staff – The Seattle Central Library’s budget was recently cut by $1.17 million, reducing the budget to buy books, deferring IT maintenance and reducing staff. (Capitol Hill Blog)
• Keep Community College Childcare Centers – Childcare centers such as Edmonds Community College’s Center for Families, which serves 300 kids, have closed all over the state. It costs $670,000 per year to run EdCC’s center. (Crosscut)
• Keep Deputies on the Streets – King County Sheriff Sue Rahr warned she may have to lay off up to 70 deputies next year with the county facing a $60 million budget gap. (The Seattle Times)
Sound Transit Poised to Needlessly Spend $800,000 of Taxpayer Money
State and Federal law supports awarding $40m project to low bidder
In a move that could end up costing taxpayers nearly $800,000, Sound Transit disqualified MidMountain Contractor Inc.’s bid for a commuter rail capital project on July 8, 2010.
MidMountain’s bid was the lowest of all bids and $800,000 lower than the next lowest bid, offered by PCL Construction Services Inc., a national contractor based in Denver. By law, Sound Transit is required to award the project to the lowest bidder, yet MidMountain’s bid was disqualified as “nonresponsive.”
MidMountain’s bid was deemed “nonresponsive” because it did not initially include a one-page form – known as IBF Form 6 – that acknowledges federal lobbying disclosure requirements. In fact, MidMountain did include Form 6, but about 20 minutes after the deadline for submission of all bids.
Anyone familiar with the public bidding process for capital projects knows that bids takes hours and hours of preparation and require the review and analysis of hundreds – if not thousands – of pages of documents. MidMountain’s attorneys don’t believe taxpayers should get stuck with an extra $800,000 bill on a $40 million project simply because the contractor was 20 minutes late in including one of several forms in its bid packet.
Especially when Washington state and federal law specifically states that public agencies have the latitude to waive minor bid errors so long as those errors do not give a bidder a material advantage over other bidders. What’s more, Sound Transit’s own 2010 Procurement and Contract Administration Manual states, “(Sound Transit) may also accept bids or proposals that have minor errors or irregularities.”
In addition, an abundance of federal case law and portions of the United States Code already prohibit federal money from being used to lobby for bid awards, rendering Form 6 redundant. All contractors are bound by these laws.
Here are a few examples. In Tennier Industries Inc. and Jettison Contractors Inc., the Comptroller General found:
• The anti-lobbying certification is only an issue of responsiveness if the requirements of Form 6 differ in a significant way from the anti-lobbying requirements all contractors are obligated to follow under the Byrd Amendment. Here, Form 6 doesn’t differ in any significant way from the requirements under the Byrd Amendment. As a result, MidMountain’s bid cannot have been declared nonresponsive.
• Failing to submit a signed Form 6 certification doesn’t render a bid nonresponsive because the omission has no material effect on a bidder’s obligations under the Byrd Amendment.
• In addition, in the United States Code, the Byrd Amendment requires bidders to include anti-lobbying certification upon award of the contract, not at bid opening.
In summary, both federal and Washington state law support an award of this project to MidMountain Contractors at a savings of $800,000 to the taxpayers.

Leave a comment Comments → 4
  1. Newty2727 says:

    I hope TNT does an actual investigation into this and see if anyone at Sound Transit has connections to PCL construction

  2. flipperj says:

    I agree with Newty2727

  3. dang if I read this sooner I wouldn’t have wasted my time on a Tacoma Rescue Mission Tacomic (which was still fun to draw)


  4. EatonvilleTaxPayer says:

    Read the article…..MidMountain admits there WAS a paperwork error. Bids are very strict and by the book. Any bid can be thrown out if not completed properly. If MidMountain didn’t do their bid right, then by all means they are out.

    We are in the construction (dirt work) biz….it’s a tough game, but you should know enough to cross your t’s and dot your i’s.

    Unfortunately, MidMountain’s whining about being disqualified is costing taxpayers money–and for no good reason. MidMountain needs to go home and look for new bids and quit wasting our money. They are just giving their company a bad name and reputation by pursuing a legal avenue like this.

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