Native Excavating owner Ed MacArthur, from left, Connell Resources construction manager Eric Marsh and Duckels Construction owner Fred Duckels listen Tuesday to Steamboat Springs City Council members discuss a disputed $4.5 million contract for base area construction.

Photo by Matt Stensland

Native Excavating owner Ed MacArthur, from left, Connell Resources construction manager Eric Marsh and Duckels Construction owner Fred Duckels listen Tuesday to Steamboat Springs City Council members discuss a disputed $4.5 million contract for base area construction.

City upholds base area contract

Duckels keeps project; Native, Connell to receive reimbursement for bid work

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Base area redevelopment coordinator Joe Kracum addresses council members about the disputed $4.5 million contract. Council members will meet at a later date to discuss Kracum's future employment.

— City officials reaffirmed Duckels Construction’s $4.5 million contract for base area work Tuesday after two other contractors withdrew their protest provided they receive compensation for their bid work and that the city not use the controversial bid process again.

The decision means that work on a public promenade and daylighting of Burgess Creek, both at the immediate base of Steamboat Ski Area, can move forward this spring without a potential two-month delay or redesign costs that officials say could have reached $30,000.

“Having this (project) push out would have been of no value to the community at all,” said Ed MacArthur, of Native Excavating, which was a finalist for the work along with Connell Resources and Duckels. “There’s a lot of people depending on the base area, and it needs to move forward.”

The Steamboat Springs City Council, acting as the city’s redevelopment authority, voted, 5-1, in Centennial Hall to reaffirm its April 6 award of the contract to Duckels, to compensate Native and Connell as much as $16,000 — total, not each — for their work creating a bid proposal, and to direct City Manager Jon Roberts to permanently remove the “best and final offer” proposal process from the city’s procurement policies.

City Councilman Walter Magill was absent Tuesday. City Council President Cari Her­­macinski voted against the three-part motion because of concerns about public perception of the compensation to Native and Connell.

“What it looks like is that we’ve paid two other contractors to be quiet and withdraw their complaint,” she said.

Hermacinski said members of the public not in attendance Tuesday night “would not see the sincerity” of MacArthur and Connell construction manager Eric Marsh, who spoke about their desire to remove the city’s best and final offer process rather than to receive the contract themselves or question Duckels’ integrity.

“This protest was never about the contractor,” MacArthur said. “It’s all about the process, to make sure the process never happens again. That’s why this protest was put forward.”

The best and final offer process includes two rounds of bidding and was tainted in March, when base area redevelopment coordinator Joe Kracum publicly told Routt County commissioners the range of initial bids before the bidding process was completed. Kracum has acknowledged his error, which Roberts has called a prohibited release of information and a violation of the city’s procurement policies.

“I made a mistake — a big mistake,” Kracum said Tuesday night. “I regret that and offer my sincerest apologies. … I had absolutely no intention or motivation to taint this proposal process.”

Duckels lowered its bid by $460,000 between the first and second rounds of bidding, which made Duckels the low bidder for the project and sparked accusations of impropriety by contractors and questions about the integrity of the bid process. Connell lowered its bid by $377,509, while Native raised its bid by $32,800.

“We have three contractors in the room who have worked with each other for many years,” MacArthur said. “These relationships have become very strained.”

Earlier Tuesday, Duckels issued a written response to the April 13 protest jointly filed by Native and Connell. The response asked for public apologies from numerous parties, a police investigation into the bid process and a postponement of city action on the contract.

Roberts had recommended that the City Council rescind the contract awarded to Duckels and rebid the entire project.

City Council was on the verge of granting Duckels’ request for postponement of action — possibly until May 3 — when MacArthur and Marsh gave public comments that led to the withdrawal and compensation agreement.

Council members and city staff agreed that the bid process was flawed and that Native and Connell should be compensated for their proposal work. MacArthur said his company put about $10,000 into the proposal. Marsh said it cost Connell about $6,000. Both companies will have to provide documentation of their proposal costs. The total compensation cannot exceed $16,000.

City Council voted, 4-2, to direct the Steamboat Springs Police Department to investigate the initial bid process, in an effort to preserve public faith in the integrity of how the city bids publicly funded projects.

“I think it’s vital to understand the intricacies of what went wrong in this situation,” Councilman Kenny Reisman said.

Council members Jim Engel­ken and Meg Bentley voted against the investigation. Both have previously cited the unfounded nature of rumors surrounding the bid process, saying such rumors should not be a basis for police work.

Roberts said Detectives Capt. Bob DelValle will lead the investigation.

City Council voted, 5-1, to discuss Kracum’s em­­ployment May 4. Kracum previously has told City Council that his role at the ski base is winding down. City Council re­­newed his contract, through De­­cember, on April 6. Bentley opposed the discussion next month.

Outside Centennial Hall after the base area contract vote, MacArthur reiterated that the decision to withdraw the proposal was based solely on a desire to remove the best and final offer process from city policies.

He also acknowledged the pain of missing out on a $4.5 million project during a recession.

“It stinks,” MacArthur said. “We all need work. … Projects like this don’t come around often.”

— To reach Mike Lawrence, call 871-4233 or e-mail mlawrence@steamboatpilot.com

Comments

Scott Wedel 4 years, 8 months ago

Having two police officers investigate the bid process to try to regain public confidence is asking a whole lot from these officers. There is not a widespread belief that laws were violated. Thus, the sort of investigation expected by police officers will have MINIMAL IMPACT on the lack of public confidence.

The fundamental problem was the chosen bid process and then the mistake that went to the heart of the bid process's most serious vulnerability which was the confidential bids that were not the final bids.

To regain public confidence will require something like bringing in a CDOT bid process expert whom can both point out the flaws in this bid process and make sure the bid process used in the future is of high quality.

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dave pieknik 4 years, 8 months ago

Regardless of what really went down-in the bidding or complaint withdrawl process- the real point was spoken, the ski area and Steamboat NEED this project to happen. Yes this whole thing "stinks" as Mr. MacArthur pointed out- but in the bigger Steamboat orientated picture the correct decision was made. These truly are hard times for all- Thank you for doing the right thing.

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hivltge 4 years, 8 months ago

Hopefully the Town of Steamboat Springs/Base area is the real winner in the end for this project moving forward. It was not Duckels, Native or Connell's fault but hopefully this will be used as a learning experience and the process will be review before future project bids. Thank you to Native and Connell for putting the town and people first. Thank you to the city for moving forward on this project and avoiding further costs and delays. Native Ex has shown for years their support for our community and their actions in this issue truly show they care about the bigger picture here in Steamboat. Best of luck to all contractors and business's in these tough times. The city now needs to move forward and put measure in place to make sure this doesn't happen in the future and the process is fair to all involved.

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oldskoolstmbt 4 years, 8 months ago

we don't need to use more tax dollars on an investigation....change the process, it's really not that hard

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freerider 4 years, 8 months ago

“What it looks like is that we’ve paid two other contractors to be quiet and withdraw their complaint,” she said.

Isn't that exactly what happened ???

here's the money now go away .

And now there's a detective involved ....this looks really bad

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oldskoolstmbt 4 years, 8 months ago

splitting the job up is a good idea in theory...yet, in reality it doesn't work because of warranty issues later on down the road....no one wants to guarantee their work when the next part of the job is done by someone else.

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catsmeowtwo 4 years, 8 months ago

Wow, does the city have too much power. What should have happened is that Duckel's bid was thrown out and the decision would be between Connell and Native. This is tax payer money, and I think paying off the other bidders is a waste of it. Especially if everything was "legal", blackmail is not legal.
Yes we "need" the base work to be done, but at what and who's expense. Wake up tax payers and get a clue.

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addlip2U 4 years, 8 months ago

Paying the bidders for a bid? Is that what the Invitation to bid spelled out? ONLY in Steamboat will a contractor be PAID OFF to bid!!! I have worked in construction for decades, but never heard of such a scandal!!
Taxpayers brace yourself! Now, to be fair, should Duckels also submit an invoice for making the bid?

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housepoor 4 years, 8 months ago

so the council makes this decision 12hrs before osha violations are announced?
the commitee obviously knew about the pending investigation but ingnored it?

should the violations have any bearing on who award city awards the bid to?

this thing just smells all around

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callguinness 4 years, 8 months ago

Yampaboy, Having these three companies work together on a construction project would be like having the Catholics, Muslims, and Jewish write a religious book together. They all have good points, and they all have their way of doing it, alone anyone of them is fine. Together not so much.

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Fred Duckels 4 years, 8 months ago

Oldschool, OSHA had to say something and we will appeal. Any serious violation would easily run deep into six figeres. Hate to ruin your day.

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oldskoolstmbt 4 years, 8 months ago

yampa valley boy~ i get what you are saying...even with lawyers (pencil pushers)..they could draw up contracts, but sometimes ( not all the time) companies will go to war over..."well, THEY used the wrong compactor for the soil, causing our concrete to fail"...yada, yada, yada...big mess and money to prove who is to blame...this is why this scope of work is awarded to one company..just sayin'...

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