City upholds base area contract
Duckels keeps project; Native, Connell to receive reimbursement for bid work
April 21, 2010
Steamboat Springs — 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.
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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."
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