Our View: Bid process needs scrutiny
April 25, 2010
Troubling questions have arisen about the city of Steamboat Springs' process when it comes to bidding public projects, and we think they should result in an in-depth review of the city's methods.
The city awarded a nearly $4.5 million contract for work at the base of Steamboat Ski Area on April 6 and affirmed its decision last week. The bidders went through a two-tiered process where they gave initial bids and interviewed with a committee before being given a few more days to return with a "best and final offer."
After Duckels Construction received the contract, allegations arose that bids had been leaked. The source of the accusations was never clear, though fellow finalists Connell Resources and Native Excavating later filed a formal protest. The allegations appeared to be based on the fact Duckels decreased its bid. Connell also returned with a lower bid, and Native returned with a higher bid.
City Manager Jon Roberts, city purchasing and risk manager Anne Small, and base area redevelopment coordinator Joe Kracum all said they had heard rumors of leaked bids but had no firsthand evidence to substantiate those rumors.
Duckels owners said no one leaked information to them. Last week, the company wrote a five-page letter asking for a police investigation of the process and a public apology from Connell, Native and the Steamboat Springs Redevelopment Authority. The Steamboat Springs City Council convened as that authority to grant the contract.
Whether information was leaked, it's clear that something went very wrong here.
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Derick Duckels told the Steamboat Pilot & Today in early April that he and Fred Duckels, his father, worked to lower their initial bid to stay competitive for the project, based on a price range of $7 million to $7.5 million that Derick Duckels said he saw in the newspaper. A March 16 newspaper article attributed those comments to Kracum, speaking to the Routt County Board of Commissioners.
Roberts said Kracum violated the city's procurement regulations for public projects, and Kracum has said he regrets his comments.
Clearly, Kracum made a serious mistake by discussing the bid prices at a public meeting before they were supposed to be made public. Roberts thought it was so serious that he recommended a complete rebid of the work. That would have required a reworking of the project, which Roberts said could cost the urban renewal authority $20,000 to $30,000. Although it would cost taxpayers money and delay the project, that seemed to be the best way to remove the stain from the process and ensure fairness.
Instead, the city decided Tuesday to pay Connell and Native for their bid work and drop the second part of the bidding process in the future. The city directed the Steamboat Springs Police Department to investigate the bid process.
The fact that the city so easily eliminated the two-stage bid system is an acknowledgment that it was flawed and left the city open to ongoing conjecture about wrongdoing. Although we support the decision to cut out that step, we don't think that's enough.
It's absolutely crucial that our public money for public projects is awarded fairly. That process must be transparent and honest to the contractors who participate and the public whose money is being spent.
The city should create a committee representing a cross-section of the private sector that is knowledgeable about construction and project bidding. It should be this committee's job to scrutinize the bid process and bring forth recommendations about how to restore its integrity.
The only party that can change the current perception and re-establish credibility and trust in the bidding system is the city of Steamboat Springs. It should cut no corners and make every possible effort to do so. Our reputation as a community hangs in the balance.