Police: No crime found in Steamboat base area bid
Investigation suggests appearance of favoritism toward Duckels
June 23, 2010
Steamboat Springs — A police investigation revealed no concrete evidence of criminal activity in the controversial bid process for this summer's base area redevelopment work.
"At this point there is insufficient evidence or probable cause to charge anyone with a crime or that a crime was committed," Detectives Capt. Bob DelValle, of the Steamboat Springs Police Department, wrote in the report released Wednesday to City Manager Jon Roberts, who in turn sent it to Steamboat Springs City Council and some city staff members.
The investigation also did not identify any selection committee member who may have leaked initial bids earlier this year in proposals for the $4.5 million project at the base of Steamboat Ski Area. The investigation did reveal widespread opinions of favoritism in the bid process. Several people DelValle interviewed in April, May or June said the bid process at least appeared to be slanted toward Duckels Construction, which eventually won the contract and has begun underground infrastructure work at the ski base with a reduced budget of about $2.5 million.
Fred and Derick Duckels consistently have denied any improper action during the bid process, which caused the city to change its bid policies for public projects and raised questions in March and April that nearly placed huge delays — or a total rebid — for base area work. That work ultimately is planned to result in a public promenade, the daylighting of Burgess Creek and other amenities at the immediate ski base.
Duckels Construction has completed other base area redevelopment projects during the past three years. Derick Duckels reiterated Wednesday that he does not think there was favoritism in the selection of a contractor for this summer's work.
"I felt we had advantages, since we had done the job for the past three years … but as far as catching any breaks, I almost felt like — (as) the people who were involved in the job before — they were giving us little to no information at all because they wanted to keep the process fair," he said about the selection committee.
Base area redevelopment coordinator Joe Kracum also expressed that opinion.
"I don't believe there was favoritism in the process," Kracum said Wednesday.
That contradicts statements in DelValle's investigation report.
"It was evident by comments made by several of those interviewed and by his own admission that Joe Kracum favored Duckels for the job," DelValle wrote.
Earlier in the report, DelValle states that in a June 3 interview at the Police Department building, "Joe confirmed he gave Duckels an edge because of their past performance on this project."
The City Council recently renewed Kracum's contract. Roberts stressed Wednesday that the investigation cited "no specific action" of favoritism by Kracum only appearances. Roberts said he does not plan to take any immediate action involving Kracum's contract as a result of the report.
"I think I'll give council time to digest the report, and certainly I'd like to get some of their feedback," Roberts said. "We'll give the council a couple of days to absorb the material, and we'll see where we go."
Support for Duckels
The City Council first awarded the $4.5 million contract to Duckels Construction on April 6. City Council President Cari Hermacinski cast the lone vote against that award, citing "very substantial" differences in Duckels' initial and final proposals that she said created at least a perception of impropriety.
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 questions about the integrity of the bid process. Connell Resources lowered its bid by $377,509, and Native Excavating raised its bid by $32,800.
In an April 13 letter protesting the contract, Native's Ed MacArthur and Connell's Eric Marsh called the city's review of bids "an absolute failure and manipulation of the pricing process." The letter raised several other issues with the proposal process.
In March, Kracum disclosed the price range for initial bids for the base area work before the bidding process was completed. The price range Kracum told Routt County commissioners during a public meeting was reported March 16 in the Steamboat Today.
City Council voted April 20 to reaffirm the awarding 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 Roberts to permanently remove the "best and final offer" proposal process from the city's procurement policies.
City Council voted, 4-2, that night for the police investigation, citing a need to preserve public faith in the integrity of how the city bids publicly funded projects.
Council members Jim Engelken and Meg Bentley voted against the investigation. Both previously had cited the unfounded nature of rumors surrounding the bid process, saying such rumors should not be a basis for police work.
DelValle wrote in his report that despite the controversy, support for Duckels' proposal was widespread.
"Of the nine selection committee members I interviewed, all agreed that Duckels' proposal was substantially more comprehensive than Native's and Connell's proposals and Duckels addressed how they would mitigate the impact of the project for business owners. Native and Connell did not address the issue," DelValle wrote. "Six of the nine members affirmed that Duckels should be awarded the contract even at their initial bid price, which was $450,000 higher than the low bid."