Engineering Corruption in Ludington, pt. 1

[XLFD]

Last May, the City Council approved at their meeting the hiring of a firm for the engineering services on the future project of the rehabilitation of the Washington Street Bridge.  This was recorded by the City Clerk...

 

... in the 5-23-2011 City Council Minutes.  A Department of Transportation manager from Cadillac took part in this process, as was part of the protocol for such a pricy project, previously critically discussed in the Torch as to its necessity and its costs.   MDOT's Liptak commended the the City for its participation in the selection process, which took bids from 8 different engineering companies.

 

Let's fast-forward to less than six months afterwards.  The City Council "rubber stamps" another big engineering contract as noted by the city clerk ...

 

 

... in the 11-14-2011 City Council minutes.  Note that the City of Ludington (i.e. it's taxpayers) is responsible for the engineering costs that total $131,481 which is slightly more than half of the prior contract which was for a $2.5 million project.  The Dowland street repairs is a $450,000 project. 

Whereas the engineering cost was less than one-tenth of the bridge project, bidded fairly among 8 engineering firms-- the engineering costs for Dowland Street repairs is nearly three tenths of the full project which was granted to the engineer firm, Prein & Newhof after an undescribed bidding process.

 

Amazingly, since before 2008, City Hall, led by the City Manager John Shay in his executive capacity and Kaye Holman in her capacity as the Finance Committee Chairman, have granted engineering contracts to Prein & Newhof exclusively except for the Washington Bridge-- which was oversaw by the MDOT manager who was part of the selection committee, and was the only one mentioned in the public record available as having gone through the bidding process. 

 

As previously noted, the City Code has specific rules for entering into contracts as we see in Section 2.4 on Purchases and Contracts.  "Sealed bids shall be asked for in all transactions involving the expenditure of $10,000.00 or more and the transaction evidenced by written contract submitted to and approved by the city council."  We have seen this totally ignored by these City leaders in their contracting with a certain sign company, a certain sidewalk-installing company, a certain electric company, a certain water tower painting company, etc.   

 

Prein & Newhof, and Prein & Newhof only, were the engineering services contractors mentioned in the public record for these following projects that were approved by the City Council and the Municipal Marina Board at the following meetings.:

2011 2-14 p3 Waste water improvements $60,000 

2010 9-13 p. 2 Staffon Street Impr. $124,153

2010 6-17 p.2 Transient Docks $107,000

2009 7-13 p.8 William St  $13,748 (as noted in 2009 10-26 p.9)

2008 8-25 p.2 Ferry Odor Project $30,595

2008 4-28 p.2 Leachate Station Impr. $10,835

2008 3-24 p.2 Four separate projects

  a.  South Madison street/pipes:  $57,000

  b.  Franklin street/pipes:  $36,929

  c.  Tinkham/Fitch sewer:  $27,625

  d.  Loomis Walkway (p3):  $167,100

 

Does Prein & Newhof have special privileges and connections with Ludington City Manager so that they have a monopoly on Ludington projects that require engineering services?  It sure looked that way to Dick Boes of the Municipal Marina Board as this exchange on April 22, 2010 between him and CM John Shay took place, according to the minutes of the 2010 4-22 Marina Board meeting:

 

"D. Boes questioned using Prein and Newhof as the only engineering firm for City projects. J. Shay explained that the City has done business in the past with other firms and that the City has been very happy with their services. It is not practical to change firms on a project by project basis. The engineering fees represent approximately fifteen percent of the total project cost. If the City were to decide to use a new engineer, interviews would be conducted at such time."

 

"Not practical" to engage in the City Code's mandated bidding process for projects over $10,000?  Speaking for the City, Shay says interviews will be done only if he decides to.  Nobody beside Boes has ever publicly blinked at this glaring example of the unlawful, unnecessary waste of taxpayer dollars.

 

If the engineering services cost us 10% of the project like in the project given to Fishman, et. al. Engineering in the competitive bidding process used for the bridge, we would save $86,000 just on engineering costs on the Dowland Street project alone!  Prein & Newhof have no competition and can set a comfortable price for them-- unless of course they have some State agency as part of the selection process. 

 

Now for the anti-climatic finale, the Ludington Torch made a FOIA request recently for:  "The competitive bids sent out and received by the City for the construction engineer services on the Dowland Street Project scheduled to take place in 2012."

 

Here is the reply:  2012 1-17 P&N Dowland Bids.pdf.  No records exist for any competitive bids.

 

If you remember, the City Manager invited me into the City Hall, that he banned me from nearly a year ago with an unconstitutional law he helped create, to have a chat with the Prein & Newhof representative just this last week.  I think I had a little more here than they could answer.  I estimate roughly that there is over $200,000 that the City has lost just by not seeking competitive bids for engineering services.  This is just pure laziness and irresponsibility by our City Manager, John Shay.  Or is it more than that?

[Marty Redman]

Incredible job.  The Ludington city council is as complicit in this as Shay.  I know you love to defend them but everyones looking the other way on this.  I would like to hear from any of the city counselors on this clear violation of the code by themselves and their fearless leader.  Why don't they ever come on to defend this very bad behavior?

You failed to mention P and N are at closest a couple of counties away.  Here is a link to their website:  http://www.preinnewhof.com/. 

[XLFD]

The Ludington City Council is my kind of people, that's why I tried to be part of that crowd in the last election, LOL.

Thanks for providing the site.  Their main office is in Grand Rapids.

[Sweater Cows!]

Devil's Advocate.

You get bids 3-4 times from a few companies,the bids come up comparable every time(as a percentage). You pick a company and  they are well versed and do there job well. The percentage they charge on future projects stays the same as the first. Is it really necessary to re-bid every time?

[XLFD]

Not a bad counter-argument, but its best refutation is reality and human nature.  And there's always the matter of the City Code, State, and Federal laws mandating the use of competitive, sealed bids for contracts of a certain amount, some as low as a few thousand dollars minimum.   When you have no competition, you can charge what you think you can get away with.  When you are one of 4-7 competitors and you really want the job, you will give a competitive bid.  Going with one company to do all your work in one area, smacks of cronyism and is rife for corruption ensuing. 

In this case, P & N's percentages have been trending higher over the last few years since they became "Ludington's Engineers".  Case in point :  the Dowland Street project.  The engineering services being at nearly 30% of the full project's cost seems comparable high with other percentages of the past, and much greater than when sealed competitive bids are used (for engineering services). 

We will be reviewing the other 7 engineering services bids that happened for the Washington bridgework, and get back with what they proffered.  In reviewing past competitive bids the city has used, there has been very significant differences, and I will post some of those when I have more time for examples of this.

[Willy]

Another excellent job of investigative reporting X. It won't be long before 60 minutes will be asking  you to join their team.

[XLFD]

I've already looked into that, Willy and found out that they too are disingenuous-- minus commercials they come in at about 50 minutes.  What's going on here? 

[AQUAMAN]

Surely P&N have been a definite favored engineering company, and for far too long, on too many projects here locally, and I also ask, WHY? Sameo as the TYE'S Signage Co. of recent. There isn't any kind of smoke where there is no FIRE, or is there? Just ask yourself if you even can be honest and common-sense like...lol.

[XLFD]

There's a wide range of projects that the City should be getting sealed, competitive bids for and they are not bothering on doing that unless there is a state representative or overseer as part of the process. 

I know someone who works for the Federal government who tells me people have lost their jobs in his neck of the woods for failing to open small projects (under $5000) up to competitive bids because it is in the rules they must follow.  There are serious consequences in places where they want to save money and reduce cronyism, but not here in Ludington. 

[Colleen Plummer]

My 94 yrs old father who graduated from Ludington High School and was a diver on the Great Lakes (worked on the Mackinac Bridge) and did much work for not only Mason County in his younger years but worked throughout the world. Anyway, we were discussing some of the posting on this blog. He said this behavior is nothing new. It's generational. He did mention that at times it did get better, but "ya have to keep their feet to the burner for them to make the right choices". Problem is as I've mentioned before, it's not a case of who's bed with one another, it a stinky ongoing slumber party

[XLFD]

Good analogy, and guess who keeps getting hit with the pillows?

I started this website back in 2009 to offer a forum that was open to the opinions of citizens and those who have an interest in this area.  We have become a place where people can speak freely on topics they feel are a concern for the area and offer their own stories.  We are not limited by the need to kowtow or be sensitive to advertisers (that is why you don't see any pop-ups or side ads) or to the local government institutions, of which we do hold their feet to the proverbial fires of the Torch. 

We are all here descendants of the pamphleteer Thomas Paine.

[Willy]

And that is exactly why SOPA is a bad piece of legislation [sorry to get off the subject]. SOPA can be used to shut down web sites that display ideas contrary to the power brokers in our Government. This site could be targeted and cancelled at the whim of a disgruntled official. If anyone doubts that, just look at Mr. Rotta's banishment from City Hall immediately after the unconstitutional ordinance [work place safety] was passed. There is no doubt that Mr. Rotta was the reason this anti citizen law was passed. That law is being abused by one official, John Shay, because he is trying to prevent citizens from obtaining public information.

[AQUAMAN]

Colleen, your dad sounds like a well versed man that may have many good stories and info. to share with us in the future. I for one would be fascinated to get any feedback he has with regards to Ludington's history, and any viewpoints/recommendations for us all to follow for success. Thanks.