Low Blows for a Low Bidder: Schultz Excavation and Rasmussen Water Lines

[XLFD]

This interesting story actually seems to have been first put out by West Michigan News 98.7 (WLDN), the only local news organization in PM Township by the way, who put on their Facebook page on Wednesday this blurb they gleaned from Tuesday's meeting: 

 

"Pere Marquette Township's Board has snubbed a local company's low bid for water main work, in lieu of a Muskegon company that's charging $40,000 more than the local company. Schultz Excavating of PM Township had wanted the job, saying it could do the work for $80,000. Township Clerk Shelly Enbody says just because they offered the low bid, didn't mean they could actually do the work at that price. The board also interviewed four candidates for the Supervisor's job: Jim Christensen, Paul Keason, Jennifer Richard, and Jennifer Doggett."

 

This gives some of the story, and seems to suggest that PM Township decided to pay 50% more for the work of an outside contractor for pipe work clearly within the realm of an experienced and established local excavating firm located in the township itself, based near the corner of PM Highway and Sixth Street.  The City of Ludington Daily News (COLDNews) did some research, but put out this in Thursday's e-edition Low Bid Too Low for PM Board, which only confuses the point more because there really is no rationale given for the vote against saving $44,000 in a $124,000 project.  Fortunately this was fleshed out in the newspaper by allowing the rationale behind their votes to be actually displayed.

 

 

 

The engineering firm's (V-Tec) rationale for dismissing the low bid is itself ludicrous in saying that it is out of range.  The Schultz rep explains exactly why they can cut the cost of the project and save the township money.  This was likely why the Nordlund contract for Washington Bridge engineering was very low in comparison to all the well-out-of-town bidders in that enterprise.  Mobilizing, gas, and per diem costs can grow a project's cost dramatically, and there is nothing like having the money stay in your own township afterwards and having people who will be affected by the construction be part of the project for accountability.

 

Page three has the board members comments, the first three are the ones that voted for Schultz, the latter four voted against.  The first three, which includes a member of Nordlund's & Associates, give rational reasons for their vote.  Then come the four against: 

Clerk Rachel Enbody worried about change orders (unlikely to amount to a fraction of $44,000) and put great weight behind the recommendation of the engineering firm, rather than the numbers, and any loyalty to her constituents, effectively slapping the Schultz family in the face.

Treasurer Sara McCallum echoed the sentiments of Enbody almost exactly; make that two slaps in the face. 

Trustee Joanne Kelley had the change orders talking point, but threw in the barb about having a firm that can start and finish on time, and Jackson Merkey seems to be that company.  More a punch in the gut.

Supervisor Jim McInnis also envisioned change orders upping the price and just wanted a good, competent job.  The knockout punch.

 

                       Seated: Clerk, Shelly Enbody; Supervisor, Jim McInnis; Treasurer Sara McCallum

                       Trustees: Jim Nordlund Sr, Paul Piper, Joanne Kelley, and Andy Kmetz

 

 It should be noted that even though the four who voted for putting an extra $44,000 do put down Schultz Excavating, politely or not, they give no particulars as to why they would do change orders, why specifically they are less apt to be as good or as prompt over the other firm that received the contract.  I did some research and found that Schultz Excavating was used for the First Street Industrial Park by PM Township in 2006.  Remember that jolt to the community's industrial base here.

 

 

Without major reported incident in this major development.  Similarly, Schultz has worked with the City of Ludington on the Cartier Park multi-use pathway also in 2006, and two other projects worth around $100,000 in 2004 and 2002 without any problems noted.  Still I scoured the internet looking for some black eye in Schultz's past, and only found one thing.  But it was fairly significant and high profile happening back in 2008 in Grand Haven, reported by Grand Rapids based WZZM news.  Where the engineering firm is based by the way. 

 

 

WZZM TV reported back on Sept. 14, 2008:  "The Ottawa County Road Commission on Thursday revoked the permit to operate on 152nd from Ludington-based Schultz Excavating - the firm hired by the developer, Bayou Developers LLC, to lay the sanitary sewer lines." 

It seems they had went about a week beyond when they were supposed to finish, and were only about 40% of the way through laying the line, inconveniencing quite a few people, and making officials upset because they were effectively hired by a limited liability company, and so could not be talked to directly.  There was quite a bit of discontent with Schultz Excavating, the developer saying he would never hire them again, and other bad things, elaborated in this article: 

http://www.wzzm13.com/news/story.aspx?storyid=98499

 

It should be noted, that there were difficulties encountered in this project dealing with unexpected flooding-- it does seem to be an anomaly in the history of the company.  Should it be a deal breaker with this project?  I would agree with Jim Nordlund, it is not a technically difficult task, and it should be done by a local contractor who underbids the nearest contractor by a lot of money.  What good is competitive bidding anyhow, if we can't award bids to the low bidder because we want the services of someone else that can bid as high as they want?

[Willy]

After reading the wzzm13 article I can understand why the reluctance to hire Schultz. That may be the only bad mark on their reputation but it's a big one and something that will take some time to overcome. Schultz never gave an explanation for the problems they were having so they left the door open for rumors and speculation. Having confidence in a contractor is very important, just as people will pay more for a car mechanic they can trust.

[AQUAMAN]

Fact remains, PM township is not following protocol correctly by letting contracts for such large financial differences go to outside firms. Brian himself was there along with an engineer to answer any questions. Looks like a "fixed agenda" was against him though. That one problem, being over 5 years ago, doesn't explain why the township can't rely on Shultz now. Now again, we will witness the hard working taxpayers monies being spent elsewhere, in Muskegon and thereabouts, not Ludington. Is it any wonder we have such high taxes, and such a dying town? I also suggest we have a local engineering company, like Nordland, instead of also farming that out elsewhere to GR. If elected and appointed officials can't show loyalty to our own locals right here, then I say they have no rightful business being in them to begin with, and should resign, or be ousted.

[XLFD]

This is my first post with my new computer, the Torchiba (a Toshiba notebook, courtesy of Michigan Municipal Risk Management, and the unethical actions of Ludington City Manager John Shay)

Both excellent points, Willy and Aquaman.  Whereas I agree the Grand Haven sewer line affair seems bad without further explanation, that episode and any others should be put into the record if someone is going to go against the very concept of why competitive bids are gotten in the first place. 

The business dictionary says Competitive Bidding is:  Transparent'  procurement method in  which bids from competing contractors are  invited by openly advertising the scope, specifications,  and terms  and conditions of the proposed contract as well as the criteria by which the bids will be evaluated. Competitive bidding aims at  obtaining goods  and services at the lowest prices by  stimulating competition,  and by preventing favoritism.

As a board member, I personally would not assign any weight to the pick of the engineering firm.  They drew the scope, specs, and terms-- that's their job, not to help pick the contractor.  If they have done their job accurately, there should be no change orders or questions over what the four brought up.   

 

But this is being done against the public interest for the City of Ludington (bridge engineering, etc.), the County of Mason (MC Jail duct work) and now PM Twp.  I have sent a FOIA request to the PM Board to get to the bottom of why it looks as if they showed favoritism or anti-favoritism in awarding this contract to a bidder of which is not in the people of PM Township's interest to do this work.