A city public works project, costing nearly $800,000, is underway, but some people question whether the project, which was not put up for public bid and is being done by a California-based compan, could have been done for less.
At its meeting Feb. 23, the Seaside City Council unanimously approved a resolution to authorize a loan through the Oregon Infrastructure Finance Authority of the state Business Development Department. The same resolution was brought before the council at its meeting earlier this month, but the vote was split 3 to 3, requiring it be voted on again.
The resolution authorizes City Manager Mark Winstanley to obtain financial assistance of no more than $800,000 with an interest rate of 3.7 percent per year to be repaid over 10 years.
The funds will be used to fulfill a $781,445 contract with BioEngineering Associates, which was signed by Mayor Don Larson Jan. 29. A California-based company, BioEngineering Associates was hired to design and build a rock retaining wall to stabilize the riverbank along the north side of the city’s wastewater treatment plant. The city has already paid a down payment of $140,660.
Work on the project began a few weeks ago after BioEngineering subcontracted with Big River Construction, of Astoria, for construction services and materials. Public Works Director Neal Wallace said he anticipates the project will take about five weeks with good weather, instead of the originally estimated six to seven weeks.
However, Dale McDowell, of TFT Construction and a member of the Seaside Transportation Advisory Commission and the city budget committee, and Keith Keranen, of Keith Keranen Excavating, said both of their companies, and likely other local contractors, could have done the overall project at less expense.
However, the city never put the project up for bid, as required by Oregon law.
Winstanley and Wallace said Oregon statutes allow for an exemption when it comes to “the cost and availability of specialized expertise that is necessary for the public improvement,” which they believe applied in this case.
“Regardless of what some of the local contractors claim of their ability to do this work, the truth is this was an extremely difficult project to get permitted,” Wallace said. “For various environmental reasons, it’s very difficult to get a rock project approved these days. BioEngineering, the company we’re working with, it’s not just that they’ve developed a niche. These guys are leaders in a new field. They’re at the forefront of bioengineering.”
“There’s no one else around here that has the ability to get this project put together and to get it permitted,” Wallace said. The city’s engineering department also doesn’t have the capability to design this sort of project, he added.
“We needed the expertise as far as permitting, as well as working in environmental areas,” he said.
The U.S. Army Corps of Engineers authorized a general permit for bank stabilization for the city’s project Jan. 16. The removal/fill permit from the Oregon Department of State Lands also was authorized Jan. 16.
But McDowell didn’t agree with Wallace and Winstanley’s assessment.
“It’s not hard to get permits; it takes time to get permits,” he said.
Several local engineers and design companies could have drawn a design and gone through the permitting process and then put the project up for bid, McDowell said.
“For them to say no local contractor could handle it is hogwash,” he said. “We’ve worked on the jetty before. And a local contractor is handling it. They’re doing the work out there.”
Not only have McDowell and Keranen raised concerns about the project not going out for bid, but they are critical of the overall cost, which McDowell said go hand in hand.
“Just follow the law and you’ll save money,” he said. “You get competitive bids. That’s the key word — ‘competitive.’”
When BioEngineering emailed several construction companies in mid-January with a request to provide a few laborers and operators, along with equipment, to work alongside the BioEngineering crew to build the wall, McDowell’s company put in a bid of $20,536 per week, or $123,216 for six weeks. BioEngineering, instead, subcontracted with Big River, which provided a lower weekly quote.
“The thing is it should have come out to bid as the whole project and not just a piece of it,” McDowell said.
He posed the question: If the raw materials cost an estimated $36,000 and construction costs for the subcontractor are less than $123,216, why did the city sign a contract with BioEngineering for nearly $800,000 that now has forced the city to obtain a loan from the state?
“The city is spending money like crazy and they don’t have any,” Keranen said.
The city has not provided a detailed budget for the project. The project’s general budget as approved for the loan from the Oregon Infrastructure Finance Authority includes $603,000 for construction; $67,000 for construction contingency; $72,000 for construction management; and $58,000 for preaward expenses, such as final design and permitting. Last September, the City Council approved a resolution to repay the loan using city sewer fees and revenue.
Now that the project has been contracted out to BioEngineering, both McDowell and Keranen said it was right for the City Council to approve the loan request, since the project has to be paid somehow. They also are happy that BioEngineering is subcontracting with Big River.
Their hope, though, is that proper procedures will be followed in the future in the community’s best interest.
“We should learn from this going forward and not do it again,” Keranen said. “It’s really all about helping them not do any more harm to the taxpayers.”
Wallace agreed the solution the city has chosen is not the least expensive solution, but he believes it was necessary because “this isn’t a typical rock revetment” or stabilization project.
“I didn’t see any other avenues to getting this project permitted in a timely fashion,” he said. “What we did was hired the best people for the job, and we’re going to end up with a good job.”
Time was a factor because the time period the city is allowed to do work in the water ends Feb. 15 and will not open again until Nov. 1. Wallace said the city barely got the permits in time to complete the in-water work for the project.
Another concern McDowell raised is that, according to the Oregon Construction Contractors Board, BioEngineering does not have a statutory public works bond, as required by the state to be eligible to do constructions on public works projects.
Wallace said he could not comment on that.
BioEngineering Associates did not respond to multiple requests for comment.