Arroyo questions Utilities Department director about process
The staff recommendation of the third highest bidder for a project planned by the City of Sarasota’s Utilities Department prompted city Commissioner Erik Arroyo this week to ask for an explanation from Utilities Director Bill Riebe.
During the commission’s regular meeting on July 17, Arroyo pulled the item from the first Consent Agenda of routine business matters.
The backup agenda material for the item explained that the city owns two “steel, elevated drinking water storage tanks …” One of them is located in North Tower Park, in the Bayou Oaks community; the second stands on Bee Ridge Road, just east of South Tamiami Trail. The coating systems (paint) on the tanks [has] reached the end of [its] useful life,” the Agenda Request Form said. Thus, the tanks need again to be re-coated, or painted, the form added.
The city issued a solicitation for bids on April 17, the form continued. On May 18, staff received six bids. The form pointed out, “After evaluation of the bids, it was deemed the lowest bidder and second lowest bidder were nonresponsive. Specifically, they did not have the required experience and qualifications for the work. The third lowest bidder, Classic Protective Coatings, Inc., submitted [the] lowest, responsive, and responsible bid of $709,120.00.” Therefore, the form said, staff recommended that the project be awarded to that company.
The total city budget for the initiative is $730,000, the form pointed out. The contract will allow 120 calendar days for completion of the work, or 60 days per tank, the form added.
The lowest bid came from Five 12 Painting & Remodeling LLC of Orlando; it was $396,750. The second highest bid, $435,000, was submitted by Champion Tank Services LLC, which is based in Minnesota.
The other bids were as follows:
- $719,000 — Southern Road and Bridge LLC of Tarpon Springs.
- $930,000 — TankRehab.com LLC of Jacksonville.
- $962,000 — Razorback LLC of Tarpon Springs.
In response to Arroyo’s question about the staff recommendation for acceptance of the Classic Protective Coatings bid, Riebe acknowledged that staff typically takes the lowest responsive bid. However, he explained, the word “responsive” relates to the qualifications of a company submitting a bid.
“What makes someone qualified?” Arroyo asked.
The solicitation materials included a section that explained the minimum qualifications needed for the project, Riebe said. Among the factors staff addresses, he continued, are the years of experience a company can document in regard to the type of work under consideration, as well as the experience of company employees. “It’s also the licensure,” Riebe noted.
“These storage tanks are critical,” Riebe pointed out. “As you can imagine, if they fail, it’s bad, especially the one down on Bee Ridge, because of its location.” Its failure, Riebe added, would be “catastrophic.”
“We want to make sure we have qualified folks [doing the painting]. This is a niche type of work,” Riebe continued; “not everybody can do it, and they need to be experienced.”
The surfaces of the tanks have to be prepped properly, Riebe noted as an example.
Arroyo then inquired when staff makes its determination on whether bidders are qualified.
“As part of the bid,” Riebe replied, companies “are required to submit their qualifications …” Each also has to submit to the city the names of its foremen, project superintendent and project manager, plus a list of similar initiatives that the company has handled.
Staff compares the materials to the specs in the solicitation, Riebe continued. If they do not match, he said, the company is deemed not to be qualified.
He also noted that, for every bid, a protest period is allowed. In this situation, he said, the lowest and second-lowest bidding companies did not file protests. “They recognized that they weren’t qualified.”
“So you’re comfortable with signing this?” Arroyo asked.
“I am,” Riebe told him.
“We’re extremely frugal,” Riebe continued. His staff has saved close to $17 million, he estimated, “just on making better decisions.”
The very first question asked in his department before any undertaking is contemplated, he stressed, is what the impact of the effort will have on the Utilities Department’s rates. “We’ve always been cognizant of that,” especially for customers on fixed incomes, he added, and “those that have a tough time paying their bill.”
Then Arroyo explained that many of the city bids end up with a wide range of amounts in the responses. “Can we do something to make sure we don’t get such a wide range?” he asked.
“It’s market-based,” Riebe said of the bid calculation process for companies. The amounts differ according to company qualifications for a specific job, he added, as well as labor force factors and the fact that different firms have different profit margins.
At that point, City Manager Marlon Brown told Arroyo that the city has qualified staff, such as Riebe, who have the expertise to anticipate the range of responses. For example, Brown said, if staff expects bids in the $600,000 range, and a company says it can do the work for $100,000, that raises questions, “and you get a number of change orders,” typically if that lowest bid is accepted.
Change orders are monetary supplements to a contract, approved often in situations when a company handling an initiative finds that its expenses are higher for various reasons.
Again, Riebe stressed to the commissioners, “We are extremely frugal.” He and his staff put so much detail into project specs, he said, that any company considering making a bid should have all the information it needs to calculate what its expense will be. The details minimize bidders’ risk, Riebe added.
Moreover, he continued, he and his staff spend much time in pre-bid meetings, trying to ensure that companies interested in an initiative have all the necessary information. In the situation involving the re-coating of the storage tanks, he said, he and other staff members also took representatives of interested companies to see the tanks.
“Is there a way to limit the number of change orders?” Arroyo asked.
“We don’t have change orders,” Riebe replied. In the five years he has been on city staff, he added, “We’ve always come in under [the bid amount].”
“You all are doing a great job.” Arroyo finally told Riebe. “Thank you.”
With that, Arroyo made the motion to award the bid to Classic Protective Coatings and authorize Mayor Kyle Battie and City Auditor and Clerk Shayla Griggs to execute the contract.
Commissioner Jen Ahearn-Koch seconded the motion, which passed on a 5-0 vote.