I guess it was three weeks ago now that there was a construction bid award in front of council slated to be given to my parent’s firm. Council decided to make a mess of the situation by not awarding the contract to neither the lowest bidder, who was disqualified, nor my parent’s firm, the second lowest bidder. They sent the thing out for re-bid at the risk of not having the project done in time to qualify for the funding that would pay for the work (which would mean local taxpayers will pay for it out of the general fund).
On the day the item was sent back for re-bid, two very workable solutions were offered to council. The first solution was just to award it to my parent’s firm who had done everything right. City staff had recommended this option as they do with hundreds of bids every year when they have to disqualify the lowest bidder for whatever reason. The second option, forwarded by Mr. Saab himself was to simply rearrange how they paid out the contract so that no advantage would be taken by the contractor. I thought that was pretty good idea too given the historical perspective where my parent’s firm was allowed to get the contract on phase I of the project using a similar argument.
I think the most important part of what happened at council that day was the fact that council members were blaming city staff for something they didn’t do. Exceeding the allowable mobilization percentage is solely the bidder’s error. I have included the original bid form below so you can see what Item No. 1 clearly states.
The city staff can’t be held responsible for bidders who can’t do math (which included my parent’s firm in the first phase of this project). To ask city staff to fix this problem was idiotic and a clue as to how little council members actually know about these bids. Out of everyone sitting up there at council, Emma Acosta should know this stuff given her career at the city where she signed off on these types of contracts. Maybe she’s proving now why there are so many questions about what went on under her watch back in the day.
The fact is that bidders screw up their bids all the time. If it’s not the mobilization costs, it’s something else like including all the signed paperwork necessary to submit a bid. I can’t tell you how many great deals the city has missed out on because the bidder forgot to attach their bid bond. It’s something they can go run back to the office and get and it doesn’t really interfere with the price or the construction of the project, but if you don’t have it on bid day – you’re out. Successfully bidding government works is 10 percent your price and 90 percent following the instructions on how to submit the price. Any of you who have done it just quietly said “amen” after reading that sentence.
City staff was told to fix the mobilization problem (that wasn’t their fault) and re-bid the project before the funding expires. I have my doubts about getting the project done on time given that when Mother Nature decides to give El Paso some weather, she always brings more than anyone ever needs. As far as fixing the problem that is not really a problem, city staff did the only thing they could do to keep bidders from screwing it up in the future – they eliminated the mobilization line item all together. You can’t get the math wrong when there’s no place to put the number.
From what I understand is that the new bid forms will not have a mobilization line item and that contractors will just have to work that number into the other bid items. This sounds simple – and it is. However, eliminating the mobilization item completely screws small local contractors and those who are fighting to stay alive financially. Let me explain.
Think of mobilization costs as the price of getting to work and doing your job. When you are awarded a construction contract you have to get all of your equipment on site, your traffic control put in place and put up whatever your Storm Water Pollution Prevention Plan (SW3P) calls for. Oh, and you have to pay off your bonding company. None of that is cheap.
A contractor will bill his mobilization line item on the first pay application in order to quickly recoup those costs. This practice was put in place to help smaller, less financially stable contractors have a shot at competing and growing. The big dogs have the money to cover this “startup cost” and that always gave them an advantage.
Acosta has been on a mission to get more contractors into the bidding game at the city and with TXDot (not going to happen because TXDot’s qualification system is specifically designed to where only very large contractors can participate). This move, initiated by her irrational actions on the original contract award, ensures that smaller contractors will not/can’t bid city work. She might as well have required them to have $500,000 cash in the bank to bid a $100,000 city project by eliminating the mobilization line item. Now only medium sized and big construction companies can afford to bid city work. And it’s all because she dislikes ME.
Way to screw everyone else instead of me, Emma. You really showed me this time!
Oh, and I should mention that when contractors are allowed to roll-in their mobilization costs to the other bid items they can strike it rich on change orders. If the project needs 100 feet more of curb and gutter, a change order is issued. The city has to pay per foot whatever the price of that line item was on the originally bid. If that item has been pumped up with a bunch of mobilization costs, the taxpayer is buying some very very very very expensive curb and gutter. And believe me – a seasoned contractor can see where a change order is likely going to be needed and I’ll be damned if they wouldn’t price those bid items accordingly.
So when you ask why change orders are smashing the city’s budget worse than usual, the city can say it’s because Emma Acosta doesn’t like ME. It seems kind of silly that she’d screw all of you to the degret she has because I have a blog. She could have simply made a motion to award the contract to the lowest bidder (Saab) and asked that any excess mobilization payments be held over until the project was finished. Instead she had to burn the whole neighborhood down. It’s just such an El Paso thing to do… so I guess that’s why she did it.
I’m not laughing with you, I’m laughing at you.