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Home My WebLink About3. Award Contract for Dean Lakes Improvements, Project 2004-4-Res. No. 6013 #3 CITY OF SHAKO PEE Memorandum TO: Mayor & City Council Mark McNeill, City Administrator FROM: Bruce Loney, Public Works Director SUBJECT: Consider A warding a Contract for Dean Lakes Improvements, Project No. 2004-4 DATE: February 17, 2003 INTRODUCTION: Attached is Resolution No. 6013, which accepts the bids and awards the contract for the Dean Lakes Improvements, Project No. 2004-4. Also included is an extension agreement with WSB & Associates, Inc. to provide construction and engineering services associated with this project. BACKGROUND: On January 20,2004, City Council approved Resolution No. 6000, declaring adequacy of petition and ordering improvements for Dean Lakes improvements for the Dean Lakes developments. Also, City Council approved Resolution No. 6002, approving the plans and ordering advertisement for bids for the Dean Lakes improvement project. On February 17, 2004, a bid opening was held on the Dean Lakes Improvement Project, in which there were eleven bids opened for this improvement project. These bids are summarized in the attached resolution. From the bid opening, the apparent low bidder is Ryan Companies U.S., Inc. with a bid of $2,656,709.70. The second low bidder was S.M. Hentges & Sons, Inc. at a bid of $2,924,482.37. From the bid opening, an attached letter was received from S.M. Hentges & Sons, Inc. stating that they will be filing a formal protest on the public bid held stating as they believe Ryan Companies bid should be disqualified, as Ryan Companies has entered into an agreement with the City to build this project under a 429 special assessment petition. The bids are being reviewed by WSB & Associates to determine if the bidder is responsible and qualified to do the work. The City Attorney is reviewing the concerns of the letter from S.M. Hentges & Sons to determine on whether the low bid can be awarded or not. Attached to this memo are the following documents for Council review on this item: . Memo from Jim Thomson, City Attorney, on the award of bid. . Letter from Gary Zajac from S.M. Hentges & Sons, Inc. informing the city of a possible bid protest to Ryan Companies, U.S., Inc. bid. . Letter from Don Sterna, WSB Project Engineer, on the specifications on the Ryan Companies, U.S., Inc. bid. . Letters from Robert Huber, attorney for S.M. Hengtes & Sons, Inc., on claims to reject Ryan Companies bid. . Letters from David Lillehug, attorney for Ryan Companies U.S., Inc., on the claims to reject Ryan Companies bid by S.M. Hentges & Sons, Inc. From the City Attorney's memo, his conclusion that there is does not appear to be any legal reason that the low bidder should be disqualified from being awarded the contract. The attached resolution does reflect the bid being awarded to Ryan Companies U.S., Inc. The City Attorney will be available at the Council meeting to comment on his memo. The engineer's estimate for this project is $3.75 million and the low bid received is considerably under this estimate, and the City would be assessing this project 100% to Ryan Companies, as agreed upon in the master agreement over a 20-year period. In addition to awarding this contract to the low bidder, Ryan Companies US, Inc., City staff will need to authorize consultant engineering services to provide surveying, inspection and administration services necessary for this project. Attached to this memo is an extension agreement with WSB & Associations, Inc. to perform the necessary services. If the Council awards the contract, staff is also requesting a contingency amount equal to 5% of the contract to cover minor change orders or quantity adjustments that may occur on this project. ALTERNATIVES: 1. Accept the low bid of Ryan Companies US, Inc. and adopt Resolution No. 6013. 2. Reject the low bidder and award to another bidder. 3. Reject all bids and rebid. 4. Authorize the appropriate City officials to execute an extension agreement with WSB & Associates, Inc. to perform consultant services on this project. 5. Approve 5% contingency amount on this project for use by the City Engineer in authorizing change orders or quantity adjustments on this project. 6. Table for additional information. RECOMMENDATION: Staff would recommend Alternative No.1, No.4 and No.5, in order for this project to commence. ACTION REQUESTED: 1. Offer Resolution No. 6013, A Resolution Accepting Bids on Dean Lakes Improvements, Project No. 2004-4, and move its adoption. 2. Authorize the appropriate City officials to execute an extension agreement with WSB & Associates, Inc. to provide consultant services on this project. 3. Authorize 5% contingency amount for use by the City Engineer in authorizing change orders or quantity adjustments on this project. ~7i Bruce Lon Public W s Director BUpmp ENGR/2003PROJECTS/DEANLAKES/WORD/MEM6013 RESOLUTION NO. 6013 A Resolution Accepting Bids On Dean Lakes Improvements Project No. 2004-4 WHEREAS, pursuant to an advertisement for bids for improvements to Dean Lake Boulevard, Dean Lake Trail, Coneflower Lane and utility extensions within the proposed plat of Dean Lakes including street construction, concrete curb & gutter, concrete median, grading, aggregate base, bituminous paving, turn lanes, storm sewer, sanitary sewer, watermain, street lighting, concrete sidewalk, bitwninous trail and any appurtenant work, Project No. 2004-4, bids were received, opened and tabulated according to law, and the following bids were received complying with the advertisement: Bidder Amount Ryan Companies U.S., Inc. $2,656,709.70 S.M. Hentges & Sons, Inc. $2,924,482.37 Ryan Contracting, Inc. $3,385,422.85 Park Construction, Inc. $3,486,087.77 N.W. Asphalt, me. $3,535,581.30 S.R. Weidema , Inc. $3,566,939.65 Barbarossa & Sons, Inc. $3,575,455.80 Latour Construction, Inc. $3,767,693.12 C.S. McCrossan Construction Inc. $3,888,744.78 Three Rivers Construction, Inc. $4,249,475.49 Northdale Construction, Inc. $4,341,053.67 AND WHEREAS, it appears that Ryan Companies U.S., Inc. is the lowest responsible bidder for the installation ofthe Dean Lakes Improvements, Project No. 2004-4. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SHAKOPEE, MINNESOTA: 1. The appropriate City officials are hereby authorized and directed to enter into a contract with Ryan Companies, U.S., me. in the name of the City of Shako pee for the Dean Lakes Improvements, Project No. 2004-4, according to the plans and specifications therefore approved by the City Council and on file in the office of the City Clerk. 2. The City Clerk is hereby authorized and directed to return forthwith to all bidders the deposits made with their bids, except that the deposits of the successful bidder and the next lowest bidder shall be retained until a contract has been signed. Adopted in session of the City Council of the City of Shako pee, Milmesota, held this day of , 2004. Mayor of the City of Shako pee ATTEST: City Clerk ENGRl2003PROJECTS/DEANLAKES/WORD/RES60 13 I . WSB & Associates, Inc. February 17, 2004 Mr. Bruce Loney, P.E. Public Works Director/City Engineer City of Shakopee 129 Holmes Street South Shakopee, MN 55379-1376 Re: Estimate of Cost to Provide Construction Engineering Services Dean Lakes Development City Project No. 2004-4 Dear Mr. Loney: According to our Agreement for Professional Services within the City of Shakopee and Section I-C-2 (Major Projects), this extension agreement is written to provide you with an estimate of cost for engineering services for the above-referenced project. We are proposing to complete the work as detailed on the attached scope of services, Exhibit A. The attached work plan describes the approach. and tasks proposed to be completed by WSB & Associates, Inc. (WSB). It should be noted that the work plan includes construction management services (as needed), construction observation, and construction surveying services for that portion of the project that will be part of the 429 Process. We are proposing to complete this work on a cost-reimbursable basis as necessary in accordance with our current fee schedule. As you are aware, construction work is somewhat variable depending on the Contractor and actual field conditions. We have estimated a fee for providing construction engineering services in the range of $204,000 to $289,000. We are available to begin work plan as soon as authorized by the City, and we anticipate to complete the project according to the following schedule, assuming that we receive the notice to proceed. We would propose to complete the project according to a tentative schedule noted as follows: 4150 Olson A ward of construction contract.......... ............... ............................................ February 17, 2004 Begin construction ..... ............ ........................ ........ ............................................. March 1, 2004 Memorial Highway Substantial completion.......... ......................... ................................. ............. September 1, 2004 Suite 300 Final construction completion ...................................... ............................. .......... June 30, 2005 Minneapolis Contract finalization and closeout........................................................................ July 31, 2005 Minnesota 55422 763.541-4800 F;\ WPWIN\Proposal\Shakopee\02) 604-bl.doc 763.541.1700 FAX Minneapolis. St. Cloud. Equal Opportunity Employer '.' '''':''''",,:.",,:'',''',",''~':<:i';':=,,~:l:'''' . . ,';T!~W"('.,,,...,-;.t,., ;'"\:"."f'''''e'l"',,.ry<,>.;'::<WI",..>':t~I"',m'',;'' r"'.' ,', .",'Tl1'n""':~.'"",':1"":1':l.".rJ"<'r~'''''''~':''''.:''n.-:1",~;:"",..,.:"'''r:!''J::o-''"r<.;.....~.;.:''''i::''.;l'<':':r.! ,."'!;'.''''I'':':!::i::-':V'.',,..n~.''''''.:,''"l';'':!''!Y'~.':".~'''~":''.,. :i",W......I..."':"....-:.':o:.,,.,"",.J ". ",~'~''''.''';1 ~:t~.<'~:',~,.,.i.y.~'..)"'.r:':'1:~~.._..._'~.r:m~.:r.'.:=.'~.7 ~I',~,:.~, I' ;:i"':!'""":~-: "'.1 ,'."'';', ,,,.,~...,.".~::;.:':'~':I.:.::,.,..,"':., .-.' .- Exhibit A DEAN LAKES DEVELOPMENT City Project No. 2004.4 City of Shakopee, MN WORK PLAN . Construction Administration This task includes construction management and coordination of all work tasks, establishment and monitoring of budgets, and correspondence with the City of Shakopee, Scott County, S.P.D.C., and MnlDOT on a periodic basis. The construction manager will provide technical direction on all aspects of the project, attend weekly meetings, and provide meeting minutes. WSB & Associates, Inc. (WSB) will prepare monthly work completed to date and summary of quantities for City preparation of monthly payment vouchers. The project manager will serve a primary role in the many construction considerations. . Construction Observation WSB will provide full-time construction observation as requested by the City. The observer or observers will keep daily records of all activities of the contractor, prepare reports, tabulate quantities, and pay estimates, perform field measurements for pay items and record drawings, observe all materials and testing, coordinate survey activities needed, and communicate the schedules with all utility companies. At the completion of the project, a punch list will be prepared, final inspection, and close-out procedures will be followed. The observer will be required to attend weekly construction meetings. It is understood that S.P.D.C. will provide the onsite observation of the water main system and document all water main construction activity and quantities. If there is the need for more than one observer, additional ones will be assigned as needed or the City could provide this additional person. WSB will not change or add personnel to the project team without prior City approval. . Construction Surveying WSB will provide a survey crew to do all construction staking for this project, including construction limits, grading alignment and grades for all utility and street facilities and appurtenances, signage locations, and any other survey needs for this project. . Material Testing Material testing will be performed by the City and/or the City's designated testing firm. WSB will be responsible for coordinating the testing; however, the cost of the material testing shall be the City's responsibility. . Record Drawings This task includes surveying the field constructed utilities, and other constructed improvements to record the field constructed locations and elevations of the new facilities. Once the field survey is complete, WSB will revise the construction plans to reflect the field constructed conditions and provide record drawing documents for future use by the City. We have included CADD time in our work plan to complete the record drawings to a digital format. Page I F:\IVPIVIMPROPOSAl.\sHAKOPEElEXHA DEAN LAKES. DOC -. .... - - ......... ~.TOi~....,"i"";-:'~,;r,-,.:.-~':'~..~ ~.".'.' ". '.' .~..'..,.r;.,.':'.,.nl":"i'11'r' '. .. -.......-. ... , ,.... . .. '~:.. ...... ,t ';--i7"",,"1'l,":"''''.';T,'! ".....,.}.,-r-..T),r;.-,.,~., '."r';-....:-.~W,7."':..'; '...,.;n;'"'t1l.;,l".-;-'l."""\Tr:7:.,.;.,-:....:,..,"h"r:..-:7:".',:).7~"t'";n1"t...t....r.,:-:'.".-,' ;-:"'l',~;;....., r :'''l'''1'1':':\-;'-'';,''''.:T;T:-:-;'t''I::,-:.-,=.,,:".,:':;':'';'t';'l;;~''',~'~';-n:':;',:'>;'," r,....."."i,..~n7.;:-;-n.;~....,.:-.~.~',.','1.,7,-.~.:'-;':"f.":".:r.;""'-"';T';:"i1'T:-v,~: ...-.-;.....- Mr. Bruce Loney, P.E. Shakopee, MN February 17, 2004 Page 2 The City of Shakopee agrees to reimburse WSB & Associates, Inc. for these services in accordance with Section N of the Agreement for Professional Services. If this agreement meets with your approval, please sign below and return one copy to our office. Sincerely, WSB & Associates, Inc. ~ ,/ .,...... ~. f): A;' Donald W. Sterna, P .E. City Administrator Vice President Enclosure City Clerk Mayor Date F:\WPWINIPROPOSAVSHAKOPEE\021604-BL.DOC "" ~ . 650 Quaker Avenue ~ P.O. Box 69 · Jordan, MN 55352 Phone: 952.492.5700 · Fax: 952.492.5705 February 17 l 2004 City. of Shakopee :Mr. Bruce Loney 129 South Holmes Street Shakopee, MN $5379 Re: Deans Lakes Site Development Shakopee,MN Dear l\1:r. Loney, This letter is to inform you that we will be filing a formal protest against this morning's public bid for the Dean's Lake Site Development. Specifications for this project on Page 1 Division 2 add the MNDOT 2000 edition for standard specifications. for Highway Construction as part of the Governing Spec1fications. In the MNDOT specifications 1302 Page 25 Paragraph 3 in award of contracts clearly calls out that a bidder has not, either directly or indirectly entered into any agreements, participated in any collusion, or otherwise taken any action in restraint of free competitive bidding in connection with the contract. Ryan Companies has entered into an agreement with the City of Shako pee to build this project by financing it thmugh public money under a 429 project. This bid by Ryan Companies must be disquali.fied. If you have any questions please feel free to give me a call. Sincerely, ~2F Gary Zajac Senior Project Manager ~",;]T~ ~ ~A\~~ " ~ ,. '-'" r. (;0/(;0 39l;;1d S391N3H WS 90L9(;61;o(;96 01;o:e;(; 1;o00(;/9t/(;0 FEB-19-2004 14:35 WSB & ASSOCIATES 7635411700 P.02/06 kt.:...::....::. . ~ 1'.;~ . ". : !.;WSB & Associates. Inc:. February 19,2004 Mr. Bruce Loney, P .E. Public Works Director r City of Shakopee . . tf~ , 129 South Holmes Street '- Shakopee, MN 55379 " '-r Re: Dean Lakes Development Improvement Project .- Project Manual Clarification City of Shakopee Project No. 2004-4 .'.~'. WSB Project No. 1566-01 .11, Dear Mr. Loney: I am writing to clarify the project manual's reference to the governing specifications for the above-referenced project. I would like to direct your attention to Division 1 of the project :~~?~~~;!~~~,~ manual; under Item 01095 - Reference Specifications, first paragraph, third sentence which states ~~ as follows: "'?~},lf;;. '. .' " "In no case shall any part of Division 1 (Supplementary General Requirements and Covenants), of the Mn/DOT Specifications apply to this contract unless specifically stated elsewhere in these Specifications. " ." ..' The purpose of this statement is to call attention tbat Division 1 of Mn/DOT's Specifications for , Highway Construction, 2000 Edition, do not apply on this project. The purpose of this statement is to disregard MnIDOT's Division 1, General Specifications and Supplement in the individual City and/or County that is performing the work with their General Conditions and Covenants that are required by each municipality. The Specifications for Division I in the Dean Lakes " Development Street and Utility Construction and Appurtenant Work project were developed to address the individual needs for this specific project for each item listed in Division 1 of this Specification. No reference to MnlDOT 1801 was made nor did Division 1 of the project manual place a limit on the amount of work that could be sublet by the prime contractor. At no time was :: there any intent that Division I ofMn/DOT's Specifications would govern this contract. "{~': Therefore, 1801 - Subletting of Contract for MnlDOT Specifications, Edition 2000, does not apply to this contract. If you have any further questions or comments regarding the intent of the Specifications that 1 have mentioned above, please contact me at 763-287-7189. ~. . Sincerely, ~:'.. '. ::.:' . ."t.~. Ii ~JZ\(' . . ~ "o~,,, w;P;P- f"::li It t"''''i!~. Donald W. Sterna, P.E. . 't"inne~~t.:. Project Engineer ii';~in~~'f~' It -~/'l ,'/2:.' cc: Bret Weiss, WSB & Associates,Inc. '" 55422. -, ~ ,~, . I., 7~.~~,~r F\WPWIN\1566-o1\021904 bl.doc ~~: 763~~~~!f.FI\X Minneapolis' St. Cloud, Equal Opportunity Employer MEMORANDUM TO: Bruce Loney, Public Works Director FROM: Jim Thomson, City Attorney f DATE: February 20, 2004 RE: Bid Protest regarding City Project No. 2004-4 Following the bid opening on February 17, 2004 for the Dean Lakes Street and Utility Construction Project (City Project No. 2004-4), you called me to indicate that the second low bidder, S.M. Hentges, mc., intended to file a bid protest to challenge the award of the contract to the low bidder, Ryan Companies. Since that time, I reviewed the letters submitted by S.M. Hentges and their attorney and the letters submitted by the attorney for Ryan Companies. I also reviewed the February 19, 2004 letter to you from Don Sterna, the City's consulting engineer on the project, and the Project Manual dated January 20,2004, which was provided to all bidders. I have also reviewed the MnDOT standard specifications (2000 Edition). The basic complaint that the attorney for S.M. Hentges raises is that Section 1801 of the MnDOT specifications requires the successful bidder be able to perform at least 50% of the contract itself and that section 1302 of the MnDOT specifications does not allow a bidder to enter into any other agreement with respect to the project. S.M. Hentges contends: (1) that Ryan will be subcontracting all of the work and therefore does not meet the requirement in Section 1801; and (2) that Ryan has entered into another agreement with respect to the project. For the reasons set forth in Mr. Sterna's letter, neither Section 1801 or 1302 applies to this contract. Section 01095 of the Supplementary General Requirements, which is included as part of the specifications in the Project Manual, states that Division 1 of the MnDOT specifications do not apply to the contract "unless specifically stated elsewhere in these specifications." The City specifications for the project do not incorporate Sections 1302 and 1801, which are both in Division 1 of the MnDOT specifications. Therefore, they do not apply to this bid award. I would note that even if Section 1302 did apply, it would not disqualify the low bidder. Section 1302 does not state that the successful bidder cannot have entered into any agreement in connection with the project. Rather, it states that the low bidder must certify that it has not entered into any agreement or otherwise taken any action "in restraint of free competitive bidding in connection with the contract." The agreements that Ryan has entered into with the City pertain to matters other than the construction of the public improvements and therefore are not related to restraining free competitive bidding on the contract. m addition, Ryan has signed the affidavit of non-collusion that was required as part of the contract specifications. Hentges also contends that Ryan is not a responsible bidder because it is a developer, not a contractor. Ryan Companies disputes that point. Regardless of who is correct on that issue, the JJT-244260vl 1 SH155-140 City's consultant engineer has concluded that Ryan is qualified to perform the work required under the contract. I am not aware of any information that would point to the contrary. Hentges also contends that Ryan did not have any incentive to bid the job competitively knowing that the construction costs would be assessed against the property and that Ryan would ultimately be obligated to pay those assessments. Although it is true that Ryan will be paying the assessments (a portion of which will be reimbursed through the tax abatement process), I am not aware of any reason why this would disqualify Ryan from submitting a bid through a competitive bidding process. The purpose of the public bidding process is to award contracts to the lowest bidder so that the public interest is protected. The fact that one bidder might have a different incentive than another bidder to submit a lower bid does not make the bid anti-competitive. I am not aware of any court decision that supports the contention being made by Hentges. Finally, Hentges contends that none of the subcontractors who submitted sub-bids to Ryan bid the job as general contractors, even though some of them regularly bid jobs as general contractors. Hentges contends that this raises the possibility of collusion, but submits no information that would support that allegation. Simply put, such an allegation can be made in any case where a company can serve as either a general contractor or a subcontractor. Hentges' attorney cites three appellate court decisions for the proposition that the "possibility of fraud" is all that is necessary to require a bid rejection. That principle, although correct, cannot be taken out of context. The principle only applies in situations where there have been irregularities in the bidding process. In the appellate court decisions cited by Hentges' attorney, the governmental entity had either allowed the low bidder to changes its bid after the bids had been opened or had accepted a bid that was not responsive to the specifications. None of those situations involved any actual fraud, but the courts concluded that actual fraud was not a necessary element in disqualifying the apparent low bidder when a substantial mistake had been made in the bidding process. In this case, the City's consulting engineer has concluded that: (1) the low bidder is responsible; (2) the low bidder is capable of performing the work; and (3) the low bid is responsive to the specifications. There is no evidence to support that any error has been made in the bidding process, let alone a substantial one. In summary, I cannot find any legal reason why the low bidder in this case should be disqualified from being awarded the contract. JJT-24426Ov1 2 SH155-140 Feb-20-04 14:53 From-Kennedy & Graven +6123379310 T-461 P.OO2l014 F-200 E-17-2004 13:55 FROM:L~UNH~U ~IKCeI ~~~ -- ---- - , ,/" LEONARD, STREET AND DEI NARD rno',Css10NAI. A~soeJAT10N February 17,2004 Robert J. Huber 612-335-1714 B(Jb.HubcT@leoDaTd.~om. BY FAX ONLY (952-233..3801) JUdy Cox, City Clerk City of Shakopee 129 Holmes St. Shakopce, MN 55379 Re: Dean. Lakes Site Development Dear Ms. Cox: I am writing on behalf of S. M. Hentges & Sons, Inc., to protest the bid of Ryan Companies on the Dean Lakes Site Development. Ryan is not a ''i'esponsible bidder" under the City's Instructions to Bidders and its bid must be rejected. In addition, awarding the bid to Ryan. would violate MNlDOT specifications, wJ'1ich were incorporated by re.n.>rence in lhe SupplementaIy Special Provisions (Division 2). The City of Shakopee's standard Instructions to Bidders, which apply to the Dean Lakes Sitc Development, contains the following requirement: 5. Capital aDd EQuipment Bidders must present satisfactory evidence that they are f3.lIliliar with the class of work specified. and that they have the necc.ssClI)' men, capital~ toolS, macbinery and other equipment necessary to conduct the WOTk and complete: the improvement within the time specified in the Sllecial Provisions in a good and wotkmanlike manner and to the satisfaction of the City Engineer and the City Council of the C"ltyofShakopee. Minnesota.. Ryan Companies is not a utility or grading subcontTacto.r, it does .Dot own the equipment necessary to compiete the wotk. and it docs not have personnel trained to complete the work in the '4workmanlike)) maoner denlanded by the instruction. It will have to subcontract the entire job lo others. 'TIle definition ofresponsive/respollSiblc bid contained in the bid specifications also contemplates that the bidder have the resources, technical knowledge and facilities adequate for the job. Ryan callnot, therefore, be considerecl a responsible bidder under the City's instnlCtions to bidders and its bid must be rejected. t)O Sou"Jf :Fll"UI STlUlIl't SU\T'6 ,.~oo MUll.'lI.AI'nU$, MINNUO'l"A SS4.(j~ Tu. IOT:J,-;ns-rsClO .r-A~ 6T2'33S-rIlS7 2.4501!l6vt J.AW on''ECJ>5 I'''' MUfNIlAt'Ot.SS., SAJNT PAIn, MANIl.ATO, S/LJ.~-r Cl.OUD ^Nt) 'W.\t:HINGtON, D.C, ~d""I..r ....--w...._ ,..,,"'. Feb-20-04 14:54 From-Kennedy & Graven +6123379310 T-461 P.OO3/014 F-200 S-17-2el04 13:56 FROM:LEONARD STREET bJ.C:: ~;:) .I.C1.... . - ", . " Judy COX, City Clerk February 17,2004 Page 2 MNfDOT "Standard SpeciiicatiOllS for Highway ConstrUction" were incorporated by rofE:rence and made a binding part of the bid SpeciflCations on the Dean Lalces Site Development in the Supplemental)' Special provisions, Division 2, "Governing Spccificanon.'" Conseql1ently, MN/DOT specification 1302. "Award ofCoD.trnct" governs this bid. Specificatioo 1302 requires, as a. condition precedent to the approval of a contract. a swom statement that the contractor: has not, either directly or indirectly, entered into my agreement, participated in any collusion, or otherwise taken any action in restrain offrcc competitive bidding in connection with the contrd.ct. Here, Ryan has entered into a development agreement with the City ofShakopee and is simultaneously bidding the job, knowing that its costs will simply he assessed by the City. This relationship violates the JMNJDOT specification. gives rise to the possibility of collusion with its subcontractors and creates a disincentive l.a competitive bidding. The City anticipates awarding the contract at tonight's council meeting. The proper coUrse is to reject Ryan's bid and award the contract to Hentges, the lowest resDonsivelwsponsible bidder. If the City awards the contract to Ryan, Hentges may sue to void the award as illegal. Sillcerely. . STREET AND DEINARD cc: Bruce Loney-Public Works Director (by fd.x) Jim Thomson-Kl:I1nedy & Graven (by fax) Gary Zajac (by fa,,) 24S0'196vl Feb-20-04 14:55 From-Kennedy & Graven +6123379310 T-461 P,004/014 F-200 FROM LEONKRD STREET 'AND DEINAliU lW~UJ 'i..lij' Uti 1,:,~/l:Jl.l';~)'f/NU. ltZolUlfUbl1'i r 'L LEONARD, STREET AND DEINARD I"1l.01'P.SS10NAL ASSOC1^Tl0/ll Febraary 18, 2004 Robert 1. Huber 612-~35-1714 Bob.Hubex@1eonarctcom BY FAX ONLY James Thomson KENNEDY & GRAVEN 470 Pillsbury Center 200 South Sixth Street Minneapolis, MN 55402 Re: DeaIALak~s,SiU! D~el(}p""e1lt. . Dear Mr. Thomson: Now that the award of this contract was removed. from 1he agenda. for last night's City Council meeting.l have had more time to articulate the bases for Hentges' protest of the bid submitted by Ryan Companies. Again, the City ofShakopee must rejea Ryan's bid because (1) RY4n is not a responsible bidder, and (2) its bid is anti-competitive. 1. Ryan is Not a "ResDonsible Bidder." Ryan)s bid must be rejected because Ryan is not a '~esponsib1e bidder" undertbe City's Instructions to Bidders. In addition, awarding the bid to Ryan would violate MN/DOT specifications. which were incmporated by:reference in the SupplementaIy Special Provisions (Division 2). Section 5 of the City of Shako pee' s standard Jnsb:uctions to Bidders, which apply to the Dean Lakes Site Development. requires that: Bidders must present satisfactory evidence that they are familiar with the class of work specifioo, and that they have the necessary men, capital, tools, machinery and other equipment necessaIyto conduct the work and complete the improvement within the time specified in the Special Provisions in a good and workmanlike manner and to the satisfaction of the City Engineer and the City Council oithe City ofShakopee, Minnesota. MnlDOT Specification 1801, inco1poratcd into the contract by ~faence, requires the general. contractor to perform 'bot less than SO percent oftbe tolal original Con1ract cost.'" - ISO SOUTH P..TH STun SLlITB 2300 MINN&^I'OLIS. MIN!IlH$OTA $5402 TEL 612-335-1500 fAX ~)2.33S-16S7 24S0769vl ..AW OPPlcaS IN M.NNP.Al'Ot.IS. 'AUIT '^L!L, M......",^,,.o. ~All"T CLOUP AND I!IAlilllNt<TQ"'. p.c. Feb-ZO-04 14:55 From-Kennedy & Graven +61Z3379310 T-461 P.005/014 F-ZOO FROM LEONARD STREET AND DEI NARD (WED) 2.18' U4 1,:,~/:n. l':~),l!l~U. qL01U'tVOO't r J Judy Cox, City eleIk February 18,2004' Page 2 Ryan Companies is a developer, not a conlrdCtor, does not own the equipment. necessary to complete the work; and does not have personnel trained to complete the work in the "workmanlike" manner demanded by the instruction. Ryan will bave to subcontract the entire job, violating the 50% rule. Ryan cannot, therefore, is not a responsible bidder. Its bid m.ust be rejected. z. Rvan's Bid is A.Ilti-ComDetitiyc. Rather than paying to build the sewers and other public improvements itself and financing them through a commercial lender, Ryan petitioned for the City to build the improvements as a 429 project and assess Ryan the cost oftbe improvements over a period of twenty years. This allows Ryan to finance the conslrUCtion at the favorable interest rates allowed for 429 projects. All would be well if that was the end of the story and Ryan did not also bid the job. Though not a contractor, R.yan bid the project as a general contractor and pI.anned to do 100% of the work with subcontractors. Ryan could not bid this project without violating .MnIDOT Specifications 1302, which W'dS incotporated by reference into the bidding documents in the Supplementary Special Provisions. and requires that the contrac1iOr: . . . has not, either directly or indirectly, entered into my agreement, participated in any collusion, or othe1'wisc taken any action in restraint of fiee competitive bidding in connection with. the conn-act. Ryan is obviously gaming the system. Knowing that the costs of construction will simply be assessed back. against the property, Ryan did not have any incentive to bid the job competitively. Ryan, for example, bid OIJly $o.OllC.Y for blaCk din and SO.olle.Y. for selecl granular borrow. None of the subcontractors who submitted sub-bids to Ryan bid the job as a general even though some of them regularly bid sUnilar jobs as generals. This raises the possibility of collusion. The possibility of fraud, not actual fraud, is all that is necessary to require bid rejection. T e1ephche Assoas'.IIt~. v. St. Louis Coun~ Bd., 364 N.W.2d 378, 382 (Minn. 1985) (~'The courts are oblig'.1ted to scropulously guard the competitive bidding process to protect agaisnt the possibility of. . . fraud'1; Coller \1. City of St. Paul, 26 N.W.2d 835, 842 (Minn.. 1947) (noting that, although there was no evidence offtaud or other wrongdoing, it was unneccssaryto make such a showing); Lovering-Johnson, Inc. '11. City of Prior Lake, 558 N.W.2d 499, 503 (Minn. CL App. 1997); . If the City awards the contract to Ryan, sanctioning its illegal biddingpra.ctices~ the City will have fewer, higher bids on future pt'ojects. Z4S0'769v\ Feb-20-04 14:55 From-Kennedy & Graven +6123379310 T-461 P.006/014 F-200 FROM LEONARD STREET AND DEINARD (WED) 2.18' 04 1,:'~/~T. 1~:~'f/NU.l!~blU4Ubtl4 r 4 Judy Cox, City Clerk February 18, 2004 Page 3 The City should reject R:y.m."sbid and award the cantract to Hentges, the lo""est responsive responsible bidder. Enclosed are copies ofMnlDOT Specifications and 1302 and 180l. Sincerely, }j-EO " t ~ .' "~ . Robert ~er RJHJjm cc: Judy Co~ City Clerk (by fax) Bruce Loney-Public Works Director (by fax) Gary Zajac (by fax) - ...- 24501601/1 l\1IN~ESOT A lH:I'..\RTMENT OF TR~NS)JOltT'\TI()N ST. PAliL, ;\UNSESO'I ,\ STANDARD SPECIFICA TIONS FOR CONSTRUCTION 2000 EDITION f or !\11~ !i\' (;\\: ~'lllllutLl Sah::iOlilcl:. SI:liC nl i\lllln':",lIJ. l)cj'l:trlm.:nll'l Tr,l"Sfl\.rl;lli~ll. .;9::5 Je,hn Irc:lollJ llhd.. St. i':\ul. :\.1:-': 55 I 5';;. I 8Q9 Thj,' pri.:c \~ S~\I.IIU I'lu:- SU\I.c S~h::I 'l"u., plu.." J,~uH.llin~ r"~\U~C rill:' Pl"!:": jnc:Jlld~ future $l1ppl\'!m.lnl~ l.I) thi:; .:~itiltll, Ch::~':'. dr:!,j l'r mnTl~'~ Ot~.:r \'.,r L."tc: t:.':.lCI :smollnt. lTll1t.!c i'il,::hh: \~) II;.: (.\'ml"\>~J(IO"r ,.r' 'fr:u\.;jlOrl:1l1on. mw;' il~!:UI"p;lCl~ rlt~. N.!,..r h'!;'l'm:lli,lll nl.\) 1--.: Qb~;ain\ll.l b::- \'l:mr.s:, '1.51) 296-22\ (,, ?;1:tl~'~J ill ('.111:1.:.1,1 ';:;<'. I.lU; :._Y',.' l:l": 11:~t~ ~I' 111..",~: .'Io'oU.:... ,)., "",UI",:'.:1h,n \.~ 1\;,\ I ';'11 H..."U",,'lJh'Jlt~ lI11el t '''\l'fl.lllr~ ,::" . 1~.,1~'.'" l,i\,HI~,~~" l:',~.,&.!, .:q',:I.!li .:,.:!1....'.r.:I~ ,.:.... t I.. .!l1 'I'" 1'1l.111l'1! \.:!I:.! il,r ,l'l:: 1:1. ".J~ ii', i .~1I1 ,J.I '\.:iJtI'1 Ih ~I.,,' -:..1"-'; ." :'I~lill~"i.' r~"\""" h .(,\' ..' I.... .i:.:... n I'll ,I'.' ,....;",.\.11 .11 III h' :1' ~'J ,,': II.', I, "",.,lclr:llllln Ur l'r1llhlllill.. \1l~1 ;11" ,";. .......' . ~\.,'rc"::,I.\nJ 1.::t\I.lhl:~ \\,!: h: ~1'1II!<;1I.:\1\>" ;hl: ",I.i~ ..: II:: ....rl.l:~: :-I,n1;;,;lli,'1l .\1' l1w I'hlJ\I":I' ,.1' il,,' .':!U:.hl[\.,l nn \lUUH:II~':.' .111.: ,:1', h,J fln..e, If :!I\: 1\~h:~,:,..11.l1 bldlJ..:r h,.l, ~l.lb\l1itwJ ~rH:'::: "ll Ill";': 1:!IlJl \.n.; u\IO:llIf:N. :ht: L')I~p:u'II",'n\ rc...:r\'t.:" the ~i\!ht tu Public 01)cnin~.,f 1)Tl"I\.,~~19 UcU:illllnc: \\ h'L.h .11\:rn"l.c! will b~ .1\:I:~r1\cd In t,;<t.." ,Ii ~ ul~;;r.:p;'ulC: ,!I !'': :1'':lw,ll~nJ r,'a:.! j',:hlidi ill Ihe !1iI1': \1;1\II'la,,-..: be".' ':1:" .1 !If'" t':.! pile..: afl.j 1111: 1!l(\I.lI\l-h",. Ih.~ \11111 bid p,..'I' ..h;lIi \,h,;.!......Ill.:I\t l',!r Illo- tl,Jd,,'N rlid/" :l\l\hllri/cl! flO\'::'11 :.,;:;r.....:J p;II'\II..~ ;trl: Ill' \t1l.1 h' b.: rr\;:-.:nt Pt~rll...:tI1\ !h.ll. .!:~ nt'l ;1I:CillIlPHnlC\! I,: i'I :ll1tl:lt\1cwr~ I'r<'r,,::.;\1 euarl.llny \1.11\ MI :,~ .;onxid\lr;:.t. An)' b,.:lc!l:r l'I\9~' be I~uirt~t 1\\ funlish ]213 cvidr:fl':C \It' \:":T1f1L:t~nI:Y in pcrt'orming the propU$<lJ wnrk. ~:: l"",\'id~\J {lixqll2lincation of Bidders for Ii\ 120 I. 1l1cn!?hl i~ rcsr.:flted t'll'l:'jeCl<lny or an l'ropa:\t!.bl.llI waiVe! J.:fc'l:' ~ lol1.!~\ ing rc:a..;oIlS m3~ be (.un.sidcrl:d:sul'ridcnl t:uW:\; and te:'bnicalit1e.;. or 10 ad\'crli~c: for OC\Ao' Pr",po$Olls. ifin \h.: jl1d~mQn\ 1\'" 1'1' .1 hlddc:r and lh~ rcjC:l.lcjc,n or iB Prol,,"~ls: ~rthe Contt:1ctinB l\utn(J1it~' its b.:st Lntc~lil win be prllmotcdlherc:b". II!'IC I'ral'u!.:ll rUT the Sill\\C work from 21n iJldi~liJulll. l'nrall..~n undr.:t the s,:unc or dill'cr.::nL narJlC 1302 If CllllllSll.m ';U1Wn;t. biJdcr.:. P:lrticil':ml~;n .:ol1u:;ion ~\ward or Contract : fill !'l:1:.)gnttiun as \liLldcrs on future 'I.'I....,r!,. \.Intil tl1e~ f\l1ll::.ta\l:,1 ~ r.::.ponsihh: biddc:t~. llte award vI' Contract. il" It bi; aWGl'~d. WIll be miluc \"ilbin 3ll - C.ndar Da)'s ..reG' the openins oCProposals to lh~ lo\V~t respon!tibk bidder wbo complies witball presc:ribccl n:quircmcnt!i. l'Iu: s\K.-ce,;sful ~ bidder will be E1O\ificd b~ lcnc:r. mlliled to the address shl.,wn tm the Propaslllt 1hat the bid bas been as:cepttd subject to C".:cution un.:! approy~\ of the Conl.l'W;:t ~ rt..'quircd hy l",w. ~,t. As. a condililut precedent to llppra,;QI ,;f:l. C\)l\U~t. a rOn':i~ or nonn:sidenl corootntion to \\I\om u Contrnct ia ~wurd.:d sllllll furnish PfQoflbat it ha.~ m~ alll~gltl r~quirenu::n\ll for In\l\sac\il\g busillt::~:C; ill "'e SUW: of Minndula. k> 1l cooc1ition prec:edl:nt. to approll'~ of ;l Conlral::t. a SV''Clm ~ sbe11 be filed with tbe Depal\mr.:iU s"'th\g ~l th~ p.:r$on$. timt., ~oD., (It eorpol1llic.n fa whom tile- Co~uaCl i~ awarded ha:) QOC". d1her directly or indim.1.I)'. c:ntcI(;d intO lInY ~~c"t. ~ in any coJlw:iol\. or o1herwi~ lakC1\ anyacti.,n in rcst....clinl gfftte competitive bidding in COM~C:li~n whh the Conll'3Ct. ThiS S'WOtIl ~t shall be: in !he torm "r iIl1 afCida\'"i1 ~ec.utt:d b\', or ml Iac:biIr of; !me:( sworn co by 111e successful \llc1der \Idbrt a perSon whn is ~ by lbc QW$ of this StltlC to ~mi/\I~tcr ,'aths. 1'1\.: rorms for 24 25 1,)62 I , '1'1" . I '''I ", -- 1\ r hI" l/l<;' 't.; .'...... . IhlllaffiUil~ il \\ ill be furnished Illlb.:- su:.:c:-,I'uJ t:J1i.J:'f ,J: ,Ilh:'~ ~haJJbt. ea patine 1\ I.' -. , AU mcmb:rS U T' l.IT'r (,t" l:;.tdl e:":p";./lh'lI ~r.. properl)' CAct\ltc:d aJ1d r~'llrncd WilhllllilC !"':II"I: r'N"'~ll:d ' n:tlU'}' Of rc:a.... .. I _'" aid die see .' (j~11nl \ ;:1lt'Jr;:~. "I~B.! '\" ,. d bone!. In tbe cas\" II ConQ*181l h fmr. ;-('1,rC:;lmlcJ. . I)' co :;:1C .. . , . 1303 sbaJJ apP .. t dlsapprovCiI \,l'lhc: t "Ill~.l~'t .m.. r, CaQcellatiolllJf .-\w~rd NoIi~o(apl'rO\alo h' In th\'s '1i'I.:r IIw l.ll',nl - fib' ddcr "'I: 111 . . .' . nlc Oepartnlenl r~en..C$ rh" rlghr UI cNu:c1 Ih.: i'\\llrJj or any Ji"al !he success U d I m"d H,lhe: CI\~.lra,'lil1~ ., ulf1"nt~ ~yC):ec!-Jtcd~nb r~~!l OM $h~11l ;\r.:. 1.\1:'l1::l~! !"'~llll c.:nrntacl at an" time helore Ihe C:XC'l:Il1iun M~o.ld ('\In~r<lL1 h~' alll'a.-n~ i;ha11 be consuJert . ,n 1,i:1., tI.:.:n full:. ~\"''':;JI.'.: ;:;'.. 'I, .....;lhQu. 4n;!-' J~ilil~' :A~a.inSl. r"l; C;omrn.:.ing ....ulh\l,..:r:. until U'If: Contr.\C\ ltlrm lClllulrcd b~ law 1304 130i Retlll1ll of Proposal GUllranl)' ... , ., F~ifure to t:"'1:("I~ (,'ontnu:' , All Propusal guar.mlj~S, e~ptthosl!: ut\hc t\,~; l(1wl::>1 hidd~tS, wIll .. tTnflh.~.;uc,::,',,<;lilll-idd';-f, ".t\l./\ LI'': \II be n:nuncd or released irnmediatelyfollnwing Ih4! .'lpCl1ill,g and Failure ~ng\~f:.u:t fllrnish ,In a(;~'C'p~~nll: h,I!l.I. ,:1: C.r;~lf checkins 01' PropoSal; The J)rap0$31 gtlt.r3fllic:s lIf ~~IC 1\'0 IO\,CS'l toc..'tCCU1e.lIu:'..o . I 'oscd r~~~dll!n\C(l ~p!,n'\ ul ,,! Hl:.: ~ " bid~ u,'iJl ~ relaiJ\~ until the COl:uacl Ila'\ hcL'1l ~~~\Jlc!d :aad otberrequlf.m1;l\t$lll l' for ~l1l1CCIl:lIiol1 oflh.: lI".\.II~1 ;:n,J I approv~ lIS required bYlaw. al....hich lirne ah.sy will be N I\:a.~cd. ~Cpl bC'cor\sldercOJusl cau.,c " ' .' . I \"'/1 (I' Ill: Ii 1,.;"..11" U:!!'l ...\11.,..1 ' ' in me l:8Se Of'forfeilure as pro,.idcd for in 1){)7 Cpon 11."Io;a,,,. l:el'liliccf Ell P po$'ll!U,\V;l'll}". . I .' I r c ~ d" lh~n be 1l111,jC \11 Ill. IIC\', "\'~' checks will be rctumed to tbe biddc;. bUI sur':l) !:Iuml:: \I.'ilI be ~:::.~; d~~::rt.: ~~iy bc J'c<1d\~rti~I.'\j ,II (.!hl." II I,:: i,..rh,' drsrroyel1. URle.~ rh~ir fetum ;s ~l'cci(jca1l> rCLjUClllcd O..-par1lll<:.lll n13~ de\;l d~' un..; Rcq ~ireble&'lt of Con tract BOQd At !.he Eim~ aftbe c:~cl:utlon ofrbc: COntraCI. Ulc 5uc~CNifUI bidd~r I1h:s.11 furnisl1 a paymcnl bond equal 10 'he C:onlr:iC't OUlll>unt and 4 perfcmnatu:o;: borld c:quaJ '0 anc Contract amounL u'jlh 1"~ 3g~rO;:8-1IIc liability oflhc: bond(s) ~Q'LIal to twice tht Tull d3UOIIIIl c)t'lhc CI1ntrlilC:1 Th~ tOntl of the: bondS and the surctic~ stlall be aL:ccrtabJ~ to th:: Ccntrila:ing Authority. 1306 ExcclIlio n aDd Apprtwal or CUIl1:r.U:t The COOtmct shall ~ signed by ,he: SIlcc~ss/'ul bidder::.nd n:tllmed. to~e\her with 1hc: Conlnlo':l bond. within 10 Ul&}'~ alter the: lumls ha,,1.: ~Wl rnt&ilcd ro rhcbidcler. Ifrerurn oflhc tlCcCUtl.~i! Jorm~ ",ithl!} lh~ specified lime i!: imrossji~lc dye to Iht: ab.~cm;\: 0 r ~11C n:- lll(,:"c of Ihe: l'equlrl'Xf signer.>.. un ex,ellsi(ln of tim~ m~' b~ Jtrunl'~d n.\ lh~ Dc:panmc:nl pro\',idec:l ~ljllf;(c:tol')' evldcnl:c is furnili/J~d lh:!! lh.: illrm:s. ,I w ill be eJi:~\llcd. i I I ! I ! I , .,-:: 26 Feb-20-04 14:56 From-Kennedy & Graven FROM LEONARD STREET AND DEINA D J801 ProseclttiOD .and Pt4l2ms J802 .;-. QuaJif'lClIliolls of Workers 1801 ~ers shall have sufficient skill :md C.~flc SQbletllnc of COBtnu:t ~1hc wort assi!JlCd to them. 'Upon request h". 5ba1J submiI sarisfadory qualirn:anon t T1t~ ConQ1ll:fDr maIl DOt sublet. scU. UaDsfer. assign, or othcrw' ~ in spec:iaJ wori: requiring prufcssior. disposr; or~ Co~ or CaaCl'llCtS or any portion theRlO( or of ri . ~ by tbe~,.or hy aSl)' ~bc:01 ride, or ~ dlen:in. Wilbout wriIl.en c:onse:nl of the EDgi:accr. .assiped wack in a proper 81ld skUlful n case CIOD.'!eOl is ~c:a.1bI: Coatmcmr wm be pcnniw:d to sublc:C, or disorderJ}'. shaJJ be removed from tbe portion &&en:o~ blll1bc Coo.D:ac&.ot'$ orgBJll2ation shall perform ow "~or lIpoA wriucn order of the l::n~ncer 8IJlOt&I1C:iIlg touollesstban SO ~toftbe rota! origilla1 Coouact ' ,~ on any portion of the work wichol IlaIIS dSJDRflocJ ill die COI:ltrJa as .~t) ittIDs" ma)' ' . :SbOGld the CoDtnlClOr faillo remove such ~ Md tDe COSI of any specially ik:lr)S pc:tfo~ .Sllitablc and sufficient pclSOnnel for the prop. ~ will be dcductz:d from the tolllJ ~st ~Corc CODlpIlIing .. tbe EDgioeer may suspend the: work wlliJ tJ: aJJIOUDr of wurk n::quilt:d to be performed by (he Coaltal:tor's . wiSh the orders. OIpnb:alian. 011 Conncts wiIh Disadvanl88ed Businc:ss .Enterprise (DElE) . 1803 T~ GroUJI Business (rGB) c:stabli.~ go.al$, or I:lotb, ProsecutiOD ufWor" CoDQ'al:tm'sOJglUlizarionsball perform Ulodcasnounting coccn l~ ' 40 pc:n:aI1 of1tx lOCal arigiaaJ Comrac:t aJS1.. Specially ilans WJU . · J!ROGRESS SCffEDVLE d~ &om the ID1lII Cordna cost befOtC COIl'lpU11ng Ihe amount . " i. 5 days ptiDt to !:he ConD'aCt starting d:u~ wade to be perfoI'Il1Cd by l!lc Coatmctor. 't\Daish!he Etaginea:r with a progn:ss sebc:dulc fOI No SIIbc:mundor sZaU :fiIrtbr:t sublet 'OIly ponion of Ihe ..'OIk ' ~J bI: 10 Ibe form ora bat cban Of criri1:a1 p: thc&g7-bas ~to.uaw lbat subcoanaclor r.o~ . !t.jiroposcd SI3rting dales and completiun time the: wriUl:D ~ of bath the Couhl:tDr and the Ell3inccr. ".' ., . U opemz.ions. ThJs schedule shall be SUch CO~ i! given, tile F'usc tier subc:ulltl'aC&Or may sublet D poni . mcomplc:1ion dab:, CO'VCMS all pt'Q~~.c of tIu: wo.rt. not 10 ~ $0 pm:z:nr of lhe worle oriimasJ)" . '; A ~~lliQ!- f&em is one that mu.~ SccoDd tier' 5Ubccft~rs will not be pcrmincd 10 sublet an)' po '. . i or c:ompld:cly to lJe:tmil continuation (I~ of the work. ' . may be. expn::tSCd ~ worlr.inS .;Jap aft The Co~ :NIl wJlnit r;q~ IU subIa. ponioaS of :. oI-as t3l~dar eWes. CoIlb'llClIO the Enginea'. OIl a form pr'O"ided by \be Deparwmr, 5I=hcdulcshalJ tl:t1C:C1 ContracL requin:1 leasl. 10 days iD ad'\lanceoCdlcdarc 00 whid) the subcxm1l'3aOr .of ~onniDg dill work. &IJ1d shall be based to 5I8rt work. The: CoahClDr shall fumisb one: sigDed copy of '.." bourschc;dulo. wiIh sufficient mmerials. ' subamlraCl ~nem to dle EugiDCel' l1pOfl n:qUfSt. The subcan .' 1iImistled to suarantee completion ol'lhe: Pr. prices may be omiacd on 'die Engineer's coPy offbc ~lS. .. time. Wnueo consem t.o su~ assilDl, or otIlCl'Wise disposcof r.:;..o1tCSS scbeduJe wilJ be use.d 10 idcnlil)' 1 ponlon or die Conb2tt SISalI DOl UIIdeI' aD)' cin:uawtDQClQl rdiGw: : aDd as a cba::k 011 me m1e of pr08J'e$Il, COnlrBClOr of lliabilities IInd obUpions UDdc;r aile ConznJa aDd .. . is 1baI pan of II pro~ootrollins ill:ln or j All b1lIlSlIaiOn:li of Ihe ~ will be wid! the . Wore <<he next pIOgrcss.conlll3lJing il~m . Subc:ontnlClol'$ awl be 1"(Xl1V';,.~ ollly in me capac:il,l' ofealJ' ;'For each major progR:SS-C.Ontrolling item, ~h.: or wOrUr5ud sha.U be subjectlO die same requU=sentS a.~ to cob .~ iuteoded ~ ofprocfuclion during fhe j'l:'riQrJ " and tOrnpctcslCZl. ' 1fmg opcnation. ... ., . pI'Q~ lSChcdules shall be ptcpared and a:nr:qucsr.ed by die Enginc:c:r in UlC c:...~nt atlju:St , . 'ifDri&Jgtbc; progrc:ss ofll1c work.. Approval ofl~ ~r. , .. ,... II~ tit . .~'.:.. 18 t...... . 79 Feb~20~04 14:57 From~Kennedy & Graven reO-Ill-V" IU."" r/Wlf" +6123379310 T-461 P,OI1/014 - F~200 ..','" . ., "R" Fredril,son February 19.2004 ':.1 'f:,:;:: ,::::;i:,~;'aY:~o~. 'f..J:i.'" VIA TELEFAX TO 612-337-9310 James J. '!homson, Jr. I Esq. Kennedy & Graven Chartered Suite 470 200 South Sixth Str~t Minneapolis. ~N 55402 Re: Dean Lakes Sili' Development. City of Sbakopee Project NO. 2004-4 Dear Mr. Thomson: We repr~scnt Ryan CClmpi\Ili~s US; Inc. (nRyan~'), the low bidder tll'\ lhe ~1b~,\'~-c:a'Ptioned construction project. ~yan anlicipalt.-u lh:\\ the City COUIl(' 11 would award tl,c contra.c\ to R)'ln at lhe Tuesday coul'\cillnee\inl~. [n~\~ad. you inlbrmc:d us h\tc Tuesday that the City has postponed the com:racl award hI MondaYl Febru.lry 23.2004, tit 6 p.rn. As the low, responsive, ,md n:sponsibl~ bidJcr. l{yan hopes and c"p~'cts that the conn-act will be awarded at thal meeting. You kindly furnished us with a copy ur\h~ February 17IcuerofRobc:r1. J. Huber, writing as attorney for S.M. 1 [entge::; & Sons. h) ( 'ily ClerIc Judy Cox. Hentges' twO arguments that it should be awaru~d the contract. I'h)lwithstanding its higher hid. ha\'1.: no merit whatsoevt."T'. Hemges firsl asserts l.h:1l Ry.ID is not .1 'l.:llponsibIe bidder. I ient,gcs c:mnut be unaWare th'lt Ryan is one.: ollh~ leading conSlfLh,.'\h.m contractOl'S unJ managcls in the Midwest. As Ryan has do,umemed, Ryan has S'llCI."~.~~C\.ll1y completed nl1merou::; projects sirnilano this one. Ryan clearly has the r~sources, l~dlnlcal knowledge. and facililies 1.0 complete 'lhis project as blu. Second, Hentges c:bil11~ that Ryan's hiJ i:'\ non.respon:si\"\.'. I (()\\cver, RY:ln's bid is responsive in all r~pec\.S. As requesh:J by the City, RYi.\J1 has submitted a sworn non~ collusion statement on thc foml pro\,kh::d hythe City. Ry.\1'1 Llally denies thal Ryan, by 'the dcveloplnem agrcl.:m~nl, by agrl:~lll~IIlS wi1.h subc"'rm~\C1.ors. or otherwi~e. has taken any aClion rll restr~(in free competiti\'1.: nl~h.litl~. Hentges was r~~ to bid, chose to bid, and submiued n bid app~d..\bl>, highet' \h:'11I Ryan's. For tht: t.'iry 1.0 r.:j~ct Ryt1l1S low, responsive \'lid and .\ccept the higher hid, ~ Hentges urge:>. would be profoundly anti. competitive. ",,"n-Y' 8< Ad.i,.,,, i ..'0. PIII'".'Y Cen'" ,,,sin 612.4&;> ./1I() 0 :to 0 So utll SllCth SueeL fin fl1~11~i:.70!f MI"n..~r.OIIt;. Mlnmu:otil www.tredllilw.C!l'n : 55.10:: H2" I 1)[.' ,,:t; IIIhnn,'uP\llh. 1.,nClUI' .:l.i:rh.l ," ~..~..JCh:u ell'Y,. W~r''JIw M.. u,.~l ~u.ll"l>> V".tU ",'\11 r J. Feb-20-04 14:57 From-Kennedy & Graven rs:s;J- I e- ".. IU-"'", +6123379310 , 1\"'116 T-461 P.012/014 . ". - F-200 - James J. Thomson, Jr.. Esq. February 19,2004 Page 2 Prompt awt\rd and eXl.:'cution ()fLhis Cllmrm:l is importatll10 Ryan's ~chcdule ~nd to the development orthis impo1't::il.11\ project.. This afternoon. we will submit a response 10 Mr. Huber's lener \.0 you dated F~bLuary 1 S. In the meantime!, if)'OLl wish t~) discuss this further., please contact me at 612-492-7321. Finally,repl'es~nlative!\ of Ryan will be present on Monday e"ening to respoo,l \I.l any questions or L:once:rns. Sincerely, /2/,. ' David L. Lill"~ DircctDi1l1: 6]2.492.7321 Email: dlil1chnl1~@t1.t:dlaw.com DLL:rz cc: Kent Carlson Gel1~"ieve MeJ ihon David C. S\:llcr~rel1. b;q. Charles F. Dic5sncr, Esq. t.293os67\1 2 Feb-20-04 14:58 From-Kennedy & Graven +6123379310 T-461 P.013/014 F-200 February 19,2004 VIA TELEFAX TO 612-337-9310 James J. Thomson, Jr., Esq. Kennedy & Graven Chanered Suite 470 200 South Sixth Street Minneapolis, MN 55402 Re: Dean Lakes Site Development, City of Shakopee Project No. 2004-4 . Dear Mr. Thomson: We represent Ryan Companies US, Inc. C'Ryan"), the low bidder on the above-captioned constrUction project. This is in response to the February 18leuer of Roben Huber, attorney for S.M. Hentges & Sons ("Hentges"), which elaborates on Hentges' previous arguments (made by Mr. Huber's letter of February 17) that Ryan is not a responsible, responsive bidder. I responded to those arguments in my letter of earlier today. On the issue of responsibility, Hentges again contends that the MNIDOT specifications apply. Hentges then points to MNIDOT specification 1801, which requires that more than 50% of the work must be self-perfonned. Specification 180 I is found in Division I of the MNfDOT specifications. In making this argument, Hentges ignores this project's own Supplementary General Requirement 01095 (found at page 5 of Division 1 of the Supplementary General Requirements) that reads as follows: "In no case shall any part of Division 1 (Supplementary General Requirements and Covenants) of the Mn/DOT Specifications apply to this contract unless specifically stated elsewhere in these specifications." As specification 1801 is within Division 1 of the MNfDOT Specifications, it does not apply unless specifically called out elsewhere. As it is not called out, it does not apply to this project. To the contrary. the City's own Instructions to Bidders indicate that there is no limitation on work to be performed through subcontractors. Under paragraph 15a., a contractOr is a responsible bidder if it has "Financial resources, technical qualifications. experience, organization and facilities to carry out the project, or a demonstrated ability to obtain these. . . ." The reference to "demonstrated ability to obtain these" indicates that a contractor may perform work through subcontractors. Of course, the successful bidder's work, whether through subcontractors or self-perfonned, must meet the City's plans and specifications. This Ryan will do. Feb-20-04 14:58 From-Kennedy & Graven +6123379310 . T-461 P.014/014 F-200 James J. Thomson, Jr., Esq. February 19.2004 Page 2 Parenthetically, Hentges' assertion that "Ryan Companies is a developer, not a contractor," is incorrect. Ryan is both a property developer and a contractor. Its low bid on this project was submitted as a responsible contractor. Second; Hentges argues that Ryan's bid is "anti-competitive." On its face, this contention is preposterous; obviously, Ryan's low bid was more competitive than Hentges. Hentges' charge that Ryan "is obviously gaming the system" is false. Hentges has provided no credible or logical evidence of any fraud or collusion. First, Hentges notes that Ryan's numbers for black dirt and select granular borrow are low. Yes, they are low, and properly so. Ryan has access to material from adjacent property. There is nothing wrong with that; indeed, these numbers prove Ryan's competitiveness. Second. noting that none of Ryan's subcontractors bid the job as a general contractor, Hentges speculates that there may have been collusion. Hentges has absolutely no evidence to support such an outrageous claim. Ryan denies that it colluded with anyone. including its own subcontractors. to prevent bids. Simply put, Hentges' allegations must be seen for what they are: a higher-priced contractor's grasping complaints supported by neither the facts nor the law. If Hentges had any proof of its inflammatory allegations. the proof would have been stated. There is none, and there will be none. As previously noted. prompt award and execution of this contract is important to Ryan's schedule and to the development of this project. I and other representatives of Ryan will be present on Monday evening to make sure that any new allegations by Hentges do not go unanswered. Sincerely, - David L. Lillehaug Direct Dial: 612.492.7321 Email: dlillehaug@fredlaw.com DLL:rz cc: Kent Carlson Genevieve McJilton David C. Sellergren. Esq. Charles F. Diessner, Esq. #2931192\1