By Tom Morphet
Southeast Roadbuilders of Haines has defaulted on a $12 million bid to
widen and repave Lutak Road from the ferry terminal to town, delaying the project the
state Department of Transportation planned to begin this summer.
The two-year job was expected to provide a direct boost to the Haines
economy. Southeast Roadbuilders uses local operators and it projected a payroll of more
than $5 million for the work.
In mid-May, the local firm bid $11.5 million on the job the state
estimated would cost $12.7 million, apparently topping bids from two other firms, Secon of
Juneau ($15.4 million) and Kiewit Building Group, Inc. of Anchorage ($18.3 million).
According to Mal Menzies, director of DOT in Southeast, company
president Roger Schnabel immediately was worried about the bid, asking if he could review
his numbers and talking with state construction engineers.
When the company was scheduled to post a performance bond for the job,
Schnabel instead told the state he had made an administrative error in the bid and would
like to withdraw it.
State engineers are now reviewing Schnabel’s claim that the
mistake was an administrative error (such as a missed decimal point) and not an error in
judgment (such as an estimation of being able to do the job faster or better than a
competitor), Menzies said.
"Roger realizes the seriousness of this and he has submitted
preliminary evidence of an administrative error. We said those documents weren’t
complete and asked for more information," Menzies said.
The difference between the two kinds of mistakes is significant. The
state can forgive an administrative error but if it determines the mistake was one in
judgment, Schnabel would have to forfeit a $550,000 bond to withdraw from the work,
possibly damaging his ability to secure future bonding from insurers.
"This is a big decision for us," said Menzies.
""It’s all about him proving to us he did make an administrative
error… This has happened in the region in the past, but not with numbers this
big."
Schnabel said this week the error stemmed from a traffic control
problem, based on interpretation of contract documents.
DOT’s decision on the question must be approved by an attorney
general. Menzies said he expected it by Friday. Even if it’s favorable to Schnabel,
Menzies said he expects the job would go to the second-lowest bidder.
"We don’t want to rebid the project. The project has been
lingering for the community of Haines for too long. We want to go forward as fast as we
can," Menzies said.
But the job might be rebid if Schnabel were to protest awarding the job
to the second-highest bidder on grounds that there was a mistake in the state’s plans
or engineering for the job. "Roger hasn’t said that yet, but it’s still a
strong possibility," Menzies said.
Schnabel told the CVN this week he was not at this time planning on
filing such a protest.
Re-bidding would delay the two-year job as much as a year, and
it’s not clear whether Schnabel would be eligible to submit a bid, Menzies said.
"We’ve asked the attorney general on a ruling for that. Common sense tells you
you can, but it would be really weird."
The bids by Southeast Roadbuilders and Secon were in the typical range
for such a job, Menzies said. Schnabel was 10 percent below the state engineer’s
estimate for the work and Secon was 15 percent above. "Roger was not that far off.
Usually you have to be 20 to 25 percent above or below the engineer’s estimate to
raise the engineer’s eyebrow."
Menzies said Southeast Roadbuilders has done more difficult jobs than
improving the four-mile stretch between the Haines ferry terminal and town, including
construction of three miles of remote road for a power station along Taku Inlet that came
off "with flying colors."
"His ability is among the best in Southeast… I think the
biggest surprise was Roger’s."
Secon and Kiewit are owned by international firms. Southeast
Roadbuilders outbid Kiewit for a section of the Haines Highway widening project between 34
Mile and 42 Mile in 2000. The local firm completed a $17 million project on Prince of
Wales Island last year.
