After a poor response to bid requests kept a major sewer project from starting this summer, the Crescent City Council was poised to offer a contract to locally based Hemmingsen Contracting.

But a bid protest filed by Mercer-Fraser, which was the second-lowest of the three bids the city received for the Second Street sewer replacement project, prompted City Manager Eugene Palazzo to proclaim that company the lowest legitimate bidder, according to City Attorney Bob Black.

The Council on Monday approved the contract with the Eureka-based company. Even though the vote was unanimous, Councilwoman Kelly Schellong and Mayor Pro Tem Rick Holley expressed their disappointment at being unable to award the contract to Hemmingsen.

The project is being funded through a $1.28 million Community Development Block Grant. It includes five components starting with a base project to replace the mainline laterals from B to F streets. The other four components include an addition to the base bid, which would extend the sewer line to G Street, and three alternatives, which would ultimately extend the line to K Street.

Additional funding would be needed to complete the base bid addition and three alternatives, according to Public Works Director Eric Wier.

With a base bid of about $1.25 million, Hemmingsen was the lowest bidder, according to the city's staff report. Mercer-Fraser's base bid was $1.29 million. The third bidder was MoCon Corporation of Indio, Calif., with a base bid of $1.9 million.

Mercer-Fraser's protest bid contended that Hemmingsen Contracting did not comply with the city's instructions to provide prices for the base project and the four additional components, according to Associate City Attorney Martha Rice. Hemmingsen only provided prices for the base bid and the base bid addition.

Mercer-Fraser's bid protest also stated that the bidders' bond submitted by Hemmingsen was not valid because the bond was filled out in the amount of $1.28 million and the insurance company's representative only had authority to sign for a bond of up to $200,000, according to Rice.

Rice speculated that Hemmingsen Contracting representatives were aware of the amount of CDBG funding the city had for the project and were under the impression that a contract for the other project components wouldn't be awarded.

"It comes down to what is a speculative question about fairness and advantage," Rice said, referring to Mercer-Fraser's argument. "When both companies are trying to fill out the bid forms and are trying to be as accurate as possible, well, how fair is it to us when we have to spend all this extra time and effort on A, B and C when this other company focuses all their time and effort on just the base bid and the base bid addition?"

Schellong said that while she would have liked to fight Mercer-Fraser's bid protest and award the contract to a local company, doing so would put the city at risk of a lawsuit and would put the project in jeopardy. She pointed out that the city must spend 50 percent of its CDBG funding before it can apply for the next cycle of funds in March.

"If we were to go ahead and hold our hand hard in supporting our decision to offer the contract to Hemmingsen, we could be putting our project in jeopardy and also applying for CDBG funds," she said. "(CDBG funds) not only helps the city, but also helps things like the food bank and CASA and the domestic violence program."

Holley noted that the bid process is an objective method of managing contracts, but said it was disappointing not to be able to award a contract to a local firm.

The project was scheduled to start in July, but after receiving just two bids for $1.16 million and $2 million, the Council rejected the lowest bid due because it contained a clerical error and put the project out to bid again.

Construction is now expected to start in early October, according to the staff report. The city added a winter stop clause that would allow the contractor to suspend work if there has been 10 inches of rain recorded at the wastewater treatment plant since the first day of work on the project.

The contractor could also suspend work if there has been at least 10 consecutive work days of rain or other inclement weather conditions for at least half of each day.

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