News From Terre Haute, Indiana

October 12, 2012

Objection delays awarding of contract

New wastewater treatment project getting legal review

Howard Greninger
The Tribune-Star

TERRE HAUTE — A taxpayer objection alleges bid documents violate Indiana’s public bidding statutes, causing the Terre Haute Board of Sanitary Commissioners on Thursday to delay awarding a construction contract on a more than $115 million wastewater treatment project.

The board delayed awarding a contract until 10 a.m. Tuesday for a legal review from the board’s attorney, Terry Modesitt.

Dustin Richards, a resident of the 2900 block of South Sixth Street, read a prepared statement that as a city resident and taxpayer he objects to Electrical Automation Services (EAS) incorporating a 15-percent penalty for not purchasing certain materials through EAS under “Section 13600 scope of work” for the project.

Richards, associated with Thieneman-Walbridge, a joint venture from Westfield (Ind.) which submitted the apparent second lowest project bid at $115.95 million, recited a state code that “requires that a public board shall avoid specifications which might unduly limit competition.”

Richards stated the effect of the 15-percent penalty “eliminated any competition by forcing bidders to either purchase all of the materials through EAS or be subject to a15-percent penalty.”

“This corrupted the bid process by eliminating competition in violation of Indiana’s public bidding statutes,” Richards read from a prepared statement.

The measure forced “all bidders to incorporate EAS’s quote into its bid,” Richards said.

Ken Thieneman, president/owner of Thieneman Construction Inc., said EAS requires electricians to use Siemens for supplies on the project, such as electrical equipment for sewer lift stations. If materials are purchased elsewhere, the 15 percent penalty amounts to $1.5 million.

“The regional and national rep[resentative] for Siemens denied pricing to six electricians and they said they were told do not bid that. We were not allowed to use Square D or Culter Hammer (makers of circuit breakers and telemecanique replacements),” Thieneman told the sanitary commission.

“There are local electricians here, who will tell you if you call them, that they were not given a fair shot at this bid,” Thieneman said.

“In 25 years in this industry, never have I had a vendor put a penalty in writing,” Thieneman said. “Sole sourcing is one thing, putting a penalty of $1.5 million, I question whether contractors put it in [their bids], didn’t put it in or where confused,” he said.

“I don’t know whether our competition put the penalty in or not. The difference between first and third [bidders on the project] is more than the penalty,” he said. “Somebody might have said no, I know the penalty is not legal and I am not going to put it in. They might have won [the bid contract] because of that, we don’t know,” Thieneman said.

Plocher Construction Co. of Highland, Ill., is the apparent low bidder at $115.43 million. PC Construction of South Burlington, Vt., was the third lowest bidder at $116.45 million.

The objection brought discussion from the sanitary board.

“Do we have a fair bid, regardless of the 15 percent penalty,” City Engineer Chuck Ennis asked board attorney Terry Modesitt.

Modesitt said he received an email Wednesday after 5 p.m. stating there would be an objection but Modesitt said he did not have specifics on problems with electricians.

Guido Borgnini, project manager for HTNB, a consulting engineering firm on the project, said the city sought to use EAS as the “sole source systems integrator very early in the project.” EAS already provides instrumentation controls and services for the first phase of the city’s wastewater treatment project. The idea is to ensure that all computerized sewer control systems “properly communicate with each other,” Borgnini said.

Board President Jim Winning said the city is on a timeline schedule to meet financing. The board on Tuesday must adopt a declaratory resolution for a bond issuance and introduce a bond rate resolution. The Terre Haute City Council in November must then adopt a sewer rate increase to cover the bond issue.

The bond is to go on sale Nov. 28 with a bond closing on Dec. 13.

“The last thing we want to do is delay this, but I suggest we give Terry a few days to research this just to make sure we are not in violation of any kind of laws or any practices,” Winning said.

Reporter Howard Greninger can be reached at 812-231-4204 or howard.greninger@tribstar.com