Company loses out on $2 million Price construction contract over clerical error

By Matt Ward

A clerical error cost a local construction contractor a $2 million contract to build Price City’s new community baseball complex.
Price City Council members on Wednesday decided that despite the unfortunate error, they had no choice but to go with a higher bid because the project bid package stipulated what would happen if such an error occurred during the process.
Nelco Contractors Inc. and BODEC Electric each bid on the community baseball complex, a project funded by a grant and low interest loan from the Community Impact Board as well as funding from the Carbon School District. The companies had other competition for the project, with Nelco eventually being named the lowest bidder after bids were opened on Aug. 15.
Nelco won with a bid of $2,211,355.50 for the project.
It turned out, however, that BODEC was actually the lowest bidder by $3,108.
In BODEC’s bid package, the company committed a clerical error when it listed the unit price of 4-foot chain link fencing at $1,980 per linear foot instead of $19.80 per foot. At this incorrect price, $2.257 million was mistakenly added to the overall project cost instead of the correct amount of $22,572.
The unit price error, however, was not reflected in the bottom-line bid amount. It only came to light when city officials double checked all the bid packages’ math by tabulating the unit prices for the materials each company estimated using for the project.
“Discrepancies between the multiplication of units of work and unit prices will be resolved in the favor of unit prices,” said Russell Seeley, Price City engineer. “So when there is a math error that happens, which was the case here, we have to go by what the unit price is. Unfortunately in this case, that unit price was $1,920 (sic) instead of $19.20 (sic). So by that provision in the instruction to bidders that changes their total price to over $2 million for that item, which is clearly an error, but that puts them out of the running as being the low bidder.”
Tony Martines, a BODEC employee and currently a candidate for county commissioner, attempted to plead his company’s case during the council meeting. He handed out copies of the spread sheet his company’s estimators put together, complete with 96 line items of materials and prices needed for the project.
“There are actually 96 line items and as you are putting all this information together, you try to do this as quick as possible, but there are a lot of items there. You can see off to the right side, the total quantity for ours on number 27, our estimators put in $190 and that should have actually been $1.90,” he said. “The other number on line 45, the same thing. Our guys were in a little bit of a hurry, it should have been $19.80 instead of $1,980. So basically what I am saying is we did make some errors, however, I would appreciate an opportunity for this board to look at those numbers and get clarification.”
He added that despite the errors in unit prices, the company’s total bid was not affected.
“The total does not change. It’s just how we listed those individual items in a bit of a rush. I want you to consider that as well,” he said.
Seeley said contractors often have errors in their bids, and most amount to a few dollars or at most hundreds of dollars.
“Two million dollar errors do not happen frequently…usually it’s just a few dollars here and there and it’s really not that big of a deal. Because as Mr. Martines noted earlier, this is a big list of numbers. There are a lot of numbers to keep track of. It’s tedious. So it’s easy to make a mistake.”
City Councilman Rick Davis said he was at a loss for what to do.
“This is very unfortunate,” he said. “Do we want to go back out? Everybody knows the numbers now, everybody gets to bid again…I’ve never seen this before.”
Seeley urged council members to keep Nelco’s bid as the winning bid despite BODEC’s pleas.
He said council members could continue to study the issue before making a decision, but that doing so even until the next council meeting could delay the project.
“If we delay another two weeks until the next city council meeting, then yes it could delay completion of one of the fields. Right now we are scheduled to at least have one field completed with sod this fall so that it’s playable in the spring time. We’re already crunched on that deadline,” Seeley said.
He also suggested that council members, since they were already set to award Nelco the bid, publicizing as much in the council’s consent agenda, consider that the city might face litigation should the council reverse its decision.
He said if the council holds to the rules as set forth in the bid package, then they would be better able to defend against litigation from BODEC should that company decide to sue.
Martines later told the Sun Advocate that he doesn’t think BODEC would contemplate any litigation over the matter.
Still, Martines was vocal about BODEC deserving the deal.
“Again we are the low bid. We want this job, it’s a fantastic job. We have 40 years of experience with the team who would be doing this,” he told the council.
In related council action from Wednesday, the city approved issuance of a $1,563,000 sales tax revenue bond.
The bond, along with a $1,562,000 CIB grant, will finance construction of the baseball complex.
The bond goes toward paying back a 30-year, 1-percent interest loan made by the CIB in the amount of $1.563 million earlier this year.
The school district is not eligible to apply for grants and loans from the CIB, so it partnered with the city, and the city applied for the CIB funds on its behalf, said Lisa Richens, the city’s finance director. She added that the school district would be making the debt payment from money the district has already set aside for new facilities. However, the city will carry the debt on its books through the partnership.
The CIB approved the loan and grant June 14.