Board: Argument for expertise over price doesn’t hold water
by Nikki Wiley
September 22, 2013 12:25 AM | 2545 views | 1 1 comments | 11 11 recommendations | email to a friend | print
MARIETTA — Cobb Chairman Tim Lee failed this week to convince his colleagues on a regional water authority that a North Carolina company should receive a contract despite asking for $1.6 million more than the lowest bid.

The Cobb County-Marietta Water Authority sells wholesale water to local governments like Cobb County and the city of Marietta, and its rates heavily influence how municipalities set prices for residential customers.

This summer, the authority asked for proposals from companies interested in constructing two backup generators at the authority’s James E. Quarles Water Treatment Plant in southeast Cobb and another at the authority’s intake plant that draws water from the Chattahoochee River.

But authority board members, who range from Smyrna Mayor Max Bacon to Marietta City Councilman Grif Chalfant, were taken aback when four companies sent proposals that differed in cost by $1.6 million.

The highest proposal came from Apex, N.C.-based Crowder Construction Co. at $9.4 million. The lowest was from Marietta-based Heavy Constructors at $7.8 million.

Authority staff recommended the board choose Crowder Construction because of its expertise and said its high cost was still lower than the $11.5 budget the project was given.

The lowest offer isn’t always the best offer, Lee, who serves on the authority board, argued at the Monday meeting.

Lee said that on a project of this scale experience matters and you get what you pay for.

“That’s what you’re getting, the know-how and the knowledge,” Lee said.

Lee made a recommendation at the Monday meeting to award Crowder Construction the project at $9.4 million but the vote failed 4-3, with Lee, Paulding County Chairman David Austin and member Dan Buyers voting in favor of the $9.4 million proposal.

The board then unanimously decided to toss out the proposals and place the project back out for bids.

Crowder Construction was given a $10.6 million contract by the Cobb Board of Commissioners in 2012 to build a station handling wastewater off South Atlanta Drive in Smyrna.

The proposals have come before the board at least two other times. Crowder Construction was given the contract on July 15, but when board members had second thoughts about the gap in prices, a special meeting was called and the offer was rescinded.

Board members differ in opinions

con, mayor of Smyrna and chairman of the authority, had concerns from the beginning.

“I’ll be the first one to tell you that the lowest bid is not always the best bid, but these were all well-qualified companies,” Bacon said.

Bacon questioned why the cost differed by such a wide range if each company would have delivered a similar product.

“In this case, it’s two backup generators that you’re buying and then you hook them up,” Bacon said.

Bacon says he doesn’t think the project is as complicated as some of his colleagues say.

“I’m all about maintaining our system,” Bacon said. “I’m all about having the best water we can have, but I’m also very conscious about the cost.”

Charlie Crowder, who is not related to the owners of Crowder Construction, understands Lee’s point of view but says the cost caused a red flag in his mind.

“It created enough questions and uncertainty,” Crowder said.

He gives credit to the companies and says they were all thoughtful in their proposals, but the cost was not “in the best interest of the customer.”

“I think (customers) would say, ‘Why didn’t you double check this?’” Crowder said.

Crowder Construction may have been the most qualified company, but board member James Scott Jr. wasn’t comfortable with the price difference.

“If you look at the credentials and the past history of the bidders, Crowder (Construction) had pretty much an impeccable record,” Scott Jr. said, adding the low bidder, Heavy Constructors, has a history of claims.

Chalfant thinks price should have been weighed more heavily before staff made its recommendation.

“When there’s that much discrepancy between the top bid and the bottom bid, I think we’ve got to ensure that we really take a look at those numbers very closely,” Chalfant said.

Generators needed, but not urgent

The generators that would be funded under the project aren’t needed immediately, said Glenn Page, general manager of the authority.

The system is designed so that if one water treatment plant loses power, it will shift to the other plant.

“As long as we have water in our tanks, as long as we have storage, the system will stay completely operational for a certain amount of time,” Page said.

It’s how long they’ll be operational that is in question. A hot summer day would mean more demand and put more pressure on the system.

“If we had a catastrophic storm and say the power grid goes down in the area, there is no means to operate our plants without generating power,” Page said.

The Quarles plant has never had a backup generator.

Reason for price difference unknown

Page says there’s no way to know why the prices differed so dramatically, but he points to the type of proposal requested.

Traditionally, municipalities ask companies to bid on a project. Under a bid, cost is considered an important criteria and businesses are given the design plans they must adhere to.

The generator project was considered a “design-build” where a company designs the project and then constructs it. Price doesn’t have to be a factor in choosing a company from a design-build proposal. The authority did consider price, though, weighing it the heaviest among all of the criteria.

Still, price wasn’t the only factor considered. On a grading scale, a maximum of 30 points were allowed based on price. The remaining 70 came from other elements like the experience of the team, technical approach and the business’ legal status.

“There is no way for me to determine why there was a $1.6 million differential,” Page said. “I will say that the best proposal, meaning the one who had spent more time on their proposal and communicated that through their proposal … they had the highest price.”

Ultimately, the board voted to toss out all proposals and revisit the project with a traditional bid process which means designing a full set of plans and asking companies to bid on how much they think it would cost to complete those plans.

Page estimates it will cost about $500,000 to bid the project because the water authority will have to design the project before asking companies to bid. The design cost was included in the proposals the board shot down.

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BY THE NUMBERS

Cost proposals for backup generators at treatment plant

• Crowder Construction Company, Apex, N.C.: $9.4M

• Excel Electrical Technologies, Kennesaw: $8.9M

• Cleveland Electric Company, Atlanta: $8.5M

• Heavy Constructors, Marietta: $7.8M

Comments
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BigSpender
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September 22, 2013
Why is it that Lee always wants to spend money? So far he has raised our taxes, our water rates, and cut services. He things the water transfer is A-OK. He supported the TSPLOST and now wants BRT on US 41. Is there any spending project out there he doesn't support? Now he wants to spend top dollar for generators. No wonder our water rates keep going up.

At least Max Bacon stood up for the people.
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