A Few Words from your commissioner...
As of late, I noticed a little buzz on my questioning of the bidding process for minor and major construction projects in the city. It's very simple everyone, the City of Edinburg is paying some extremely high prices, prices well above the industry and even other local municipalities. Sometimes 3 and 4 times the going rate. Now some might say that "That's just the way it is". I strongly disagree, the cost of bonding (which I researched thoroughly) does not justify what we have been paying. I implore you to do your own research, look into the matter. At the last council meeting I questioned prices on "how much we paid for a 8" SDR 26 PVC sewer line put in at Lift station 17. The city paid $75 dollars a linear foot (installed) at an 8' to 10' foot depth for 770 linear feet, and $99 dollars a linear foot (installed) at same depth for a 18" SDR 26 PVC sewer line but this one was for 2600 linear feet. My price as a private developer is respectively somewhere between 13 and 35 ($13 a foot for the 8" and $35 for the 18") That equates on those two line items alone to $214,140.00 dollars more than what a private developer pays. Why the marked difference, well if you notice on the council meetings, the issue of bonding continually comes into question. On average, a contractor pays 5% of the project cost to bond. That would mean that a $443K project, would bond out at about 22K. (443K being what the engineer originally estimated the project to cost).
As of late, I noticed a little buzz on my questioning of the bidding process for minor and major construction projects in the city. It's very simple everyone, the City of Edinburg is paying some extremely high prices, prices well above the industry and even other local municipalities. Sometimes 3 and 4 times the going rate. Now some might say that "That's just the way it is". I strongly disagree, the cost of bonding (which I researched thoroughly) does not justify what we have been paying. I implore you to do your own research, look into the matter. At the last council meeting I questioned prices on "how much we paid for a 8" SDR 26 PVC sewer line put in at Lift station 17. The city paid $75 dollars a linear foot (installed) at an 8' to 10' foot depth for 770 linear feet, and $99 dollars a linear foot (installed) at same depth for a 18" SDR 26 PVC sewer line but this one was for 2600 linear feet. My price as a private developer is respectively somewhere between 13 and 35 ($13 a foot for the 8" and $35 for the 18") That equates on those two line items alone to $214,140.00 dollars more than what a private developer pays. Why the marked difference, well if you notice on the council meetings, the issue of bonding continually comes into question. On average, a contractor pays 5% of the project cost to bond. That would mean that a $443K project, would bond out at about 22K. (443K being what the engineer originally estimated the project to cost).
8" SDR PVC $13.00 LF $75.00 LF 770 LF
18" SDR PVC $35.00 LF $99.00 LF 2600 LF
What does this mean, it means that the project should have come in somewhere in the neighborhood of about 465K. Well, the winning bid was 777K, 312K more than what the engineer budgeted (bond included). We obviously have a problem. Don't take my word for it, all you have to do is call a contractor or an engineer, any engineer (except those that have won bids at our city (conflict of interest)) and ask how much the two line items I specified would run. Keep in mind that the contractor would have to pay an additional 5% percent to bond the project.
I think you will be amazed at what you find. After you get the results call the councilmen who voted in favor of the price and let them know what you think.
Good luck all. I am looking forward to the responses.
4 comments:
You better keep questioning all of the bidding that comes before the board. There are many citizens who whole heartedly support you and your questioning of financial matters because no one else is doing it, so keep it up.
Gus,
First of all I would like to say GREAT BLOG!
Second, has the city ever thought of using Area Job Order Contractors (AJOC) through cooperative purchasing programs. AJOC are contractors in our area such as Centennial thru The Cooperative Purchasing Network & Jamail thru Texas Association of School Board's Buyboard Program. They are contracts who sub-contract local vendors to do the work. The great part of it is they already have all insurances and bonds that are needed to do the work. AJOC vendors can only do renovations unfortunately they can not do NEW construction work. They do save the time and energy of having to go thru the bidding process and all procurement policys are met. There is no harm or obligation in obtaining a quote from them before you decide to bid something out. That way you'll always have something to compare the bid with and you won't be wasting your time justifing yourself on why you question a bid (although I think it's great that a bid is always questioned) The only way they can give a proposal is if there is no bid but you have a choice of rejecting their proposal and still bid it out. The other good thing about these AJOC is they utlize local smaller contractors to do the work so you'll know that business is always giving to local vendors. City of Mcallen has used them, a few school districts, and County of Hidalgo.
Good Luck & Great Job!
The lawful way of bidding out a job and awarding it!
1. You advertise in a newspaper.
2. Open bids (after the 15th day of advertisement). Insure that all bids received come with a Bind Bond. NO PERSONAL CHECKS. Cashiers Check or Money Order Only. Don't accept personal checks because what if the contractor has no funds.
3. Bid Tabulation is done for City. Engineer/Architect makes recommendation depending on reputation. Example: if a contractor who has NEVER done a good job on a project is the low bidder, would you Councilman recommend them? or would you reccomend a contractor who has a reputation for doing a good job?
4. City approves recommendation and awards contract to the best qualified-low bidder.
Now I implore you to do your research before making an ass of yoruself!
Anonymous 3:04 p.m.
Area Job Order Contractors (AJOC) are competitively bided out by cooperative entities that the city can become members of at no charge. One is The Cooperative Purchasing Network through Region 4 (Education Centers). Here is a brief explanation of how they work for government entities http://www.tcpn.org/About_TCPNY2K.htm the 3rd paragraph reads "Participation in TCPN is not required of government entities. However, participation by government entities can provide the legally required competition for contracts for commonly purchased items thereby saving the individual entity the cost of going through the competitive process." Centennial is their awarded AJOC vendor. They work great with your own engineers & architects or the city has the choice to work with their engineers & architects it’s up to them. Another coop is through Texas Association of School Boards and here is there website so that you can read it and get a better understand of them http://www.tasb.org/services/cooperative_purchasing/buyboard/index.aspx they have a section that reads "No more bidding
All items and catalogs posted on the BuyBoard have been competitively procured and awarded by the Cooperative’s Board of Trustees based on Texas statutes. This eliminates the need for members to go through the bidding process on their own." Jamail is their awarded AJOC vendor thru them.
When you use an AJOC, all the Required Bidding that the City is Statuary obligated to, have already been met by the LAW. There is no fee to become members for either of these coop and you gain lots of already competitively bided out vendors to use with out having to go through the bidding process at your choice. These are a great resource especially during an emergency situation.
The City can become members under GOVERNMENT CODE CHAPTER 791. INTERLOCAL COOPERATION CONTRACTS here is that website too http://tlo2.tlc.state.tx.us/statutes/gv.toc.htm so that you can understand how legally this entire process works. You especially need to read section 791.025 c CONTRACTS FOR PURCHASING (c) A local government that purchases goods and services
under this section satisfies the requirement of the local
government to seek competitive bids for the purchase of the goods
and services.
If either of these vendors were not legally bided out then the City of McAllen, City of Harlingen County of Hidalgo and County of Cameron wouldn’t have used them. These entities have been using them for a while now. Here is TCPN list of entities that have become members http://www.tcpn.org/TCPN%20Membership%2006-10.pdf in case you don’t believe me who is already using these vendors.
Again Good Luck Gus! and if there is still confusion by anyone else who reads your blog on the legality in using awarded vendors through Cooperative Programs let me know I’ll be more than happy to add more links for you to understand them better.
Oh and by the way I wouldn't of mentioned AJOC if I didn't know how they already work!
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