CHEYENNE, Wyo. — Several Wyoming contractors claim the required specifications for a $7 million water pipeline project in northwest Wyoming disqualified them from bidding on the job.
The project involves relocating 12,600 feet of an existing Shoshone Municipal Pipeline Joint Powers Board water pipeline on a Wyoming Department of Transportation right of way three miles east of Cody.
The pipeline relocation will allow the department to reconstruct part of U.S. Highway Alternate 14 between Cody and Powell.
The Shoshone Municipal Water Project delivers water from Buffalo Bill Reservoir to a water treatment plant and moves it to the town of Lovell and other communities and customers in the area.
Before the June 3 deadline for submission of pre-qualifications for the project, at least one contractor notified the project engineer that the requirements would exclude all Wyoming-based contractors for qualifying to bid on the work, said Bruce Hicks, senior estimator for Excel Construction Co. in Sheridan.
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Instead of requesting a listing of general pipeline construction experience, the pre-qualification requirement specified that contractors must have constructed projects involving two miles of 24-inch pipeline in the past five years.
“There hasn’t been that much 24-inch pipe laid in the state in the past five years,” Hicks said last week.
Hicks said that is why he and other Wyoming contractors couldn’t figure out why that specific requirement was in the pre-qualifying specifications.
“We just wanted to be allowed to bid,” Hicks said
The five contractors who made the short list for the project are based in Colorado, Montana and Florida.
Hicks said he and the other resident Wyoming contractors raised the issue because it could affect qualifications for other work, such as the planned $300 million Gillette water project.
“We’re looking out for every contractor in the state,” Hicks said.
Complaints about the pre-qualifying requirements were taken to Gov. Matt Mead’s office, the Wyoming Water Development Commission and the Wyoming Department of Transportation, as well as the Shoshone Municipal Pipeline Joint Powers Board and several state legislators.
After learning that only out-of-state contractors met the qualifications, three Wyoming contractors and a representative of the Wyoming Contractors Association met with the governor’s administration. As a result of that meeting, the joint powers board agreed to revisit the bid issue at a special meeting June 29.
The board members took the complaints under advisement, and after conferring with the board’s attorney and engineer and thinking it over, decided to move ahead as originally planned, Donald Richards, the board chairman, said Tuesday.
The project was to be advertised for bids Wednesday.
“And we’ll go from there,” Richards said.
Richards said some of the information required to pre-qualify the contractors to bid had been incomplete or omitted by some contractors in their responses.
“Wyoming contractors all had an opportunity to bid,” he said. “We are looking for Wyoming contractors if at all possible.”
He noted that some of the five out-of-state contractors who qualified have offices in Wyoming.
Richards said the board is composed of lay people who depend upon their attorney and engineers for advice.
The pre-qualification was necessary so the board knew ahead of time the capabilities of each contractor, he said.
The project has three sources of financing — 50 percent, or $3.3 million, from WYDOT; 34 percent, or $2.2 million, from the Wyoming Water Development Commission; and the remaining money from the pipeline’s joint powers board.
Because federal dollars are included in WYDOT’s share of the cost, Wyoming’s resident contractor preference law does not apply for this project, officials said.
Jonathan Downing is executive vice president of the Wyoming Contractors Association. He said the pre-qualification issue came late to the attention of his group because of the joint powers board’s timeline.
WYDOT scheduled the highway project for 2012 but can’t let bids until the pipeline is moved. The joint powers board also wants to disrupt water service to residents as little as possible.
Downing said his group is concerned because the project was developed in a “vacuum.”
“I understand why some of the contractors are upset,” Downing said. “We get concerned when you get a process closed and people do not get a chance to bid.”
Downing said he appreciated the involvement of Mead’s office through policy adviser Mary Kay Hill and the Water Development Commission through director Mike Purcell at the June 29 board meeting.
Although the Wyoming-based contractors are out of luck for the Shoshone pipeline project, the problem they encountered with the pre-qualification requirements prompted some future solutions.
The Wyoming Contractors Association is forming a working group to get discussions going earlier in the pre-bidding process, Downing said.
Purcell said when he and his staff looked at the pre-qualifications for the Shoshone pipeline project, they didn’t understand the experience requirement was so tight that Wyoming firms were being eliminated.
“From now on we will have the Wyoming Contractors Association look at pre-qualifications before we consider them,” Purcell said. “We will bring in some experts who can tell us if they they think they are too tight.”
The Water Development Commission, he said, functions largely as a banker for water projects. The pipeline project was confusing because of the mix of federal, state and joint powers money. At the request of Water Development Commission staff, the attorney for the joint powers board submitted a letter saying the pre-qualification requirement was legal.
The commission approved state money for the project in 2009.
“Basically at the end of the day, it was their call,” Purcell said, referring to the joint powers board.
Downing said the state is in a transition period for contractors who want to work on public projects.
“Moving forward, there’s going to be a lot more accountability,” he said. “As the contractors submit their renewals, they will be subject to higher standards.”
Purcell said about one-third of the phone calls he receives from water project sponsors are inquiries about the effect of new state contractor laws.
One law that went into effect July 1 requires a contractor to have maintained a principal office in Wyoming and to have employed 15 Wyoming residents for at least a year.
Another requirement to qualify as a resident contractor is payment of workers’ compensation and unemployment taxes in Wyoming for at least a year.
The new law also requires the state Department of Employment to conduct investigations to determine whether a person, or contractor, is eligible to receive or continue to hold a certificate of residency.
It also increases the fines to $750 for someone who intentionally falsifies residency information or who fails to hire Wyoming laborers on public projects.
A separate law which went into effect in March places additional restrictions on contracts for public works let through an alternate design and construction method, if the contracts use appropriations authorized by the state Legislature during the fiscal biennium ending June 30, 2012.
The additional requirements include conducting an open-bid process before awarding subcontracts and awarding resident subcontractors at least 70 percent of the value of all subcontract work.
The requirement can be waived for special reasons, but the waiver must be submitted to the governor and the Legislature’s Joint Appropriations Committee.
The Joint Appropriations committee will study the impacts on the changes between now and next year’s budget session.
