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01/27/93 Special Meetingsi ~ ~ ~1D~lY~~~~~ ORAL PRESENTATION TO YELM CITY COUNCIL DETERMINATIONS & RECOMMENDATIONS ON McCLURE AND SONS BID PROTEST-JANUARY 27, 1993 For those of you who don't know me, I am Sandy Mackie, counsel for the City of Yelm. Last week we received a letter from McClure and Sons Inc., who is the second low bidder, who raised a question about the fairness of the bid: that is, whether Red Samm was given a competitive advantage because part of the bid materials, Form 00318, which is a form with respect to MBE/WBE Contractor Contact-Utilization Report [was not completely filled outJ. Red Sam identified certain subcontractors it would use, but did not fill out the entire form and did not identify the costs for the subcontract prices for the subcontractors. McClure and Sons did fill out all of the forms and filled out the dollar amounts. McClure and Sons says that because Red Samm did not fill out all of the amounts in this case Red Samm had a competitive advantage. Oh, 1 need to take one step back, in the interest of full disclosure, our office does land use work. One of the clients I am presently working for is a trust for the benefit of Pease & Sons employees. They own property in Thurston County and are involved in a subdivision appeal. f have 'not been asked to review anything involving Pease & Sons, I cannot and will not review anything involving Pease 8~ Sons. If somehow Pease 8~ Sons becomes involved in this case, I will have another counsel advise you as to that matter. Presently there have been no issues with respect to them, but I do want the council to understand. I don't want someone later to think that I am hiding a relationship. I have been in contact with McClure and have received a comment from Mr: Mark Jensen. I also contact Red Samm, and received correspondence from a Mr. Richard Lambe. I asked them to identify both the basis of the appeal on behalf of McClure and the defense on behalf of Red Samm. The issue [of a protest] is always one of concern because in a competitive bidding process the integrity of the process is as important as the end result. Bids must be fair, they must appear to be fair, and people must have confidence in the system. If not, then you lose the advantage of the competitive bid process. Minority goals and compliance issues are probably raised in as many protests as any other single issue that !can think of, and I have been involved in bid protests since 1967. Protests started out involving affirmative action plans at 'the federal level. You would think that after 20 some years people would get it right, but it is still a difficult issue. The question we have in this case is: Has Red Samm been given an unfair advantage? The second one is: Is the procurement sufficiently defective as to require_us to throw out all bids because somehow the IFB was unclear? McClure asked us to take a look at a Snohomish County case, which is similar in that it did involve failure to properly complete a document. In that case the court said that because the low bidder did not properly document minority bids it had to be thrown out as nonresponsive, that is he did not entirely respond to the IFB. The case was awarded to the second low bidder. The case is closely analogous to this case, but is not directly on point. The reason it is - not directly on point is that there was mandatory language in that case about the forms and about specific compliance with certain notices and lists. ~ It is different from the f language here. So, the first question that I looked at was: Did Red Samm satisfy all of material elements of the IFB? Our answer is: Yes it did, and our recommendation is that "Yes they did." They did leave certain information out, but they are required by the terms of their bid to comply with all materials of the contract. This is not a question like somebody who forgets to sign a bid and walks away and says "1 don't know" and gives them a second bite at the apple and says aw gee, my price is too low, something is wrong and can walk away. The language in our case is different from the Snohomish County case, it is much more akin to the language used by the City of Olympia/LOTT, in which a very similar issue came up. A similar problem existed and the determination was (1) that even though certain of the blanks were not completely filled out, [the bidJ was responsive to all of the requirements, and (2) that to the extent that the blanks had not been filled out, they could be waived as a minor irregularity which did not give significant or substantial advantage to Red Samm. . In taking a look at this, one of the reasons that we come to those conclusions is that Red Samm is committed to comply with all of the requirements of the contract. By failing to fill out the numbers for its subcontractors, it does not escape compliance with all of the terms of the contract. The language of the IFB does not mandate the use of a designated list of subcontractors. (IFB is Invitation For Bids.) Between the time of the bids and the time of the award and start of construction, if one of the identified bidders on either McClure's fist or Red Samm's list went out of business or got another job and went off to Hanford and couldn't comply, if they were able to substitute and still meet the goals, they would meet all of material requirements of the IFB. If they are proceeding with the contract and a year from now or when they are half way through the contract elect to use another subcontractor with a more favorable price, but they still meet the goals of the contract, you cannot refuse to permit them to have that substitution. In looking at it, one of my questions was determining what the purpose of this fist was. is this list so binding that it gives us the authority to control the use of subcontractors? My conclusion after reading the whole Invitation For Bids is that it is a guideline, it is additional information for us, but unlike the Snohomish County bids, unlike the Tacoma language that they asked us to look at, and unlike other language that they referred to, all of those bids had much more specific language on completion of the entire document, both binding and material requirements. Language we do not have in our invitation, and that is why I find this difference. The second question that I have is: Does the absence of this language and the facts ~~ of the protest give us the situation where we can say This IFB was so confusing that we should throw it out. There was no level planning field here. McClure was bidding one set of specifications and Red Samm was bidding another." After reviewing the bids again, my answer is "No." The same rules apply to both, the same flexibility applies to both, the same requirements apply to both. Both of the bids have the same obligations under the same terms and conditions. In other words, we got a price based on what is a level playing field. 2 ~ ~ .'• ~ '~. ~~ ~ 0 Again, had somebody been concerned that the language here was different, was not as clear as it should have been, there was a bidders conference and an opportunity to ask the question and say "gosh in our previous practice in Tacoma and Snohomish County there was a certain mandatory requirement that I don't find in your IFB. Is the city going to make completion mandatory or optional? `Somebody could have requested clarification. Nobody requested clarification." If somebody says it could have been better explained, then they could have requested clarification. I don't find it to be so difficult to understand as to register the IFB as defective. In conclusion again in this case then, is that; another way to look at it is: Can I say that Red Samm did something that requires us to reject Red Samm? If we did that, would Red Samm be able to ask the question "What did I do wrong? What mandatory provision of your contract did I fail to follow? What gives the special advantage?"~ Our answer is: You filled all of the mandatory requirements of the contract, I see no escape or special privilege. The conclusion then, and the recommendation is: This is a responsive bid and in most cases we would recommend award. In fact the consultant recommended an award. In this case there are several other ways we have to look at this proposal before we can accept the contract and award the contract. So, the recommendation at this stage is that we refer the bid of Red Samm, that we find it is a responsive bid, and that we refer it to the Department of Ecology and Environmental Protection Agency and the Farmers Home Administration, with the recommendation that they consider the bid for approval. Those agencies need to approve the bid before we can actually issue the award. To the extent that McClure disagrees with the findings that we have recommended, there is an administrative appeal process that is available that is spelled out in the regulations. So, there is a second avenue of appeal. I would be happy to answer any questions from the council. This has not been scheduled as a public hearing. If the council would like to give McClure and Red Samm an opportunity to make a few brief comments, that would certainly be appropriate under the circumstances before acting. I want to assure you that I did carefully consider both letters. I have letters from both sides. I did carefully consider all of the materials that were presented, and the questions raised by McClure were serious questions. This was not a frivolous appeal, and they were raised in good faith and there were issues that required us ask some question. In this case, the questions in my opinion can be answered in favor of awarding the bid to Red Samm. (End of recommendations. This was followed .by questions from the council and comments of McClure and Red Samm] [Transcribed from a tape of the City Council meeting. Notes in brackets are to correct language in tape or for clarification.] 3