Wyoming contractors not allowed to bid on $6.6 million project

Qualifications for bidding on a $6.6 million job to move a section of the Shoshone Municipal Pipeline were set so narrowly that no Wyoming contractor was allowed to bid the project, a Sheridan-based contractor said.

Two and a half-miles of the pipeline must be moved this fall to get it out of the right-of-way for two future projects to widen U.S. 14-A east of Cody.

The Shoshone Municipal Water Pipeline Joint Powers Authority board voted to accept bids for the job only from contractors who had worked with 24-inch steel pipe in the past five years, said Bruce Hicks, a senior estimator for Excel Construction Inc. in Sheridan. But there have been no projects of that nature in Wyoming in the last five years, and no Wyoming firm qualified under those terms, he said.

“No contractor from Wyoming could possibly meet the (prequalification document) as it was written,” said Hicks, a former Powell resident.

The five companies qualified by the board to bid the job all are from other states — three from Colorado, one from Montana and one from Florida.

Shoshone Municipal Pipeline Manager Craig Barsness said Friday the board never intended to exclude Wyoming contractors; its only intent was to select a contractor the board was confident could handle the job with as little disruption to waterline customers as possible.

“Roughly 50 percent of the (waterline’s) users are downstream of the relocation project,” Barsness said. “When it is time to transfer water from the old line to the new line, the contractor will have 24 hours to complete the task without impacting users downstream.”

The waterline, which carries water from the Buffalo Bill Reservoir, serves the cities of Powell and Cody; the towns of Frannie, Lovell, Deaver and Byron; and the Northwest Rural Water District.

Hicks stressed that some Wyoming contractors do have the experience and capability to complete the job competently; in fact, Excel’s owner was the general superintendent for the contractor on the original job to lay the 26-mile water pipeline in 1989.

In 2007-08, Excel successfully completed an $8.8 million, 8-mile pipeline project with 20-inch pipe. Whether 12-, 20-, 24- or 60-inch pipe, “it all goes together in the same way,” he said.

Hicks noted that the Wyoming Department of Transportation prequalifies contractors by the type of work they do instead of prequalifying them for specific jobs.

Greg Frederick, WYDOT assistant chief engineer, said contractors are prequalified annually. They must submit questionnaires each year based on experience, manpower, equipment and financial strength.

“Based on their experience, they are prequalified for up to a certain amount,” he said. Then, if they are qualified for a specific job, they are eligible to receive a bid packet.

But, Frederick added, “We bid about 10 projects a month, every month of the year, and we have about five bidders on each of our projects. For over a year, we have 600 bidders. To compare our bid process to someone who may have two or three bids per year isn’t a fair comparison.”

Half of the pipeline relocation cost will be paid by the Wyoming Department of Transportation; the Wyoming Water Development Commission will pay 33 percent, and the Shoshone Municipal Pipeline is responsible for the remaining 17 percent, Barsness said.

Hicks said the fact that no Wyoming companies can bid the government-funded project makes it a “welfare program for out-of-state contractors.”

Excluding Excel and other Wyoming firms from bidding the job flies in the face of Wyoming Gov. Matt Mead’s and the Wyoming Legislature’s intent to provide preference for Wyoming contractors, Hicks said.

Mead has repeatedly stated his support for contractors in the state, and the Legislature passed two bills earlier this year — House Bill 111 and Senate File 144 — that improve opportunities for in-state contractors to receive bids on state-funded jobs.

Renny MacKay, the governor’s press secretary, said Mead remains supportive of Wyoming’s contractors.

“The governor’s policy, especially with contractors, is to have an open door,” he said.

But, since the pipeline prequalifying decision was made by the Shoshone Pipeline Authority board, the governor has no authority to change it.

“He’s going to be a firm advocate for Wyoming contractors, but he’s not going to exceed his authority, either,” MacKay said.

BID PROCESS EXPLAINED

Michael Purcell, director of the Wyoming Water Development Commission, explained the process from the commission’s viewpoint on Friday.

Purcell said the Shoshone Municipal Pipeline board came to the commission with a request to prequalify rather than just open the job up to all bidders.

“We requested of them a letter from their attorney advising us on the legality (of that process),” he said.

The letter the commission received also detailed the board’s concerns about the schedule, money and disruptions to customers, he said.

“We agreed that they could, in fact, prequalify bidders,” he said. “We did not do a thorough review of the packet. We felt that was the joint powers board’s business. I did review it in retrospect and determined the qualifications required were very specific.”

But, even if Purcell had reviewed the packet in advance, “I don’t know if I would have understood that those qualifications were going to restrict Wyoming firms’ participation,” he said.

Hicks contacted the board, the commission, the Wyoming Contractors Association and the governor’s office regarding the situation, and a representative from each agency or group agreed to meet to discuss the bid process.

MacKay said Mary Kay Hill of the governor’s policy staff attended the meeting on Mead’s behalf.

Based on input during the meeting, Purcell said, “The board was very concerned about the schedule. The pipeline needs to be relocated so WYDOT can meet its schedule to fix the highway, and it has to be completed in the non-irrigation season so it won’t conflict with irrigated lands. And when you’re replacing a pipeline, some of their customers’ service is going to be disrupted. They wanted any disruption to be minimal.”

But contractors’ concerns also were “very legitimate,” Purcell said.

“The question becomes, did that necessitate these qualifications to be worded so tight? I would assume there would be some in-state contractors that could have met those schedules and those requirements as well.

“While I can’t speak for the joint powers board,” Purcell said, “I can only assume they were doing what they thought best for their customers.”

Because of the tight timeline, the board determined there was no time to go back and redo the bid process, so its decision stands.

BETTER PROCESS FOR THE FUTURE

“Ultimately, the joint powers board has decided to go ahead with the process without changing their requirements,” Purcell said. “That is their decision, and because they have completed all other necessary activities to receive bids, we’re allowing them to proceed with the bidding process.”

But Purcell said things will be different from now on.

“Ultimately... I wish some things were done differently, but now my goal is to make sure this doesn’t happen again,” he said. “In the future, we will offer these prequalifications to the Wyoming Contractors Association for review before we allow these to proceed.”

Jonathan Downing, executive vice president of the Wyoming Contractors Association, said the pipeline bid specifications were so prescriptive that they limited competition.

“But we also realize that, for the Shoshone Municipal Pipeline board, this process is just too far down the road.”

Downing praised the Shoshone Municipal Pipeline board for revisiting the issue — something it was not required to do — as well as the support expressed by the Wyoming Water Development Commission and the governor’s office.

Hicks said the future was his biggest reason for making his concerns about the bid public. He pointed specifically to a $300 million water project planned near Gillette. If the same pre-qualification requirements were applied to that project as well, Wyoming contractors would be eliminated from bidding that job, too.

Hicks said he’s not proposing that Excel or another firm automatically be given the bid for any project just because they’re from Wyoming.

“We just want to be able to compete,” he said.