Saturday, March 24, 2012

Bidder for airport runway safety project may sue City of Prescott

PRESCOTT - Legal questions already have pushed off the start of the City of Prescott's $8 million safety project at the Prescott Airport by about four months, and possible future litigation could further delay the project.

Depending on the action of the Prescott City Council on Tuesday, the airport runway contract reportedly could end up in the courtroom.

On Friday, an attorney for the contractor who submitted the low bid for the project said his client is prepared to sue the city if the airport runway contract goes to another company.

At issue for the City Council is whether the low bidder, A. Miner Contracting, complied with all of the necessary federal and city requirements in submitting its bid of $7.9 million.

Attorney Jeffrey Adams maintains that A. Miner met all of the federal requirements, and that a number of agencies, including the Federal Aviation Administration (FAA), the Arizona Department of Transportation (ADOT), and the design firm Dibble Engineering, "gave the blessing of approval to A. Miner Contracting as the low bidder."

But the second-lowest bidder, Fann Contracting, alerted city officials in a December email of areas in the A. Miner contact that Fann contended were "contrary and inconsistent with the contract documents."

Mike Fann of Fann Contracting says his bid of $8.9 million followed the federal requirements, including those involving the use of sub-contractors who meet the federal Disadvantaged Business Enterprise (DBE) criteria, even when those companies were more expensive.

"(A. Miner) had an unfair advantage by not following the federal requirements," Fann said Friday. "The specifications were very clear."

Along with compliance with the DBE goals, Fann's email also cited several other areas of concern in A. Miner's contract, including the requirement that the prime contractor must perform - "with his own forces" - at least 50 percent of the total contract work.

Fann says his company's analysis of A. Miner's bid indicates that sub-contractors for the project would total 52.7 percent of the bid price - in violation of that requirement.

Adams said A. Miner has submitted a response to the objections, and "has demonstrated that he's prepared to meet the requirements."

Although Fann said he never filed an official protest of A. Miner's bid, he did alert the city about his concerns through a series of emails.

For years, the city has planned to do the massive improvements to bring the airport runway into compliance with federal requirements for a "runway safety area."

Among other things, the work involves relocating 400 feet of the main runway (the end closest to Highway 89), and adding it to the other end to ensure a full 1,000 feet runway safety area on the highway end.

The city's design engineer, Dibble Engineering, estimated the cost of the project at about $8.4 million.

After accepting FAA grants to cover the bulk of the project cost this past year, the city advertised for the construction project in November 2011, and received four bids: A. Miner, $7,890,410; Fann, $8,997,654; Asphalt Paving & Supply, $10,069,339; and CSW Contractors, $11,084,549.

The city opened the bids on Nov. 30, 2011, and officials had estimated that construction would be under way by December.

After submitting the low bid, Adams said his client A. Miner expected to be awarded the contract at a December City Council meeting. On Dec. 15, Miner delivered a signed contract and the required bond to the city.

Meanwhile, however, Miner received an email from the city notifying him that the matter had been delayed, pending legal review.

Soon, Adams said, correspondence from ADOT was indicating that Fann Contracting was the likely recipient of the contract.

"There was a pretty dramatic shift from A. Miner to Fann Contracting," Adams said.

In recent weeks, the airport runway issue has appeared twice on City Council agendas for closed-door executive session discussion.

This week, the matter is expected to appear on the council agenda once again - this time during the public session.

Although the agenda currently posted on the city's website does not include the airport runway issue, City Manager Craig McConnell said Friday that city officials planned to amend the agenda on Monday to include the matter for Tuesday's meeting.

While City Attorney Gary Kidd declined to speak about the specifics of the matter, he pointed out that the council would have three options on Tuesday: awarding the contract to the lowest bidder; awarding the contract to another bidder, based on the quality of the low bidder; and rejecting all bids.

Fann said Friday that he does not know which company the city will recommend for the runway contract. Regardless of which company gets the contract, he said, "I will respect the City Council's decision to do what's right and appropriate."

Adams said A. Miner is prepared to sue if the contract goes to another company. "We'd file suit, and we'll ask for lost profits," he said, estimating the damages at $3.2 million.

A. Miner also is prepared to seek an injunction to prevent the start of construction until after the resolution of the lawsuit, Adams said.

Because bids are valid for 120 days, McConnell said the council has until March 29 to take action on the contract.


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