Losing LEC bidder files suit to stop construction contracts

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The Dallas County Board of Supervisors acted Dec. 19 on the recommendations of the Samuels Group CEO Sid Samuels, left, and Design Alliance's Kristofer Orth, center, and David Harrison in accepting construction bids for the new $22.3 million Dallas County Law Enforcement Center.

The Dallas County Board of Supervisors approved bids in December for construction of the new Dallas County Law Enforcement Center totalling $16.8 million, well below the $22.9 million in financing approved by voters in may.

A West Des Moines contractor whose bid to build the new Dallas County Law Enforcement Center (LEC) was rejected last month by the county board of supervisors is seeking an injunction in Dallas County District Court to stop the supervisors from awarding construction contracts for the project.

The general construction firm Ball Team LLC claims procedural irregularities in the bidding process made the board’s December decision “an abuse of discretion.” In Jan. 4 filings, the Ball Team said the supervisors “know they have a serious problem here” because they “completely changed the rules of the bid after the bids were opened.”

Richard Ball, the Ball Team’s chief executive officer, and Raymond Karns, Ball Team superintendent, claimed in affidavits the supervisors’ actions were “illegal,” “arbitrary,” “wholly inappropriate” and “done in bad faith” when they accepted bids totaling $16.8 million from about a dozen individual contractors and rejected the Ball Team’s lump-sum bid of $17.2 million for the project as a whole.

Dallas County voters approved $22.9 million in financing for the law enforcement center in a May 2017 referendum.

An injunction has not been issued, but lawyers for both the Ball Team and the Dallas County Board of Supervisors filed lengthy exhibit lists this week, and on Friday Fifth Judicial District Chief Judge Arthur Gamble assigned District Court Judge Brad McCall to the case “until completion.”

In its filings, the Ball Team claimed the Samuels Group, the construction management firm hired by the supervisors to oversee the LEC project, led them to believe prior to bidding that only lump-sum bids for the whole project would be accepted.

The Samuels Group “specifically stated that Ball Team could provide a lump sum bid for this project,” the court brief said, “only to use that very bid against Ball Team after the bids were opened by not awarding the contract based upon lump-sum bids.”

Instead of accepting only lump-sum bids, the supervisors also accepted individual bids on specific portions or categories of the project, such as concrete, masonry, plumbing, electrical and so forth.

“This was certainly not a level playing field for all bidders,” the Ball Team said, and the supervisors “were comparing ‘apples to oranges’ when determining how to award the contract.”

Rick Ball

Rick Ball first registered his opposition to the supervisors’ process Dec. 19, when Sid Samuels, chief executive officer of the Samuels Group, recommended that the board accept the collection of individual bids, which carried a lower cost than both the Ball Team’s lump-sum bid and the Lang Construction Group’s bid on a bundle of six of the 13 bid categories.

“The one thing I would assure you,” Ball told the Dallas County Board of Supervisors, “is that if you go down the road of individual packages, there will be a protest to the bids, and there will be a further delay. That’s without – no offense saying this – there would be a contention of the bid process, whether that’s brought by Ball or Lang.”

Ball also raised doubts about the accuracy of some individual bids, doubts Samuels rejected.

“To come in here today and create uncertainty in those bid categories is not correct,” Samuels told the supervisors. ““People are here vying for work. I think someone’s talking to position themselves to get a project, and it’s quite disturbing.”

No individual bids were received for bid package five, the job of furnishing and installing structural steel. In order to permit side-by-side comparison of the bids from Ball Team, Lang Construction and the collective of individual bidders, Samuels needed a price for the structural steel category. He explained to the supervisors how he arrived at a price of $861,500.

Sid Samuels

“After the bids came in, the next day we started making phone calls to find out what was going on, if we had interest in that bid category or not,” Samuel said. “We actually have a bidder that we spoke to that was actually going to bid directly to the county. Because they were being called by the general contractors, they chose not to continue to move forward with that and just bid to the generals. So we have talked to them. Depending on the recommendation here moving forward, we’re prepared to rebid that category.”

Ball said Samuels’ price for structural steel was “a fallacy” and had been improperly solicited.

“I don’t think it’s within the jurisdiction of the construction manager to go out and seek alternate bids the day after,” Ball said. “The only ones that count are the ones that were submitted with documentation of appropriate process. So trying to account for bid package five is a fallacy.”

Samuels disputed Ball’s claims.

“That is a real number,” Samuels told the supervisors. “That isn’t us making up a number. That’s simply a number for the marketplace on that day.”

David Harrison, architect with Design Alliance in Waukee, which designed the LEC and has worked closely with the Samuels Group on the project, suggested some reasons why no bid was received for the steel work.

“We tried to speculate on why there were no bids,” Harrison said. “It could be that the steel suppliers and the erectors in this market didn’t want to be a prime contractor, didn’t want to have a bond, and so perhaps the general contractors were able to get prices submitted to them for those packages that the people didn’t want to submit and go through the bidding process with the county. That’s just speculation on our part.”

Kristofer Orth, also a Design Alliance architect, said rebidding the structural steel package would entail some risk due to market volatility.

“Of the different bid packages, structural steel tends to be one of the more volatile markets,” Orth said. “Structural steel tends to change their pricing with more regularity than masonry or some of those other markets, so that’s something to consider as well. It’s probably a 1- or 2-percent type of volatility, not a 50 percent volatility.”

Anxiety over the risk and uncertainty entailed in rebidding package five, the steel work, led Supervisor Kim Chapman, who was chairing the Dec. 19 board meeting, to oppose approving the other 13 individual bids.

“I think there is too much risk here for myself,” Chapman told his fellow supervisors. “We don’t have a bid for number five. I’m not comfortable with the $861,500 bid on structural steel, with one or two bidders out there. I’m just not at that comfort level.”

In spite of the chairperson’s discomfort, Supervisors Brad Golightly and Mark Hanson voted to approve the individual bids as presented by Samuels, with Chapman voting against approval.

Golightly said he saw no reason to hire a prime contractor, such as Ball or Lang, to oversee the individual subcontractors.

“To me it’s no different than cutting out a layer of administration in anything we do,” Golightly said. “The reason I support the individual one is because we’ve talked all along about being able, if you will, to do things more on our own, and we have a construction management firm employed that oversees our best interests. If we didn’t want that, we could have gone out to bid for a complete package to begin with.”

The question arose again at the Dec. 26 supervisors meeting, the last to be chaired by Chapman. By another two-to-one vote, the supervisors chose not to reject all bids, wipe the slate clean and start the bidding process over.

“I’m comfortable with the process that we approached the public bid letting with,” Golightly said. “I think the language in there is good with the intent that was expressed. We received the bids. There were options, and different contractors chose different options. I think it was a healthy process.”

Chapman registered his dissent but resigned himself to the will of the majority.

“Decisions many times are very easy for this board to make. This is one of the more difficult ones that we’re considering at this point in time, at least for me anyway,” he said. “I respectfully disagree with that decision, but the board has spoken.”

After board approval of the bids, contracts were drawn up, and the Ball Team filed suit for an injunction. By the time of the Jan. 16 supervisors meeting, the Samuels Group had rebid package five for structural steel.

Chapman said his fears were somewhat calmed when Samuels presented the board with four individual bids for structural steel, with the lowest a price of $861,580, a mere $80 higher than the price used in December’s table of comparisons.

At the same time, Chapman said legal entanglements could still slow the progress of construction. In the view of Steve Lang, CEO of Lang Construction Group of West Des Moines, which had skin in the LEC bidding game, the supervisors made the right choice, and the Ball Team’s legal case is weak.

Steve Lang

“Ball Team doesn’t have a leg to stand on. That’s my opinion,” Lang said Jan. 12. “At the end of the day, the decision that Samuels and the board of supervisors made, I think, is probably right. It’s in the best interests of the taxpayers. I told this to Sid as I walked out the door (Dec. 19). I said, ‘You made the right decision. It’s in the best interests of the taxpayers. It saves them some money. I get it.'”

Lang said his view was confirmed by a highly placed associate in the Master Builders of Iowa, a trade association.

“I ran into a guy at the Master Builders, and he told me that they were protesting it,” Lang said, “and he kind of shook his head and said, ‘I can’t understand why.’ My opinion is Ball’s kind of barking up a tough tree here. But I’m not a judge, so I don’t know what’s going to happen.”

The Ball Team is represented in the legal proceedings by Brian P. Rickert with the Des Moines law firm of Brown Winick. The Dallas County Board of Supervisors, defendants in the suit, are represented by Hugh J. Cain of Hopkins and Huebner, a law firm with offices in Des Moines and Adel.

The following bidders were approved by the Dallas County Board of Supervisors as contractors for the Dallas County Law Enforcement Center:

  • 3A Concrete: Neumann Brothers for $1,729,725
  • 3B Precast concrete: Molin Concrete Products for $951,939
  • 4 Masonry: Midwest Masonry for $1,628,000
  • 5 Structural Steel: U.S. Erectors for $861,580
  • 6 General Package: Edge Commercial for $2,762,299
  • 7 Roofing, Flashing and Accessories: Central States Roofing for $484,700
  • 11A Detention Equipment: TTJ Holdings for $1,454,000
  • 11B Laundry and Food Service: Strategic Equipment LLC for $397,500
  • 21 Fire Sprinkler: Continental Fire for $316,605
  • 22/23 Plumbing and HVAC: L.A. Fulton for $3,393,000
  • 26/28 Electrical and Communications, and Security Electronics: Van Maanen Electric for $2,319,000
  • 33 Utilities: McAnich Corporation for $348,650
  • Alternates 1-5: $175,290

Total cost= $16,823,288

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