Bend council OKs low-bid exemption to finish troubled sewer plant

Expansion project has been embroiled in litigation

BEND, Ore. - The Bend City Council on Wednesday night authorized an exemption to the city’s low-bid process that will allow direct appointment of contractor MA Mortenson Co. to finish uncompleted work associated with the Water Reclamation Facility, the city’s sewage treatment facility.

“Direct appointment is in the ratepayers’ best interest in this case because it will be less expensive than the traditional procurement approach. It will allow remaining work to get started and completed sooner,” said Assistant Engineering and Infrastructure Planning Director Jeff England.

Utility Director Paul Rheault added, “The WRF is one of the most important facilities in the city, and we are at a point where we need to complete the remaining construction to efficiently and effectively operate and maintain it.”s

The Water Reclamation Facility Secondary Expansion Project construction contract was originally approved in 2013. The $32 million project was awarded to the lowest bidder, Apollo, Inc.

“The project was beset with delays and defective and deficient work,” the city said in Wednesday’s news release. “The work was not ultimately completed and is currently in litigation.”

England said, “The WRF has been operational during this time, and the facility has met our needs over the past couple of years. But we have to be responsive to growth, and knowing that with the Urban Growth Boundary expansion. there are properties ready to come into the UGB to be served by city sewer, it’s time to get the expansion done.

“The WRF is approaching its treatment limits,” he noted. “The remainder of the work needs to be completed in order to remain in compliance with DEQ permitting requirements and to continue to meet the needs of a rapidly growing community.”

The city actually is now facing two lawsuits over the unfinished plant expansion. The first is from Apollo, the Kennewick, Wash., contractor who claims it's owed $8 million from the city for unpaid work and damages. More recently, the city was sued by an electrical contractor on the project, Camp Creek Electric, alleging the city has failed to turn over public records, specifically email between key city staff working on the expansion.

The city hired Mortenson in September of 2015 to take over construction management duties of the project. Since that time, it said, Mortenson has acquired considerable knowledge of the project, the facility and city staff who operate and maintain it.

“To use a competitive process to hire someone to finish the project would require substantial time and expense to prepare new engineered construction documents,” the city said. “Only Mortenson is in a position to complete the work without substantial new construction documents.”

The city said staff will negotiate a scope of work and guaranteed maximum price with Mortenson to complete construction. The city will impose contract provisions to ensure competitive pricing for sub-contracts.

“The exemption is not a contract approval. It only allows the city to negotiate directly with Mortenson,” England said. “If we are unable to negotiate a reasonable price, the city has the ability to pursue other alternatives. Council will have to approve any forthcoming construction contract.”

City officials said it’s a one-time exemption to the competitive bidding process and is only applicable to completion of unfinished work at the WRF.

“It’s in the ratepayers and taxpayers best interest to do it this way, because ultimately this will be less expensive and faster,” Rheault said.

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