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2001-134-Minutes for Meeting March 14,2001 Recorded 3/30/2001VOL: CJ2001 PAGE: 134 RECORDED DOCUMENT STATE OF OREGON COUNTY OF DESCHUTES *02001-134 * Vol -Page Printed: 04/05/2001 15:00:28 DO NOT REMOVE THIS CERTIFICATE (This certificate constitutes a part of the original instrument in accordance with ORS 205.180(2). Removal of this certificate may invalidate this certificate and affect the admissibility of the original instrument into evidence in any legal proceeding.) I hereby certify that the attached instrument was received and duly recorded in Deschutes County records: DATE AND TIME: DOCUMENT TYPE: Mar. 30, 2001; 8:10 a.m. Regular Meeting (CJ) NUMBER OF PAGES: 17 MARY SUE PENHOLLOW DESCHUTES COUNTY CLERK KEY NC ED A - .� 2001 r N Y s"; 2 .CUUH1 Y ULEhK -C Board of Commissioners 1130 N.W. Harriman St., Bend, Oregon 97701-1947 (541) 388-6570 • Fax (541) 388-4752 --deschutes.org Tom De Wolf Dennis R. Luke MINUTES OF HEARING Mike Daly DESCHUTES COUNTY BOARD OF COMMISSIONERS CONVENED AS THE CONTRACT REVIEW BOARD Wednesday, March 14, 2001 Commissioner Tom De Wolf opened the hearing at 9:05 a.m. Present were Commissioners Tom De Wolf, Dennis Luke and Mike Daly. Also present were Mike Maier, County Administrator; Rick Isham, Legal Counsel; Timm Schimke, Solid Waste Department; and ten citizens. The purpose of the hearing was to take testimony on a protest to the Board of Commissioners' Intent to Award a contract to L & H Grading, Inc. for the Knott Landfill Cell 2 Improvement Project. Commissioner DeWolf asked if any Commissioner wished to disclose any potential or perceived conflict of interest. Commissioner Mike Daly stated that he knows one of the parties involved in the issue, but that he would not gain financially or personally from any decision, and that his decision would be based solely upon the law. Timm Schimke gave a brief overview of the history of the situation. He stated that the main complaint of JAL Construction revolves around the material TGL, Inc. supplies. TGL claims that their quote to both JAL and L & H Grading was an "all or nothing" quote. (See attached memo of explanation from Timm Schimke to the Board dated March 6, 2001, Exhibit A) Minutes of Hearing Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Quality Services Performed with Pride Page 1 of 11 Pages Wednesday, March 14, 2001 Commissioner Luke asked if L & H Grading is licensed to put in the liners. Mr. Schimke indicated that the documents need to be submitted showing an adequate number of years' experience, but that no certification is required. Commissioner DeWolf asked if there are any documents on file from L & H to TGL, or from TGL to L & H, supporting their conflicting claims. Mr. Schimke said it appears there are none. Commissioner Luke asked what Mr. Schimke would require in the way of experience. Mr. Schimke replied that he asks for references. Rick Isham asked why this was not done as a pre -qualification rather than post -qualification; Mr. Schimke answered that it would be very burdensome to verify all of the documentation that has been submitted by everyone when it is unknown who will ultimately get the bid. He further said that when a contractor enters into a contract, this is the contractor's indication that they can support their claim. There is legal recourse if they cannot do what they claim. Gerry Friesen of G. Friesen & Associates specializes in solid waste design. He has worked for Deschutes County, and put together plans and specifications for Cell 2. He said that it is not typical to prequalify all subcontractors; during the construction, submittals are required, reference checks are completed, and inquiries are done on the superintendents of past jobs. The goal is to come up with a satisfactory level of experience. Rick Isham asked what if the low subcontractor bidder doesn't meet qualifications; or what if the general contractor isn't qualified to do the work. Mr. Friesen explained that if the general wants to do the work, the County would evaluate them as they would any subcontractor. Their signature on the bid means they feel they are qualified to do the work. Commissioner DeWolf asked how L & H Grading could qualify if they don't have any subcontractors. Mr. Friesen replied that they would have to select another subcontractor. Rick Isham stated that a substitution of contractor agreement generally works in this case. Mr. Friesen explained that the basis of an award is not based on qualifying. Once a contract is signed, submittals are required to make sure they are in compliance. Minutes of Hearing Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Page 2 of 11 Pages Wednesday, March 14, 2001 ADDITIONAL ADDITIONS TO THE AGENDA! A. Consideration of the Re -appointment of Joe Pickens to the Local Alcohol and Drug Planning Committee, with a Term Expiration Date of March 31, 2004. B. Consideration of Signataure of Order No. 2001-031, Recinding Order No. 2000-115, Reactivating Land Use Appeal for Eagle Crest III - Rick Isham, Legal Counsel C. Consideration of Signature of Order No. 2001-030, Recinding Order No. 2000-116, Reactivating a Land Use Appeal for Eagle Crest III - Rick Isham, Legal Counsel 3/14/01 Commissioner DeWolf asked if the Board rejects the protest, and it is determined later that L & H cannot perform, do you go to the next bidder? Mr. Friesen explained that by contract they would have to provide qualified subcontractors. Commissioner DeWolf then asked what would happen in the case that TGL will not work with them on this project; Mr. Friesen said that there are a lot of different lining contractors. Mr. Schimke stated that the specifications do not require one particular company to provide all the liner equipment. The protestor, JAL Construction, provided a written protest (two page attachment, Exhibit B). Jeffrey Wilkinson, an attorney representing JAL Construction, stated that the Board of Commissioners is acting as a referee of a contest, which should be played on a level playing field with equal rules for all. He said the focus should be on whether the rules are being properly and equally applied. The subcontractor listing contract is very confusing. (He then gave a brief history of the development of the statute.) Mr. Wilkinson stated that according to the invitation for bids, any bidders must list who will be doing the work. He said that L & H Grading listed TGL for $128,000, but never had a contract with them except for an invitation from L & H to bid, after the fact, after the bid protest was filed. They met at a restaurant after the fact, and L & H asked TGL to do the reduction, after L & H knew there was going to be a bid protest. TGL will testify to this. L & H had no expectation that TGL would do any scope of work other than what was quoted to everyone. The same document was faxed off to everyone by TGL. He said that L & H had no knowledge of TGL doing any work at a lower cost when bidding; TGK bid one price. Commissioner DeWolf then asked if it was broken out or if it was one lump price; Mr. Wilkinson said that it was not broken out for the four items that were described, and that L & H listed TGL knowing that TGL had not committed to this way of doing things. He further said that if other bidders had known they could pick and choose, they might have done the same. He also said that this ends up with bid shopping. He also said that substitutions can be made, but you can't do so willy-nilly; the purpose is to have a very limited circumstance where you can substitute. TGL is not sure how L & H got the $128,000 number. The main issue here is whether there is a fair playing field. Commissioner Luke stated that no matter who does the liner, whether it is the subcontractor or the general, they are paying prevailing wage. The question Minutes of Hearing Page 3 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 ADDITIONAL ADDITIONS TO THE AGENDA! A. Consideration of the Re -appointment of Joe Pickens to the Local Alcohol and Drug Planning Committee, with a Term Expiration Date of March 31, 2004. B. Consideration of Signataure of Order No. 2001-031, Recinding Order No. 2000-115, Reactivating Land Use Appeal for Eagle Crest III - Rick Isham, Legal Counsel C. Consideration of Signature of Order No. 2001-030, Recinding Order No. 2000-116, Reactivating a Land Use Appeal for Eagle Crest III - Rick Isham, Legal Counsel 3/14/01 V becomes what is the big monetary advantage to doing it yourself instead of having the subcontractor do it. There should be profit and overhead in either case. There is no difference on how the people are paid. Mr. Wilkinson said he takes exception with that statement in that you aren't talking about the moment you are doing the work. You are talking about being the low bidder, having all the cards, and going to the three or four subcontractors for this type of work and start bid shopping. Commissioner Luke said that they are talking about the difference of what the general was intending to do, that kind of work. Whether the sub does it or the general does it, it is still prevailing wage. Mr. Wilkinson said it is all prevailing wage, but the issue is that it is all lump sum, too. The question is that if you have the power to shop the bid of that subcontractor and save money, you are going to do it. Commissioner Luke replied that the subcontractor has the option of doing that portion of the contract. If he accepts that, he exercises that option. Mr. Wilkinson said the reason the lump sum price was submitted is because, if you are a specialist, you usually can bid pretty high margin work. When the general contractor says he wants to get you down on your price, where does it come out of; it comes out of the high margin work. If the $128,000 that they wanted TGL to do was the low margin work, which we can surmise that it is since he doesn't want to do it, then TGL is harmed in the process. Commissioner Luke said that it appears Mr. Wilkinson is assuming things for the apparent low bidder that aren't in the record, and is trying to read their minds. The subcontractor has the option of accepting the contract for doing the portion that the general doesn't do, isn't that correct. Mr. Wilkinson replied yes, pre-bid; not after bid. That is the issue at hand. Commissioner DeWolf stated that if in fact everyone would have said that there are four areas that need to be handled and bid each of these four individually, prior to the bidding, what you are claiming is that L & H did this after the bidding. Rick Isham stated that in terms of evidence before the Board, to paraphrase what Mr. Wilkinson is saying, is that in order to list a subcontractor and an amount, there should be behind that listing a piece of paper or fax transmission or Minutes of Hearing Page 4 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 1 i i 1 i I I 1117 .. ` E� 6; f { , i 1 ML. I �Ik C O a 4 � C � � C O a 1 I t 'V ! q " 1 1 N ' 4 u i CL �o N Z t something that has exactly the same number, and it would be from the subcontractor who is listed. Commissioner Luke said that in reality those things come in on phone calls, and the backup information doesn't get there for a while. Mr. Wilkinson said you have to step into the mind of the general contractor at the moment he signed the certification listing his subcontractors. He's making a statement. There is a larger issue here. If we accept, as the Legislature has said, that bid shopping is wrong, what happens to the bid statute if the Board of Commissioners sends a message that you can list anybody and any amount even if you don't have a commitment from them. The guaranteed result would be that every general contractor submitting a bid, when preparing their certification, will list them all at five percent of their proposed subcontractor amount. After the fact, they'll go back to bid shopping. Commissioner DeWolf explained that the thing he would like to see is the documentation - not just a letter after the fact that this is someone's intention - prior to this bid being closed that TGL's bid was definitely all or nothing. Mr. Wilkinson recommended that the Commission require L & H Grading to supply copies of their bid file on this item. Commissioner Luke asked if Mr. Wilkinson was saying that the subcontractor did not submit a bid on written form to L & H. Mr. Wilkinson said Mr. Kwake of TGL will testify that he submitted a written document to all general contractors with one lump sum price. Commissioner Luke asked if it says on that document that TGL won't do just part of it. (Mr. Wilkinson then referred to his paperwork.) Mr. Wilkinson then said that he misquote. He said that TGL did break out subtotals on their quotation to L & H, but doesn't know if they correspond to the $128,000 figure. Nick Kwake of TGL spoke. He said he has been in the liner business for twenty- one years and is the president of TGL. He said that L & H called him the day before the bid was due, asking for a quote; he gave him the same quote that he ha provided to the others. Rick Isham asked if each of the items numbers 7, 8, 9 and 10 were listed in the specifications so that the contractor would have been required to bid each of those Minutes of Hearing Page 5 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 items. Mr. Kwake said yes. Commissioner Daly asked if the request for bid was broken down. Mr. Kwake again said yes. He also said that normally on this type of project there is one price that is given. He said that his company normally doesn't break down quotes, but several contractors had asked for it. The same document went to all contractors. Commissioner Daly asked if the request for bid was broken down this way; Mr. Kwake said he believes it was. Rick Isham said that he noticed that each of the items listed by JAL in the subcontractor list are higher than the ones that are listed in the bid quote. He asked if Mr. Kwake quoted different prices to different contractors; Mr. Kwake said no. Mr. Wilkinson asked Mr. Kwake if he had a conversation with anyone from L & H Grading concerning whether or not TGL would be doing less than all of those items. Mr. Kwake said after the bid opening, yes. Commissioner Luke asked if there was any conversation before the bid opening where Mr. Kwake told L & H that it could not be broken down. Mr. Kwake said no; that it is industry standard that one company does the whole liner system in order to make sure it is done properly. It is a coordination issue, and a warranty cannot be given if others do part of the work. Commissioner DeWolf asked if no one else anywhere does it that way, having separate contractors perform separate functions. Mr. Kwake said not that he is aware of, but there are other liner companies in the northwest and he doesn't know their specific work practices. Joe Levesque, CEO of JAL Construction, spoke. He said that there are other items that will be added on to that liner cost, such as company overhead, profit and a trench that needs to be excavated. These increase the original subcontractor's quote. He said that generally they don't go in straight with the bottom line of a subcontractor; he will add percentages on for the company. Rick Isham asked that when JAL did its subcontractor disclosure statement, did JAL disclose TGL liners at $445,960; Mr. Levesque said yes, but he didn't personally write the figures in; they were included for all of the work that they had on their original quote. Minutes of Hearing Page 6 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 Mr. Levesque further said that on occasion when they are dealing with minority subcontractors, they'll bid items like flagging and perhaps some clearing. Occasionally you will call the subcontractor prior to the bid opening and ask if they would be willing to do the clearing or the trafficcontrol and we'll do the clearing, and so on; but that has to be done prior to the bid opening. He said if they make that phone call, they make a note of that. Otherwise, they don't touch a sub's quote. Commissioner DeWolf said that it appears there are four different pieces of a bid, put in prior to the bid opening. He asked if isn't that de facto saying that there are four different parts involved. Mr. Levesque said actually not; that the subcontractor is bidding the contract as those different items relate to him with a total at the bottom on that. This has to do with progress billings and payments, and makes a cleaner transaction. Rick Isham said that Timm Schimke submitted the subcontractor disclosure statements, and that the JAL Construction subcontractor disclosure statement for TGL is $445,960, which is the same number. The contractors have to bid all items. Commissioner Daly stated that another reason that Timm Schimke had asked for the subcontractor to break out their bid is to be sure that everything has been included. Rick Isham said that in this particular bid schedule they were required to separate them. Mr. Levesque said that on the listing of the source for the aggregate, the job takes two types of aggregate. One of those is a crushed aggregate and the other is a rounded, river -type rock. He said that he thinks L & H Grading will need two sources to provide the two different types of material. JAL's quote provides for both of those materials, and he thinks that L & H is missing an item. Rick Isham stated that there was no prequalification of any of the subs that would be providing the significant portion of the work to be performed. He asked Mr. Wilkinson to explain how the Board of Commissioners can look at behind the disclosure, and how far back should they go. He said that clearly if you have a contract to provide a source of material, they can provide that because it is not a subcontract. How far does this Board have to go back to say that the subcontractor disclosure statement is not valid? Minutes of Hearing Page 7 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 Mr. Wilkinson said the traditional, legal rule has always been that a public body need not look behind the four corners of a bid to determine responsibility. That rule has been put on its ear as a result of the listing statute. It is asking the bidder to affirmatively represent what went on behind the bid. He said he thinks at a minimum the Commissioners have both the right and the obligation to request that the apparent low bidder provide documentation to substantiate that those that they listed, or didn't list, are appropriately listed or not listed. Commissioner DeWolf said that it is not his responsibility to search out who is not listed. He hasn't been told by Mr. Wilkinson who is not listed. Mr. Wilkinson said they don't have the power of subpoena, but certainly it's clear that when the contractor is going to call for $500,000 worth of specialized aggregate and their bid doesn't contain this, one has to wonder how they are going to supply a critical component of this project. They need to demonstrate that they have a source. Commissioner DeWolf stated that they've already heard that this would be done after the contract is signed, and if they can't deliver it will be dealt with at that point. Mr. Wilkinson said that if you, two months after the fact, after the submittals are gone and they've mobilized to the job and they start doing this very technical work, you suddenly tell them they are not qualified to do that; the next call will be to him, for breach. Commissioner Daly asked if the County is required to list all the subcontractors who provide a specific dollar amount of work. Rick Isham explained yes, there are certain percentages involved. Commissioner Daly asked if the aggregate is listed on the bids. Rick Isham explained that there are twenty listings, and the aggregate is one of them. Commissioner Daly asked if both contractors listed all of their subcontractors. Rick Isham said that a general contractor might say he will do all of the work, but this may not always be true. If he isn't licensed for a particular type of work, he may intend to hire. Timm Schimke said that of all the subcontractor disclosure forms, L & H listed eight, and JAL listed three. It is impossible to go through the paperwork and discover who is missing. Mr. Wilkinson said that there are two separate bases for the protest - a failure to list and improper listings. Minutes of Hearing Page 8 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 Jim Beck of L & H Grading then spoke. He has been the majority owner of the company since 1996. He stated that most of the work that his company does is landfill work. He said they have done approximately 74 landfill projects since 1988 in the states of Oregon, Washington and California. They recently completed the largest project in the northwest in Arlington, Oregon. All of those projects involved using liners. In total, they have completed more than five hundred acres of landfills. Mr. Beck said that he feels the purpose of the listing statute is to discourage bid shopping. They listed TGL only to install the geomembrane liner because of a possible time conflict with two other landfill projects that L & H is currently doing, and in which L & H is installing the liners. Commissioner Luke asked if L & H is qualified to do this type of project; Mr. Beck replied yes, his company is qualified to do all four of the sections, and he encouraged the Board to contact his long list of references. Commissioner DeWolf asked if Mr. Beck would typically break this portion into pieces. Mr. Beck said they normally would do it all, but he listed TGL on this bid because of the possibility of a time conflict with another job. His estimator made the call to TGL and says he asked for a liner quote only. When the quote was received, it listed all four items when only one portion was needed. There was a price with each item, so he listed TGL to install just the liner, with the idea that L & H would be procuring the other materials and installing them. That is verified when the subcontractor disclosure statement is examined; he listed the supplier of the geotech, geocomposite, and the geosynthetic clay lining. Commissioner Luke asked if, after a successful bidder has the job, he finds he has no time conflict and decides to do the work himself and not use the sub, is this allowable. Rick Isham said he doesn't know the answer to that question. Mr. Beck said that while there may be strict qualifications for the subcontractors, the general contractor may never have done a landfill before, but can bid on it as long as he provides a performance bond. That's the guarantee that the work will be done at the cost quoted. He said he keeps hearing that the TGL quote was lump sum, but clearly it lists the liner cost separate. Commissioner DeWolf asked if there is anything in writing that L & H only wanted one item. Mr. Beck said no. He said he is not out on the street trying to Minutes of Hearing Page 9 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 manipulate things; he hasn't talked with any other liner installers, and will do the work himself if necessary. Mr. Beck said regarding industry standards, you don't have to go much further than Crook County, where L & H did an installation last year. He said that regarding the rock, in 90% of the landfills they do they manufacture their own rock; they have portable crushing, washing and screening equipment and a source in Prineville for raw material. Commissioner Luke asked if they are not buying the gravel and are doing it themselves, is that outside the listing. Rick Isham replied that they don't have to list themselves if they are doing it themselves. Mr. Beck then stated that there has been no bid shopping, as JAL has stated. Rick Isham said that nothing on the subcontractor disclosure list provides that they list what they're providing as a subcontractor. By looking at the face of the document, all you know is that they are listed as a subcontractor. This is per regulations in the County's standard form. It is unknown if rock in the ground is a supplier; and it is difficult to see how a dispute over subcontractors is of any benefit to the County. He said that the Board is asked to reject one bid, the apparent low bidder, and go on to the next, at an additional cost to the County. He said that looking at the subcontractor disclosure lists, and everyone has listed fencing and electricians, but the protestor has listed none of those people. Commissioner DeWolf said that they have not yet awarded the bid to anyone. Rick Isham said there is a fourteen -day protest time frame involved. Commissioner Luke stated that if the apparent low bidder had decided to do the entire job himself, you wouldn't even have this. Mr. Beck said there would be one more listing for a supplier, and one less listing for a combination. Commissioner DeWolf explained that the key issue is that L & H Grading claims that they asked for a bid for just the liner portion. TGL, Inc. claims that they were asked for a total lump sum bid on all four parts. Unless there is documentation one way or the other, it sounds like all of this was verbal, and he doesn't know how the Board is supposed to know what was said over the telephone. That's the dilemma. He then asked for a response from both sides that would answer that question. Minutes of Hearing Page 10 of I 1 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 He requested that this issue be left open until 12:00 noon, Friday, March 16, 2001 for final written arguments and further documentation. All information must be delivered to the Commissioners' office by that time to be considered. The Board will then deliberate this issue again at its administrative liaison at 1:30 p.m. on Monday, March 19, 2001. Rick Isham stated that a written decision will be required from the Board of Commissioners. Being no further testimony brought before the Board, Chair Tom De Wolf adjourned the hearing at 10:25 a.m. DATED this 7t" Day of March 2001 for the Deschutes County Board of Commissioners, Convened as the Contract Review Board. h Tom DeWAf, Chair s R. Luke, Commissioner ATTEST: Daly, JVommissioner Recording Secretary Minutes of Hearing Page 11 of 11 Pages Board of County Commissioners Convened as the Contract Review Board Protest of Intent to Award Bid - Knott Landfill Cell 2 Project Wednesday, March 14, 2001 To: BOCC From: Timm Schimke Date: 3/6/01 Re: Contract award protest The Board of County Commissioners issued an intent to award a contract to L&H Grading, Inc. for Knott Landfill Cell 2 Improvements on February 28, 2001. On March 8, 2001 we received a protest (attached) of such award by JAL Construction, Inc. specifying the grounds upon which the protest is based. A hearing is scheduled for Wednesday, March 14, 2001 at 9:00 am to resolve this issue. The main complaint by the JAL Construction centers around TGL, Inc., a subcontractor that specializes in liner installation. The liner on this project consists of 4 layers of various clay or plastic materials. JAL Construction asserts that L&H Grading listed TGL on their Subcontractor Disclosure Form for only a portion of the work that TGL quoted. Indeed, TGL has submitted a letter confirming what their total quote to all general contractors was, and claims that their quote was an "all or nothing" quote. They say that they will not provide services to L&H Grading for less than the full amount of their quote. According to JAL Construction, since TGL will not enter into agreement with L&H Grading, L&H Grading has submitted a bid that is not responsive and should be disqualified. L&H Grading contents that they requested a specific quote from TGL for one portion of the liner installation. L&H Grading contends that they have adequate experience to install liner components themselves. TGL responded with a quote for the installation of all liner components. L&H Grading contends that TGL's quote did not specify "all or nothing" terms, and they felt they were acting in good faith when they listed TGL for that portion of the quote they specifically requested. L&H Grading disclosed suppliers of liner components that they intend to install themselves. Additionally, JAL Construction claims that L&H Grading failed to list an aggregate subcontractor on their Disclosure form. L&H Grading reports that they have a source of aggregate in Central Oregon, and will not be purchasing aggregate for the project from local suppliers. Contract specifications do not require one company to install all components of the liner system. Specifications set installation experience level requirements for each liner component. State law gives authority to substitute a nondisclosed first-tier subcontractor when a disclosed first-tier subcontractor fails or refuses to execute a written contract after having had a reasonable opportunity to do so. 03/113/01 15:54 FAX 503 223 5706 STEWART SOKOL STEWAR2T SOKOL & G H. Let Cook" Arnold L. GLny Thomas A. Iarldndo Jan D. Sokolt John Spencer Stewart*to Susan Z. Whimey` Jeffrey B. Wilkinsont VIA FACSIMILE 1500 BENJAMIN FRANKLIN P1AZA ONE SW COLUMBIA STREET PORTLAND. OREGON 97258-2016 (503)221-0699 FAX (503) 223-5706 www.lavmg.coln 13 March 2001 - Mr. Timm Schimke, Director of Solid Waste Deschutes County Department of Solid Waste 61000 SE 27h Bend, OR 97207 RE: JAL Construction, Inc./Deschutes County Knott Landfill Our File No_ 7827-33910 Dear Mr. Schimke: This letter is a follow up to my previous written with the award of the Cell -2 improvements to L&H Gr An additional significant factor must be considet evaluating the responsiveness of L&H Grading's bid. T power that L&H Grading acquires by virtue of listing TG amount that TGL quoted L&H Grading. Listing TGL for quotation to L&H Grading gives L&H Grading two poter process. First, if, as it occurred here, L&H Grading finds it It has significant leverage over TGL. Because L&H Grp it is the only entity with which TGL can supply the servii general contractors. L&H Grading sits in the catbird se award or not award that scope of work to any of the sul work. If TGL does not make price concessions, L&H G supplier of the same scope of work and exert the same iY LLC F YS AT LAW 0002/003 Todd O. Foster" Angela M. Otto* Matthew A: wand Stephanie A. Wichman All Members of Oregon Bar * Washington Bar t District of Columbia Bar o Alaska Bar rtment of Solid Waste - of the protest in connection d by the Commissioners in at hector is the negotiating , Irn:. ("TGL") for less than the )ss than the amount of TGL's tools to manipulate the bidding If os the apparent low bidder, ng Is the apparent low bidder, a that it quoted to all the be cause it has the power to Dn ractors who quoted the ding can go to the next The second leverage acquired by L&H Grading I� theit it Is free to refuse to contract with TGL under the listing statute if TGL refuses to enter into a subcontract for the reduced scope of work for which they were listed. �ne of the few exceptions to the requirement that a listed subcontractor ultimately perfo;m tt-e work is if the listed ------------- 03/23/01 15:54 FAX 503 223 5706 STEWART SOROL Q003/003 Mr. Timm Schimke 13 March 2001 Page 2 subcontractor refuses to sign a subcontract. ORS 279.07. f TGL refuses to accept the subcontract for the reduced price, they can substitut on :he grounds that TGL has refused to agree to a subcontract. If the Commission allws _&H Grading to list in that fashion, all bidders In the future will simply list every sub ontiactor for an amount less than they know a subcontractor is willing to do the work. The result of which will be none of the listed subcontractors will accept the lower price, :and thus the purpose of the listing statute, which is to discourage bid shopping, 411 h;ave been defeated. For these reasons, the Commissioners must reject the bid of L&H Grading and award to JAL Construction, Inc. I look forward to -meeting you at the hearing set for tomorrow morning at 9:00 a.m. before the Board of County Commpsio iers of Deschutes County, 1130 NW Harriman Street, Bend, Oregon 97701. Pleas? ad•/Ise me if there are any changes in the scheduled hearing time. Very truly o , STEWA T OK L & rRf►Y, LLC JBW:tj `. cc: Joe Levesque, JAL Construction, I W.%WORKU13VMAucwmW,dar %$d*nks.osi30.wpd Ik son :. (via csim le) - t � 3 a STEWART SOKOL & -G LLC P, 2- 11' lAW