By Karen Gleason
The 830 Times
City council members have rejected all three proposals for the rehabilitation of the city’s transportation depot building downtown after questions arose about large disparities in the prices and the methods used to evaluate the proposals.
City council members discussed the proposals for the depot rehabilitation work during their most recent meeting, after hearing comments from two members of the audience.
The agenda item under consideration was a resolution “authorizing and directing the interim city manager to approve a contract with Jose Ernesto Salazar, LLC, DBA (doing business as) JESCO, in the amount of $540,000 for contractor services for the Southern Depot Rehabilitation Project.” The depot is the city-owned building located at 100 W. Ogden St.
The first person to speak to the council was Elisabeth Ortiz, who represented the contracting company ALAS, LLC, which had submitted the lowest-priced proposal for the project.
Ortiz told the council, “The reason I am here today is that we were present when the bids were turned in, and the company that is being awarded the project was at $540,000, and we were at $188,000. When they opened the envelopes, the company that’s being awarded did not have their bond, so that automatically disqualified them from the bid being awarded (to them). So that was our first question: why are they being awarded the project if they did not meet the qualifications?
“Second there is a company from out of town that submitted a bid for $210,000. We were at $188,000, and the company (the bid) is being awarded to is at $540,000, so we wanted to see what it was that was being bid, if they turned in the same specifications as we did. We wanted to make sure that we’re bidding what they bidded and so why is the higher number being awarded the project?” Ortiz finished.
Del Rioan Raul Alatorre, owner of ALAS LLC, also addressed the council.
“I’m actually going to bring up the same topic, regarding the same process. We had a Zoom meeting with your city purchasing agent and the city architect, and we asked them to describe the scope of work that was going to be done for this project. I did mention other things that need to be fixed which were not in the scope, so I just want to make sure we’re actually comparing apples to apples, unless something was alternated afterwards, which I think is wrong if it was.
“Even though it’s considered a grant and the windows (for the project) have already been ordered. . . It makes me wonder how we actually spend our tax dollars. I mean, you have the high bidder, then you have two other bidders almost on the same level. Why did this one go so high? Is he bidding for something else that we’re not aware of, that we weren’t told about? If that’s the case, then I think you all should table it and let us bid again and be fair about it because if (the city) purchasing agent did not provide the correct information to me, he defaulted on that. I think it should be fair and square. Also, customer service. Please answer your phones,” Alatorre said.
After the two comments, Mayor Al Arreola invited City Purchasing Agent Luis Menchaca to give the council a presentation on the agenda item.
Menchaca first told the council, “We want to specify this was actually a request for proposals. It was not a request for bids.”
“A request for proposals is for something that’s maybe a little bit more difficult to put on paper, and so that’s mainly where the difference comes in. A request for proposals also doesn’t tie us to price and that way is normally awarded is to the highest evaluated vendor,” he added.
Menchaca also said, “Even though the evaluation takes the price into consideration, it wasn’t a major factor. So whenever we did the interviews, there were certain vendors who said they hadn’t been able to take into consideration the level of rot that the building already has, so that’s mainly where, once everybody evaluated all the different vendors that submitted their proposals, the highest-rated vendor was JESCO, so that’s why we are proposing for JESCO to be awarded the contract.”
When Arreola asked if there were any questions, Councilman J.P. Sanchez said, “I don’t have a question, but the way I see it, (the company making) the highest proposal did not provide you with a bid bond. Was a bid bond required?”
“The bid bond is required, but. . .” Menchaca began.
Sanchez interjected, “So he didn’t supply you with a bid bond.”
“Yes, but. . .” Menchaca began again, but Sanchez said, “That’s the end of that question.”
“He didn’t supply you with a bid bond. The other two vendors did supply you with a bid bond,” Sanchez added.
“No. And if you’ll just allow me to elaborate,” Menchaca said.
“Yes, yes they did. I see on the bid form here, where it says ‘bid guarantee,’ that the other two bidders did supply you with a bid guarantee,” Sanchez said.
Menchaca replied, “There are several items that were listed as requirements, and not all the vendors submitted all the requirements. Now, normally the city will only reject a proposal, a bid, a statement of qualifications, if the missing item is going to affect the price, the quality or the delivery of the work. The bid bond can still be obtained before a contract is finalized, and that’s why we felt comfortable moving forward with JESCO.”
Sanchez responded, “A bid bond is supposed to be supplied when you bid. And there’s such a thing as a performance and payment bond, and that is usually supplied when you’re being awarded the contract, but a bid (bond) is supposed to be supplied when you bid. That means your number is guaranteed.”
“Yes, sir, in requests for bids. This is a request for proposals,” Menchaca said.
Sanchez said, “I can’t accept this. I can’t go with this. It sounds like, to me, your specifications were too vague. You had two vendors that were $10,000, $20,000, apart, and then you had this other one that was $350,000 apart, and right now, the city is in a crunch. We’re in a financial crunch. We need to save as much money as we possibly can, so you’re gong to need to go back, as far as I’m concerned, but I’m just one vote up here.
“You need to go back and work on your specifications and make it fair to everybody, because the way I see it, you’re not being fair to everybody, and then you’re asking us to award a contract that’s $352,000 more than the low bid. . .With this crunch that we’re in right now, we can’t afford to be making decisions like that, and I think it’s up to you to clean up what you’re doing. This is reflection on you,” Sanchez said.
Menchaca replied he is not the person who draws up the specifications for a project.
Arreola interjected and asked Interim City Manager Manuel Chavez to address some of Sanchez’s concerns.
“As Mr. Menchaca was mentioning, what determines what gets put out, is based on the type of bidding process that’s being utilized, in this case, it was a request for proposals. There might be something that we probably need to clarify in that sense. I’m comfortable if city council wants us to go back and do something different, but in this particular case, it was a request for proposals. It was specified what needed to be submitted, and as Mr. Menchaca mentioned, that, if you look at the bid, that’s something that should have been part of the whole process.
“But again, if that’s something to come back and re-evaluate or do something different, then we’re open to that,” Chavez added.
Sanchez then made a motion to reject all of the bids and submit new specifications, “making this project more clear.”
Councilwoman Ernestina “Tina” Martinez asked if the funding for the project came from grant money.
Assistant Finance Director Roxy Soto answered, “The request for proposals was a TxDOT requirement. They did ask us to do a request for proposals. We cannot do a request for bids for this project. Also, this was 100 percent grant-funded, so it’s not paid from property taxes or sales taxes. So it is a grant fund, and we do have the available funds for construction and for project management, and the (proposal of) $540,000 does meet the grant funds available for this project.”
Arreola said the project could be postponed “and go back to the drawing board.”
Menchaca said “going back to the drawing board” would require re-approval from the Texas Department of Transportation, through which the grant was funded, noting that process could take three months.
Arreola then asked if there was a second to Sanchez’s motion. Councilwoman Carmen Gutierrez gave the second, then asked some questions of her own.
“So, if I’m understanding you correctly, all three bidders had the same information and bid the same scope of work?” Gutierrez asked.
“Yes, we posted our request for proposals online. We did not provide it directly to anybody,” Menchaca answered.
Gutierrez asked if TxDOT had approved that, and when Menchaca said it had, she said, “So would you explain – and first of all, I’d like to clarify one thing: I was a certified state of Texas purchaser with TxDOT; it was part of my job. I also wrote specs and purchased procurements and contracts and right away, the very first thing, and I mentioned this to Mr. Chavez, I said there was no bond guarantee, and I would have disqualified (that proposal) automatically. We would not have moved forward with that.
“What I don’t understand, with that being said, I agree with Mr. Sanchez, how could you have such a big variance from $188,000, and the second closest was $210,000, and they’re kind of close to each other, but then you have the $540,000?
“And when I received information yesterday when I was questioning this, I was told that JESCO found extra things that they were going to do, included in that, that’s why their proposal was so much higher. My question is, were the other two bidders given the same opportunity to bid on the same amount of work?” Gutierrez asked.
Menchaca replied, “The amount of work was listed on their proposals so everyone had the same opportunity.”
After additional discussion and questions from other council members, the council voted unanimously to approve Sanchez’s motion to reject all of the proposals and begin the process again.
The writer can be reached at delriomagnoliafan@gmail.com.
