Local preference hits pavement job (UPDATE)
Published: April 12, 2010
Tags: appeal, bid, Burbach, D.C. Burbach, Department of Public Works, Don Stark, DPW, Korban, law, local preference, Milwaukee General Construction, paving, Payne & Dolan, Piefer, Snorek Construction, Stark Asphalt Service, Zenith Tech
D.C. Burbach Inc. could become the first paving contractor to lose a job because of Milwaukee’s preference for city-based bidders.
Waukesha-based Burbach submitted a low bid of $497,143 to repave West Tower Avenue. But, based on the city’s local preference law, Milwaukee-based Stark Asphalt Service Inc. is the recommended project winner with a $506,820 bid.
Peter Burbach, president of D.C. Burbach, said the preference law has left him considering giving up on bidding Milwaukee jobs.
“Not yet, but if it happens again,” he said. “Why should I go through that process? It takes a lot of man-hours to bid these jobs.”
Burbach said he will write a letter to the Milwaukee Department of Public Works to complain about the city’s recommendation to award the project to Stark. He said he has not decided if the company will file a formal appeal of the award.
The city law gives Milwaukee-based companies a 5 percent bidding cushion, with a cap of $25,000, when bidding on city contracts. Two sewer contractors have sued the city after losing contracts because of the local preference, but the Stark project would be the first paving job involving the preference law.
Don Stark, CEO of Stark Asphalt, said city leaders can run their bidding system however they see fit.
“We were eligible for it,” he said, “and we filled out the form for it, and that’s what we did.”
Burbach said the preference is a disincentive for contractors and will result in less competition and higher costs on Milwaukee projects.
Yet Burbach’s prediction has not played out on Department of Public Works projects this year, said Ghassan Korban, coordination manager for the Milwaukee DPW.
“We have not seen any signs or any indication of loss of interest on behalf of the contractors,” he said.
The city has opened bids for seven paving contracts since February, and all have had three to five bidders. The preference law applied to all seven contracts, though it was never necessary to use it until now.
The same five builders bid on almost all of the projects, and two of the regulars — Stark and Milwaukee General Construction Co. Inc. — are based in Milwaukee.
Milwaukee General has won three contracts, Stark won one and Burbach, which has bid on all of the city contracts, has won one project.
Snorek Construction Inc., Greenfield, submitted a low bid for a contract that has not yet been awarded. The seventh paving contract is recommended for award to Stark because of the local preference.
Zenith Tech Inc., Waukesha, has competed for two of the paving contracts. The preference law is not prompting the company to shy away from bidding in Milwaukee, said project manager Scott Piefer. But, he said, he opposes the preference because it impedes open bidding.
“If there’s work out there that fits our operation and fits the schedule that we’re looking at doing, we want to put a number on it,” Piefer said. “You won’t get any work if you don’t bid it.”
Burbach said he has employees waiting to get called back to work. He said his crew of 35 people, eight of whom are Milwaukee residents, are starting to come back from winter layoff, but may have to wait longer and work fewer hours if he loses this contract to Stark.
“They’d have a lot more to do if we got this job,” he said, “because it’s a nice, big job.”