Milwaukee bid preference cuts city contractor
M.J. Construction Inc. fell $17 short of winning its seventh Milwaukee contract under the city‘s local preference law.
The law requires Milwaukee give a 5 percent bid preference to city-based companies, and a sewer project bid by Milwaukee-based M.J. exceeded that amount by $17. That means the city will accept a $143,550 low bid from United Sewer & Water Inc., Menomonee Falls.
The city’s Department of Public Works on Monday is expected to recommend United Sewer win the project.
Scott Maly, United Sewer’s vice president, said it is the closest he has come to losing with a low bid because of the city policy. But, he said, emerging uncut from the close shave only feeds his desire that the city eliminate the policy.
“I’m 100 percent against it, 100 percent,” Maly said. “The people who voted for this have no comprehension of the construction market. They don’t understand the profit margins. Five percent is a huge difference.”
Milwaukee law limits the 5 percent bid preference to a maximum of $25,000.
After bids were opened Wednesday for the contract, M.J. Construction officials questioned why the city did not invoke the local preference law, said Ghassan Korban, coordination manager for the Milwaukee DPW. The question hinged on whether the 5 percent margin should be based on M.J.’s bid of $150,744 or United Sewer’s low, he said.
“M.J., after I talked to them, opted not to pursue it,” Korban said.
Representatives from M.J. Construction did not respond to a call for comment.
Five percent of M.J.’s bid would have created a wider margin and would have given M.J. the contract. But the city always calculates the 5 percent margin based on the lower bid, resulting in a slimmer margin that, in this case, benefited United Sewer.
Dennis Biondich, president of American Sewer Services Inc., Rubicon, was not so lucky. A separate bid opening Wednesday resulted in city officials recommending acceptance of M.J.’s $430,540 bid instead of a $411,741 bid submitted by American Sewer. American Sewer earlier this month also lost a city water main contract to M.J. because of the preference.
Biondich said he will appeal Wednesday’s recommended award to M.J. If the appeal fails, it will be the sixth contract American Sewer has lost to the preference law.
United Sewer’s Maly said the local bidder preference is unfair no matter how the city does the math.
“The only solution,” he said, “is to have this ordinance repealed.”