Cost takes back seat for New Berlin utility job

By James Briggs

The city of New Berlin has agreed to pay $280,785 more than the low-bid price for design work on a sewer and water main project that’s part of a large development of city farmland.

New Berlin wants to help spur close to 600 acres of mixed-use development east of Moorland Road.

First, though, the city must install 9,500 feet of 16-inch water main, 2,320 feet of interconnecting water main and 1,950 feet of 12-inch sanitary sewer to set the table for future development.

New Berlin awarded the engineering contract for the sewer project to Madison-based Strand Associates Inc., which submitted a proposed price of $437,000.

Minnesota-based SEH Inc. submitted proposed fees of $156,215, and Lake Geneva-based Crispell-Snyder Inc. bid $169,180.

Strand project manager Matthew Yentz said he’s not sure how any firm could calculate such a low-cost proposal.

“We felt our proposal was very low and was a very good deal for the city,” he said. “Some of those numbers they saw are just unrealistic. I don’t want to speculate as to why they may or may not have provided such an exceptionally low price.”

Neither SEH nor Crispell-Snyder immediately responded to requests for comment.

New Berlin officials said they weren’t willing to test the math of firms that submitted strangely low bids.

The city wants the sewer and water main project completed by the end of 2012.

“The contractor was chosen because they could make the date that we have to have this completed by,” said Alderman John Hopkins, a member of New Berlin’s Utility Committee, which approved the contract. “It didn’t appear in our judgment as though (the lowest bidders) could, and we didn’t have recourse if they didn’t.”

In particular, Hopkins said, city officials were troubled that SEH estimated it could do the work in fewer than 700 hours — a feat Yentz said wouldn’t be possible.

“I don’t know if they were planning on subcontracting out a bunch of the work and that 600 hours was just their effort,” Yentz said, “whereas we’re doing the majority of the work in-house.”

The only two other proposals, from Milwaukee-based AECOM Inc. at $467,635 and Waukesha-based Ruekert-Mielke Inc. at $562,024, were more in line with Strand’s proposal.

Unusually low bids, though, have become more common in recent years, Yentz said.

“The engineering industry is seeing similar downturns to the economy and everything else, so there are a lot of hungry engineers out there,” he said. “As a professional service, we’re not really in a bidding situation. We try to be based on the quality of our service and negotiate a fair fee.”

New Berlin’s selection criteria, Yentz pointed out, gave little weight to price compared with other factors such as experience and familiarity with the city and type of work needed.

New Berlin officials are not yet sure what kind of development will go into the farmland, but Hopkins said it’s important to get the sewer and water main work done quickly so the city can move on to the next phase.

“There’s a lot that has to be done, a lot of planning that has to be done yet,” he said, “and we have to see what’s actually going to go in there.”

The city, Yentz said, will be glad it chose an engineer that didn’t cut corners in its proposal.

“I feel very comfortable with our number and the services we’re going to provide,” he said. “I would consider (the higher-bidding) firms closer in terms of peer engineering companies.”