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Bid errors open door for interpretation

Paul Snyder
paul.snyder@dailyreporter.com

Contractors are making more mistakes more often on bid documents, prompting state officials to broach the prickly prospect of giving themselves more discretion in awarding projects.

“I’d say with almost every project, we see one contractor disqualified for a mistake in the documents,” said David Helbach, an administrator in the Wisconsin Department of Administration’s Division of State Facilities and secretary of the state Building Commission. “And in this economy, more and more people are bidding on state projects for the first time and we’re seeing more mistakes.”

Helbach said problems range from the clarity of documents to state officials not providing enough information at pre-bid meetings. But he also called a recent snafu in bids for the new academic building at the University of Wisconsin-La Crosse “heart-wrenching” and said problems arose that might not have in the private sector.

“We had 50 some bidders, and 14 contractors made mistakes — five of them were first-time bidders from out of state,” he said. “But the winning bidder actually made a clerical mistake and put the numbers on the wrong page.”

As a result, La Crosse-based Fowler & Hammer Inc. had to withdraw its bid, Helbach said, and the next-lowest bidder, Fond du Lac-based C.D. Smith Construction Inc., won the project.

“It was one of those things where, in the private sector, I might have been able to use my discretion and say, ‘This is what they meant,’” he said. “But I can’t do that here.”

Giving the state more discretion could pose some dangerous problems, said Robert Anderson, director of the Wisconsin Technical College System Purchasing Consortium and chairman of the association’s Cooperative Purchasing Committee.

“State leaders are obligated to treat everyone equally, but they’re also obligated to get the best value for the taxpayer,” he said. “There can be a very direct conflict right there. And if you let the state have more discretion, you open yourself up to the possibility of it being abused down the road.”

Helbach said he is not advocating for more discretion, but it could be a major topic of discussion when he holds a listening session on the clarity of state bid documents later this month with contractors, architects and engineers. He said as many as 100 people are expected to attend.

“The question is: If someone makes an obvious clerical mistake on a $15 million contract, should the state use its discretion?” Helbach said. “I can certainly see the case against it, probably from the next-lowest bidder, who’ll say, ‘If I followed the rules, why couldn’t they?’”

Finding a happy medium between fairness and value to taxpayers will be a challenge, but it is attainable, said Dennis Lynch, vice president of health care service and general manager of southern operations for Neenah-based Miron Construction Co. Inc.

“We can do it in the private sector,” he said. “It’s up to the politicians to see if they’re comfortable with the changes.”

But private-sector practices cannot always translate to state government, said state Rep. Dean Kaufert, R-Neenah, and member of the state Building Commission. Although he said he would approve more discretion on clerical errors, the Legislature might disagree.

“You could run into situations allowing (Helbach) to pick and choose contractors, and then there’s going to be a problem,” he said. “With all the calls for transparency now, (Helbach’s) in a tough position.

“Someone once told me no good deed goes unpunished. I think in this case, you could fix an error that will come back to bite you.”

Anderson said discussing change is admirable, but people who make mistakes also need to realize their responsibilities.“The state can try to make things as clear as possible,” he said. “But if nobody asks questions, they can only assume people understand. If you’re bidding on a state project for the first time, you have to realize when it’s time to pick up the phone and get questions answered. It can’t be 10 minutes before you give (the documents) to FedEx.”

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