In an attempt to win back two city contracts from MJ Construction Inc., two contractors are arguing the builder does not qualify as a Milwaukee-based company.
Underground Pipeline Construction Inc. (PDF), New Berlin, and American Sewer Services Inc. (PDF), Rubicon, are protesting the city’s recommendation to award two sewer contracts to MJ based on a 5 percent bidding cushion for Milwaukee-based companies. The two argue MJ does not meet the standards to receive the bidding advantage.
“I’m not saying MJ Construction doesn’t operate out of Milwaukee,” said Dennis Biondich, president of American Sewer, “but that’s not what the ordinance said, ‘operate out of Milwaukee.’ They were very specific.”
The Milwaukee Public Works Contract Appeals Committee will consider the two appeals at 10:30 a.m. Monday in room 501 of the Zeidler Municipal Building, 841 N. Broadway.
Milwaukee gives a 5 percent cushion on bid prices to companies that pay property taxes to the city. Michael Tomasini, MJ Construction owner and president, and Kathleen Tomasini own the contractor’s headquarters at 8617 W. Kaul Ave., Milwaukee. The company name is not listed as the owner of the property.
Representatives from MJ Construction were not available for comment Friday.
Since the new rule took effect Aug. 10, four companies — Stark Asphalt Service Inc., Lalonde Construction Co. LLC, C.W. Purpero Inc. and MJ — have applied to receive the preference on public works contracts. None of the company names are listed as the owners of the properties in Milwaukee, though the landowners are either the owners of the companies or company subsidiaries.
“The first opportunity to apply (the bid preference), and they’re applying it to a business that does not pay property taxes to the city of Milwaukee,” said Joe Olson, an attorney who helped Underground Pipeline and American Sewer write their appeals. “Their landlord apparently does.”
Underground Pipeline does not own its land in New Berlin, and American Sewer does not own its land in Rubicon. Biondich is listed as the owner of American Sewer’s land. The New Berlin property is officially owned by R-Best Management Corp., which has the same address and same owner, Norbert Dretzka, as Underground Pipeline.
“We’re not taking advantage of a local bid preference,” said Mike Dretzka, project manager for Underground Pipeline. “We never registered for it. They registered for it. They certified on the statement that they were.”
Olson said there is a real-world difference between the land being owned by MJ and being owned by Michael Tomasini. The city only can pursue property taxes from Tomasini if they are not paid, he said, and could not pursue the company.
Dretzka, conceding that he is not an attorney and does not understand the legal peculiarities of the argument, said there are bigger issues in play. The back and forth over MJ’s status as a taxpayer just proves the city program has loose definitions, he said.
“It’s something they need to nail down tighter if they want this to go through,” he said. “In the end, I hope it doesn’t go through.”
Milwaukee requires three things (PDF) of contractors that want local preference: They must pay taxes to the city, have a physical location in Milwaukee’s borders and have done business in Milwaukee for more than a year.
“It’s pretty clear what ‘located’ means,” Olson said, “but I don’t know what ‘doing business’ means.”
Biondich said there would be no end to the problems if the city qualifies MJ as a local company. He said he owns land in Milwaukee and pays property taxes and asked if that would satisfy the city requirement.
Biondich said the appeal American Sewer filed is only intended to win back the more than $1 million contract it might lose to MJ’s runner-up bid.
“That’s what we’re looking at,” he said. “Let’s get at least these projects awarded to the low bidder, which gives our attorneys more time.”