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Contractors sue city over local bid preference

Sean Ryan
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Two contractors went straight from Milwaukee’s City Hall to the courthouse after a government panel rejected their challenges to a local bid preference.

Underground Pipeline Construction Inc., New Berlin, and American Sewer Services Inc., Rubicon, sued the city (PDF) Monday. The contractors oppose the city’s decision to give Milwaukee-based companies a 5 percent bid advantage. The builders, on separate contracts, submitted low bids but may lose the contracts to MJ Construction Inc., Milwaukee, because of the local preference.

“It’s not just these two contracts; it’s our future, our industry’s future,” said Richard Wanta, director of the Wisconsin Underground Contractors Association, which supports but is not a party to the lawsuit. “It’s our marketplace.”

The lawsuit asks Milwaukee County Circuit Court to force Milwaukee to award the two contracts to Underground Pipeline and American Sewer. The lawsuit also seeks to prevent the city from using a local preference on all Milwaukee projects that receive money from the Wisconsin Clean Water Fund, which provides loans to municipal water and sewer projects. Attorneys also filed an injunction asking the court to prevent the city from awarding the contracts until the lawsuit is decided.

Jeffrey Mantes, Milwaukee Department of Public Works commissioner, said the department will comply with the injunction.

The lawsuit names as defendants the city of Milwaukee, MJ Construction and the Public Works Contract Appeals Committee, which on Monday morning unanimously rejected Underground Pipeline’s and American Sewer’s appeals of the recommended contract awards.

Michael Tomasini, president and owner of MJ, and Norbert Dretzka, owner of Underground Pipeline, sat side-by-side during the morning hearing and shook hands after the city committee ruling. After the hearing, Tomasini said he has no hard feelings against the other contractors. He said he bid the jobs competitively without considering any local preference.

“I don’t know what I would’ve done if I was in their position,” Tomasini said.

A few hours after the committee’s decision, attorneys for Underground Pipeline and American Sewer filed their lawsuit. Tomasini was not available to comment on the lawsuit before deadline.

The lawsuit reiterates arguments made during the morning hearing by attorney Joe Olson, who is representing Underground Pipeline and American Sewer.

Deputy City Attorney Katherine Block rejected most of those arguments Monday morning but agreed that MJ Construction’s Milwaukee property is owned by Tomasini, so the company does not directly pay property taxes to the city. That difference in property ownership probably does not satisfy the city requirement that companies receiving a local preference pay property taxes to Milwaukee, she said.

“It’s not entirely clear,” Block said, “but I think the fairest reading of that section is it requires ownership of the property by the business itself.”

Tomasini said he was not trying to skirt the rules when he signed up for the preference. He said he filled out the paperwork to get the preference after a Milwaukee-based subcontractor, James Harris, president and owner of Sirrah Construction & Co. Inc., urged him to.

Harris said he would get more than $200,000 in concrete work as a subcontractor to MJ on the two contracts. Sirrah, which is a minority-owned company, does not directly benefit from the local preference because it applies only to general contractors, he said.

“It’s going to have to take time to see if the program will work,” Harris said, “and two jobs, it’s not enough to say if a program will or will not work.”

During Monday morning’s hearing, Tomasini repeated that he does not know what he did wrong to end up in this situation.

“I didn’t want to be the first one,” he said.

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