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Contractors rekindle local preference fight (UPDATE)

By Sean Ryan

Milwaukee has invoked its local bidder preference on three sewer project awards, and contractors have challenged every contract.

Builders filing the latest challenge argue the local preference law hurts Milwaukee residents looking for work because, in the long run, fewer people are employed. One contractor, MJ Construction Inc., has received each sewer job awarded using the local preference law, and MJ’s workers will remain busy handling multiple projects.

But the city could put more people to work if the contracts were spread among several companies, said Dennis Biondich, president of American Sewer Services Inc., Rubicon. American Sewer and United Sewer and Water Inc., Menomonee Falls, on Wednesday will challenge MJ’s third city sewer contract that was based on local preference.

Instead of MJ’s one crew building three projects, Biondich said, three crews could do the same work, resulting in more people employed, he said.

“Would you rather have 20 guys working six months out of the year,” he said, “or 40 guys working three months out of the year?”

Milwaukee Alderman Willie Wade, who supported the local preference law, said the preference is not intended to generate jobs. The preference should give an edge to businesses that pay taxes to the city, he said, and that are more accessible to Milwaukee workers looking for jobs.

“If they were in Milwaukee, we wouldn’t be having this conversation,” Wade said. “They could still come to Milwaukee, and they can make their bids lower.”

American Sewer in late December submitted a low bid of $538,222 for a Milwaukee sewer contract, but the city recommended MJ receive a contract for its $547,633 offer. The local preference law requires Milwaukee-based builders win contracts if their bids are within 5 percent — with a limit of $25,000 — of the low bid.

Although United Sewer’s second-place bid of $544,940 for the sewer contract would have lost to American Sewer, United still is joining the appeal.

“It’s just a matter of time before I’m the one that gets leapfrogged,” said Scott Maly, United Sewer vice president.

Maly said United has a crew of five people and no work for them.

“Nothing now,” he said. “I have one job to start in the middle of March with two weeks of work.”

Michael Tomasini, owner of MJ Construction, was unavailable for comment.

Biondich’s company has taken the biggest hit from the local preference law, losing an earlier appeal for a $1.2 million contract that went to MJ. Biondich said his crew of 25 to 30 people is out of work, and 40 percent of that crew lives in Milwaukee.

“Nobody’s working right now,” he said. “I went after that $1.2 million job that they awarded to MJ, and that was going to keep my guys working.”

Maly said he understands the benefits of such other city contracting laws as the requirement that 40 percent of hours worked on projects be performed by Milwaukee residents. But local preference does not make sense, he said, because it keeps one company’s workers busy for longer periods while other contracting crews are laid off.

Attorneys representing American Sewer and United Sewer will argue the city should not award the contract because there are pending challenges to the local preference law, Biondich said. A judge has not ruled in a lawsuit filed by American Sewer and Underground Pipeline Construction Inc., New Berlin, challenging the preference, he said.

The contractors also are challenging the Wisconsin Department of Natural Resources’ decision allowing the preference on projects that receive DNR loans.

American Sewer and Underground Pipeline sued Milwaukee within hours of the city’s first local preference appeal hearing, which was in October. Maly said he doesn’t know what will happen Wednesday if the latest appeal is rejected.

“That’s up to our legal counsel,” he said.

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