High-dollar Cedar Rapids work attracts new contractors, more scrutiny

CEDAR RAPIDS - A subscription service zipped an email detailing a lucrative construction job opportunity to the inbox of Blake Enloe and his team at Legacy Corp. of Illinois.

It was a big one: a 2,500-linear-foot levee and a gatewell for the Cedar Rapids flood control system, an estimated $5.2 million payday. The East Moline-based company typically works in the Quad Cities market, but this was a good chance to crack into Cedar Rapids.

'It's the type of job we do,” said Enloe, who started his business in 2005. 'It is pipe work and dirt work and that is what we do.”

Cedar Rapids has seen a surge in spending on public infrastructure projects - a trend likely to continue for years, thanks to flood protection and street work - and it's attracting a wave of new-to-the-market contractors.

Legacy, which specializes in excavation, grading and drainage, crunched the numbers to a low bid of $4.49 million. They beat the city's internal engineer estimate of $5.2 million, and bids from a list of regulars and another newcomer to land the job at the old Sinclair meatpacking plant site.

'I wouldn't say it is easy,” Enloe said of being new to the market. 'There's a lot to it. You have to know the right people to do the right things for you.”

As a new contractor to the area, figuring out suppliers and which subcontractors excel at which type of work is a learning curve, Enloe said.

keeping a watchful eye

With millions at stake, the process for awarding contracts is being watched closely.

Another new-to-the-market contractor, Holst Trucking and Excavating of Le Claire, learned that first hand. Holst had bid unsuccessfully on a few demolition contracts in recent years, but was primed to win its first job with Cedar Rapids last month.

Holst had the 'apparent low bid” of $1.79 million - beating out runner-up D.W. Zinser's bid of $1.9 million - for an asbestos remediation and water detention basin project for the flood system.

The Holst application had 'technicalities,” city staff said. Holst sent a subcontractor to a required pre-bid meeting for general contractors, but city staff considered the discrepancy minor enough to recommend awarding the contract to Holst anyway.

Dave Zinser, president of D.W. Zinser of Walford, which has a history of working in Cedar Rapids, objected when the City Council voted on awarding the contract to Holst on Jan. 10. In addition to missing the mandatory meeting, Holst lacked an active asbestos license at the time of the bid, although it updated its license after, Zinser told City Council.

'I'm not being a sore loser because I'm the No. 2 bidder, but I think with the amount of work that is going to move forward in this community with the flood, this is not the precedent the City Council should set, or the purchasing division,” Zinser said. 'For the many years you have to go in the bidding process, don't sour the other contractors, including myself.”

Later, Zinser said, 'you have to stay on alert,” and make sure the 't's are crossed and ‘i's dotted so it is fair, especially with such close bids.”

Zinser's red flags prompted the City Council to scrap the contract and start the bidding process over, likely later this year.

'I am not too happy with it,” Holst said. 'It struck me as maybe I could have gotten a phone call beforehand, so I could have gone to the council meeting and defended the concerns.”

nice work if you can get it

Cedar Rapids has been working with a number of new contractors recently either competing for or winning contracts, said Nate Kampman, Cedar Rapids city engineer. There's no definitive list, but Kampman rattled off contractors, including Williams Bros. Construction Inc., on the NewBo Pump Station; Possibilities Unlimited, Midwest Concrete Inc. and Hunt Construction Co. on sidewalks; and Ti-Zack Concrete Inc., of LeCenter, Minn., on curb ramp repairs.

The expanded interest falls in line with a range of new public infrastructure spending.

Cedar Rapids is entering the fourth year of a 10-year street repair program called Paving for Progress, through which some $18 million is spent each year thanks to a voter-approved, one-cent, local-option sales tax. The four-year, Americans with Disabilities Act compliance effort, which includes upgrading hundreds of curb ramps, clocks in at $15 million. There's also been a strategic goal of adding 2,500 linear feet of sidewalk each year.

Spending has increased each of the past three years from $28.3 million in fiscal 2014 to $39 million in fiscal 2015 to $44.8 million in fiscal 2016. Another $42 million is slated for fiscal 2018.

That doesn't include the 20-year, $630 million flood control project and Federal Emergency Management Agency sewer work. For flood control alone, through last September, the city spent $24.5 million, and some $19.2 million of work is underway or slated for this year.

The flood system work is drawing the most external interest due to the dollar amount and the type of work, Kampman said.

'They are all from a construction dollar standpoint much larger than most city let projects,” he said. 'It tends to draw interest from a little further out.”

Competition is good

Contractors need only be licensed to work in the state of Iowa to win a public improvement job in Cedar Rapids. The bidding process is governed by state law.

The city clerk advertises a job, and identifies the deadline and where bids must be submitted. Shortly after the deadline, the bids are unsealed and read. Some contractors attend the reading while others do not, Kampman said.

During the public reading of the bids, an 'apparent low bid” is identified, he said. The city must select the lowest bid responsive to the project request and submitted by a responsible party, which has the financial and technical ability to perform the work, Kampman said.

For the city, more interest is a good thing. Increased competition can lead to better prices and there's confidence in numbers about the scope of a project when a number of bids come in around the same price point.

'The word is out there,” said Rob Davis, Cedar Rapids flood control manager. 'We are not getting a tremendous number of bids, but enough we are getting good competition.”

l Comments: (319) 339-3177; brian.morelli@thegazette.com