The competition for the water project is over.
CDM Smith, once part of a three-team race for the contract to design, build and operate the Woodland-Davis Clean Water Agency surface water project, was unable to meet the initial concept submittal requirements set by the agency and has officially bowed out of the contest.
Officials from the contractor informed agency General Manager Dennis Diemer of their intentions in an email Wednesday.
The decision to drop out leaves one remaining contractor that can submit a proposal for the project — CH2M Hill, a Colorado-based designer, constructor and operating agency — as Veolia Water North America stepped away from the process late last year because of its own inability to put together a proposal.
More importantly, the development essentially strips away the competition between contractors during the final bidding process that agency and city officials have said would drive down the overall cost of the surface water project.
The final proposals from the contractors were due in late July.
The $113 million surface water project, which CH2M Hill now has the sole ability to submit a proposal for, will pump water from the Sacramento River, treat it and pipe it to Davis and Woodland, largely replacing each city’s ground drinking water supplies.
Davis residents approved the project in March by a 54 to 46 percent vote. Water bills in Davis as a result of the city moving forward with the project are expected to triple by 2018.
While Diemer says CDM’s departure actually will save the agency $500,000 on bidding process costs, it’s unclear what the loss of competition will mean in terms of the overall cost and quality of the project.
Diemer maintains, however, that the competition and the resultant savings were already achieved.
“We’re two and a half years into this and five weeks away from the submittal date, so I think we were very successful in having a competitive process over that … period,” Diemer said.
City Manager Steve Pinkerton echoed those comments Saturday, explaining that he believes the DBO process worked. While not all contracting teams made it to the final step of the bidding process, they were still narrowed down to the one that’s capable of carrying out the project at the cost, or lower, and quality that the agency has specified.
But Councilman Brett Lee, who sits on the water agency board, worries that the agency — and subsequently Davis and Woodland — won’t be paying the best price for the project.
“I am very concerned about this recent development,” Lee said in a statement. “The WDCWA has been very good at setting the criteria that makes sure that whatever firm is selected will be well qualified to carry out the design, construction and initial staffing of the plant. However, I believe that it is the competitive bidding process that would have provided us with an assurance that we are not over-paying for the project. Even a modest 1 percent to 2 percent difference in bids would yield savings of $2 million to $3 million dollars.”
Lee added that the City Council should request that the agency make a presentation to the council to provide objective information as to why they believe that this process should move forward.
“We need to know that we are spending our community’s money wisely,” he said.
Diemer said that it would be impossible to predict what the cost savings would be if the agency still had two teams heading into the final bid proposal step. But he also stressed that with the new request for proposals document that the water agency board approved in April, the project will still come in 20 percent less than the original engineering estimates.
The new RFP sets a price maximum guarantee of $235 million, down from $245 million.
The general manager also said that because the contract forces CH2M Hill to show that they’ve competitively bid the work that will be completed by subcontractors — which makes up 70 percent of the project — the contractor still must submit a competitively priced bid.
Joe Glicker, a CH2M Hill official, agreed Friday, explaining that with CDM out of the picture, the spotlight is on them to produce a quality proposal.
“You’ve got to come up with some decent numbers,” Glicker said. “If (the agency is) not happy the project may go away.”
Glicker added that the RFP set extremely stringent requirements for the contractors and that he wasn’t surprised other bidders dropped out of the race. He’d also never seen all bidders except one drop out.
Mayor Joe Krovoza believes, however, that the agency did not set the bar too high for the bidders when they approved the new RFP.
“We set the high bars wanting to make sure that we got the most aggressive pricing possible for the rate payers,” Krovoza said. “If CH2M Hill stays in (and submits a bid below the maximum guaranteed price) the bar wasn’t too high.”
CH2M will submit their priced proposal in late July and the water agency board is scheduled to award the contract by early fall. If the project stays on schedule, construction should begin later this year.
— Reach Tom Sakash at firstname.lastname@example.org or 530-747-8057. Follow him on Twitter at @TomSakash