Second DBO team drops out, rejoins water project bidding race

By Tom Sakash
From page A1 | February 08, 2013 | Leave Comment

Two months after Veolia Water North America pulled its bid for the Woodland-Davis surface water project, one of the two remaining design-build-operate teams still dueling for the project also recently had thoughts of jumping ship.

Dennis Diemer, general manager of the Woodland-Davis Clean Water Agency, confirmed Thursday that the CDM Smith/United Water team wrote a letter to the water agency in January to say they were uncomfortable with the risk they were being asked to take on to put together a bid proposal and that they would be removing themselves from the race.

However, in response to the letter, the agency sat down with the team in late January, smoothed out some of the concerns they had and convinced them to rejoin.

“They were concerned about the agency, under the current model, transferring too much risk to them,” Diemer said. “Specifically, they raised contentions about indemnification, limits of liability and default.

“(But) they have told us specifically they appreciate the fact we sat down with them to hear their concerns,” Diemer added. “They understand the agency is prepared to work with them on addressing their concerns … and they remain interested in the project.”

The agency originally pursued three teams to compete for the project through the design-build-operate procurement process. The DBO process calls for one firm to entirely design, build and operate a project. Supporters say that ensures that the process is efficient and that the quality of the end product isn’t compromised.

Had CDM/United Water also dropped out of the bidding process, however, the water agency would have been left with one firm, CH2M Hill, essentially stripping away any incentive for the lone team to offer a competitive bid.

Veolia Water first dropped out of the race in December, saying key personnel and other resources it would have needed to truly compete for the project had been reassigned.

To re-establish the three-team playing field, Diemer and water agency management reached out to a fourth team — Balfour Beatty — that had just missed qualifying for the short list in 2011. But Balfour Beatty declined to participate, fearing that it would be far too behind on the details of the project to compete.

Diemer said at the time, after conferring with his consultants, that the process and the cost of the project would not be affected by the loss of one of the three teams.

The loss of a second team, however, likely would have forced the agency to restart the bidding process and result in delays to the project schedule.

Representatives of the CDM/United Water team could not be reached for comment.

Meanwhile, it’s unclear how the instability of the remaining design-build-operate teams will affect the Measure I vote on the Woodland-Davis surface water project.

Measure I asks whether voters approve of the Davis City Council moving forward with the project. Ballots were sent Monday to all registered voters in Davis and are due back to the Yolo County Elections Office by March 5.

— Reach Tom Sakash at tsakash@davisenterprise.net or 530-747-8057. Follow him on Twitter at @TomSakash