Veolia Water North America, one of the three short-listed firms picked by the Woodland-Davis Clean Water Agency to compete for construction of the surface water project, has dropped out of the race.
With no other teams showing an interest, the water agency has no choice but to move forward into the bidding process that kicks off early this year with only two teams competing for the work.
In late December, representatives of Veolia Water wrote Dennis Diemer, general manager of the WDCWA, that they would withdraw from the design-build-operate procurement process.
The DBO process allows for one larger firm to offer bid proposals for a project where they would — often through subcontractors of their own hire — entirely design, build and operate the project. Proponents of this type of system say it’s the most cost-effective and efficient way to bid out a project of this magnitude.
According to Sean Haghighi, vice president of business development for Veolia Water North America, after several delays in the project schedule, the company found that it could not retain the key personnel and resources it would need to compete for the project.
“We looked at our resources and at our key staff and we found ourselves unable to respond based on the new timeline,” Haghighi said Wednesday. “We’re very busy with other pursuits and our resources are concentrated in other places. We just really didn’t feel like we could be gearing up again for this project based on the revised schedule.”
At the agency board meeting on Dec. 20, Mayor Joe Krovoza did not appear thrilled about the development.
“I’m disappointed in Veolia,” Krovoza said. “(They’ve) had an opportunity to watch this process all along. While (it has been) frustrating, it’s been very clear about the timeline.”
Meanwhile, with Veolia out of the picture, the agency quickly turned to Balfour Beatty, the firm that just missed inclusion in the bidding process that the agency went through in 2011, to gauge its interest on rejoining the race.
But Balfour Beatty has since declined to participate, not willing to join the process this late in the game, according to Diemer, leaving just two teams for the agency to choose from as the bidding process moves forward: CH2M Hill and CDM/United.
The WDCWA has asked the two remaining contracting firms to develop two separate bid proposals, one including the original Woodland-Davis project plan and one Woodland-only plan, in case the Davis public rejects the project in March.
Diemer said Tuesday that the shuffle in design-build-operate teams would have no affect on the overall cost of the project to the cities of Davis and Woodland, however.
“We don’t see any reason to suggest, nor do our advisors (that) the costs are going to change,” Diemer said. “They tell us that it’s not uncommon to have these processes to have two firms. It’s not unprecedented.”
The agency board at its meeting in December also approved issuance of the request for proposals from the two remaining contracting firms. Each must submit conceptual bids in February, then priced proposals in June.
According to Diemer, the agency will award the firm with the winning contract in September. Construction on the project is then scheduled to begin at the end of 2013.
Veolia had received some local public scrutiny from a Davis Palestinian rights group called Boycott, Divestment and Sanctions throughout the course of its involvement with the project because of its well-documented connection to the Israeli-Palestinian conflicts in the middle east.
But the agency board ruled in April last year that because it was not dealing with Veolia Transportation, but rather Veolia Water, their involvement in the conflict was irrelevant.
Still, Mikos Fabersunne, member of the local BDS group, says that pressure placed on the international company from activists around the country may have forced Veolia to rethink investing the millions of dollars it may take to put together a bid package for the Woodland-Davis water agency project.
“We’re happy to see that,” Fabersunne said. “I think we don’t hold anything against Veolia other than that we want them to be a good corporate citizen.”
The Woodland-Davis surface water project will pump water from the Sacramento River, treat it and pipe it over to Davis and Woodland to replace each city’s dependence on deteriorating ground well water supplies.
Estimated at about $113 million to Davis, $245 million combined with Woodland, the City Council in October elected to put the entire project up to a public vote through an all-mail election, with ballots to be sent out the week of Feb. 4. Completed ballots are due back to the Yolo County Elections Office by March 5.
— Reach Tom Sakash at [email protected] or 530-747-8057. Follow him on Twitter @TomSakash