Willmar electrical contractor edges Perham firm for new hospital project
Two commercial electrical contractors were almost neck-and-neck in bidding for the lucrative Perham Memorial Hospital project-one from Willmar, and one about a half-mile away, near Perham's big Main Street.
Willmar Electric was the apparent low bidder on the project, by between $20,000 and $90,000-depending on how the bids are interpreted.
The stakes were high. Electrical work for the new Perham hospital is estimated at about $2.7 million, based on the engineers, planners and project manager, Brainerd-based NorSon.
Though hospital officials and some Perham Hospital Board members regretted that they were unable to keep the contract with a firm in the community, the board acted on recommendations from its legal advisors, and awarded the contract to the Willmar company. The vote, which was by a 14-2 margin favoring the Willmar firm, was taken at the Dec. 2 board meeting.
The local firm, J.C. Electric, contested the bid-which sent the matter to several attorneys for legal opinions. The hospital board obtained opinions not only from hospital attorney Dennis Happel; but also from an attorney associated with the League of Minnesota Cities. JC Electric contended that their bid was closer to about $22,000 higher, because of some materials and expenses that were not incorporated into the Willmar company's initial bid.
But hospital executive Chuck Hofius countered that the Willmar firm was low bidder by about $88,000.
Because the hospital is governed by a board with taxing authority, adherence to the Minnesota state bidding laws is required.
As a governmental unit, the hospital board runs the risk of ending up in court if they award the contract to a higher bidder-without sufficient justification, said PMHH Administrator Chuck Hofius.
There is no question that both firms were qualified, capable and had the necessary experience for the job. However, based on careful review of both bids, Hofius said there is also no question that Willmar Electric was legally the low bidder.
Representing J.C. Electric, which submitted a bid with Frazee Electric as a collaborator, was Perham attorney Steve Peloquin. He contended that, in two other instances, smaller contracts were awarded to firms that were not the absolute low bidder. Further, Peloquin says the board does have the authority to enter a contract with a higher bidder if there are other circumstances. Among those factors is the proximity of the Perham firm, which would enable closer and quicker service, if necessary, contended J.C. Electric.
If the board decided to completely start over and re-bid the electrical portion of the project, it could set back the project by three months. Even after re-bidding, "it could still end up with a non-local firm...and we would still be where we are today," said Hofius.
In other reports on the new hospital building project, which was discussed at the Dec. 2 hospital board meeting, "warm weather phenomena" has enabled contractors to complete nearly all of the earthwork in preparing the site; and the cement work is expected to be completed by the end of the month, said Hofius.
A financing package for the hospital project, includes a $30 million combination of 20-year loans and 30-year bonding backed by the U.S. Department of Agriculture. Bremer is expected to be the lead bank, said Hofius.