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I I I Council Meeting Minutes August 23, 1994 Page 5 Council Business. continued Samuelson asked if Egan posted bids with other general contractors. Sullivan confirmed that Egan posted bids with Madsen-Johnson, Penn-Co and others. Williams asked Sullivan what action is needed to determine a relationship between Penn-Co and Shank. Sullivan suggested interviews be performed on persons involved in the bidding process and review of work papers. Williams asked the cost and who would pay for the investigation. Sullivan said the investigation would take less than two days and the cost will not be significant. Sullivan feels the City should pay for the investigation. LeFevere said there are ways in which contractors can run afoul of the public bidding process, one is an undisclosed interest in a bid. In this case, Penn-Co disclosed to Barr that Shank was their subcontractor, and the City was aware that Shank submitted a general contractor bid. He does not believe there was a disclosure problem. Penn-Co submitted a bid based on information received from their subcontractor's bids. However, what the City does not know is if Penn-Co knew what Shank's general contracting bid would be or if there was an agreement to submit a non-competitive bid or share in the profits. There appears to be very sparse evidence of collusion, and he does not recommend the bid be rejected. He feels the Council does not need to delay their decision, but it may be prudent to conduct an investigation. There is evidence from Barr that Shank was serious about their general contractor bid. Williams said it appears there is nothing illegal in regards to Shank's activities. LeFevere feels there is nothing that would suggest an undisclosed interest. Fulton asked LeFevere to address the issue of Penn-Co's responsibility as general contractor in awarding subcontracts to vendors of their choice. LeFevere acknowledged that Penn-Co is not obligated to select the low bidding subcontractor. Benke said that if NewMech, the low bidder, did not make a mathematical error this discussion would be mute. He noted the remaining six bidders were all very close. Williams asked if the investigation could be completed within two days. LeFevere feels the investigation could be completed within that time. Fred Dyck, Penn-Co, confirmed that the bid was not made in collusion and he did sign a non-collusion statement. Penn-Co did not have a prior agreement with Shank and there was minimal dialogue before the bid opening. Dyck did not have prior knowledge of the Shank bid. Dyck did not tell Egan that there was a prior agreement to use Shank's bid. Benke asked if it is usual for a company to bid both a general contractor and subcontractor job. Dyck said it is not uncommon to bid both jobs and it is more common with a water treatment plant project because such a large portion of the work is mechanical. Samuelson confirmed that Penn-Co chose Shank over five other subcontractors. Dyck said Penn-eo's decision was made in regards to cost performance and other factors, and Egan did not bid the same scope of work as Shank. Benke confirmed that it is the general contractor's decision to choose its subcontractors. Council Business Project 94-01, PGACWTF Addition A ward of Bids Report 94-198