Water contract passed over some objections

Friday, Jan. 21, 2005 | 9:51 a.m.

The board of Southern Nevada's regional water provider approved Thursday a $14 million contract to build a new water bypass near Lake Mead in response to the drought, but the approval came over the objections of a competing contractor and two board members.

The 4-2 approval for contractor CH2M Hill, a multinational company with extensive experience working for the Southern Nevada Water Authority, came over objections raised by the team of Las Vegas-based Contri Construction Co. and Iowa-based Stanley Consultants.

The competing team echoed the analysis by the Water Authority team that found Contri submitted a higher-quality proposal. But Contri also submitted a bid of $17.4 million -- $3.4 million more than CH2M Hill.

The work in question would build a bypass between the two intakes the Water Authority uses to draw water from Lake Mead to route to urban users in Clark County. The older, higher intake is threatened by five years of drought.

Water authority officials last August said the bypass, to draw water from the lower, newer intake into the higher line, could be essential to bringing sufficient water to the urban area.

Pat Mulroy, Water Authority general manager, said without the bypass, and if the level of Lake Mead continues dropping, Boulder City and Nellis Air Force Base could lose water pressure.

Marc Jensen, the agency's engineering director, agreed in his presentation to the board.

"It's critical to our future water supply," Jensen said.

Water Authority officials said in August that because of the need to expedite the bypass construction, they would use a design-build procedure and forego the low-bid system usually used for large public works projects. The design-build system provides a broad criteria to competing contracting teams, and allows those teams to both design the project and submit a price to build their design.

Jensen said the design-build option would shave 60 to 90 days off the time it would take with the usual design and bid process.

Staff considers both the design quality and price, as well as other factors such as incorporation in the state, and based on a point system recommends a team. The water authority board, made up of regional representatives from local governments, makes the final determination.

In December, five teams submitted five proposals. While Contri won the quality judgment, CH2M Hill won the price and overall score. Jensen said, however, that because the design-build process allows discretion in making a final decision, the board could pick either team for the contract.

Water Authority board member and North Las Vegas Councilwoman Shari Buck championed the Contri proposal. She cited technical corrections that CH2M Hill had to make to its proposal.

"This seems to be to be a pretty significant thing," Buck said. "You have maybe some groups that get it right ... Some groups that don't get it right.

"Is it fair to those who bid? Are we doing a disservice to not accept someone who had the highest quality? We've got to make sure our project is more than adequate, that it is as good as it could be."

Clark County Commissioner and fellow board member Lynette Boggs McDonald sided with her colleague.

"I'm just very concerned about a material deficiency" in the CH2M Hill proposal, she said.

Water Authority officials said this was the first time the agency has used the design-build process.

"This is a brand new law and guess what?" Mulroy asked rhetorically. "We're the guinea pigs."

Board member and Clark County Commissioner Myrna Williams said that although the process may not be perfect, she felt obliged to follow through now that it was in its final paces.

"The fact is, we did it this way," Williams said. "I think we need to make a decision on this."

CH2M Hill representative Kris Ballard noted that the contractor has made the corrections in the proposal, among them a 0.6 of an inch increase in thickness of the walls of the planned water line, from 5.9 to 6.5 inches, and will "honor the bid proposal."

Both CH2M Hill and Water Authority board members pointed out that because the contractor's bid did not change, the staff would continue to give the CH2M Hill the narrow but financially significant recommendation for the contract.

Jensen, the Water Authority's engineering director, said CH2M Hill had variances in its proposal -- but so did every other bidder, including Contri.

Ballard said CH2M Hill's proposal was sound, despite the technical issues.

"CH2M Hill has complied with the design-build criteria," he said. "There is no question about that... It is a red herring to suggest that this pipe wall thickness somehow invalidates the bid."