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Council upholds prequalification process but questions impact on local firm

The Lake Oswego City Council heard complaints Tuesday about its prequalification process for contractors, but it upheld a decision to reject some firms hoping to bid on upcoming infrastructure projects.

Woodburn-based Kerr Contractors was among a few firms contesting their disqualification from bidding on the Lake Oswego-Tigard Water Partnership’s planned construction of new, bigger water transmission lines. Also challenging its disqualification was SJ Louis Construction Inc., which has divisions in Minnesota and Texas.

Brent Kerr, company founder and president of Kerr Contractors, said massive, expensive pipeline projects like those planned by Lake Oswego and Tigard are “few and far between.” The partnership’s planned projects will traverse several cities and are estimated to cost $250 million overall.

“There’s been a drought in these types of projects in recent years,” Kerr said, attributing the dearth to tight budgets and water conservation efforts. Meanwhile, he said, his firm offered a “level of commitment you don’t get from national contractors.”

He listed off numerous pipeline and road projects his company has completed over the years.

No one questioned whether the city had seen success working with Kerr Contractors on many past projects. At the same meeting on Tuesday, the Lake Oswego City Council awarded a $497,354 contract to the company for major work on Boones Ferry Road.

However, Project Director Joel Komarek said, “We had a process here. We established minimum criteria that every applicant had to meet. ... Unfortunately, in this situation, Kerr didn’t provide us with the information we needed to be able to find they were qualified to bid on our projects.”

In this case, officials evaluated firms based on company experience as well as the experience of their proposed project managers and project superintendents. As a company, Kerr Contractors qualified to bid on the water transmission pipelines; however, it failed to meet the requirements for key personnel. For example, the project manager identified for the work may not have held that same title when working on recent projects similar in size.

But there’s a reason for that, Brent Kerr said.

“We’re not big on titles,” he said. “We’re big on getting the job done.”

The council had the option of overturning the determination that Kerr Contractors didn’t meet prequalification standards when the firm applied. The council also could have allowed additional input on the company’s qualifications, although the city might then have to give more time to other construction firms that came in below par. A handful of other firms also failed to meet prequalification standards.

“I have high regard for Kerr Contractors,” Komarek told the council. “I’m disappointed they didn’t submit an application that would allow us to reach a different conclusion.”

At the same time, he warned, allowing the company time to fix its application “would be a departure from past practice and precedent-setting for all future projects.”

Officials plan to issue bidding documents for the water pipeline projects mid-July, and the work is set to begin in September.

Some council members questioned whether the prequalification process was too blunt, and whether it set standards impossible for smaller, local firms to meet.

Councilor Karen Bowerman said she appreciated the idea of using a local company.

Councilor Mike Kehoe expressed concern the city’s lofty criteria could lead to less competition when it comes time to bid on projects. Four companies are now qualified to bid on water transmission line construction. One is from Salem, and the others are based in Seattle, California and Colorado.

“That strikes me as not a lot for a project this big,” Kehoe said.

Councilor Skip O’Neill also questioned whether the standards were too strict.

But the council had documented evidence Kerr Contractors simply didn’t meet the criteria, Councilor Donna Jordan said. If the council were to decide that decision was wrong, she said, “We’re taking the criteria and bending it to make our decision fit.”

Councilor Jon Gustafson noted the council was in a “tough spot,” and said Kerr Contractors appeared “supremely qualified” for the work.

“But given the parameters our decision is supposed to be based on ... their application just didn’t meet the criteria in a couple of key ways,” he said. “And I think the criteria is pretty black and white.”

The council voted 7-0 in favor of upholding the water partnership’s decision.

However, Gustafson said, “That’s a lot of reluctant yeses.”

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