Supervisors OK contract for Los Osos sewer plant

A work crew installs a main sewer line on Pismo Avenue near Seventh Street as installation of sewer lines continues in Los Osos.
A work crew installs a main sewer line on Pismo Avenue near Seventh Street as installation of sewer lines continues in Los Osos. jjohnston@thetribunenews.com

A majority of county supervisors voted Tuesday to award a contract for the construction of the long-awaited Los Osos sewage treatment plant to a company that bid nearly $2 million more than its competitors for the job.

The board voted 3-2 to award a $48.2 million contract to Auburn Constructors of Sacramento to build a treatment plant. Supervisors Adam Hill and Caren Ray cast the dissenting votes.

The debate focused on whether technical errors by two other applicants with lower bids were significant enough to disqualify them.

Auburn’s bid came in about $1.8 million higher than Balfour Beatty’s bid of $46.4 million. The second-lowest bidder was Anderson Pacific at $47.5 million.

“I understand why the decision was made to approve the Auburn award,” Hill said. “But I have spent a lot of time in this office working to create jobs in our community. This would have created an estimated 45,000 to 50,000 man hours for local workers.”

Balfour Beatty’s bid included a subcontract with the San Luis Obispo-based electrical company, Electricraft, while Auburn planned to use in-house electrical workers, Hill said.

The treatment plant is slated for construction on a 24.5-acre site north of Los Osos Valley Memorial Park off Los Osos Valley Road.

Construction of the network of sewer pipelines began in October 2012 and is expected to be finished by July.

Balfour Beatty’s technical error in its bid involved budgeting $200,000 for decommissioning, commissioning and training — which was supposed to be 2 percent of its overall contract bid.

Instead, that amount came out to 0.43 percent, said Dave Flynn, the county’s deputy public works director.

Anderson Pacific’s bid also contained an error, Flynn said.

Errors in the bidding process that underestimate costs can give contractors a competitive advantage and open up the county to litigation if overlooked, County Counsel Rita Neal said at the meeting.

County staff members estimated a new bidding process could take an estimated four months, and Neal said no guarantee could be made of a lower price tag from new bids.

Auburn President Andy Granner said at the meeting his company would make an effort to hire local workers.

“We can hire local guys, which we will,” Granner said. “We would only bring some key employees down here, and then those folks will stay here, spending money in restaurants, spending money in local stores. It will be a win-win for the county.”

But in public comment, Los Osos resident Julie Tacker spoke in favor of a rebidding process, which she said she thought would result in a lower cost for the plant.

“Take the time you need to get the best deal you can for Los Osos,” Tacker said. “Do something constructive. Get the rates down for us.”

Supervisor Bruce Gibson, whose district includes Los Osos, said it’s “not a happy place” to potentially hire more people from out of town at a higher rate.

But Gibson cited a time delay in building the plant and a potentially diminished employment pool if the bid were to reopen.

He said his goal is to continue construction at the lowest possible cost.

He also suggested trying to lower costs by working to adjust the interest rate of a state revolving fund loan that starts in late 2016 or early 2017. The $78.7 million, 30-year loan has a 2 percent interest rate.