Company disputes bidding process

by Manuelita Beck

Daily Lobo

One of the bidders for the construction of the UNM Hospital expansion questioned the fairness of the bid process before the Board of Regents voted on Tuesday.

The regents voted unanimously to award the contract for the UNMH Children's Hospital and Critical Care Pavilion to Jaynes/J.E. Dunn, a joint venture between local firm The Jaynes Company and J.E. Dunn Construction.

When the regents took public comments, a lawyer representing bidder Okland Construction Company said they were concerned about possible "backroom negotiations" during the bid process.

Attorney Vern Payne said the company wasn't in a position to say there were improprieties, but felt "uneasy" about the process.

Payne said Okland had the low bid, but heard UNM was meeting with other bidders to lower costs. He said Okland did not have any such negotiations, which would have allowed it to discuss ways to bring in an aesthetically pleasing building that would meet UNM's financial needs.

UNMH Chief Executive Officer Steve McKernan said there were no discussions or negotiations with any of the bidders.

Howard Mock, chairman and chief executive officer of The Jaynes Company, agreed, saying his company had "absolutely no communications" with UNM about the bid.

Three companies submitted bids based on a specification from UNM. The bids included a base bid and a revised construction cost that was derived from the inclusion of any of the 12 cost-saving substitutions UNM listed.

Payne said Okland had the lowest base bid and remained the low bidder through the first 10 alternatives. When it chose to keep the original stone and steel front specification in its bid instead of substituting a stucco finish, Payne said Okland became the second lowest bidder.

Jaynes/J.E. Dunn used the stucco finish alternative in its bid.

Payne said if the University awarded the bid based on the stucco finish, but then decided during the construction process to go back to the original steel and stone finish, the University could be exposed to "significant legal challenges and potential liability."

Regent Mel Eaves said Okland was not the lowest bidder. He said the base bid was only part of the overall bid and could not be separated from the alternatives.

"The University is required to consider the entire bid and not go back and negotiate any portions of the bid because that would be improper," he said.

Eaves said the process was done by the book and negotiations to lower costs can only take place with the lowest overall bidder.

All three bids UNM received exceeded the University's estimate for construction costs. The Jaynes/J.E. Dunn bid, with all the alternatives accepted, comes to about $129 million.

UNM Purchasing Director Bruce Cherrin said over-budget bids were expected.

"This entire summer there has been an increase in most building material costs," he said, adding the price of steel in particular has risen sharply.

Throughout the summer, UNM revised its internal estimate of the construction costs. He said the bids actually came in a little below what UNM projected.

Sam Giammo, UNM Health Sciences director of public affairs, said the awarding of the bid is the last thing the Federal Housing Authority needs before it can sign off on the loan. The project is partially funded by issue bonds from the FHA and cigarette tax revenue.

He said he anticipates the construction to start fairly soon, with the groundbreaking in late summer or early fall.

The expansion includes a new trauma center, emergency room and labor and delivery units.