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TRC wins Holly demolition contract amid protests from competitors

Friday, May 13, 2011 by Michael Kanin

The Austin City Council has awarded the contract to disassemble the Holly Power Plant to the firm at the center of a controversy over how the bidding process for that project was conducted. Members approved an $11.5 million deal with Lowell, Massachusetts-headquartered TRC Environmental on a unanimous vote.


The move came after representatives from two of TRC’s competitors for the contract did their best to pick apart both the firm and the process in which each of the companies was involved. “Honestly, it’s my opinion that the fix was in from the start,” said NCM Demolition and Remediation Senior Vice President Don McGlamery. “The way TRC has spoken in some of their working committee meetings and the way they’ve worked with the city for the last 10 years, I think they were under the impression that they had the job from the get-go.”


McGlamery added that he felt that this confidence allowed TRC to offer its first bid. “In their first bid they just threw a number up there, and they knew they were going to get it,” he added.


At their April 28 meeting, Council members had delayed action on the project after concerns were raised about the cost differences between a $24.9 million bid submitted by TRC in January and the most recent, eventually victorious $11.5 million effort. The Council had instructed city staff to reissue the request for proposal for the project in February after expressing concerns about the fact that staff recommended TRC despite the high price relative to their competition.


The more recent bid solicitation garnered the $11.5 million offer from TRC, a $14.9 million submission from Dixie Demolition, a $15.8 million bid from URS Corporation, and a $12.3 million response from NCM. However, TRC’s competitors have suggested that the company could escalate the cost of the project through change orders after council signed off on the deal. Council Member Bill Spelman did some quick math.


Spelman confirmed with the city’s Director of Contract and Land Management Rosie Truelove that staff could only authorize up to five percent of TRC’s $11.5 million contract in change orders without coming back to Council. He also checked to make sure that the most that TRC could offer in change orders by law would be 25 percent.


“There are some instances where you could go above that,” said Truelove, “but they are primarily health and safety issues.”


Truelove admitted that that is a rare eventuality. Spelman was content enough to conclude his questioning.


“I calculated that if we had a 25 percent change order, the maximum that we could get to is $14.4 million which is still cheaper than the bid price for Dixie and URS – although it is more expensive than the bid price for the fourth finisher, NCM.”


Dixie Demolition finished second to TRC in city staff’s evaluation of potential contractors. On April 29, attorney Joe Lassiter of Birmingham, Ala., firm Maynard, Cooper & Gale filed a formal protest with the city. In it, Lassiter details the history of the project, suggests that Dixie should have been awarded the deal after the first round of bidding, and questions TRC’s second bid.


“Predictably,” he writes, “questions were raised by the public as to how TRC, a firm that had pronounced its initial bid (of $24.9 million) ‘more realistic’ than those bids offered by its competitors, could suddenly slash its bid by over $8 million.”


After the hearing, McGlamery said that his firm had also filed a protest with the city. “Usually you lose based on merit, and in this case we did not lose based on merit,” he said.


McGlamery added that NCM would likely submit an open records request. After reviewing documents associated with the bid, he said that the firm would decide whether to proceed with any legal action. “If there’s a smoking gun, obviously we’ll look at it,” he said.

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