A too-good-to-be-true deal to build Savage’s mental health facility turned out to be just that when the contractor told the county he could not stand by his bid last month.
Now county officials are encouraging the Scott County Community Development Agency to pass the bid to the second bidder and pocket part of the bond security in order to keep the project on track.
The Scott County Community Development Agency awarded the $4.8 million bid to Fendler Patterson Construction, a Savage company, in a resolution in July, but will move to Shaw-Lundquist Associates, Inc. for $6.1 million on Aug. 13.
Only two bids were received for the project.
Bill Jaffa, the development agency’s executive director, said the contract change won’t impact the project’s timeline, and construction is still expected to begin before the end of the month.
Money for the project comes from various sources including the state Legislature, Scott and Dakota counties, the city of Savage and Allina Health.
Jaffa said the construction cost increase doesn’t exceed dollars allocated for the project.
The 16,000-square-foot, two-story treatment center will stand on a half-acre parcel of vacant land on the northwest corner of Ottawa Avenue at 124th Street.
Clients will be able to access intensive residential treatment services for up to 90 days and crisis stabilization services for up to 10 days. The facility may house up to 16 clients at a time.
The facility will be owned by the development agency and operated by Guild Incorporated, a nonprofit that provides an array of mental health services and residential treatment programs.
The Savage City Council approved the plans in April.
The original contractor, Fendler-Patterson, notified the county just days after the agency board approved their bid and awarded the company the project that their mechanical engineering subcontractor could not “stand behind their bid number.”
Agency representatives and Scott County Deputy Administrator Danny Lenz reportedly worked back and forth with Fendler-Patterson over the following weeks to try and find a solution. The agency decided to move on to the second bidder rather than re-bid or engage its own construction manager.
Board members split 2 to 3 over whether or not to return the money Fendler-Patterson had put in as part of the bid process, known as the bid security.
Lenz told board members that they were within their rights to retain the money because Fendler-Patterson did not inform the agency of their inability to meet the bid price unit two weeks after the bid opened and was awarded. This was apparently despite representatives’ double-checking the bid with the company.
Commissioners Jon Ulrich and Michael Beard argued the situation constituted an honest mistake and the small local company shouldn’t be penalized for the actions of a subcontractor.
“I mean, he (company president Rob Fendler) has done everything, volunteering, his company’s volunteering,” Ulrich said. “To have a quarter-million-dollar hit to a small company would be pretty, pretty significant.”
Board Vice Chair Dave Beer said he recognized the particular position of Fendler but worried about how the county’s actions on this project would impact their treatment with future mistakes.
“By no means do I want to take anyone to the woodshed. I’m a grace guy, and we all make mistakes,” Vice Chair Dave Beer said. “But does that create some weird precedent the next time?”
The Board eventually came to a compromise to keep a portion of the bid security necessary to cover the staff time costs. It’s unclear how much that amount is.