Los Osos sewer bid award costs residents and local jobs

February 6, 2014


Los Osos residents will have to foot a bill for nearly $2 million beyond expected costs and local electrical workers will lose thousands of man-hours because San Luis Obispo County staff recommendations were approved by the board.

On Jan. 28, the San Luis Obispo County Board of Supervisors awarded a $48.2 million contract to a Sacramento construction firm Auburn Constructors to build the Los Osos sewage treatment plant, one of the final components of the multi-decade sewer project. The board awarded Auburn Constructors the contract even though two competing contractors submitted lower bids and opted to hire San Luis Obispo based electrical workers to perform much of the job.

Balfour Beatty Infrastructure submitted a bid of $46.4 million, approximately $1.8 million less than Auburn Constructor’s proposal. Anderson Pacific Engineering Construction submitted a $47.5 million bid.

Both Balfour Beatty and Anderson Pacific planned to use San Luis Obispo electrical firm Electricraft as a subcontractor. Balfour Beatty and Anderson Pacific representatives estimated that Electricraft workers would receive about 40,000 man-hours on the project.

“That’s 10 to 12 people for two years who just lost out on employment,” Electricraft founder Jon Treder told CalCoastNews. “We were unjustly denied the project.”

Prior to the Jan. 28 meeting, Public Works Deputy Director Dave Flynn eliminated Balfour Beatty and Anderson Pacific from contention due to errors in their bid applications. One contractor undervalued a line item of project costs, and the other improperly placed percent signs next to decimal figures. Flynn said he could not forgive the errors.

Flynn rejected Balfour Beatty’s bid because it did not budget 2 percent of its total costs, as required, for demobilization, commissioning and training. Balfour Beatty budgeted about .4 percent of its total costs towards that line item.

Flynn threw out Anderson Pacific’s bid because it contained misplaced percentage signs. For example, it stated “.13 percent” instead of “.13” or “13 percent.”

Project bidding instructions stated that the county could waive discrepancies, irregularities, informalities or errors in order to best serve the public interest.

Flynn described the mistakes made by the two lowest bidders as irregularities, but deemed their entire bids unacceptable. When asked by CalCoastNews why he did not exercise the clause allowing him waive the irregularities in the interest of the public, Flynn did not respond.

The SLO County Public Works Department, headed by director Paavo Ogren, is charged with administrative and operations of water and waste water facilities, including the Los Osos Waste Water Project.

During the hearing, County Counsel Rita Neal and Deputy County Counsel Patrick Foran said the county could not waive the bidding errors. Foran said bidding errors are not legally forgivable if they affect the lump sum of the bid or give one contractor a competitive advantage over another.

The losing contractors argued that they neither gained competitive advantages, nor changed their total project costs by committing the infractions. However, Foran said the mistakes gave the contractors additional flexibility in how they spend project funds.

Following the legal advice of its staff, the board still could have opted to rebid the project. Several public speakers requested that the board do so, saying a rebid would result in lower figures due to competition among contractors. But, Flynn said rebids would likely come in higher, and Neal said they would create added legal risk.

The board ultimately voted 3-2, with supervisors Adam Hill and Caren Ray dissenting, to award Auburn Constructors the contract.

Ray said she considered the idea of rebidding but felt that she could not go in that direction.

“I feel like our hands are tied,” Ray said.

Hill said Flynn made the right decision to reject the two lowest bids and that he was voting against the contract as a symbolic gesture.

“I will oppose it knowing that it is symbolic,” Hill said. “I have spent everyday in this office working in some degree, sometimes quite successfully, sometimes less successfully on behalf of jobs in our community.”

Supervisor Debbie Arnold said she wanted to see local contractors at work and Los Osos residents have less to pay, but she voted in favor of the contract. So did Supervisor Frank Meacham, who said he felt bad about the situation and said “uncomfortably yes” when asked for his vote.

Supervisors Bruce Gibson, whose district includes Los Osos, made the motion to award the contract. He said staff correctly deemed the two lowest bids invalid and that rebidding the project would create too much risk.

Prior to breaking ground on the sewer project, the county budgeted $36 million for design and construction of the sewage treatment plant. The facility is now estimated to cost a total of $61 million.

Likewise, the cost of the entire sewer is rising. Before approving the sewage plant contract last week, the board finalized an expenditure overrun for the project as a whole. Project costs increased $10 million from $173 million to $183 million.

“We look forward to getting this project constructed at the least possible cost,” Gibson said at the conclusion of the meeting.



I just have to wonder if Supervisor Gibson has a brother-in-law running an engineering company up in the Sacramento area …. or cousin, or brother, or uncle or, or, or ….


The mistakes on the bid are pretty big mistakes. There is a big difference between 13 percent and .13 percent. Such a big mistake, if made in the building of the WWT plant could result in a big disaster.

I don’t think a rebid is a good idea. They should have gotten it right the first time.

This is a huge project we are talking about. If a company’s oversight is this sloppy on the bid, how sloppy would it be on the project?

For decades, SLO county has been in the grips of county contracting cronyism either likes of the Wallace Group. I think looking outside of the local insider cronies for contracting, instead of automatically shuttling it down the crony highway to the likes of John Wallace, could be the best approach.

JB Bronson

Pasodowny: Very keen observation!

“Adam, with that statement you telegraphed that you knew in advance how the vote would go down. I’m guessing Bruce–that Brown-Act-is-for-everyone-but-me expert–once again gave you the breakdown. But once again, he didn’t account for your loose lips.”


Nice thought but undoubtably county council had already weighed in because of the possible litigation. That would have indicated direction and would not have been a brown act violation.



Nice thought but county counsel weighing in doesn’t signal how a vote should go down. You said yourself (in a comment below) that Hill voted second. Hill called his vote a “protest.” That signals either

A) Hill knew in advance how the vote would go (and in that case, given that this sewer pickle is Gibson’s, Bruce likely told him how the others would vote. Hence the Brown Act violation).


B) Hill made his “protest” vote w/out knowing how it would turn out.

If it is A, then Hill is conniving and ethically challenged.

If it is B, then he is just stupid.

Neither are pleasant choices. The best choice is to replace him.

fishing village

The firm awarded the bid can do any number of things to make it right by the people of Los Osos. They can hire locally, and when the overages come (they always do) then they can be adjusted. These bids are rarely the final figure.


Typically bids of this nature require the naming of the sub contractors. The winner is not allowed to just switch out the listed subs

Kevin Rice

What’s the deal with Caren Ray?

“Ray said she considered the idea of rebidding but felt that she could not go in that direction.”

But she did vote for rebidding!! When did she “not go in that direction”?


That’s a good question. Only part of that appears to be a quote. In any case, she voted the other way, leaving Arnold as the deciding vote.

Maybe it shows that Ray actually listens to the public comment before she makes her final decision. I would like to think some of the BOS respects the public enough to listen

Kevin Rice

The quote is: “I feel like our hands are tied,” Ray said.

But she voted opposite of what this quote implies. And she voted opposite of “felt that she could not go in that direction”.

So which came first? The “feel like” or her vote? And why the incongruity?

Also, how was Arnold the decider amongst three? What was the order of the voting? Who was the movant and second?


My recollection of order is Gibson (y), hill (n), Mecham (y), Ray (n), Arnold (y). I may be a little off. I am sure of Ray 4th and Arnold 5th

Kevin Rice

Who seconded Gibson? Someone needs to download the video.


So upon further review, Gibson made the motion, frank seconded it. So on the role call, those two were first then Hill, Ray, leaving Arnold to break to 2-2 tie.

Ray’s comment “I feel like are hands are tied” came immediately before she cast her vote. Clearly someone struggling between what county council has indicated and trying to protect local jobs.

Kevin Rice

Very regrettable on its face. However…

Electricraft: “We were unjustly denied the project.”

No. It never was your project. Balfour & Anderson planned to use your firm if they won the contract. They made errors in their bids. That’s not unjust. It’s a screw-up.

The difference between 0.13% and 13% is ONE HUNDRED FOLD. How can anyone PRESUME they meant 13% when they wrote 0.13%? They screwed up. Should have paid more attention in math class!!!

[Kids: math skills are important! A $47M job was lost because someone isn’t fluent in correctly expressing percentages!]

Balfour apparently lost because they FAILED TO READ THE INSTRUCTIONS.

You cannot just have “do overs” for everything. Some things are permanent. Hold a do-over and Auburn’s attorneys will then be costing even more millions and more delays. Further still, the bidders have seen each other’s cards and the re-bid will likely come in higher.

EVEN MORE, who can guarantee that Auburn wouldn’t adjust and win the re-bid?

Very regrettable, but the right thing happened. Balfour/Anderson/Electricraft: Very sorry. It was caused by your own error. Move on.


I absolutely agree. Hopefully, this will trigger changes in the way Balfour handles its bids in the future.


The additional $2,000,000.00 should charged to those who have actively delayed this project.


Julie Tacker and the Los Osos sewer obstructionists don’t have that kind of money. That’s one of the reasons they opposed the project; they don’t know how they are going to pay for the costs imposed on homeowners.


Thank you, Mr. Treder and Cal Coast News, for bringing this to the attention of our local community. Money spent on construction typically multiplies four times through the local economy – except of course when that construction work goes to out of area firms. This is not just a loss of jobs to Mr. Treder’s workers but to everyone in business here.

Too bad the other two supervisors on the Board who voted YES with Gibson didn’t stick to their guns and request a rebid. “Yes but” or” No but” are not options here. I am so tired of excuses.


Good ol’ Gibson puts fourth the motion to approve the contract, giving it to a Sacramento firm. I wonder about Bruce’s aspirations and a connection to the state legislature.

What I find hilarious is Adam Hill saying his vote was a “protest” vote. Really? On a 3-2 decision? Adam, with that statement you telegraphed that you knew in advance how the vote would go down. I’m guessing Bruce–that Brown-Act-is-for-everyone-but-me expert–once again gave you the breakdown. But once again, he didn’t account for your loose lips.


Didn’t this all get started because of a bid protest by Anderson Pacific Engineering? Once lawyers get involved a magnifying glass gets pulled out on all bid proposals. Nobody wins……except Auburn Constructors