ON ARCHITECTURE- Procurement predicament? City outsources Downtown Mall project

Locally-based demolition company Parham Construction went to work on the Downtown Mall this week, but of the 9 contracts for the $7.5 million project, only two were awarded to local companies.

Just before Christmas the city launched a "Shop Charlottesville" campaign in an effort to convince Charlottesvillians to buy local this holiday season. 

"It is now more important than ever that we invest our dollars in the local community, and one of the best ways that we can do this is by supporting City businesses," said Charlottesville Mayor Dave Norris in an official release.

The release went on to say there would be more such economic initiatives in the coming months, designed to help strengthen the local economy by educating the public "about the economic impact of shopping locally."

However, when the city did its own holiday shopping– looking for contractors to renovate the Downtown Mall– they seem to have ignored their own campaign message. 

Now that most contracts have been awarded, it appears that very little of the $5 to $7.5 million allocated for the project will be going to local businesses. 

According to the city procurement office, only two of the seven signed contracts for the project have been awarded to local businesses–locally-based Parham Construction is doing the demolition work, and Design Electric is doing the electrical work. Additionally, though not technically a local company, the new bricks are being supplied by Old Virginia Brick, a Salem-based company that was acquired in 2006 by "a private Charlottesville-based investment group that also has holdings in banking, real estate development and building materials, according to Virginia Business Magazine. Three of the contracts were awarded to a Maryland-based contractor who will do most of the brick work. That's not to mention the fact that the company in charge of design planning, MMM Design Group, is based in Norfolk, and the company doing the construction management, Barton Malow, is a large Michigan-based company.  The city still has two Invitation to Bids to issue for caulking work and refurbishing the fountains, but the odds don't appear to be in favor of them being awarded to local businesses. 

Meanwhile, city planners have been crowing about the fact that the project could be 10 to 15 percent under budget due to the competitive bids that were received–much like buying that perfect Christmas present online, instead of at Barracks Road, because it was so much cheaper.

"Contractors from out-of-town are underbidding us, and I'm getting tired of it," says Stephanie Marshall with Marshall Contracting & Masonry, who was passed over in the bidding process for the Mall project. "I'm fine with competitive bidding, but once you start cutting my throat, I'm going to get mean." 

Marshall says her company, which has been in business locally for 10 years (they did the rock work at Peter Jefferson Way on 250 East), has had to compete with 20 contractors on some projects. Normally, she says, there are just five or six.  

"I have to pay $15 to $30 an hour in Charlottesville for workers, to keep them," she says, "but out of town companies use cheap workers– their guys are doing it for $8 an hour."

Marshall understands that the economy is forcing companies, especially larger ones, to bid on projects farther away from home, but she's frustrated that the city isn't doing more to help local contractors get local projects. Recently, her company lost a rock contract for the new Jefferson Scholars building to an out-of-state contractor, and she says an Ohio-based masonry company did the work on the new Walgreen's on 29 North. Now the Mall's brick work has been handed over to a Maryland contractor.

"Tell me," she asks, "how is that fair?"

When city council approved the Mall renovation last July, councilor Holly Edwards voiced her concern that "true employment opportunities" for local workers be provided with the renovation.

"We're spending a lot of money on the project, and I'd like to believe that there will be some employment opportunities for a variety of people," Edwards said. "Is that not possible with this?"

In response, city planners told council recently that students from Charlottesville Albemarle Technical Education Center (CATEC) would be involved in the project, a decison that Councilors applauded. But why wasn't more of the work directed toward local contractors? Wouldn't that be a simple way to help the economy? 

Mayor Norris agrees its a bit hypocritical for the city to ask citizens to shop local and then hand out city contracts to business from Maryland, but he points out that state procurement laws the city is required to abide by limit flexibility in handing out contracts.

As Jennifer Luchard, the city's Procurement & Risk Management Services Manager, explains, "A preference for local products and firms in the case of a tie bid is allowed. Otherwise, there isn't enabling legislation which allows a local preference."

The city must also answer to tax payers.

"Obviously, those who have expressed concern about the Mall project's price-tag will not be happy if we find a way to avoid automatically awarding such projects to the lowest qualified bidder," says Norris.

But Norris is clearly on Marshall's side.  "...but to me there is a value in contracting locally that should be factored in to [procurement] decisions," he says "I'm not convinced we have done enough within the constraints of the process to give as many advantages as we can to locally-owned businesses."

In fact, Norris says he has asked the city's Economic Development department to put together a strategy for boosting local procurement within exiting laws. "It benefits us to recycle dollars locally and create jobs locally," says Norris.

Chris Engel, assistant director of economic development, says that members of the city's finance and procurement offices will be meeting this week to discuss the issue. 

"We do want to support our local businesses through the procurement process," says Engel, "but as the Mayor mentions, there are federal and state restrictions on what we can legally do."

Meanwhile, as out-of-area contractors go to work on one of our local treasures, that kind of lip service appears to be of little consolation to contractors like Marshall.  

 "I'm pissed," she says, "The Mall project is getting started, and local contractors are getting ready to lay off big time. We'll probably be laying off 25 people in January because of a lack of work."



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