Oregon ARRA funds go to Washington businesses

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Wednesday, September 22, 2010

By Jacq Lacy

The recently completed Tillamook North Jetty project was awarded to an out-of-state company over local bidders, raising questions about the future use of federal stimulus funds awarded to Oregon projects.

On Friday afternoon, Vancouver, Wash.-based Kiewit Pacific Co. placed the final boulder at the tip of the North Tillamook Jetty. The Army Corps of Engineers Portland Division awarded Kiewit the Tillamook project in July of 2009 and paid the company more than $16 million.

In addition to being an out-of-state company, Kiewit also submitted the highest bid. Four companies submitted bids for the project last year: Kiewit for $16.1 million, KERR Contractors of Woodburn for $11.4 million, Tapani Underground of Battleground, Wash. for $12.4 million and an unknown company undisclosed by the corps. The corps granted the project to Kiewit, using funds designated for Oregon projects through the American Recovery and Reinvestment Act of 2009. The corps received the ARRA dollars for the project before the agency requested bids.

One of the goals of ARRA funding is to create local jobs by working with local companies. But only a fraction of the money paid local Oregon contractors to work on the project, providing small rock, a fence, concrete slabs and trucking. The majority of the funds went to Kiewit, who gathered 11,000 boulders from Northern Washington quarries and trucked them all the way to Tillamook. 

KERR challenged the contract between Kiewit and the corps in September of 2009 in federal court, arguing that selecting the higher bid was unfair to taxpayers and that local companies and subcontractors could perform the Oregon job cheaper.

"We didn't believe that taxpayers should pay this premium, especially funds specifically for an Oregon project," said Alan Aplin, vice president of KERR.

The judge dismissed KERR's complaint and sided with the corps.

"The company has to have the right supplies for the project. We have technical specifications that have to be followed," said Kathryn Warner, corps project manager.

Senator Ron Wyden's office also supported the decision, stating that the project saved Oregon jobs.

"It saved Oregon jobs along the coast," Tom Towslee, state communications director for Wyden, said. "They're not just piles of rock in the ocean. Without them there would be no coastal economy. There would be no commercial shipping or commercial or recreational fishing."

According to the Port of Garibaldi, the South Tillamook Jetty also needs repair. Matt Rabe, spokesman for the corps, said that the South Jetty Project is a high priority for the corps.

Kevin Greenwood, Port of Garibaldi manager, estimates the South Jetty job will cost $31 million: $600,000 for planning, $25 million for rock procurement and delivery, and $5.4 million for actual work and repair.

The corps intends to use the same criteria for selecting a contractor for the South Jetty as it did for the North Jetty. The same procedure applies for the stimulus projects that the corps has yet to award.

Jacq Lacy is an associate writer for Oregon Business.

As the corps and other ARRA agencies begin to solicit more bids for stimulus projects statewide, should Oregon companies and jobs receive priority?

 

Comments   

 
Judy Wheatley
0 #1 Oregon ARRA Funds go to Washington BusinessesJudy Wheatley 2010-09-22 13:00:19
I feel that Oregon companies should definitely be given priority, especially when the bids they submit are competitive.
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Sho Dozono
0 #2 Sho Dozono 2010-09-22 13:11:03
iT WOULD BE HELPFUL IF oREGON bUSINESS mAGAZINE DID MORE RESEARCH ON THIS SUBJECT OF WORK BEING DONE IN oREGON FUNDED BY STATE,FEDERDARL AND CITY ARE GOING TO OUT ODF STATE COMPANIES. WE MAY BE SUPRISED AS TO HOW MANY JOBS ARE BEING SHIPPED OUT OF STATE WHEN WE NEED ALL THE JOBS RIGHT HERE IN OREGON.
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CR
0 #3 Stimulating Oregon?CR 2010-09-22 15:34:39
There are other stimulus projects in Oregon that are given to out of state contractors, Engineers and Architects too. It does occasionally go the other way as well. You would think that Oregon companies would be given extra consideration for Oregon ARRA dollars but the feds only think big picture (see Towslee's response above)helping immediate small business needs has not been a consideration to date. There is no reason why they couldn't do both; Feds I spoke to really just don't care. Seems obvious if a certain party what votes in November.
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Mike Lilly
0 #4 Non-conforming bidMike Lilly 2010-09-22 20:42:09
Didn't anyone notice that the Oregon company lost because they submitted a non-conforming bid? Look at this line in the story.

""The company has to have the right supplies for the project. We have technical specifications that have to be followed," said Kathryn Warner, corps project manager. "

If you don't meet the specs, you shouldn't be given the bid. That's the way it is and always has been. That's why the judge threw out the case.

The reporter seems oblivious to this point.
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