Jose de Wit
SUN Staff Writer
Published 10/23/08
A company picked to build student dormitories at Northern New Mexico College is disputing in state District Court the college’s decision to rescind its choice so it could reopen the bidding process.
Administrators had said in March they aimed to break ground for the project this past August but instead find themselves in court. Northern’s Board of Regents authorized administrators Aug. 21 to cancel a request for proposals in which Northern had selected Institutional Project Management, of Chicago, Ill., after the company changed how it planned to finance the project and Northern changed its choice of construction materials, according to a document signed by Northern President Jose Griego.
A request for proposals is a competitive bidding process in which companies are selected according to qualifications and other evaluation criteria not necessarily limited to the lowest-priced bid. Northern selected the company over two other competitors through such a process in January, and the two parties were still negotiating a contract when the Board rescinded its offer.
In a protest filed Aug. 28, the company argued that by cancelling the request for proposals, Northern violated state procurement code, the terms of the bid and Northern’s “duty of good faith and fair dealing.”
State procurement code allows Northern to cancel the bid “when it is in the best interest of the state agency or local public body,” but the company argues Northern is taking advantage of that clause to “benefit from professional services for which it had not paid.”
The company claims it helped Northern refine its plans for the dormitories over the course of negotiations and alleges that Northern now plans to take those modified plans to a different company.
“Procurement Code … (was not) intended to permit a public agency to induce or lure an offeror to provide information, expertise, and education, only to have the agency cancel the (request for proposals) and issue another (request for proposals) which takes advantage of these professional services without the agency’s having paid for them.”
The company is asking Northern to give it either a contract for the project or $301,592 for work it claims it did for Northern while negotiating a contract.
In his Sept. 29 determination, Griego denied IPM’s protest, as well as any wrongdoing by the college. The company filed an appeal Oct. 1 in District Court.
The determination cites case law that interprets procurement code to presume Northern acted in good faith, which would put the burden on the company to prove in court the college violated the code or acted improperly.
In an affidavit, Northern Vice President Tom Garcia, who led the selection committee that chose Institutional Project Management, stated Northern cancelled the bid because “too many things had changed since the original evaluation of the proposals.”
Garcia declined to comment, citing pending litigation. Administrators said in March they expected to break ground for the dormitories in August.
Initial plans called for the company to build, and eventually operate, a 140,000-square-foot building with about 124 dormitories. Construction would be financed by a non-profit organization created specifically to sell non-taxable bonds. The company would have recuperated its costs and made a profit by managing the dorms and charging students rent, then turned the building over to Northern after 30 years.
For Northern, costs would be confined mostly to buying about five acres of land south of the campus owned by Gilbert Martinez, for which the college had set aside $1.5 million left over from a $3 million appropriation the school received in 2005 for land purchases. The purchase of that property and three others for a combined 16.6 acres has been delayed after the state Higher Education Department asked for a reappraisal of the properties, Board of Regents Chairman Michael Branch said at an Oct. 16 meeting.
As the two parties negotiated a contract, the Board said it wanted to use steel studs to build the dorms instead of the wooden frame construction that were initially called for, according to Board minutes. The company changed its financing plan to sell taxable, instead of tax-exempt, bonds. The company argued in its protest that would ultimately save the college money, but Branch said it would also take longer before Northern received ownership of the building. The company also changed the architect it would hire for the project, according to documents.
Administrators said in the Oct. 16 meeting, the college plans to issue another request for proposals as soon as the appeal is resolved. According to information provided by Mickey Beisman, the company’s lawyer, multiple deadlines for each party to file paperwork related to the appeal mean more than three months could go by before a hearing date is set.