Wilmer rescinds NC3 award, approves Kramer Service Group for Wilmer Connect phase 1

Operations Director Kyle Box told the council the city no longer has confidence in NC3 LLC to complete the Wilmer Connect phase 1 project as bid after the contractor informed city staff it lacked the financial and operational capacity to perform.

Kyle Box, Operations Director, said staff, consultants (Bolton & Menk) and Hometown Fiber had met with NC3 several times and that, after recent conversations, they recommended rescinding the award previously given to NC3 and moving to the next responsive bidder. "Over the last two weeks, NC3 has informed the city that it's bid on additional work and no longer has the financial or operational capacity to complete the Wilmer Connect project as originally proposed," Box said.

The council voted to rescind NC3's award by roll call (8 ayes, 0 nos). "We reserve all of our rights and remedies available under the contract, including pursuit of their bid bond or other legal recourse should it be necessary to recover costs or damages," Box said. City Attorney Robert Scott advised the council that the city has a claim to the full difference between NC3's bid and the next lowest bid, but that the 5% bid bond would not cover the entire gap.

After rescinding the NC3 award, staff recommended the council award the phase 1 contract to Kramer Service Group, the next-lowest responsive bidder. Box said Kramer had provided required bid bonds, responsible-contractor documentation and confirmed it has the staffing and financial capacity to execute the work. Kramer's bid was presented at $8,197,392.50, roughly $569,000 higher than the NC3 award.

Council members questioned whether the city should wait for private-sector alternatives or for a federal economic-development grant staff is pursuing that staff estimates could reduce construction costs by about $1 million to $1.5 million. "If we receive the grant, that's fantastic. Otherwise, we will have to build the industrial park at a later time," Box said. Several councilors pressed staff on contingency amounts, wage requirements tied to potential grant funds and how scope reductions would be handled.

Council moved and by roll call approved awarding Wilmer Connect phase 1 to Kramer Service Group; the motion carried (vote recorded as 5 ayes, 3 nos). Box said scope adjustments and any reduction tied to grant funding would come back to the council as change orders and that staff would continue to pursue recovery from NC3 if appropriate.

What happens next: staff said it will pursue claims where necessary (including potential recovery under NC3's bid bond) and will return to council with any proposed change orders or grant-driven scope modifications. The city did not state that the federal economic-development grant has been awarded and said the grant is not guaranteed.