Council amends bid award language after bidder admits major error in lead line bids

Councilors on June 23 debated whether to immediately award contracts for the city’s 2025 lead service line replacement project after a bidder acknowledged significant omissions on one of its submitted bid groups.

Aaron Dean, a Minneapolis attorney representing Elcon Excavating Inc., told the council his client had made multiple errors on its bid documents submitted June 3 and asked the council to remove the item from the agenda or, at minimum, delay action so the city attorney and engineer could investigate. Dean said Elcon’s bids for packages 1 and 2 were roughly $388,000 and that the firm failed to enter figures for parts of group 3, making that submission incomplete. He warned the council that, if the city proceeded and released bid bonds, Elcon would likely contest an award in court and cited Minnesota Supreme Court precedent on mistaken bids.

Engineering staff summarized the bid tabulation and said staff had secured approximately $1.5 million in combined state and federal grant funding plus a state loan projected to be forgiven for the project. The engineer identified the next-lowest responsive bidders for each group and said staff recommended acknowledging the bids and proceeding with award to responsive bidders where appropriate while continuing discussions with Alcon/Elcon.

The city attorney advised caution, noting state funding participation complicates a decision to reject or accept a low bid and that the city should confirm the state’s position before taking final action that could trigger liability. Councilors asked whether accepting the next-lowest bidder would release the low bidder from obligations; the attorney said not necessarily and recommended the council preserve flexibility.

Councilor Holland moved to accept specific bids naming the apparent low bidders; after discussion the motion was amended to award contracts to the "lowest responsive bidder" for each group to allow staff and the city attorney time to confirm obligations with the state and to avoid prematurely naming contractors. The amended motion passed on a roll call in which six councilors voted aye and the mayor registered an abstention.

The council directed staff and the city attorney to continue reviewing the Alcon/Elcon bid issue and to verify state funding conditions before finalizing contracts. The amendment permits the city to proceed with contracts to responsive bidders if outstanding legal and funding questions are resolved in the coming weeks.

Next steps: staff will consult with the state funding agency and the city attorney, attempt to resolve matters with Alcon, and return any necessary findings to the council before signing final contracts.