Confusion regarding paperwork almost cost the city nearly $2 million in federal stimulus money for a water and sewer project.
The City Council held a special meeting Friday to officially turn down the low bidder — Neill Grading and Construction — for its sewer repair and replacement project and accept the second-lowest bidder — Atlantic Coast Contractors — resulting in the project cost increasing almost $50,000.
Monroe Pannell, of Martin & Monroe Pannell PA, the law firm that represents Conover, read a statement from City Manager Donald Duncan on Monday, but declined to answer other questions about the situation.
"It's unfortunate that the funding sources for this project was going to withhold funds if the city awarded the project to Neill Grading. The city is disappointed that it could not award the bid to Neill Grading. However, the city had no choice if it was going to receive the stimulus (money) but to award the contract to the next lowest bidder, Atlantic Coast Contractor," read the statement in part.
Pannell said Atlantic Coast Contractor, of Denver, bid $1,390,562 on the project.
Clay Neill, of Neill Grading, said his company bid $1,344,374, a difference more than $46,000.
Neill confirmed the problem was with the filing of paperwork required by N.C. Department of Environment and Natural Resources, but said his company sent in what they thought DENR wanted.
"We're getting booted out because of the confusion and there's a lot of confusion with the process for getting stimulus money," Neill said.
Neill said the price difference in the bids between his company and Atlantic Coast Contractors will have to be paid by taxpayers.
Conover Councilman Kyle Hayman said going outside to contract work bothered him.
However, Hayman said the City Council had no choice in the matter because the DENR said the state-required paperwork was not in order.
Attempts to reach officials with DENR were unsuccessful.
According to Duncan's statement, the project has been on the city's "to do" list for several years, a factor in the city's receiving $1.7 million in the first round of distribution of funds through the American Recovery and Reinvestment Act.
Half of the money will be given to the city as a grant, the other half is a zero-interest 20-year loan.
The money will be used for repairs and replacements to the sewer system in the northeast part of the city.
Conover's application was one of between 160 and 180 applications for stimulus money. Thirty-six were approved, including projects in Hickory and Rhodhiss, for total of almost $46 million distributed by DENR.
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