AUGUSTA — Posting two natural gas companies’ bids online was a matter of public interest, City Manager William Bridgeo said Monday in response to a charge from one company that the city violated bidding rules.
Maine Natural Gas and Summit Natural Gas of Maine have both bid to supply city property, including municipal, school, court and county buildings, with natural gas. Thursday, Maine Natural Gas officials told city councilors that city violated its own rules and gave an unfair advantage to its competitor by posting the bids on the city website.
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Maine Natural Gas said the posting violated the city’s procurement ordinance and conflicted with request for proposals wording issued by the city, which said the bids would be confidential. The company says that gave Summit an unfair advantage, because it was allowed to lower the prices it offered to the city after seeing Maine Natural Gas’ initially lower prices.
But Bridgeo said Monday neither he nor the city attorney, Stephen Langdorf, believe the city has violated the procurement ordinance or the request for proposals.
Bridgeo said the bids were posted because of the significant public interest in the issue and because the state Freedom of Access Act required the information to be released to the public.
“Traditionally we try to be as open and transparent as possible,” Bridgeo said. “This is a very big issue not only for city government but all the residents of Augusta. The council was very concerned the public be as fully apprised of this as possible.”
Bridgeo wouldn’t respond further to Allen’s claim the process was unfair to Summit, because of the potential for litigation.
Unequal treatment
David Allen, a consultant for Maine Natural Gas, told councilors Thursday that after the website posting, Summit was allowed to change its pricing “in a manner specifically designed to compete with the proposal from Maine Natural Gas, an easy task since they had access to our proposal.”
“We do not know if the city asked Summit to make this change or whether Summit made it unilaterally, but in either case the city violated the terms of the RFP and its own ordinance by disclosing the bids and then accepting Summit’s revised prices, which now appear to form an important part of the recommendation of the city’s consultants to select Summit,” he said.
He added that, “The city’s ordinance requires confidentiality of bids and fair and equal treatment of all bidders. The current process provided neither.”
The city’s procurement ordinance states, in part, “Contents of the proposals shall not be disclosed to any of the competition or offerors during the negotiation process.”
Summit Natural Gas of Maine officials, meanwhile, said they did provide a better price to the city after their company’s initial bid submission, but said they were not asked to do so by the city. Also, Summit said the approximate rates of both companies are already public information, so information posted online was not new and did not give them an unfair advantage.
“There is enough public information out there to know where our prices are,” said Mike Minkos, president of Summit Natural Gas of Maine. “There’s no collusion. It’s pretty easy to determine where you have to be to be able to attract the business you need to attract.”
Cony campus a factor
The challenge to the city’s proposal process comes before the city has picked a winner.
The choice of which company will provide gas to school and city buildings could go to councilors as soon as this Thursday.
For some property, there is some urgency, particularly Cony High School and Capital Area Technical Center, which share a building. Getting gas to the campus is a priority for the city because the oil-fueled heating system is being ripped out, and a new gas-burning system will be installed by October.
The new system needs gas, Bridgeo said.
“The alternatives, if gas isn’t piped there by this fall, are concerning,” he said. “Because it would mean we’d have to somehow get propane there for a year. Which presents both cost and safety issues. It’s very important we get natural gas to the site this year.”
The Maine Natural Gas bid to supply gas to city and school property initially didn’t include plans for the campus until 2014. Maine Natural Gas officials, in response to questions from the city, altered their proposal to include gas to the schools this year after initial bids from both gas companies were submitted.
That was one of two changes made by Maine Natural Gas after its initial bid. The other change was the addition of a financial surety, which would be payable to the city if the company is not able to follow through with the commitments it makes to the city.
The original request for proposals required a surety and also required that gas be supplied to the schools by fall.
Langsdorf said the Maine Natural Gas bid, because it did not meet the initial request for proposal requirements, could have been considered a non-responsive bid, which Bridgeo said are typically rejected. But in this case, Bridgeo noted, the city allowed Maine Natural Gas, as it did Summit, to change its bid.
If all this sounds familiar, it may be because it is not the first time the companies have battled over the selection process. Both companies submitted bids in response to a state request for proposals last year to provide natural gas to state property in Augusta and Gardiner. However, the state’s efforts were scuttled. An appeals panel ruled in September that the bid process used by the state Bureau of General Services to select Maine Natural Gas as the provider was flawed and invalid.
In the meantime, both companies have crews laying pipe throughout much of Augusta.
Dan Hucko, a spokesman for Maine Natural Gas parent company Iberdrola USA, which also owns Central Maine Power Company, said Monday the company has decided on a strategy, which it will announce publicly today.
He noted the company “is fully committed to bringing affordable natural gas to the region. City facilities are just a small portion of the gas load in the area and we are anxious to continue our efforts of signing up even more commercial and residential customers so they can begin saving money on their heating bills as soon as possible.”
Keith Edwards — 621-5647
kedwards@centralmaine.com
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