Middletown Awards Stormwater Project Contract, Low Bidder Threatens Legal Action

The Middletown Town Council on Wednesday night awarded a $3.2 million construction contract to begin the town’s major engineering project and long-term solution to keep stormwater contaminants from flowing into Easton’s Bay.

The contract was awarded to the high bidder C.B. Utility for a total amount of $3,269,185, drawing outrage from the low bidding company, which submitted a proposal at roughly half the cost.

Besides C.B. Utility, the only other company to submit a project bid was HK&S Construction of Newport, which submitted a project bid of $1,631,125.

Working with engineering consultants from Woodward & Curran during the bid review process, Town Administrator Shawn Brown recommended that the Town Council reject HK&S’s lower bid as a “non-responsible bidder," a legal technical finding. Before awarding the project to C.B. Utility—at the recommendation of Town Solicitor Michael Miller—the Town Council first took a unanimous vote to assert the “non-responsible bidder” status upon HK&S as the low bidder.

Some of the primary reasons outlined in a memorandum to the Town Council from the engineering firm Woodard & Curran maintained that HK&S had not named the sub-bidders, or subcontractors, to be hired to perform the blasting component of the project and that the company had provided inadequate references for the type of large pipe installation services that are the primary component of the Esplanade outflow redirection project. The one most comparable project reference, from Mohammed Mabulsi of Nantucket, ended up giving HK&S a negative reference, according to the Woodard & Curran memo. The memo also asserted that that the company’s previous reference history in Middletown should be taken into account, and that both negative references—along with the failure to turn in a company profile with the bid and a list of blasting subcontractors—had provided the town with a legal basis for rejecting the lower bid.

According to HK&S President Jonathan Key, the company had completed a sidewalk construction project for the Town of Middletown within the Oxbow Farms apartment community off West Main Road several years ago and the company has a pending lawsuit against the town in Newport Superior Court for owed monies from that project.

After the Town Council awarded the bid Wednesday night, the Key brothers who run the family company spoke with press outside and stated they are considering filing another lawsuit against the Town of Middletown for rejecting their lower bid award without communicating with them throughout the bid review process to seek clarification on their proposal, or to address any of their concerns before awarding to the high bidder.

“It boggles our minds,” said Vice President Hugo Key the 3rd, who described how they had called town officials throughout the bid review period to offer to answer any questions. They would have addressed any concerns the town had and provided additional information if the town had responded and contacted them, he said.

To keep the costs lower, HK&S would have used a different tactic, a floating barge, to perform the work, asserted Key. Citing references, he said his company has previously constructed a $1 million boat ramp in Bristol and performed a $3.1 million pipeline project at the URI Alton Jones Campus.

Town Administrator Shawn Brown said he stood by the reasons outlined in the memo from Woodard & Curran for rejecting the company's bid.

“I just feel like we made the right decision,” said Robert J. Rafferty, of Woodard & Curran, the town’s engineering consultant who reviewed the bids with town officials and also has prepared the project thus far, working with state and federal environmental environmental and coastal regulators.

Scope of Project

The multifaceted project, now five years in the making, will primarily involve the redirected flow of stormwater away from Easton’s Bay at Atlantic Beach to an area at the end of an

A new stormwater main will be installed down the Espanade and the road will undergo reconstruction.

Other components will involve blasting, trenching and the construction of a temporary causeway.

The temporary causeway will be removed and the bluff will be restored to its natural state at the end of the project, according to a memorandum from Town Administrator Shawn Brown to the Town Council.

Brown said the target date to complete the project is May of 2012 before the next summer season begins.

The Esplanade stormwater outfalls project will also coincide with the town's separate construction project involving the installation of 70 new stormwater catch basins throughout Middletown.

Simultaneously, the City of Newport is constructing a to kill harmful bacteria in Newport's stormwater before the city's outflow enters Easton's Bay.

Funding the project

Originally budgeted at $2.1 million, the project is coming in at roughly $1 million more than anticipated due in part to engineering challenges in dealing with coastal resource regulations, construction and engineering techniques required for working on the coastline and permitting requirements, according to Brown.

In a memorandum submitted to the Town Council, Middletown Finance Director Lynne Dible detailed the following funding sources for the project:  

• Judgment Bond: $2,100,000
• Road/Drainage Bond: $649,647
• Capital Improvement Projects: $425,000
• Sewer Fund: $94,538

What’s Next?

The Coastal Resources Management Council will hold a public hearing on the project at 6 p.m. on Tuesday, Aug. 23 at the CCRI-Newport Auditorium, 1 John Chafee Blvd., Newport.

For more information

• See the public documents submitted to the Middletown Town Council related to the contract award in the image gallery above.
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