Small firms angry over safety center bid system

2012-04-13T05:00:00Z Small firms angry over safety center bid systemRuth Moon Journal staff Rapid City Journal
April 13, 2012 5:00 am  • 

Tensions ran high Thursday as Native American construction companies on the Pine Ridge reservation met to debate why they had only been awarded a quarter of the bids for a $28.5 million justice center project.

Reservation-based construction companies face several challenges when they bid to work on large construction projects. For one thing, contractors on the reservation cannot use land to take out bonds to fund projects, because reservation land is trust land and not taxed by the federal government.

“Banks won’t come anywhere near the reservation,” said Dustin Twiss, who with his father lost a bid on a communication system for the new facility. “You’d be lucky to make a payday loan, let alone a half a million dollar bond down here, unless you have 100 percent of the assets.”

Some contractors, like Mike Carlow, who has been in business 23 years and owns Carlow Enterprises, think the tribal government should step in and designate funding to back their businesses. Other companies think startups should have to earn their own ability to take out bonds, said Cordelia White Elk, director of the Tribal Rights Employment Office.

The bidding process, which was designed to give Native American reservation-based companies preference in the project, allowed reservation companies an early bidding period; contractors typically all bid at the same time. Some contractors at the meeting were concerned that the method allowed their contractors and suppliers to let other sub-contractors know what people were bidding, so they could underbid.

After the early bidding period, Denver-based Milender White Construction Company opened the bidding process to off-reservation companies for leftover parts of the project.

Louis and Dustin Twiss said they felt treated unfairly because off-reservation companies might be able to find out what they bid and underbid them later in the process.

“We feel like we can go to Denver and bid on the open market and be competitive,” said son Dustin Twiss. “Yet we can’t be competitive right here in our corner, in the middle of nowhere in South Dakota.”

The project will house the Oglala Sioux Tribe’s jail, police force and judicial system in one 93,642-square-foot building southwest of the current adult jail near the Nebraska border. It is being overseen by Milender White, which is obligated to give preference to Native Americans in the subcontractor bidding process because the project is on the reservation.

Companies from the Pine Ridge reservation put in 22 bids on the project. Adam Mack, operations manager for Milender White, considered six of those bids, totaling about $10 million, and the rest of the project was bid off the reservation. The reservation bids were for earthwork, utilities, concrete, food service equipment and mechanical and electrical work.

About a dozen other tribal contractors were at a heated, 90-minute special meeting of the Oglala Sioux Tribe Department of Public Safety on Thursday.

Tribal and construction companies overseeing the bidding process have communicated poorly, said Carlow. He bid on six parts of the justice center and was recommended as a contractor for two.

In addition, many companies are used to handling $200,000 or $300,000 projects and don’t have the employees or budget to jump to a several million dollar project, Mack said.

“They’re not exposed to this many large opportunities, so if we were doing housing, some foundations, siding, painting — great, fantastic,” he said. “If you’ve got a guy that tries to get 10 times bigger all at once, he will fail. It just happens.”

Ken Soderlin, owner of Sod’s Mechanical, was recommended to provide plumbing and heating work for the building. He bid the project at $6,553,500, less than 4 percent over the bid budget of $6,316,152. He said he reached an agreement with Milender White and was planning to take on the project when the company said he needed to cut his budget further. The construction company was working to cut $3 million from the project budget at the tribe’s request.

“They’re basically saying we’re $1 million over budget when we were supposedly within thousands of dollars,” he said. “It’s quite a contrast, when you think you have the job.”

Contact Ruth Moon at 394-8415 or ruth.moon@rapidcityjournal.com.

Copyright 2015 Rapid City Journal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(6) Comments

  1. antelope
    Report Abuse
    antelope - April 13, 2012 10:17 pm
    indian preference,and the tribal council cannot enforce their own laws on indian land,the pine ridge was a place where the indian people always spoke freely,quit pointing fingers and do your job
  2. mrcabdriver
    Report Abuse
    mrcabdriver - April 13, 2012 7:37 pm
    bman123 said: "Small firms don't have the expertise to close a deal like this..as the article pointed out, a $200-400K project type doesn't compare a $10-30M buildout. You would see cost overruns and excessive delays without a professional team on board. It's too much for a small contracting outfit. "

    You hit the nail on the head. I would also like to add this. With a large project like this bonds may and will be required for subcontractors and suppliers. Getting bonded on a reservation is difficult for a well funded company and more difficult for the smaller guys. You cant hand a contract to someone who cannot prove they can handle the projects cost, pay its wages to employees etc. If a subcontractor makes a mistake calculating cost will they be able to finish the project or will they go out of business? This is what bonds are for. You must be able to prove your ability to to complete the work. I understand the feelings but this issue is not just a reservation issue it happens all over the country every single day.
  3. bman123
    Report Abuse
    bman123 - April 13, 2012 4:15 pm
    Small firms don't have the expertise to close a deal like this..as the article pointed out, a $200-400K project type doesn't compare a $10-30M buildout. You would see cost overruns and excessive delays without a professional team on board. It's too much for a small contracting outfit.
  4. wayawa
    Report Abuse
    wayawa - April 13, 2012 10:16 am
    What about our available work force for these construction projects? Is the TERO office up to speed about training our unemployed Lakota work force? If this office is not ready, then network with other programs and agencies. Everyone has known for years that this new justice center development was being funded. Why are we on the reservation now just starting to talk and plan? We have a number of workers who can become journeyman, apprentice, etc. in these construction trades. Let us not fail to advocate for the employment of our own people here on the reservation! Let us not see all of the jobs go to Nebraska, Rapid City, etc. because we do not have a local trained work force that these construction companies need. Or will we only qualify for the low-paying pick and shovel work? This is more than about the local contractors, it is also about the gainful employment of our Lakota people too! Wopila TERO! Pilamayaye
  5. conan
    Report Abuse
    conan - April 13, 2012 9:53 am
    I actually feel for our small contractors here on the Pine Ridge Reservation. I thought TERO was to protect our people and make shur they have priority when it comes to employment on our lands.All our so called small contracting companies can pull together and sucessfully build this project. We have talented individuals, that can make a big project such as this work. Come on Tribe stand up for us all for once. I know all these individual contractors, they are decent people, who need to make a living just as any other person on earth. They can be a force to reckon with if you keep pushing them. Dont know what our council man provost was saying by the pose and finger pointing. I hope he was standing up for us. By the way, we need a Wal-Mart, getting tired of the high ass prices at sioux nation and white-clay. One meal is over $50.00. We need a swimming pool, we need a movie theatre, bowling alley, We need to build nice things for our kids. Tribal council step up, quit your traveling, workshops etc. Help our contractors. Lets start using our hands to help build, instead of traveling and using your hand to put that coin in a good old slot machine, or to down that cold one. TERO better wake up and move them chairs around, quit ignoring your people, just so YOU can have a paycheck. Or retire quit, let some fresh young minds in, who want a change and ones who will step up an actually do something!
  6. antelope
    Report Abuse
    antelope - April 13, 2012 8:04 am
    the local construction firms on the pine ridge need to be 8a certified,the local tero office should be holding training sessions in the certification process
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