American Sewer Services suing city after lost work

Contractor has won nearly $5 million in work after stickers, guns ended two contracts

American Sewer Services has been awarded more than $4.8 million in contracts with Milwaukee’s Department of Public Works since it was stripped of two contracts earlier this year, but it is a roughly $400,000 contract the company did not get that has prompted legal action.

The Hartford-based firm alleges in a lawsuit filed in Milwaukee County Circuit Court that the city incorrectly award a contract to replace 50 lead water service lines to MJ Construction Inc. American Sewer Services says its $395,920 bid should have won out over a $408,765 bid, but the city deemed the company was a “non-responsible” bidder.

American Sewer initially sought an injunction preventing the city from awarding the contract, but withdrew those motions following a hearing last week.

Mike Ganzer, an attorney for American Sewer Services, said the contract was the first time the company was deemed “non-responsible” on a city contract.

“Purportedly due to ‘unbalanced bidding’ which has never been an issue and about which there are no published standards to our knowledge,” Ganzer said in an email.

Milwaukee has awarded American Sewer Services nearly $104.2 million in contracts for sewer and water work since 2005, according to online city records. The total includes $4.8 million in work this year, including three lead service line replacement projects.

In an affidavit filed with the court, Jennifer Gonda, Milwaukee Water Works superintendent, said the company’s bid violated the city’s requirements against unbalanced bids. She said unbalanced bids – where a firm puts a high price on some items and a low price on others – are particularly problematic on lead service replacements because private parties are paying for a portion of the work.

Gonda’s affidavit said in some cases the company bid just 1 cent on certain items and claimed the company has demonstrated a past practice of excessive excavation.

American Sewer Services says in its filings that it met all the city’s requirements and was awarded work on a similar 40-line replacement contract in April.

The bid documents for the 50-line contract include special provisions for lead service line replacement dated May 2018 that include language on “appropriately balanced bidding.”

“Any bid that appears unbalanced may be deemed non-responsive by the commissioner of Public Works, regardless of whether the unbalance appears detrimental to the city,” the document says.

Milwaukee Water Works declined to comment on the case.

American Sewer was also stripped of two contracts earlier this year after photos emerged of employees carrying guns on job sites and using coolers with Ku Klux Klan and Confederate flag images on them.

Photo from Milwaukee Common Council

The city terminated one contract with the company and rejected another bid on a job where the company was the low bidder. Those two contracts totaled about $800,000.

American Sewer Services agreed not to rebid on those contracts and to not contest the city’s actions.

Gonda referenced that agreement in her affidavit, but said the city’s decision to deem the company “non-responsible” on the 50-line contract was not related.

Asked if his client thought the incidents played a role in not getting the current contract, Ganzer said he was “uncertain.”

“It was mentioned in the city’s affidavit as a non-factor – though that begs the question as to why it was even mentioned in the first place,” Ganzer wrote.

Shortly after the city stripped American Sewer Services of the two contracts, a Public Works inspector discovered an employee carrying a gun on another job site. The company fired the employee, withdrew its winning bid on another contract and pledged to emphasize its policies to employees.

“American Sewer has had a very good and productive relationship with the city of Milwaukee over many years,” Ganzer said when asked how relations have been since January.

American Sewer Services has been awarded more than $4.8 million in contracts with Milwaukee’s Department of Public Works since it was stripped of two contracts earlier this year, but it is a roughly $400,000 contract the company did not get that has prompted legal action.

The Hartford-based firm alleges in a lawsuit filed in Milwaukee County Circuit Court that the city incorrectly award a contract to replace 50 lead water service lines to MJ Construction Inc. American Sewer Services says its $395,920 bid should have won out over a $408,765 bid, but the city deemed the company was a “non-responsible” bidder.

American Sewer initially sought an injunction preventing the city from awarding the contract, but withdrew those motions following a hearing last week.

Mike Ganzer, an attorney for American Sewer Services, said the contract was the first time the company was deemed “non-responsible” on a city contract.

“Purportedly due to ‘unbalanced bidding’ which has never been an issue and about which there are no published standards to our knowledge,” Ganzer said in an email.

Milwaukee has awarded American Sewer Services nearly $104.2 million in contracts for sewer and water work since 2005, according to online city records. The total includes $4.8 million in work this year, including three lead service line replacement projects.

In an affidavit filed with the court, Jennifer Gonda, Milwaukee Water Works superintendent, said the company’s bid violated the city’s requirements against unbalanced bids. She said unbalanced bids – where a firm puts a high price on some items and a low price on others – are particularly problematic on lead service replacements because private parties are paying for a portion of the work.

Gonda’s affidavit said in some cases the company bid just 1 cent on certain items and claimed the company has demonstrated a past practice of excessive excavation.

American Sewer Services says in its filings that it met all the city’s requirements and was awarded work on a similar 40-line replacement contract in April.

The bid documents for the 50-line contract include special provisions for lead service line replacement dated May 2018 that include language on “appropriately balanced bidding.”

“Any bid that appears unbalanced may be deemed non-responsive by the commissioner of Public Works, regardless of whether the unbalance appears detrimental to the city,” the document says.

Milwaukee Water Works declined to comment on the case.

American Sewer was also stripped of two contracts earlier this year after photos emerged of employees carrying guns on job sites and using coolers with Ku Klux Klan and Confederate flag images on them.

Photo from Milwaukee Common Council

The city terminated one contract with the company and rejected another bid on a job where the company was the low bidder. Those two contracts totaled about $800,000.

American Sewer Services agreed not to rebid on those contracts and to not contest the city’s actions.

Gonda referenced that agreement in her affidavit, but said the city’s decision to deem the company “non-responsible” on the 50-line contract was not related.

Asked if his client thought the incidents played a role in not getting the current contract, Ganzer said he was “uncertain.”

“It was mentioned in the city’s affidavit as a non-factor – though that begs the question as to why it was even mentioned in the first place,” Ganzer wrote.

Shortly after the city stripped American Sewer Services of the two contracts, a Public Works inspector discovered an employee carrying a gun on another job site. The company fired the employee, withdrew its winning bid on another contract and pledged to emphasize its policies to employees.

“American Sewer has had a very good and productive relationship with the city of Milwaukee over many years,” Ganzer said when asked how relations have been since January.

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