City of Bay City cancels Liqu-force contract.

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The Bay City Commission on a vote of 5-2 Monday ended its three-year contract with Liqui-Force Services, the company it has so far paid nearly $6 million for repairs of the city's aged sewers.

The recommendation to terminate the contract came from City Manager Robert V. Belleman, who said the company violated the prevailing wage provision of the contract and that it did not provide a performance bond guaranteeing its work.

Belleman defended the city's decision to hire Liqui-Force in a report he released on Nov. 7.
On Monday, however, he said the company "as of today, has not provided a (performance) bond as required by contract and state law."

Belleman also said Liqui-Force did not pay prevailing wages through the entire first year of the contract; the company since has made restitution to its employees for tens of thousands of dollars in wages and benefits they were underpaid.

The contract with Liqui-Force went into effect in October 2004, after approval by the City Commission.

Bid documents given to commissioners at the time showed Liqui-Force as the lowest overall bidder among three companies, but an investigation by The Times showed Liqui-Force actually was the highest bidder for sewer lining, which has made up the bulk of the work to date.

Belleman has estimated that the city would have saved $1.8 million so far had it gone with lower bidders for the work. He suspended sewer-lining work on Oct. 26, the day The Times showed him the detailed bid documents it had obtained from the city under the Freedom of Information Act.

After Monday's meeting, Belleman said he does not know whose job it was to provide oversight to the Liqui-Force contract, but said he is "looking into it."

Before Monday's vote was taken, John Thompson, a Liqui-Force representative, defended his company. "We have addressed (the prevailing wage issue), dealt with it and corrected it and have since taken on the other issue of the performance bond. ... Both issues can be addressed without a problem," Thompson said.

He did not say why the Canadian-based company did not have the performance bond.

Commissioner Michael E. Wooley, 2nd Ward, said he was at a loss to understand why the city did not secure a performance bond and why Liqui-Force did not know it needed one, especially when it has done work in the state for several years, including several projects in Bay City over the last eight years. "I can't imagine that any company ... wouldn't know that's state law," Wooley said.

Flannery said it's not acceptable that the company did not have the bond, nor that the city did not know the company didn't have the bond.

"I just don't know how it happened," Flannery said. "There's a lot of finger-pointing going on." Flannery said he is concerned that some contractors may be reluctant to bid on jobs in Bay City because of the cancellation. He is also concerned about the condition of the sewers and said the city can't keep delaying the job and passing the cost on to future residents.

Belleman told The Times he does not know if the job will be rebid.

Wooley said terminating the contract with Liqui-Force does not mean the sewers aren't going to get repaired.

"It's my understanding that there are several companies that do this work," Wooley said. Even Liqui-Force could bid on the project again, he said. Some Liqui-Force employees spoke to the commission before the vote was taken.

"I am currently laid off from Liqui-Force," said Brett Wall, who was hired by Liqui-Force for the Bay City job. "Tonight I'm here to let you know that this contract is between more than you and this company."

Wall said 20-25 families have been affected by Liqui-Force layoffs.

However, Wooley said, "The overarching issue ... is the protection of all the taxpayers ... and we have to do what's best for everyone, not just the employees hired by Liqui-Force."

Davidson said that if the city canceled its contract with Liqui-Force, it would pay more for sewer repairs.

"A three-year contract was a smart business decision," he said. "It locked us into prices."

Liqui-Force was charging from $41 to $95 per foot for sewer-lining; the low bidder on the job was SOS Service Group Inc. of Michigan, which bid from $35 to $65 per foot for the same work.

In the past two years, sewer rates have gone from $2.83 per 748-gallon unit to $6.18 per unit to pay for the work.

Bay City resident Larry Elliot says he read Belleman's Nov. 7 report, which he said raised several questions that have not been answered.

"I'm trying to figure out why we didn't have (a performance bond) to begin with," Elliot said. "Someone needs to be held accountable for that."

Now Some you reading this may be asking yourself, why is this here and how is this train related? Well, thats simple. Liquiforce just built a nice sized loading area to load sewage into tank cars at the north end of the HESR Weanona yard. The place holds 5 or 6 tanks at a time and is usually always full. Its switched ofter i think though i've never seen it myself. So once again the city of bay city screws themselves and others over as this has already and will continue to cause lost jobs. INFO provided by the Bay City times thanks to Mlive.com