Garco loses military job despite having low bid

Spokane’s Garco Construction is appealing an Army Corps of Engineers decision to award a $36 million construction job to an Oklahoma company, claiming the selection process incorrectly gave an advantage to the competitor.

  Garco, which has had military construction contracts for about 15 years, submitted the lowest bid on a new truck and equipment maintenance facility at Joint Base Lewis McChord near Tacoma. But the Savannah district of the Army Corps of Engineers recently awarded the contract to The Ross Group, based in Tulsa, Okla.

Garco Vice President Hollis Barnett said the company has filed an appeal with the corps. That appeal has halted the contract, which will undergo an independent review by federal officials.

The roughly $36 million Lewis McChord project is the first of as many as 16 equipment and maintenance facility contracts the Army Corps of Engineers will hand out over the next three years. Those facilities are expected to cost about $499 million.

Ross, Garco, Absher Construction, of Puyallup, and S&P - Mason & Hanger, J.V., of Houston, were chosen as four prequalified companies to compete for those jobs between now and 2014.

Ross’ bid was $36.1 million for the first project. Garco presented a bid of $35.5 million, Barnett said.

But the contract includes a preference for companies considered HUBZone-certified businesses. HUBZone is a term created by the Small Business Administration identifying “historically underutilized businesses.”

Though Garco presented the lower bid, the HUBZone process required an additional 10 percent to be tacked on to its proposal.

Ross Group was the sole HUBZone company bidding. As a result its bid was chosen as the lowest, since Garco’s HUBZone-adjusted bid came to roughly $38 million.

But Garco contends the Ross Group is not a qualified HUBZone contractor.

It’s not listed on the SBA website, and the documents used for the bid identify Ross as a “self-certified” HUBZone firm, Barnett said.

“We think this is just not a level playing field,” Barnett said. He said Garco also lost two other large military contracts earlier this year by the same process.

“I’m not sure our people in Congress know how this is being applied,” he said.

Billy Birdwell, a spokesman for the Army Corps of Engineers, said the next step is for an independent review to be done by a different division of the agency.

The process could end a number of ways, only one of them beneficial to Garco, Barnett said. If the corps decides Ross Group is not eligible, the Lewis McChord award should go to Garco, he said.

But if the federal agency decides the process was flawed, and that other companies also should have been prequalified for the contracts, the whole contract may be scrapped.

“In that case the contract would be thrown out, and Congress would have to again look at authorizing” the money, Barnett said. “That possibility seriously concerns us.”