Another Million Dollars And Counting

Feb 4, 2024 | City Council

One item on the Consent Agenda of the February 5, 2024 City Council meeting is worth special attention.

CA-11 (23-2133) Resolution to Approve a Construction Contract with DiPonio Contracting, LLC for the Crescents Water Main Replacement and Resurfacing Project (RFP 23-61; $7,691,341.70) and to Appropriate $6,601,000.00 in Contributing Funds. (8 Votes Required)

Since community approval of a “Best Value” contracting policy in 2021, City Council has approved a number of contracts with prices higher than the lowest submitted bid. Such contracts are easily identified by looking at the scoring sheets attached to these contracts. A low score in the row “Part E – Schedule of Pricing/Cost” reflects the fact that a contractor is charging more than others. In this week’s agenda item CA-11, staff recommends awarding a contract to DiPonio, based on the scoring sheet below:

Crescents proposal evaluation sheet dated Dec 2023 as found in the Feb 5, 2024 Ann Arbor City Council agenda

(Direct link to scoring sheet)

This scoring sheet shows that two contractor bids scored better than DiPonio in “Schedule of Pricing and Cost,” meaning that their bids were lower. In assessing these bids by the “Best Value” standard, City staff recommend awarding the contract to DiPonio, but bids from Verdeterre and Fonson scored better on price. How much better? Below are the prices from those three contractors:

  • DiPonio $7,691,341.70
  • Fonson $6,626,059.00
  • Verdeterre $6,073,973.70

It’s worth looking more closely at all three of these contractors. Since 2008, Verdeterre has been awarded only two contracts with the City, adding up to less than $500,000. However, Fonson is a trusted City contractor that has done millions of dollars in work for the City, including multiple large contracts since 2020. Most recently, Fonson was awarded a similar contract for water main and resurfacing work at Madison/Madison Place (May 2023) and prior to that, Fonson was awarded the much larger construction project on South State Street (May 2022) 

  • May 16, 2022 (link) Resolution to Approve a Construction Contract with Fonson Company, Inc. for the South State Street Reconstruction Project ($6,727,358.01) and to Appropriate $9,083,000 in Contributing Funds (8 Votes Required)
  • May 1, 2023 (link) Resolution to Approve a Construction Contract with Fonson Company, Inc. for the West Madison – Madison Place Water Main and Resurfacing Project ($2,122,850) and to Appropriate $1,133,000 in Internal Contributing Funds (8 Votes Required)

NOTE: Submitted bid prices are available for anyone to see at the RFP page on the City’s website. Click on the links for “proposal tab” to see the bid prices on any given contract:

In Council questions to the agenda this week, no one asked about this contract or requested any details about why it costs so much more. It is worth noticing that in this single contract, the flexibility and discretion of the “Best Value” standard is costing the City over a million dollars. 

The “Best Value” standard, as implemented by a majority (and now unanimity) of City Council has resulted in arbitrary decisions, awarding contracts to specific companies favored by individual Council Members. I wrote about it a year ago in my post “A Million Dollars And Counting“:

This problem is not new. Watch Council Members in action – switching contracts at the Council table to favor specific companies – in a video I made in December 2022: