RIO GRANDE CITY — The Rio Water Supply Corporation is under scrutiny for their decision to not award a contract for a USDA-funded project to the lowest bidder.
County Commissioner Jaime Alvarez questioned Rio Water Supply’s decision to award a contract for their water supply improvement project to a company called The 5125 Company instead of Five Star Clarke Construction, which had the lowest bid. The difference between the two bids is $376,932.
Three companies submitted bids for the project. The highest bid was $7,595,253 by Sal Construction Management. The 5125 Company came in second at $6,541,008 followed by Five Star at $6,164,076, according to a copy of the bid tabulation sheet.
“ The issue is not a single company or contractor … all three contractors are very capable of doing the work,” Alvarez said. “My issue is why do we have to pay $376,000 to go with the middle bidder when the other bidder can do the work?”
Alvarez said he believe Five Star, the lowest bidder, was disqualified on a technicality.
In response to questions regarding the bidding process, Lourdes Guerra, the general manager for Rio Water Supply said they would issue a written statement. However, the statement was not sent to The Monitor as of press time.
The submitted bids were for a project to replace water lines, which date back to 1966, because of severe water outages due to leaks.
In October, Rio Water Supply received a $4.36 million grant and a $293,000 loan from the U.S. Department of Agriculture to fund the replacement of the water lines and the installation of a new water tower which is the second phase of the project.
The first phase, which was finalized in 2014 and also funded through a USDA grant, consisted of the construction of their water plant.
The scrutiny over the bidding process is similar to the uproar faced by the Agua Special Utility District after they awarded a contract to the second-lowest bidder.
The contract awarded by Agua SUD, which provides water to cities in Western Hidalgo County as well as sewer service to Sullivan City, was for a project to provide sewer services to the city of Palmview.
The Agua SUD board of directors voted to award the contract for the second phase of the project to the second lowest bidder, expressing concern over lack of experience of the lowest bidder.
However, their concerns were not shared by the Texas Water Development Board which, after reviewing their justifications, rejected their decision.
The Agua SUD board had no choice but to change their decision and award the bid to the lowest bidder, otherwise the state would have withheld the funds for the project.
For projects funded by the USDA, like the project by the Rio Water Supply, the selection of a bidder other than the low-bidder would require additional justification and documentation, according to the USDA public affairs office.
The agency is required to concur with the selection.