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Rejected bidder cries foul over demolition of Keystone Towers

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A New York-based company is upset that the city of Indianapolis did not award it the contract to demolish the vacant Keystone Towers apartment complex even though it submitted the lowest bid.

Titan Wrecking & Environmental LLC of Buffalo submitted a bid of $571,621—more than $255,000 lower than the winning bid of $827,000 from Indianapolis-based Denney Excavating.

Problem is, Titan Wrecking failed to provide necessary information, specifically a financial statement with its paperwork, disqualifying it from the bid process.

But the company’s managing partner, Frank Bodami, contends he later offered to provide a financial statement to the city and was rejected. He further argues that Indiana law allows municipalities to waive such “formalities.”

“I mentioned to [city officials] that it seemed to be a formality, and that $250,000 seemed to be a lot of money for taxpayers,” Bodami said. “But they rejected that.”

Denney Excavating plans to implode the towers within 120 days, the city announced Monday.

The city is funding the demolition project with $8 million in federal housing dollars as part of the Neighborhood Stabilization Program. In addition to demolishing Keystone Towers, the money will go toward tearing down the long-vacant Winona Hospital and rental housing projects in a few parts of the city.

Denney’s bid was one of 10 submitted for the project that came in below the budgeted $2 million. The bids were reviewed by three city offices: the Department of Metropolitan Development, the Office of Corporation Counsel, and the Department of Minority and Women Business Development.

Samantha Karn, the city’s corporation counsel, said the city occasionally receives incomplete bids, but it never offers an offending company the opportunity to correct mistakes even if it would mean saving public money.

Karn acknowledged state law does give municipalities the right to allow bidders to correct errors, but only if it doesn’t give them an unfair advantage. In this instance, Titan Wrecking also failed to submit a demolition plan, which further disqualified the company, she said.

“Definitely there are times when the city gets hurt because the bidder doesn’t follow the requirements,” Karn said. “Believe me, we think that’s unfortunate, too.”

After the demolition, the city will explore redeveloping the site. Any new projects must include mixed-income rental housing by the rules of the federal grant used to demolish the 15-story complex.

Located northeast of the Indiana State Fairgrounds near the intersection of Keystone Avenue and Binford Boulevard, Keystone Towers has been vacant more than 10 years.

The apartment complex, built by local developer George Ginger in 1974 as the VIP Center, originally included apartment and office components and was intended to be a crown jewel on the midtown Keystone Avenue corridor. However, leasing problems hampered the project from the beginning and the office space was eventually converted into apartments.

Denney Excavating, founded in 1990, has handled numerous local demolitions, including the Penn Building and the Larue Carter Memorial Hospital buildings.


 

 

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  • Lowest Bid
    I'd be interested to see what the other bids were to see how close Titan was to the rest of the pack. I work for a general contractor, and when we see a significant difference between the #1 and #2 bidder, we call it "scary low." I agree with David and Dean above...$250k sounds like a significant enough number to raise a red flag in my mind. When you think about it, most of the time, material costs are going to be more or less the same for any contractor (assuming that a group of contractors is bidding on the same scope of work), so the only things that could really be adjusted to lower costs are 1) labor and/or 2) overhead/profit. And what company is going to do a job for little or no profit? So they cut down the labor costs. And if it's true that you get what you pay for, I'd be a little afraid of what I get if I pay absolute bottom-dollar for labor. Plus, it sounds like they were just plain lazy when submitting their bid. All the projects my company has ever bid that were to be funded by public dollars required a financial statement in order to submit the bid. And it appears that Titan knew about that requirement. Just because "Indiana law allows municipalities to waive such 'formalities'” doesn't mean that they HAVE to waive those formalities.
    That's the risk Titan took when submitting their bid without the financials. They have no reason to be upset. And I'm sorry, but crying about $250k being a lot for taxpayers just sounds like sour grapes talking...contractors are in business primarily to make a profit, not to save taxpayers' money.
  • Indiana Jobs
    Let's hope they hire an Indy-Metro workforce to execute the job.
  • Indiana Jobs
    Let's hope they hire an Indy-Metro workforce to execute the job.
  • Boo hoo
    I don't feel sorry for the company. You didn't follow directions... you didn't get the job. It's business. There's more to choosing a contractor than the lowest price. when getting bids for a new roof on my house, I didn't go with the cheapest... Why? They were late for their appointment... Drove an old truck that barely ran, and gave their estimate on yellow notebook paper. I have a feeling they probably used a bunch of illegals also.
  • graft and corruption
    1, You know the local company is giving someone a kickback. Thats the way the game is played in Indiana.
    2, It is a shamefull waste that the building is not being renovated.
    3, how many tax dollars will the new projects cost us?
  • Low Bids
    A bid that low scares me..it is usually good to turn and run otherwise everyone can end-up paying more for the job to be properly completed. How do you know what you are getting without the proper bid info. submitted (some info. is more pertanent that other)? If they were close it would be a little diffenrent story, but this is a significant variation. If you have a good cluster of bidders that are close it can be irresponsible to accept the low one that does not fall witin the standard deviation. I think it was a very hard, but responsible call. I like the idea of keeping the jobs in Indy,too.
  • LEEDS
    Its a shame the buildings could not be renovated. Think of the waste going into our landfills. These buildings could be nice if renovated. I can't believe someone could not repurpose these structures. They really anchor this part of town. Someone needs to be creative.
  • back where I come from..
    Where I come from, we have an understanding, you know?

    We get the job, you overlook paperwork...everybody's happy. I think we understand one another now.
  • Quit whining, Titan
    I'd rather the city spend an extra $250K than waste staff time tracking down bidders that can't follow instructions while they could be reviewing qualifying bids. If there was no demo plan, what are the chances that lower bid is even accurate/feasible?
  • Not so fast...
    As a C.P.M. holding purchasing agent, I can tell you that is standard practice with government and most Fortune 500 company bids. You either follow the instructions, or you are disqualified. The thought is that if a bidder doesn't read the fine print and comply with what is asked for in the bidding process, it's probably a reflection of how they will handle your contract. Just my two cents.
  • demo
    Yes, $250,000 more from the taxpayers. But the $250,000 stays in the Indianapolis area through paychecks to Denny Excavating employees and Denny Excavating, a local company. And those employees as well as the company ownership will most likely spend that money locally. A New York firm will hire some of the work force from Indianapolis, but most of the money paid to the New York firm will be spent in New York. Looks more like a win win for Indianapolis - money stays local and local company contracted to perform job.
  • Come on...
    No financial statement and no demolition plan. Really?!?

    I'm sorry that Titan couldn't follow instructions and it cost the taxpayers an extra $250k... but that's assuming that Titan would actually qualify by the time they submitted those things.

    I'm glad it's going to an Indy firm.

    I hope there are no political connections like there seems to be on everything else that the Mayor does.
  • Demo
    Government types making common sense decisions? As in, "get those papers in here pronto so we can save 250 large!" HUH....

    Forrest said it best "stupid is as stupid does"!

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