Included in the Airport's Capital Improvement Program is the Car Rental Transfer Lot and Terminal Loop Road Repair Project. Currently, the car rental companies located at the Airport load and unload rental cars at the entrance to the Quick Turn Around (QTA) Car Rental Facility on Overlook Drive and on a vacant lot not leased to them.  The rental cars are delivered just before the peak summer vacation season and removed from the Airport during the autumn and winter months. These operations can block traffic and create unsafe driving conditions. This project will construct a paved, 72,000 s.f. asphalt Car Rental Transfer Lot located adjacent to the QTA and away from traffic areas.  Also included in this project is the replacement of the south portion of Terminal Loop Road that was damaged last Winter.  This section of the road experienced significant "frost heave," the result of severe cold alternating with warm weather.  This freeze-thaw cycle, combined with poor soil drainage below the road, caused the pavement heave. This project will remove the existing pavement and base material and replace it with new base material, a mesh material for more strength, and new asphalt paving. This project was advertised in the Billings Times on June 26, July 3 and 10, and was posted on the City's Web Site. The City received bids on July 15, 2014.  Due to a bid irregularity staff requested the award of the bid be delayed for review.  The following bids were received:

CONTRACTOR	BID
CMG	$639,596.00
Knife River-Billings	$672,761.30
Cayton Excavation, Inc.	$792,567.13
T&T Contracting, Inc.	$926,724.25

After reviewing the bids, it was determined that the low bid from CMG contained irregular items, specifically the mobilization bid item, which is limited to 10% of the total amount for each scheduled bid item, excluding the amount for mobilization.  The reason that mobilization is limited is because it is typically paid to the contractor early in the project, which could cause contractor payments to be higher than is reflected in the amount of work completed or materials supplied.  For Schedule 1, the mobilization amount was 38.98%  and for Schedule II, the mobilization amount was 103.39%.  This places a significant amount of the bid into the mobilization line item, which then unbalances the other bidded unit prices.  This is not a minor irregularity, and staff and the Airport's consulting engineers, Morrison-Maierle, Inc., both believe that the low bid from CMG should be rejected and the project awarded to the next low bidder, Knife River-Billings.

The City Council may:

• Approve the award  of the Car Rental Transfer Lot and Terminal Loop Road Repair Project; or
• Reject all bids, possibly delaying  the project.

The bid cost for this project is $672,761.30. Funding for this project is available in the Airport's Capital Account.

Staff recommends the City Council reject the low bid from CMG due to bid irregularities and award the Car Rental Transfer Lot and Terminal Loop Road Repair Project to the next low bidder, Knife River-Billings, for the amount of $672,761.30.