EG&G reacts to phase II decision

EG&G strikes back! In a letter sent to all elected officials the day before Tuesday night?s vote, which awarded the phase II contract to James C. Hailey and Company, EG&G president John Grossmann pointed out why his company?s fees appear higher than Hailey?s.

Of concern to elected officials are two invoices requesting the city to pay $52,860 for services EG&G provided for phase II of the project that came attached to the letter ? and an allegation made within the letter.

The letter claims McMinnville Electric System called EG&G?s electrical consultant for phase I, Peters, Tschantz & Bandwen, Inc., on Jan. 4 requesting that they prepare the electrical plans for the phase II project. In return, MES would pay the fee.

If MES pays for the services to be done by someone else instead of in-house, the letter alleges that MES will be forced to raise its rates to recoup the cost.

?Ultimately the city is going to pay for the fee whether it pays for it up front or pays for it long-term through the tariff that will be charged by McMinnville Electric System for their electric system,? the letter claims.

The debate regarding the $600,000 ARC grant, which elected officials recently learned they missed because the deadline had passed, once again reared its ugly head with Alderman Jimmy Haley saying he believes EG&G could get the grant despite the deadline because Grossmann had done it in the past. Incidentally, that was the first time an ARC grant was awarded for a Main Street project.

?I?m not ready to entertain the idea that EG&G has exclusivity on grants and insult the government agencies and the other individuals who do it routinely,? said Alderman Billy Wood. ?If EG&G can do it, then someone else can do it. I think this is a scare tactic.?

Aldermen voted 4-2 in favor of going through with the ordinance to hire Hailey as phase II project engineer. Once again, Aldermen Patty Nunley and Haley voted against the ordinance while Aldermen Donald Hillis, Bobby Kirby, Rick Barnes and Wood voted in favor of it.

However, given the allegations by Grossmann of a possible rate increase by MES in an effort to recoup costs, aldermen have instructed Mayor Royce Davenport to sign the contract with Hailey only after the above allegations have been disproved.

As for the letter, Grossmann states, ?comparing EG&G, Inc. costs with James C. Hailey & Co. costs, it becomes evident that the same apples are not in both proposals.?

He cites four areas that would change the proposal by EG&G and in doing so, lower EG&G?s fees.

? Because electrical consultant fees were not included in Hailey?s contract, they can also be deducted from EG&G?s fees. Also, construction administration is provided in EG&G?s proposal at a cost of $165,220. In the Hailey proposal, construction administration is limited to grant administration only at a cost of $35,000.

If the city does not want the construction administration or the electrical consultant, the cost of $175,000 could be removed from EG&G?s proposal.

? Preliminary drawings were included in EG&G?s proposal at a cost of $76,000. According to the letter, these drawings must be done and are ?used for review with the city, TDOT, and each property owner? and are used ?to work out all the problems up front.? Because of this, the cost of the drawings should have been figured into Hailey?s contract but was not.

? As for the $975,000 TDOT grant proposal, EG&G prepared and obtained the grant which is to be used during phase II construction. When used, EG&G would be entitled to 4 percent or $39,000. Because of this, that amount was also figured into EG&G?s fees. Hailey did not obtain this grant, so that number was not used in his proposal.

? There is also a request of $13,860 for the ?cost of developing the preliminary construction costs for the phase II project, including schedules and making presentations to both the public and private sectors at the request of the city.?

If the city had remained with EG&G, these costs were figured into the preliminary cost of phase II. Because the work was not done by Hailey, that number is not included in his proposal.

If elected officials take into account the figures generated from the letter and compare ?apples to apples,? EG&G?s fees would drop to $350,372, the letter contends.