RAWLINS — When buying automobiles locally, Rawlins City Manager Scott Hannum made it clear to the Council on Tuesday evening that the city usually doesn’t.
“I’d love to see every vehicle that was bought for the City of Rawlins have local dealership name tags on the back of it,” he said. “That hasn’t happened for years.”
As to why, Rawlins dealerships argue that Wyoming State Statue deters them from bidding.
What requires that all bidders purchase a 5% bid bond, which guarantees that a governing body is properly compensated in the event a contract somehow impedes, local dealers argue it’s too financially burdensome.
“It’s our money that’s getting spent,” Rob Morris, general manager of Dallin Motors in Rawlins, said on Tuesday. “We want to minimize that as much as possible. My tax dollars are just like yours – they mean a lot to me.”
“I want you to spend them wisely,” he added.
Just recently, the city received seven bids on a new 2019 Ram 1500 pickup truck to be used by the fire department. Five of those bids, which were made by dealerships outside the Rawlins community, came with the required 5% bid bond.
The other two bids — submitted by Dallin Motors as well as Skyline Motors Inc. of Rawlins — had reportedly circumvented the required bid process by hand delivering the offers to Fire Chief John Rutherford “due to the bid bond requirement.”
Dallin would eventually prove to be the lowest bidder at $25,000, which was $10,915 less than the next proposal, according to the city. The council, however, cannot legally accept the bid because state statute wasn’t followed.
“In advertising any bid, the forms of guarantee required under this section and approved by the city or joint powers board shall be specified,” Amy Bach, Rawlins city and prosecuting attorney, publically recited from W.S. 15-1-113. “In addition, bidders shall be required to accompany each bid with a bid bond or, if the bond is $150,000 or less, any form of bid guarantee approved by the state, town or joint powers board equal to at least 5% of the total bid amount.”
In other words, had Dallin legally provided a bid with a 5% bid bond, they would’ve had to spend an irreparable $1,250 on the bond purchase itself.
“Quite frankly, there’s no profit in it for us when we bid that,” Morris said.
But, according to Bach, the city simply cannot favor one dealer over the next.
“The intent is for this process is to be uniform, non-discriminatory,” Bach explained. “And while we give preference to local Wyoming companies, we have to treat all Wyoming companies the same and we can’t give preferential treatment to our local dealers.”
Bach also shed light on the fact that, if the rules aren’t applied to everyone, less bidders and less competition would inflate the offers, causing the city to perhaps spend more money if the market is somehow cornered.
But, state statute does state that any “forms of guarantee,” which doesn’t necessarily have to include a bid bond, “shall be specified” and approved by any given governing body.
So, in-lieu of a 5% bid bond, the city can legally allow dealers to provide other forms guarantee, such as personal, cashier’s and business checks as well as letters of credit. The city could simply hold on to the check without cashing it until the vehicle they purchased is received.
Additionally, Hannum pointed out that the city does not actually pay the amount owed until the vehicle is at their “front door step.” So even if a contract is broken, the city doesn’t incur any losses, he argued.
“What are we out?” Hannum asked.
For possible solutions to this, the city advised Bach and Hannum to work on the issue, which may consequently give bidders the opportunity to provide alternative forms of guarantee when bid letting.
Councilperson Linda Smith also moved to reject all current bids for the pickup truck, which was approved unanimously (Mayor Steve Nicholson was absent). All bidders will be returned their bid bond money.
The next bidder, which did provide a bid bond, was Spradley Bar Motors out of Cheyenne. Their offer was $35,915.