Local Contractor Claims Bid Process Error Cost Taxpayers Thousands in Watertown Street Project
- Steve Jurrens
- Feb 17
- 2 min read
Northeast Radio SD News - Watertown, SD - A $2.87 million contract for the reconstruction of 5th Avenue North was awarded Tuesday night, but only after a local contractor alleged that a city staff error cost him the winning bid and deprived taxpayers of tens of thousands in savings.
The council voted to award the project to Siteworks Inc. for $2,870,000, a figure well under the $3.5 million budget. However, Colin Paulsen of J&J Earthworks took to the podium to claim that his firm, which placed second, should have been the low bidder.
“I just wanted to... we were the second low bid on the project,” Paulsen said. “Due to unfortunate circumstances, we would have been the low bid had the procedure been followed... and the procedure was not followed correctly. We were not added to the plan holders list even though there was a request made for that.”
Paulsen alleged that, because his firm was omitted from the “plan holders list,” it did not receive a crucial quote from a concrete subcontractor that would have reduced its bid by $156,000.
“After reviewing the numbers, it was very evident that we would have been the low bid by over $40,000 on this project,” Paulsen argued. “I do want to highlight that the bidding procedure was not followed... and for that, we are asking that this not be awarded and either be rejected and re-bid.”
The allegation sparked concern from Councilman Brent Mohrmann, who questioned the long-term impact of the procedural oversight.
“This is a perfect—or it’s an unfortunate scenario where I believe that city staff failed Mr. Paulsen and J&J Earthworks,” Mohrmann stated. “Our mistake on the city staff potentially cost the taxpayers $40-some thousand dollars that we could have been spending on other street department projects. Some errors we make are minor, some errors we make can be quite devastating.”
City Attorney Lisa Carrico countered that the legal requirements of the bid process were strictly met. She noted that the “plan holders list” is a discretionary tool, not a statutory requirement for participation.
“The opportunity to compete was open to all. No bidder was excluded from participating,” Carrico advised. “The low responsible bidder [Siteworks Inc.] was also not on the plan holders list... It’s not a statutory requirement, and it wasn’t a requirement of the bid package, and it doesn’t determine their eligibility to submit a bid.”
City Manager Alan Stager defended his team, stating, “I don’t think an error was made on the part of the city staff at all. City staff did their part and forwarded the request to be added to the plan holders list to our consulting engineer.”
Despite the disagreement, the council voted unanimously to award the contract to Siteworks Inc., with Mayor Ried Holien absent.
