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Fargo contractors upset levee removal work goes to Minnesota firm

R&Q Contracting of Roseau, Minn., works Thursday to remove a clay levee along Rose Creek Drive near 25th Street South in Fargo. (Michael Vosburg/The Forum)

FARGO - Levees began leaving the streets of Fargo on Thursday, irritating some of the locals who helped build them.

Area contractors weren't hoping the temporary floodwalls would stay up forever. They just wanted a bigger piece of the action when they came down.

Chad Wolsky, owner of L.C. & Excavating in Fargo, said there are a lot of upset contractors. "It just doesn't make much sense."

Wolksy and other owners of local construction firms are upset that the $3.3 million contract to remove Fargo's clay dikes went to a Newfolden, Minn., company, Davidson Ready Mix. They hoped revenue from removing levees would pay for the costs they incurred in the frantic push to construct them in late March.

That week or so of harried building was tough on their equipment and meant a lot of overtime, Wolsky said. Some of his workers pulled 32-hour shifts, and "I had guys who had 40 hours in by Tuesday," he said.

One sticking point is the "set-asides" required under federal contracting rules. The clay-dike contract for Fargo, as well as the one for Moorhead's clay levees not yet awarded, was required to go to a firm in a Historically Underutilized Business Zone, as classified by the U.S. Small Business Administration.

Those rules are designed to help small companies in places that are economically distressed get a leg up, said Tim Bertschi, the Fargo-based area engineer for the U.S. Army Corps of Engineers, the agency that is awarding the contracts.

"It's because they're disadvantaged and the federal government is trying to ... help them get on their feet or help them get moving, you know, get a good business going," Bertschi said.

Though a portion of both Fargo and Moorhead are HUB Zones, according to the SBA Web site, all five companies that submitted proposals were from outside Fargo-Moorhead. Davidson, for instance, has headquarters a few miles north of Thief River Falls, where the entire county is a HUB Zone.

Bertschi often deals with local contractors and said he's received "quite a bit of guff" from them about the contracting rules.

"They've worked their congressional angles, you know. There's interest by the governor," he said. "And this one," the Davidson contract, "even ticked them off a little more because it comes from Minnesota. But the rules are what they are and in order to overcome them, I'm not sure that there's anything that can be done."

Locals won't be shut out on the removal work. The $1.8 million contract to take out Hesco barriers used for flood protection went to Fargo-based Specialized Contracting Inc., said Melissa Gulan, an engineer with the Army Corps. That deal had to go to a small business that was included in the federal disaster declaration. All removal contracts from the corps must go to companies in a county in the disaster declaration areas.

Gulan said that the third and final contract in Fargo - to remove sandbags - will likely be the largest and won't have any set-aside preferences.

There has been talk of hiring students to do some of that work, and the corps will keep that possibility in mind when it signs agreements with contractors, said Shannon Bauer, an Army Corps spokeswoman.

Bauer also pointed out that in building more than 55 miles of earthen dikes in Fargo, Moorhead and Valley City, N.D., the Army Corps spread around $24.8 million.

"It's pretty safe to say we hired almost everybody with available heavy equipment within 200 miles of the valley to help us out with this fight," she said.

Some of Fargo's largest construction firms will also be subcontracted to help with removal. Davidson is enlisting the help of Industrial Builders, Gulan said. Bertschi said Specialized plans to subcontract much of the Hesco job to Northern Improvement.

While the first deal may have rubbed contractors the wrong way, there is lots of work that hasn't been awarded yet. In addition to the Fargo sandbagging contract, the corps is seeking offers for sandbag and levee contracts in Moorhead.

Though Cass County Engineer Keith Berndt said corps officials told him the solicitation for the county's levee removal contract would be released on Thursday, it didn't show up on the federal contracting Web site,

Berndt said he was told removing county levees could start as soon as early next week. Pat Tucker of the Army Corps said work in Moorhead should begin by May 1.

In Fargo, the contracts dictate the removal process should take no longer than 21 days. The levees being removed in Fargo amount to more than 240,000 cubic yards, according to the corps solicitation.