An allegation that the county failed to follow proper procedures in its awarding of bids for home elevation projects in 2016 and 2017 was apparently the subject of an exchange that occurred at the Mathews County Board of Supervisors’ Jan. 28 meeting.
During that meeting, supervisor Paul Hudgins presented a packet of materials to the other board members, along with the comment that he was “embarrassed to be sitting on the board with this group of people.” He did not explain to those present what the materials were.
The Gazette-Journal has since been provided a copy of the paperwork, and it contained a letter addressed to the county board, dated June 12, 2019 and written by Mathews contractor George Jones of JB Property Development LLC. There are also copies of bid tabulation sheets and checks for bid guarantees written to the County of Mathews by Morse Enterprises Inc.
In the letter, Jones charges that the county had accepted invalid surety in the form of company checks from the winning bidder, Morse Enterprises, for bids made on the FEMA housing elevation projects. He said the company should have been disqualified for improper bid surety when the bids were presented. Jones and his brother, David Jones, co-owners of the company, also made bids on some of the projects involved.
The Code of Virginia states that “in lieu of a bid, payment, or performance bond, a bidder may furnish a certified check, cashier’s check, or cash escrow in the face amount required for the bond.” The letter stated that the other contractors submitting bids had provided bid bonds. Jones charged further that the checks were never deposited with the county treasurer, which he said is required by the state’s Public Procurement Act.
Mathews County Planning, Zoning, and Wetlands Director Thomas Jenkins said during an interview that it was correct that he had mistakenly accepted company checks from Morse Enterprises for several of the bids, but that it was not done to favor one contractor over another. He said he likely would have also accepted company checks from JB Property Development LLC if that was what the Joneses had offered at the time.
Jenkins explained that a bid bond is a guarantee that a company will enter into a contract for the work if offered the job. The state requires surety in the amount of 5 percent of the bid on a project that is over $100,000. This was the type of bond discussed in the letter. He said the bid surety could be in the form of a certified check or cashier’s check.
“My mistake was that I accepted a check that was neither a certified check nor a cashier’s check,” he said.
In contrast to a bid bond, a performance bond is a bond for the exact dollar amount of the contract in order to guarantee that the job is completed in conformance with the plans, specifications, and conditions of the contract. No allegations were made regarding performance bonds.
Jenkins said that he was unaware of any requirement to deposit bid bond funds with the treasurer, and had always held onto them, returning them to the contractors once a bid was awarded. He said a bid bond check is only useful as a penalty when a bidder backs out on the bid, but that all the bidders so far have honored their bids.
Mathews County Treasurer Wendy Stewart confirmed that she had not received any of the moneys associated with bid bonds, but said that she routinely received extensive paperwork for the performance bonds from Jenkins.
Each of the contracts that Jones included in his packet was awarded to the lowest bidder on the project, said Jenkins, and the type of surety the contractors provided was not a factor in the decision. The closest bid to Morse Enterprises’ bid on any of the projects that it won the contract for was $30,000 higher than Morse’s bid, he said. Jenkins said that JB Property Development LLC and another contractor, DK Walters Builder Inc., had been awarded contracts for some of the elevation projects, as well.
County Administrator Mindy Conner said that Jenkins had taken responsibility for the mistakes made, but that the county had hired a consultant for project administration, including the bidding process, and that company should have flagged the business checks.
“We hire people we should be able to rely on to manage these contracts because they require quite a bit of scrutiny,” she said. “We do not have the staff to provide the necessary oversight.”
Conner said the matter had been brought to the board’s attention and addressed months ago.