City OKs Northfield Hospital Clinic

Editor's note: This story has been updated. Schroeder-Leverington had filed suit Tuesday to challenge the awarding of the contract, but dropped the challenge.

The City Council on Monday agreed to hire RJM Construction of Plymouth to build a new clinic at Northfield Hospital for $4,415,700, with work expected to start this month and wrap up in 2007.

That timeline almost faced a delay.

An attorney for Schroeder-Leverington of Bloomington confirmed that the firm filed suit in Rice County District Court to block the contract, but quickly withdrew the action because it wasn't cost effecive. Attorney Einar Hansen told the council that Schroeder-Leverington objected to the city's decision to reject its lower bid of $4,378,000 because the firm didn't meet the experience qualifications set out in the bid documents.

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Hanson said the city didn't request documentation of the qualifications until after the bids were opened and that it should have opened the qualifications first and rejected the bid before seeing the price. The conditions were that any bidder would need to show it had done at least three similar clinic projects in the last two years and that it had five years of medical facility experience. City officials determined that Schroeder-Leverington executives had experience working on projects they did while working at M.A. Mortensen, but that the firm didn't have the same track record.  

In essence, Hanson argued that it looked as though the hospital and the city were trying to find a reason to hire RJM, which already is in the middle of construction on the hospital's new clinic in Farmington. That project, which has 14,600 square feet of space and a price tag of $2,547,500, was started this summer and is set for completion in 2007.

City Attorney Maren Swanson told the councilors that she believed the conditions and the process would hold up to a court challenge, but cautioned that there are no guarantees in court. "I think you have a good bid," said Mark Hansen, lead architect for both clinics and principal in Mohagen Hansen Architectural Group of Wayzata. Hansen said it was crucial to have experienced contractors to handle the complicated construction involved in medical facilities.

Attorney Hanson countered that the contractors aren't making medical equipment, but doing the same construction found in commercial buildings. 

The bidding process was further complicated by the fact that the two lowest bidders out of the field of six bidders withdrew voluntarily after they discovered computation errors in their bids that made them too low. 

In other hospital business, the council approved issuing up to $34 million in bonds, with $10 million set aside for the new clinics and the rest to be used if refinancing the 2001 bond issue for the hospital proves financially feasible when the bonds hit the market. A representative from the hospital's bond counsel explained that estimates now are that the refinancing could save about $50,000 a year. That's about $1.3 million over the life of the bonds or about $750,000 in present value.