Riley Bros. Construction appears to have attempted a creative way to try keep its business afloat while it waits for a decision on whether the company will be allowed to bid on government construction jobs.
However, the attempt to failed. According to a story published Friday on the Wahpeton (N.D) Daily News Web site, a company known as Alexandria Gravel Products - which apparently is tied directly to embattled Morris-based construction company Riley Bros. -- had its low bid rejected by the Wahpeton Public Works and Safety Committee.
According to the Daily News story, Wahpeton Public Works Director Randy Nelson concluded that Alexandria Gravel was, essentially, bidding for Riley Bros. on a streets rehabilitation project. But since Alexandria Gravel was considered a new player in Wahpeton's public works experience - and, said Nelson, up front about its relationship to Riley Bros. - the low bid of $1.321 million was rejected.
The contract for the North Central Area Streets Rehabilitation Project was awarded to Central Specialties Inc., of Alexandria, for $1.337 million. Wahpeton received six bids for the project, and will recommend the Central Specialties bid to the City Council on Monday.
To see the Wahpeton Daily News story, go to www.wahpetondailynews.com and click on the story "Alexandria company 'not a responsible bidder' ".
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Wahpeton city officials reviewed information provided by Alexandria Gravel and determined its was not a responsible bidder because of its current business connections, the Daily News story stated.
"The company is... quite upfront. Basically, they are bidding in place of or for Riley Bros.," said Nelson in the Daily News story. "Riley Bros. currently is suspended from federal and state contract... in the three-state area." He added, "They had a hearing (Monday, March 3) at the federal level to see if the result is being disbarred. Their situation is in some flux."
Riley Bros. founders Joe Riley and John Riley pled guilty to defrauding the IRS last last year and are awaiting sentencing. As a result, Riley Bros. has been suspended from bidding on any federal, state or local government work. The suspension is temporary, but government administrators could "debar" Riley Bros. from bidding on jobs that involve any government money for as many as three years.
According to the Daily News story, Alexandria Gravel told Wahpeton officials that if Riley Bros. is permitted to bid on government work and continues to function as a company, it would have been a subcontractor on the Wahpeton project. If the company is debarred, Riley Bros. would be sold to Alexandria Gravel.
But Wahpeton officials said there were too many unknowns in the arrangement to consider it the bid viable.
"As best we could determine Alexandria Gravel has never held a contractor's license... until 12 days before," said Pope. "They just got their contractor's license in under the deadline, which is fine, but it's a company that's never had one. So they're jumping into a $1.3 million project and... they're an aggregate company."
Pope added that Alexandria Gravel currently owns one truck and trailer, which is not sufficient equipment to do the rehabilitation project.
He summed his reluctance by saying, "There is no certainty. Yes, they intend to buy out Riley. If they can't, well, we need to know who we're dealing with today."
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Riley Bros. officials met with federal representatives earlier this week in Washington, D.C., as is expected to learn whether it will be debarred from bidding on government contracts in mid-March.
