MOORE — The city of Moore is paying local contractor Silver Star Construction Co. $80.78 a ton for tornado debris removal — a rate two to three times as high as the $25.70 to $33.95 a ton Oklahoma City is paying two out-of-state contractors to remove debris from the same storms.
“I was shocked about how low those prices were,” Silver Star President Steve Shawn said of the debris removal prices Oklahoma City is paying its contractors. “I just don't understand it, honestly. ... My company doesn't operate in a deal to rip anybody off. We just don't.”
Shawn said he believes Oklahoma City benefited by opening bids at a time when companies were desperate for work. Silver Star's contract with Moore had been in place for several years and requires it to do a lot more besides debris removal.
The difference in rates is expected to translate into millions of dollars in payouts from taxpayers' funds. Shawn estimates Moore started out with about 112,000 tons of debris from the May 19 and 20 tornadoes. An Oklahoma City official estimates the storms left about 60,000 tons of debris in south Oklahoma City.
About a third of the huge rate differential can be readily explained. Moore requires its contractor to pay the $17.54 a ton tipping fee charged by the city's designated landfill, said Steve Eddy, Moore city manager. Oklahoma City pays tipping fees for its contractors, so they don't need to include them in their bid prices.
Officials say another contributing factor to the rate disparity is the way the two cities bid out their contracts.
Moore solicited bids for debris removal seven years ago as part of a broader effort to contract with a company willing to perform public works projects such as street repairs and reconstructions. Oklahoma City obtained emergency bids specifically for debris collection after the tornadoes hit.
Jim Lewellyn, program manager for Oklahoma City's public works department, said he believes Oklahoma City got a much better price because contractors were able to see the large quantities of dense debris concentrated in residential areas. They knew their transportation costs would be low, he said.
Contractors' bids are typically much higher for picking up debris after ice storms and some other types of disasters that leave debris scattered over wide geographical areas, which drives up transportation and labor costs, Lewellyn said.
When contractors are required to bid in advance, they must include worst-case cost scenarios into their bids to financially protect their companies, he said.
Shawn agreed that was a factor, saying his company lost money in picking up debris in Moore following earlier ice storms.
Another possible factor was the level of competition.
Moore sent out bid forms to 12 companies in 2006 for its public works maintenance/debris removal contract, but Silver Star Construction was the only company that attended a mandatory pre-bid conference, and it was awarded the contract. The contract has been annually renewed, with some negotiated rate increases.