City Council divided on honoring contract

After debating the better part of a half hour, the Clinton City Council voted 4-0 Tuesday to table action on the official receipt of a new garbage truck.
That was after the vote on one motion had ended up tied 2-2 and another had failed to get a second.
The debate was whether to penalize the supplier of the truck for being 54 days late in delivering it, and if so, how much the penalty should be. During the discussion Mayor David Berrong figured the City would lose credibility if it didn’t penalize the company more than a token amount and Councilman Jason Hulin thought it would have a tough time getting service from that supplier in the future if it penalized it at all.
Bobby Stewart, who had little to say during the long discussion, eventually sided with Hulin while Chuy Rosales, the fourth councilman present, appeared to be somewhere in between, feeling a small penalty would be okay but not one nearly as big as the City by terms of the contract could levy. That was $100,756.98.
Under the contract, the company itself apparently had made such a huge penalty possible by guaranteeing delivery within 150 calendar days after the bid was awarded and agreeing to pay a penalty of 1 percent of the purchase price for each day it went past that.
One percent of the net purchase price would be $1,865.87, and 54 times that would be $100,756.98.
The supplier was the Roberts Truck Group of Oklahoma, LLC, doing business as the Summit Truck Group. Its base bid for a 2019 International was $192,587, which equated to a net $186,587 after giving the City $6,000 trade-in on an old truck.
City Manager Mark Skiles said the bid was accepted five months ago and the net amount was approved by the council.
“The manufacturer is asking for relief,” he said, also adding that this is the second truck the City has bought from that company. Indications were that service had been good on the first one.
Hulin began the council discussion by asking if delivery was late. Skiles told him it was 54 days late.
“I make a motion we abolish the penalty of 1 percent of the bid price,” said Hulin.
Skiles said he was not recommending that the company be hit with the entire $100,000-plus.
“Was this a contract we insisted on?” asked Berrong.
“It’s one they issued to us,” replied Skiles.
“Right now I’m thinking we should diminish the fine,” said Berrong, suggesting it be lowered to something that would be “reasonable and fair.”
Hulin asked if the first truck Summit had sold the City had been delayed, also stating that the language in this contract appeared to be standard to what he sees as an employee of the Oklahoma Department of Transportation. But he inferred that bidders are never held to such extreme penalties.
Someone asked if this was the City’s contract language. Public Works Director Donald Webb, whose jurisdiction includes the Sanitation Department, said it was the City’s bid document but the company filled it out.
And signed it, added Skiles.
Hulin made a motion that the company be charged “zero” for its late delivery.
Skiles said as the contract reads, the liquidated damages under the circumstances would be 54 percent of the bid price.
“We should be like a judge,” said Berrong. “They’re obviously guilty.” But he also inferred that some compassion could be used.
Hulin wanted to know if there was a reason the company was so late.
“Parts,” said Skiles, inferring that parts were not available in a timely fashion.
“They could have written in 365 days (instead of 54 days) and covered themselves,” said Hulin. He also said if the City penalizes them $5,000, the company would find a way to make it up.
Berrong mentioned the word “credibility” and indicated he thought the City’s was at stake.
Councilman Rosales wanted to know what percentage of the purchase price a $5,000 penalty would be.
“Every 1 percent is $1,800,” said Skiles, “so $5,000 would be about 3 percent.”
“There are principles on both sides,” said Rosales, obviously struggling within himself.
“Why don’t you have somebody talk with them?” suggested Skiles.
Skiles – who wasn’t here then – wanted to know if the City hadn’t charged liquidated damages for delays when the new fire station was built.
It had, but Berrong returned the conversation to the truck, stating that he felt the issue needed to be settled that night, which appeared to negate talking to the company.
“Nothing or almost nothing,” he said.
“I’d say $2,500 and call it a day,” said Rosales.
“I say take receipt of the truck,” added Hulin.
“I second his motion,” said Stewart.
The vote then was taken to accept the truck, apparently with no penalty on the producer, but it failed with Stewart and Hulin voting for the motion and Berrong and Rosales saying no. The fifth councilman, Ernie Dowdell, wasn’t at the meeting and missed what certainly was the most controversial issue debated since he came on board four months ago.
Berrong, chairing the meeting as normal, then wanted to know if there were any other suggestions.
“Twenty-five hundred dollars,” repeated Rosales. There was no second, so Rosales made another motion to table the matter and it was approved 4-0.