Ketza questions Dawson City sewage treatment bid process

In its bid to build Dawson's wastewater treatment facility, Ketza Construction Corp. made the mistake of promising to finish the project on time. "We lost points for that," said owner Peter Densmore.

In its bid to build Dawson’s wastewater treatment facility, Ketza Construction Corp. made the mistake of promising to finish the project on time.

“We lost points for that,” said owner Peter Densmore.

The Whitehorse company also lost points for not having “a tree-protection plan.”

There’s not a single tree on the site, said Densmore.

Ketza and BC-based Corix Utilities were the only two companies to bid on the project.

Ketza proposed a “bug farm”—a biological treatment plant that uses micro-organisms to digest the contents of sewage with a high-grade UV disinfection unit at the end.

There are 800 of these biological treatment plants in operation, and 100 of them are in the North.

Ketza’s bid was $16.5 million.

Corix bid $25 million to build a deep-shaft system, where sewage is stored underground and broken down using compressed oxygen.

Ketza’s bid was disqualified on technical grounds.

The construction company—in business for more than 30 years—spent six months and more than $100,000 preparing the bid for Public Works.

After the bid was rejected, Densmore asked for an explanation.

It took government two weeks to respond.

“Over the last 35 years, we’ve done half a billion worth of work in the territory—they could have at least given us a five-minute phonecall,” said Densmore.

“It was like a slap in the face.”

When the explanation arrived, it left Densmore with more questions than answers.

“They delayed it two weeks and then left us with gibberish,” he said.

The Yukon government’s concern that Ketza’s project was scheduled to be completed on time stunned Sapphire Group—an Alberta company contracted by Ketza to supply the proposed biological treatment plant.

“This must be the first bid in history where it was considered an issue to comply with the schedule and you had to say you could not meet the schedule to gain full points,” wrote Sapphire president Dan Huras in a complaint letter to federal Transport Minister John Baird on Tuesday.

The evaluation team, made up of local and Outside professionals, gave Sapphire’s design—which represents the heart of the system—a failing grade of 45 per cent.

“This would, of course, come as a surprise to the owners and operators of the 800 systems around the world that are operating successfully,” wrote Huras.

The evaluation team also subtracted points because “the roof and cladding was not to Dawson specifications.”

But it met Dawson’s historic guidelines, said Densmore. The proposed roof is the same one that sits on the Dawson City Museum.

More points were subtracted because the “roof design specs appear to use a ground snow-load rating, rather than roof snow.”

“That’s what you’re supposed to use,” said Densmore.

“Our structural engineer provided all the information that is necessary … including the ground-bearing pressure, wind loads, snow loads, and seismic loads.”

Ketza also lost points for not mentioning site drainage.

But the proposal “clearly references that site drainage will be positive and away from the building,” said Densmore.

Ketza was docked more points for addressing nitrification.

Nitrification was not required in the request for proposals, said Public Works.

But it was.

Section 2.4.6. of the request for proposal specifically requests information on how the biological treatment process will address concerns about nitrification.

“They didn’t even read their own document,” said Budget Plumbing and Heating owner Bill Mason, who was contracted by Ketza for this project.

They didn’t read Ketza’s proposal either, added Mason.

If the evaluation team had read it, Ketza wouldn’t have lost points for failing to address sludge.

Sludge handling was addressed in detail in section 2.5.5 of our proposal, said Densmore.

“They must have missed the five pages where this was discussed,” wrote Huras.

The evaluation team also claimed seasonal variation was not addressed.

“It was addressed in three different places in the proposal,” said Densmore, citing sections 2.5.3, 2.5.6, and 2.5.7.

“This was a common theme where we lost points for things supposedly not identified,” wrote Huras.

“It was so rampant we wonder if our full proposal was actually read before the conclusions were reached.”

The technical requirements were assessed first.

If the proposal passed, officials would then open the financial envelope.

Ketza’s proposal never got to this stage.

But it lost points for not having a detailed equipment list in its technical proposal.

Trouble is, the request for proposals “clearly states the detailed equipment list is to be provided as an attachment to the financial proposal,” said Densmore.

“Our team provided this list, but unfortunately that envelope was never opened.”

Ketza was also docked points for not identifying a heritage permit.

“There’s no such thing,” said Densmore.

In the building permit application, Dawson’s heritage requirements are fully addressed, he said.

After learning of its rejection, Ketza drafted a 15-page response to the government’s concerns, challenging every one.

It was a follow-up to Ketza’s formal bid challenge launched on April 14th.

If Ketza wants to challenge the process, we have a process set up for a fair independent review, said Public Works corporate services deputy minister Leslie Anderson.

Anderson, a member of the evaluation committee, would not address each of Ketza’s individual concerns about the evaluation.

“But we made sure our selection process was set up to be thorough,” she said.

“The evaluation committee went through an immense amount of work—it was onerous.

“It’s important for the Yukon government and for Dawson that we put together a fair procurement process.

“We weren’t expecting any conflict—we just want the right solution.”

That’s all Ketza wants, said Densmore.

“All we want is a fair evaluation process,” added Ketza’s Mason.

Contracting conflict?

A year ago, Ketza approached Public Works with an unsolicited bid to build Dawson’s wastewater facility.

Ken Johnson, who works for BC-based engineering firm AECOM, assessed the bid.

“And it was clear he didn’t understand it at the time,” said Densmore.

This time around, Johnson was back.

“Ken (Johnson) is one of our advisers,” said Anderson.

“He works for an engineering firm we contract for technical advice.”

AECOM “acted with a degree of incompetence that is clearly professional negligence,” said Densmore. “And that resulted in government choosing (Corix’s deep-shaft technology), which has failed across Canada.”

A deep-shaft facility is in operation in Verdin, Manitoba, population 3,000.

It was built by Earth Tech Canada, a company Johnson used to work for.

But that’s not a conflict, said Anderson.

“In the Yukon, it’s hard to get someone who doesn’t have a hand in more than one file,” she said.

“And with wastewater discussion, it would be hard to find someone that wasn’t involved with some form of technology.”

Verdin’s plant has not met federal effluent standards in the last 10 years, according to its manager of works and utilities, Cornie Peters.

It’s in the process of being replaced, he said.

The fecal coliform count should be around 30 milligrams a litre, he said.

Verdin’s is at 9,000 mg/L.

The total coliform count is even worse.

The average is 40 to 60mg/L, said Peters.

“We’re at 110,000 mg/L.”

Earth Tech also installed a deep-shaft system in Portage la Prairie, but the Manitoba city replaced it.

Public Works contacted Verdin to discuss its deep-shaft system.

But checking references is not part of the request-for-proposal process, said Anderson.

“We contact other folks in the business to make clarifications, but we do not seek additional info outside the (request-for-proposal) process.”

“Anderson said references don’t count for points and she was satisfied with the process,” said Densmore.

“That’s the definition of insanity.”

There’s another deep-shaft sewage facility operating in Homer, Alaska.

It barely meets US standards, said Densmore.

Canada’s effluent standards are lower than US standards and will be getting even more rigid in the next few years, he added.

Santa Paula, California, considered installing a deep-shaft system in 2006, but decided against it.

In a technical memorandum, Santa Paula listed several problems with this technology.

It cannot meet the discharge requirement for total nitrogen or suspended solids.

It has corrosion potential.

It does not address solids handling.

And it would not meet the requirements for process redundancy and reliability.

“Dawson City will pay way too much for a system that in all likelihood … will not meet the permit requirements and will cost far more to operate than planned,” wrote Huras, Sapphire’s president.

Sapphire contacted the Homer, Alaska deep-shaft facility operator.

“They struggle to meet 30/30 effluent for TSS/BOD (total suspended solids/biological oxygen demand),” wrote Huras.

“The current guidelines in the Yukon are less than 25/25 and the system is supposed to meet future requirements—which will be lower.

“Operating costs are also … way over budget,” he wrote.

Deep-shaft technology’s selling point is it’s cheaper to build and operate than most wastewater facilities.

“So why did Corix’s bid come in close to $10 million higher than ours?” said Densmore.

“For the money they want to give Corix just to build the plant, we will build our biological treatment plant and run it for the next 23 years at no additional cost,” said Mason.

“Dawson, Yukon and Canadian taxpayers better pay heed or they’re going to end up with a another white elephant.”

Contact Genesee Keevil at