Questions arise over abandoned well-plugging contract

Clarion News writer

Incorrect information in a project bid request led to questions Nov. 20, 2018, about a Clarion Conservation District abandoned well-plugging project and the issues seem to be unresolved.

Clarion County Conservation District Manager Trudy Alexander fielded questions from Farmington Township resident Clyde “Gene” Frederick, who owns Frederick Drilling Co. & Sons, Inc.

Alexander’s decision to award the well-plugging project to S&T Service and Supply of Pleasantville in August concerned Frederick after he learned the project was not awarded according to bid stipulations.

The May 1, 2018, bid announcement said the project plugging seven abandoned methane-producing wells in Farmington Township was to be completed in 2018 with a Department of Community and Economic Development Orphaned and Abandoned Well Plugging Program grant totaling $219,855.

Contractors had to submit a bid to Alexander by June 1, 2018.

Documents obtained by the CLARION NEWS with a right-to-know form show S&T’s bid was more than the budgeted grant funds and asked for nearly a two-year extension to complete the project.

The following information is compiled from documents, telephone interviews and discussions at meetings.

November minutes

“Did the whole board approve this bid?” Frederick asked at the conservation board’s Nov. 20, 2018, meeting.

“I have answered all the questions that you asked me about that bid,” Alexander replied.

Citing S&T’s bid of $224,343 with a $4,399 administrative fee, Frederick asked if Alexander was the only person who decided what to do with almost $250,000.

“Nobody has any input?” he asked.

Alexander said she alone was in charge of issuing the contract.

“It was all above board,” she noted.

Alexander stated she was advised by her grant administrator to issue three bid request letters. S&T was the only company that applied.

Frederick said he would have applied if he knew the deadline could be extended.

Alexander explained S&T has plugged over 100 wells in cooperation with the district and is in good operational standing.

Frederick asked Alexander if she had any idea what S&T was currently working on. He alluded to a former S&T employee who was indicted and is serving time for improperly plugging wells.

Alexander asked if Frederick’s allotted three minutes for public comment were expired.

“You’re entitled to three minutes,” she informed Frederick.

“I’ll be back for three minutes (at) the next meeting,” Frederick said before leaving.

Extended deadline

Alexander issued three bid request letters under advisement from DCED grant analyst John Murray. She said she made sure to send one to S&T because of past collaborations.

She sent letters to Ted Howard of Howard Drilling, Inc. and Frederick at the suggestion of others. Alexander did not need to choose the lowest bid and set the project deadline herself based on past experience.

“In my mind, that was a reasonable timeline,” she added.

When S&T submitted a bid, the company asked for more time “due to prior commitments.” Alexander was willing to work with owners Rob and Rebecca Greathouse’s request for a June 2020 extension.

“(Rob’s) tried and true,” said Alexander.

She noted Rob Greathouse has worked for the district and Pennsylvania DEP. She dismissed Frederick’s statement about a former S&T employee’s federal conviction for improper well plugging.

“It has no bearing,” she said. “I’ve worked with Rob. Rob is very reputable.”

Clarion County Commissioner Ed Heasley who originally suggested the district apply for the DCED grant, according to Alexander said the county wasn’t involved with the grant and isn’t involved with the project.

Though he didn’t see the bid request letter, Heasley believes the new deadline should have been applicable to all three potential bidders.

“She should have extended (that option),” said Heasley.

In an unrelated 2016 incident, the county was informed the district needed to abide by all “local, state and federal” bid determination guidelines.

Wrong grant amount

The bid request letter also provided an inaccurate grant amount. Alexander explained information was reused from 2016, when the district applied for and didn’t win a DCED grant.

DCED actually issued a grant for $220,103, including a 2 percent administrative fee. (DCED plugging grants are capped at $250,000.) This is about $4,240 less than what S&T budgeted for the project.

“The grant was not approved for the total amount,” explained Alexander.

With the administrative fee calculated out, S&T has $215,700 for seven wells ($30,418 each). It budgeted $31,421 per well.

Alexander explained the company won’t work past the grant’s value. This may mean not all seven wells get plugged. The company agreed to work “in kind,” according to Alexander. It won’t leave a well mid-plug and will absorb the extra cost.

“I know that they’re not going to pull off a well,” she said.

Once four or five wells are plugged, Alexander and Greathouse will analyze remaining grant funds.

Thus far, S&T has plugged Well 1 and Well 2 for $14,225 and $12,590, respectively. Well 3 is underway.

Though she doesn’t like making mistakes, Alexander isn’t concerned about the announcement’s inaccuracies.

“The bottom line is, Gene did not even submit,” Alexander said.

Alexander added if she hadn’t taken the S&T bid, she would have had to turn the money back over to Harrisburg.

DCED grant analyst John Murray in the Office of Business Financing in Harrisburg does not know if a misinformed bid announcement is legally binding or not.

Murray blames the district if something was inaccurate in the bid request letter.

“It was their responsibility,” Murray said. “They have certain things (they must do).”

Frederick speaks

Frederick did not know about mistakes in the bid request letter.

“I don’t think she can do that, legally,” he countered.

Frederick’s grandfather started Frederick Drilling Co. & Sons, Inc. in the 1930s and worked in many states. Frederick has handled projects in Clarion, Elk, Venango, Jefferson and Armstrong counties, plugging about 300 wells over the last 30 years.

Frederick saw an ad for the wells in Farmington Township and talked to Alexander about applying. When he learned about the end of 2018 deadline, he knew he couldn’t complete all seven wells in time.

“I was already committed till the end of 2018,” he said. “I could have done it in 2019.”

Frederick said he believes the project was awarded unfairly, especially when it was granted outside the project’s specifications.

“I’m wondering why they have a board of directors,” he added.

He attended the August board meeting to voice his concerns. In November, he was given three minutes to speak.

“I don’t like the way it was handled at all,” Frederick said, referencing how he was treated at the November meeting. “I felt like I was being degraded.”

According to Frederick, no one answered his questions about why S&T won the project. After initial contact, Alexander sent Frederick a letter referring him to Murray. Murray did not return Frederick’s call.

December decisions

Frederick attended the Dec. 18, 2018, district meeting, where he told the board he didn’t want to take up too much time.

“I need to know the name of your solicitor,” he stated.

Heasley informed Frederick the county’s legal counsel is Chris Gabriel of Cafardi Ferguson Wyrick Weis and Stotler LLC in Sewickley.

Frederick thanked the board for the information and requested a copy of the November meeting minutes, which he received.

According to Chapter 58 of the Pennsylvania Procurement Handbook, bid protests must be filed within seven days of the protesting party learning the facts giving rise to the complaint.

Protests must be in writing and must include all the grounds the protesting party deems improper.

Frederick did not complain in writing after learning about discrepancies in the bid. He plans to consult legal counsel regarding the legality of the district’s action.

At the time this report was written, a call made by the CLARION NEWS to Gabriel wasn’t returned.