Too many red flags leads to canceled forest deal
Company turned in signed contract after 30-day deadline, concerns raised about if they met bid rules
Taylor County won’t be doing business with a local logger after all.
Members of the county’s forestry and recreation committee on Friday voted unanimously to terminate the contract with Kafka Forestry of Stratford for a recent logging bid on the Taylor County forest. The action also disqualified the company from being a bidder on county forest projects for two years.
Kafka Forestry had been the high bidder on a recent forest logging project let out on June 4 with a bid of $90,959.25 over Wilson Forestry of Athens with a bid of $83,867.50. At the time, it was noted that about 15 years ago, Kafka had some noncompliance issues with a county over a logging project but moved ahead with awarding the contract.
Things went downhill from there, with forest administrator Jake Walcisak noting that Rusk County had rejected Kafka as a bidder in June due to past poor performance. Likewise the logger had just come from being blacklisted from bidding on Department of Natural Resources projects due to compliance issues and that they are currently on a payment plan to pay off money owed to Clark County for a forest project there.
The bigger concern for Walcisak was that under terms of the bid approval, the logger has 30 days to return a signed contract to the county and that during that time the security deposit based on a 25% of the bid amount put on the contract must be in place.
Walcisak said it is common for companies to put down a personal check and then replace it with a bond or line of credit document as security during that 30-day period. The checks are routinely held until the contract is signed. However, in this case Walcisak was told that the check of $22,739.81 issued was “no good” because the owner was in the process of changing financial institutions. A second certified check and signed contract was eventually delivered to the forestry office on July 8.
Walcisak explained that because the 30 days expired on a holiday (July 4), they went to the next business day the office was open which was Tuesday, July 6.
Walcisak said he spoke with Tim Kafka on July 7 about the contract and read him the certified letter that was going to be sent out that the contract offer would be suspended pending review by the forestry committee on Friday, July 9.
Walcisak said he has been in contact with the county’s attorney throughout the process and it was her recommendation to terminate the contract because Kafka did not deliver a signed contract and qualifying bond within 30 days of the bid being awarded. In addition she advised Walcisak to attempt to deposit the original bid bond to verify that it has no value as stated by the company owner.
Walcisak said the county’s policy in these situations is to retain the amount equal to the actual damages, in this case it would be the $7,091.75 difference between Kafka’s bid and the next highest bidder. He noted the county could also take those damages from the certified check that was delivered on July 8.
“We have an honesty issue,” said committee member Mike Bub remarking on the conversations versus actions of the contractor. He said the contract was due on Tuesday and not delivered until Thursday. Bub said he was less interested in seeking the additional damages. It was noted that if Kafka’s bid had been disqualified at the beginning the county would not have been out anything.
Committee members voted to direct Walcisak to contact Wilson Forest Products to see if they had interest in the project. “Worst case scenario, we would rebid it,” Bub said.
Wilson Forest Products is currently working on another project near that site in the county forest.
Walcisak said it was the industry standard to require the deposit and that most follow the same process of holding the check until the contract is signed. “It has to have value, it can’t be a dummy,” Walcisak said.
Committee member Gary Beadles who is a logger, said that he sees a number of red flags and was in support of canceling the bid. He noted that when it comes to bidding on projects people must follow the rules.
Other committee members agreed and voted to cancel the contract.
As far as if the county would seek damages, committee chairman Chuck Zenner said he felt canceling the contract and putting a two-year ban on them bidding was enough punishment. “I don’t want to hit him up with another $7,000,” he said.
“You are definitely being flexible and you are not dropping the hammer,” Walcisak said.
In other business, committee members:
_ Discussed what the next step will be following Gov. Tony Evers vetoing the bill that would provide state government leverage for a cooperative to purchase and refit paper mills in Wisconsin Rapids and Park Falls. The Verso mill in Wisconsin Rapids was shut down in part due to a decreased demand for office paper. Plans had called for it to be refit to produce brown paper used in packaging and shipping. The legislative bill had included using federal COVID-19 relief money as part of the financing plan and it was this part of the project that Evers opposed generating the veto. Walcisak said he had doubts about the mill’s reopening being the difference between saving or condemning the paper industry in the state based on overall volumes of wood.
_ Received word that under a state law change, the county forest stumpage amount paid to towns would increase from 30 cents per acre which was set in 1981 to 63 cents per acre. Walcisak noted the original legislation had sought a 30 cent increase, but it was actually raised by the governor in the budget by the additional 3 cents per acre to create a rounded final number.