Vander Pol Excavating, of Orange City, submitted the apparent low bid of $902,312 for the 27th Street Southwest Street improvements.
The street will serve new and expanding businesses in the industrial park area.
The project involves 2,640 feet of a new street, 27th Street Southwest, and an extension of Industrial Road by 510 feet.
The city received RISE program state grant dollars to pay for half of the project. The state money is for economic development projects and the program is formally known as Revitalize Iowa's Sound Economy.
A requirement of the bidding for the work with the state grant money may not have been met, according to information the city has received from iowa Department of Transportation (DOT) staff.
As part of the process of submitting a bid, contractors are required to contact businesses listed by the DOT as Targeted Small Businesses.
JEO Consulting Group, of South Sioux City, Neb., is the project engineer for the street work.
Jerry Ripley of JEO told the council the state wants to see a positive effort by contractors to work with Targeted Small Businesses on part of the project.
"It's a way of encouraging opportunities for what are deemed Targeted Small Businesses," Ripley said during a special meeting Monday of the Le Mars City Council to discuss the project.
Also at the meeting Le Mars City administrator Scott Langel explained Targeted Small Businesses by referring to state paperwork for the bidders.
Targeted Small Businesses are defined as 51 percent or more owned, operated or actively managed by one or more women, minority persons or persons with a disability, Langel told the council.
"They are generally a for-profit small business enterprise under a single manager, located in Iowa and have a annual gross income of less than $3 million," Langel said.
The contractor for the street project doesn't have to include a Targeted Small Business in their bid, Ripley said.
The bidders contact the Targeted Small Businesses to see if there is interest in being part of the project, he explained.
The bid submitted by Vander Pol listed five Targeted Small Businesses, but four of those listed are no longer on the DOT's list.
The city council was slated to award the bid for the work on Nov. 6, subject to approval of the low bid by staff from the Iowa Department of Transportation.
The state approval is required because the RISE grant provides half of the money for the new street.
DOT approval had not been given by the regular council meeting last week and a special meeting was called.
The city council receive a recommendation from JEO Monday to award the bid to the second lowest bidder, Concrete Specialties from South Sioux City, Neb.
The firm's bid is approximately $60,000 higher than the Vander Pol bid.
The firm met the Targeted Small Business requirement but Vander Pol's bid did not, according to the DOT staff's review, Ripley told the council.
The council was asked to delay the award by Jerry Rus, general manager of Vander Pol Excavating.
"Give us a little more time and we can go back to the state and ask them to re-evaluate the situation because we feel we have put in a good faith, positive effort by selecting the Targeted Small Businesses that we had on there and at one time they were all on the list, too," Rus said.
He also explained Vander Pol staff had begun an appeal process related to the requirement.
Councilwoman Delana Ihrke thanked Rus for the effort which continued over the weekend.
"I think it is absolutely ridiculous that apparently at a state level a positive number is no longer one," Ihrke said. "It doesn't matter to me that the four others went off the list. One is greater than zero."
She described the requirement as one that would cost the taxpayer $66,000 due to the higher bid from the South Sioux City firm.
The council voted unanimously to table action on the street project and authorized Langel to work with the governor's office on expediting the project.
At a previous meeting a consultant told the council Governor Terry Branstad had wanted projects that are economic development-related and create jobs to be expedited.