To: the Board of Directors of Lake Dunlap Water Control and Improvement District, Texas, and to All Other Interested Persons

TO: THE BOARD OF DIRECTORS OF LAKE DUNLAP WATER CONTROL AND IMPROVEMENT DISTRICT, TEXAS, AND TO ALL OTHER INTERESTED PERSONS:

Notice is hereby given that the Board of Directors of Lake Dunlap Water Control and Improvement District will hold a special meeting on February 16, 2021 at 5:00 p.m. In accordance with the Governor’s emergency proclamation suspending certain provisions of the Texas Open Meetings Act effective March 16, 2020 in response to the COVID-19 virus, individual members of the Board of Directors of the District will participate in the meeting remotely. All members of the Board and public may participate in the meeting telephonically or by weblink using the instructions below.

Weblink Instructions:

Members of the public may join the meeting through the following web link: https://global.gotomeeting.com/join/152051477

Telephonic Instructions:

Members of the public may join the meeting telephonically by dialing the following telephone number: +1 (872) 240-3212

When your call is answered and when prompted, enter in the following Meeting ID below followed by the pound sign (#): 152-051-477 #

Meeting Topics:

The meeting will be held for the following purposes:

1. Receive Public Comments.

2. Consider and take action regarding approval of the minutes from the January 19, 2021 Board of Directors’ meetings.

3. Discussion relating to implementation and contents of the internet website for Lake Dunlap Water Control and Improvement District.

4. Consider and take action relating to proposal by Heartwood Development Company II, LLC for: (i) creation of defined area for reimbursement of proposed residential development infrastructure costs; or (ii) release of property from corporate boundaries of the District.

5. Consider and take action relating to Funding and Construction of Improvements to the Lake Dunlap Dam Facilities:

a. Status of award of contract by Guadalupe-Blanco River Authority for construction of Improvements to the Lake Dunlap Dam Facilities including related litigation; and

b. Other matters related thereto.

6. Consider and take action regarding Approval of the Bookkeepers Report and Payment of Bills and Invoices.

______

The Board of Directors may go into Executive Session if necessary, pursuant to the applicable section of Subchapter D, Chapter 551, Texas Government Code, of the Texas Open Meetings Act, on any of the above matters. No final action, decision or vote will be taken on any subject or matter in Executive Session.

The District is committed to compliance with the Americans with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request. Please call 512-328-2008 for further information.

MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF LAKE DUNLAP WATER CONTROL AND IMPROVEMENT DISTRICT Tuesday, January 19, 2021

STATE OF TEXAS § § COUNTIES OF GUADALUPE AND COMAL §

The Board of Directors of Lake Dunlap Water Control and Improvement District (the “District”) conducted a special meeting, open to the public, on Tuesday, January 19, 2021 at 4:00 p.m. Notices of the time, place and the subject of the meeting, and the actions to be taken at the meeting, were posted at the places and for the time required by the laws of the State of Texas. In accordance with the Governor’s emergency proclamation suspending certain provisions of the Texas Open Meetings Act effective March 16, 2020 in response to the COVID-19 pandemic, the meeting was conducted remotely. All persons, including members of the public, could participate in the meeting by telephone or weblink in accordance with the instructions set forth on the meeting agenda.

The roll was called of the directors of the Board, to-wit:

Douglas Harrison- President J Raymond Harmon- Vice President Laurence Johnson- Secretary Vernon Gary Schaub- Treasurer Harry Alvin Moeller- Assistant Secretary and all of said persons were present, thus constituting a quorum. Also present was Anthony Corbett of McLean Howard, LLP (District legal counsel). The following residents were present at the meeting: Garry Barr, Scott Wakefield, Leo York and Terry Zimmerman.

Director Harrison called the meeting to order at 4:00 p.m.

1. The first item of business was receipt of public comment. Mr. York addressed the Board and asked it to increase the level of communications to the public regarding the District and its activities. The Board responded that it was in the process of establishing an internet website to provide more information to the public, and that the meeting agenda included an item to create a Communications Committee to facilitate public communications.

2. The Board then considered approval of the meeting minutes from the December 15, 2020 and December 31, 2020 meetings of the Board of Directors. After discussion, Director Schaub moved that the Board approve the minutes as presented, subject to changing the word

“bods” to “bids” in the December 31, 2020 minutes. Director Harmon seconded the motion, which carried unanimously (5-0).

3. The Board then considered the establishment of an internet website for the District. Director Harrison presented a proposal and contract by Maxwebs to establish a website. He noted that the contractor was very familiar with water districts and the information required to be posted on a district’s website. The Board then discussed whether to retain the contractor, or to utilize a website created by Director Johnson in order to lower costs. After subsequent discussion, Director Harrison moved that the Board approve a contract with Maxwebs for creation of an internet website for the District. Director Harmon seconded the motion, which carried unanimously (5-0). The Board requested that Director Harrison ask whether Maxwebs could use any of the work product prepared by Director Johnson in order to lower the District’s costs. A copy of the Maxwebs Proposal and Contract are attached to these meeting minutes.

4. The Board then discussed matters relating to public communications. The Board first considered a Resolution Establishing a Communications Committee. After discussion, Director Harrison moved that the Board adopt the Resolution, and designate Directors Harrison and Schaub to be the initial members of the Communications Committee. Director Harmon seconded the motion, which carried 4-0-1, with Director Johnson abstaining. The Board then discussed the content of initial communications by the Committee to the public. The Board concurred that the Communications Committee should communicate actions accomplished by the District during its initial 100 days, and information relating to the Lake Dunlap Dam Project. The Board also concurred that individual directors may provide proposed information to the Communications Committee for potential communication to the public.

5. The Board then considered matters relating to the funding and construction of improvements to the Lake Dunlap Dam. Director Moeller reported that GBRA had been sued by the low bidder after GBRA announced its intention to award the contract to Zachary Construction (the second low bidder). The Board discussed the matter but took no action.

6. Allen Douthitt presented the Bookkeepers Report to the Board of Directors. After discussion, Director Johnson moved that the Board approve the Bookkeepers Report and the payment of bills and invoices as presented. Director Moeller seconded the motion, which carried unanimously (5-0).

7. By unanimous acclamation, the Board adjourned the meeting at 5:04 p.m.

[The remainder of this page intentionally left blank.]

______Secretary, Board of Directors (SEAL)

Matt Kutac LAW OFFICE OF MATTHEW B. KUTAC 512.615.0503 a Professional Limited Liability Company [email protected]

MAILING ADDRESS: 3321 Bee Caves Road, Suite 203 Austin, TX 78746

February 5, 2021

Via Email Mr. Tony Corbett, McLean & Howard, LLP Barton Oaks Plaza, Building II 901 South MoPac Expy., Ste 225 Austin, Texas 78746 Email: [email protected]

Re: Heartwood Development Proposal

Dear Tony:

I write on behalf of my client, Heartwood Development Company II, LLC (“Heartwood”), with a proposal for your client, Lake Dunlap Water Control and Improvement District (the “District”). Heartwood has entered into a contract for the purchase of approximately 177 acres of real property shown on the enclosed Attachment A (the “Heartwood Tract”). The southwestern boundary of the Heartwood Tract is adjacent to Lake Dunlap, and approximately 150 acres of the tract are included within the District. Heartwood intends to develop the Heartwood Tract as a residential community and is interested in supporting the efforts of the District in a manner that is also beneficial to its development and residents thereof. To that end, Heartwood would like to propose an agreement to be drafted as outlined in this letter that could provide for an additional revenue source for the District (the “Initial Agreement”).

Under the Initial Agreement, the District would: (1) allow for addition of the remainder of the Heartwood Tract to the District; (2) establish a defined area comprised of the Heartwood Tract; (3) agree to the form a reimbursement agreement to be executed at a later date (“Reimbursement Agreement”) providing for reimbursement of certain water, wastewater and drainage improvements necessary to serve the development within Heartwood Tract (“Subdivision Improvements”); and (4) agree to call and conduct a bond election authorizing the District’s reimbursement for the Subdivision Improvements. The Initial Agreement would also provide for Heartwood’s funding of a portion of the District’s existing obligations under its agreement with the Guadalupe Blanco River Authority (the “GBRA Agreement”) using any reimbursement proceeds received by Heartwood through reimbursement for the Subdivision Improvements.

More specifically, the proposed Reimbursement Agreement would provide for reimbursement by the District of Heartwood’s costs related to design and construction of the Subdivision Improvements, using proceeds of bonds issued by the District. Importantly, the bonds issued by the District would be funded by ad valorem taxes levied only upon property within the Heartwood Tract (the “Heartwood Tract Defined Area”). To be clear, under Heartwood’s proposal, only the residents and property owners within the Heartwood Tract Defined Area would pay additional taxes. Moreover, the proposed Reimbursement Agreement would provide that a portion of the reimbursement payments received by Heartwood will be paid by Heartwood to the District for use in funding obligations with respect to the GBRA Agreement. As a result, other residents and property owners within the District would benefit from an additional District revenue source for use in payment of the District’s obligations under the GBRA Agreement.

The potential benefits of this proposal are clear. If successful, it would result in enhanced quality of the Heartwood Tract development, earlier repayment of obligations under GBRA Agreement by the District, LAW OFFICE OF MATTHEW B. KUTAC PLLC February 5, 2021 and presumably, a reduction of the contract tax payable by all residents over time. However, we recognize the District’s core objective is its ongoing dam project, and that this proposal will present initial hurdles and subsequent ongoing administration that will require the District’s participation. To summarize, the following initial steps would be necessary:

• Execution of the Initial Agreement; • Obtaining City of New Braunfels consent to addition of the portion of the Heartwood Tract currently outside of the District; • Obtaining District approval of the addition of such land; • District adoption of a defined area plan and an order that defines the Heartwood Tract Defined Area and calls a bond election for the defined area; • Execution of a Reimbursement Agreement providing for: (1) reimbursement of Heartwood for Subdivision Improvements; and (2) Heartwood funding of a portion of the District’s GBRA obligations through bond proceeds; and • Voter approval of required bond authorization at a November 2021 Bond Election.

If either the addition of land or the bond election were to fail, then Heartwood would request that the Initial Agreement provide for a path to exclusion of a portion of the Heartwood Tract from the boundaries of the District. Heartwood would not request exclusion of any land that is adjacent to Lake Dunlap or within approximately 750 feet of its centerline.

If the District is inclined to explore this proposal, Heartwood will submit a draft of the Initial Agreement and present additional information regarding the amount of funds Heartwood would propose to contribute to funding the District’s obligations under the GBRA Agreement. The amount would most likely be based upon a percentage of reimbursements received by Heartwood. However, a more intensive financial analysis would be necessary before a firm commitment can be made, and prior to engaging in such an exercise, Heartwood seeks an indication as to the District’s willingness to proceed in exploring the general framework of this proposal. In addition, it should be noted that Heartwood is also willing to explore potential legislation that might streamline the process of creating a defined area and conducting the bond election.

We believe this to be a workable proposal with the potential to benefit the District, its residents and property owners, and the eventual residents of Heartwood’s planned development. We are willing to take the lead in drafting documents and conducting meetings and negotiations necessary to move forward with the proposal, and would very much appreciate the opportunity to further discuss this proposal, or present it to the District’s Board of Directors. Thank you very much for your consideration, and again, we are certainly willing to meet and discuss at greater length.

Sincerely,

LAW OFFICE OF MATTHEW B. KUTAC a Professional Limited Liability Company

By:______Matthew B. Kutac

Encl.: Attachment A – Map Depicting Location of Heartwood Tract cc: Paul Powell, Heartwood Development Company II, LLC

LAW OFFICE OF MATTHEW B. KUTAC PLLC February 5, 2021

ATTACHMENT A MAP DEPICTING LOCATION OF HEARTWOOD TRACT

Heartwood Tract

ATTACHMENT A

V ERNON C. HOWERTON, JR. Licensed in: Direct Dial: 469.320.6058 Texas and Oklahoma Direct Fax: 469.320.6853 [email protected]

January 11, 2021

Via Federal Express, U.S. Mail and Email ([email protected])

Kevin Patteson, J.D. General Manager / CEO GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155

Re: Lake Dunlap Spillgate Replacement and Dam Armoring; Bid No. 2021-001 (the “Project”) Protest by Thalle Construction Company Inc.

Dear Mr. Patteson:

Gray Reed & McGraw LLP represents Thalle Construction Company Inc. (“Thalle”) in connection with the referenced procurement. Please consider this letter as Thalle’s notice of its protest the award of the contract for the referenced Project to Zachry Construction Corporation (“Zachry”) or to any proposer other than Thalle under the current procurement. It is being submitted to your attention as a precursor to any action Thalle might file to set aside the procurement as void under TEXAS GOVERNMENT CODE Ch. 2269. For the reasons set forth below, Thalle is protesting because of its belief that the Guadalupe-Blanco River Authority (“GBRA”) failed to conduct the procurement in accord with Ch. 2269, as supplemented by WATER CODE § 273. See GOV’T CODE § 2269.003(d). However, the opportunity remains for GBRA to correct the defects in the current procurement without causing delay to commencement of the Project work.

Background

The name, address, telephone number and email address of the proposer / protestor are as follows.

1601 ELM STREET, SUITE 4600 | DALLAS, TEXAS 75201 | P: 214.954.4135 | F: 214.953.1332 | GRAYREED.COM 4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 2

Thalle Construction Company Inc. ATTN: John Zupan, Project Executive 10110 E FM 917 Alvarado, Texas 76009 Phone: (972) 775-5838 Email: [email protected]

Thalle is an interested party as it submitted a proposal in connection with the referenced Project on October 27, 2020. Thalle was unofficially informed it was not the successful proposer by GBRA’s Victor Castillo via email sent on January 4, 2021. An attachment to the January 4, 2021 email (Table 2) advised “Zachary Construction has been awarded the bid” without a date of award or contracting. Thalle was officially notified via publication on bidnetdirect.com on January 11, 2021 that the Project Contract had been awarded to Zachry on December 30, 2020.1 Prior to the January 11, 2021 publication of the Notice of Award, Thalle had not been officially notified of the award to Zachry.2

The Instructions to Bidders (“IBs”) and Supplementary Instructions to Bidders (“SIBs”) for the Project specified that the Project contract would be awarded based on Competitive Sealed Proposals in conformance with TEXAS GOV’T CODE Ch. 2269. The SIBs stated the various criteria to be utilized to evaluate proposals. Specifically, Section A of the SIBS indicated proposals would be scored based on Team Qualifications and Similar Prior Experience (25%), Crest Gate Manufacture’s Qualifications and Similar Prior Experience (25%), Project Approach and Schedule (20%) and Price (30%).

Based on the Scoring Summary provided to Thalle by GBRA on January 4, 2021, Thalle scored 2.9 total points higher than Zachry for Team Qualifications and Similar Prior Experience and thus was considered the most qualified proposer to perform the work. Thalle and Zachry received the same score on Crest Gate Manufacture’s Qualifications and Similar Prior Experience, suggesting they selected the same manufacturer for this scope of work.

Thalle’s proposal included the low base Bid3 of $32,410,000.00 with an alternative deduct for specified dam armoring of $3,400,000.00. Zachry submitted the second low base bid of $34,798,440.00 with an alternative deduct for specified dam armoring of $3,999,127.00. Zachry’s unit price bids of $250.00 and $230.00, respectively, for Concrete Crack and Surface Repairs were significantly higher than Thalle’s unit price bids of $100.00 each. Thalle also submitted a substantially lower unit price bid for flood event clean up of $100,000.00 per event versus Zachry’s price per event of $250,000.00. Notwithstanding a calculation error4 in Zachry’s

1 See https://www.bidnetdirect.com/private/solicitations/1657011853/abstract?innerTabId=docs-items. 2 Archer-Western also submitted a proposal. Archer-Western’s total point score was over 10 points less than Thalle’s total point score and, as such, is not further discussed herein. 3 To the extent practicable, capitalized terms used herein have the meaning ascribed to them in the Instructions to Bidders. 4 The evaluators calculated the points awarded Zachry for price based on the difference between the base Bid of Thalle and the base Bid of Zachry as the numerator and Zachry’s base Bid as the denominator. SIB Section C.4

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favor, Thalle base Bid price was scored 2.06 total points higher than Zachry’s, without regard to the alternate and unit price differentials that favored Thalle.

The only criteria upon which Zachry scored higher than Thalle was Project Approach and Schedule. As detailed below, notwithstanding the fact that Thalle was rated as better qualified, GBRA’s evaluation team awarded Zachry two points more for its Project Approach and Quality Control plan than it awarded Thalle. Zachry was awarded 3.4 points more than Thalle for its Delivery Schedule, which apparently included some form of early completion schedule.

The total point difference in Project Approach and Schedule with the price differential error resulted in Zachry receiving a total score 89.94 points or a winning differential of 0.44 points. If the price differential error is corrected, Zachry’s point total is 0.29 points higher than Thalle’s. This differential solely results from the evaluation team’s Project Approach and Schedule scores and ignores the fact that Thalle’s proposal (a) contained all content listed in the SITB selection criteria and (b) Thalle submitted the “most economical bid” under any award scenario. Yet, notwithstanding Thalle’s low, most economical and responsive Bid / proposal, we understand GBRA currently intends to award the Project to Zachry at a minimum5 cost of approximately $2.39 million more to GBRA’s customers.6

Bases of Protest

Thalle protests any award of the Project Contract to Zachry because (1) Thalle has submitted the proposal which will result in the “most economical completion” of the improvements required for the Project and (2) any award to Zachry is necessarily based on consideration of criteria not fairly described in the request for Competitively Sealed Proposals.

River authorities such as GBRA are allowed to award public works improvement contracts for projects such as the Project based upon CSPs submitted in accord with GOV’T CODE Ch. 2269. See GOV’T CODE § 2269.002(2)(D). However, unless specially excepted, river authority contracts awarded under Ch. 2269 must still comply with WATER CODE § 273. GOV’T CODE § 2269.003(d).

Water Code § 273 requires award based on the “most economical” proposal, after consideration of other factors. Subsection (c) provides:

specifies that Price points will be awarded based on a “comparison with the lowest total Bid price proposal. Thus, the points awarded to Zachry should have been calculated based on the total price difference as a percentage of Thalle’s price, rather than Zachry’s. This calculation results in a point differential in favor of Thalle of 2.21 rather than 2.06. See Table 3. 5 Because of the difference in alternate pricing and unit prices, GBRA selection of the dam armor deductive alternate or use of any Zachry unit prices would result in an even higher price differential between the amounts owed Zachry or that would be owed Thalle if the contract was awarded to Thalle based on its current Bid. 6 For comparison purposes, the Project Bid Tab, including alterative and unit pricing, the Scoring Summary with points awarded, and Thalle’s Scoring Summary Adjustment Spreadsheet showing point differences, adjusted pricing using Thalle’s price as the price point denominator, and scores based on the Deduct Dam Armoring Alternate are attached to this letter as Tables 1 – 3, respectively and incorporated herein by reference.

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(c) A contract may be let and awarded in any other form or composite of forms and to any responsible person or persons that, in the board's judgment, will be most advantageous to the district and result in the best and most economical completion of the district's proposed plants, improvements, facilities, works, equipment, and appliances” (emphasis added). Thus, river authorities must award best value based contracts based on CSPs to the proposer submitting the most economical Bid where the proposal is otherwise responsive to the stated selection criteria. The statutes discussed below confirm this.

The ITB and SITB both instruct that any award of the Contract is to be made based on GBRA’s review of CSPs submitted by interested proposers / bidders, consistent with GOV’T CODE CH. 2269. Under it, in making an award under Ch. 2269, GBRA may consider:

(1) the price; (2) the offeror's experience and reputation; (3) the quality of the offeror's goods or services; (4) the impact on the ability of the governmental entity to comply with rules relating to historically underutilized businesses; (5) the offeror's safety record; (6) the offeror's proposed personnel; (7) whether the offeror's financial capability is appropriate to the size and scope of the project; and (8) any other relevant factor specifically listed in the request for bids, proposals, or qualifications. GOV’T CODE § 2269.055(a) (emphasis added). Essentially, the SITBs listed each of these permitted criteria as factors for consideration in awarding the Project Contract. Quality control and scheduling were listed other factors under item (8).

Concerning project approach and quality control, SITB C.3.a. identified the following things to be considered as part of the evaluation scoring.

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vi. Describe the Contractor’s approach towards mitigating and managing potential unforeseen conditions should they be encountered on this project. Identify specific potential situations. vii. Provide a quality management plan describing how the Prime Contractor will ensure that necessary steps, safeguards, subcontractor oversight, Quality Assurance and Quality Control (QA/QC) process, and document controls are implemented in a rigorous manner as to ensure the completeness, accuracy, and successful completion of the project. Concerning schedule, SITB C.3.b. identified the following things to be considered in the evaluation scoring.

b. Delivery Schedule (10 points)

i. Provide a Primavera or Microsoft project (CPM milestone) schedule. Include milestones and completion dates, purchase, manufacture and delivery activities for major materials and equipment, specific critical processes and critical path items, submittal preparation and acceptance of shop drawings, permits, approvals, coordination with stakeholders, weather delays and startup and commissioning. For purposes of preparing the schedule, the Bidder shall assume a Notice to Proceed date 120 calendar days following the Bid Date. This date is only an estimate and should not be considered the actual Notice to Proceed date. ii. Identify long lead items and critical path shop drawing submittals. iii. Provide detailed fabrication schedule for the crest gates. iv. Provide details for the hydraulically actuated crest gates, hydraulic hoist, gantry crane, and engine generator procurement and delivery. Based on the description in the .3.a and .3.b criteria, proposers would only receive points for providing the requested information. However, very little to no detail was included concerning how or if each sub-item in the listed criteria would be weighted or scored based on content.

For example and without limitation, there was no indication that a proposer could receive a higher score for submitting an early completion schedule where substantial and / or final completion were achieved prior to the expiration of the Contract Time. The Bid Form itself at Article 6 only indicates that bidders must achieve Substantial and Final Completion within 730 and 760 calendar days, respectively, after the Contract Time commenced to run or pay liquidated damages for delayed completion. See also Agreement at §§ 4.02 – 03. Gov’t Code Ch. 2269 required this information if points were to awarded based on content of information rather than inclusion.

Section 2269.153 (PREPARATION OF REQUEST) states:

The governmental entity shall prepare a request for competitive sealed proposals that includes construction documents, selection criteria and the weighted value for each criterion, estimated budget, project scope, estimated project completion date, and other information that a contractor may require to respond to the request.”

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(Emphasis added). Section 2269.154(b) (EVALUATION OF OFFERORS) then provides “the governmental entity shall evaluate and rank each proposal submitted in relation to the published selection criteria” (emphasis added). In other words, GBRA not only needed to describe the items to be evaluated, but also how they would be scored if the scoring was based on anything other than inclusion of the specified information. Thus, if GBRA intended to award more points for a five point QC plan than it would for a four point QC plan, GBRA needed to advise prospective bidders of this fact. Likewise, if an early completion schedule would receive more points than an on-time completion schedule, GBRA needed to provide this information as a condition of scoring an early completion higher than an on-time schedule. This is confirmed in Gov’t Code § 2269.155(a).

The governmental entity shall select the offeror that submits the proposal that offers the best value for the governmental entity based on: (1) the selection criteria in the request for proposal and the weighted value for those criteria in the request for proposal; and (2) its ranking evaluation. (b) The governmental entity shall first attempt to negotiate a contract with the selected offeror. The governmental entity and its architect or engineer may discuss with the selected offeror options for a scope or time modification and any price change associated with the modification. Here it appears based on the scoring for the Project Approach and Quality Control and Delivery Schedule criteria, GBRA chose to score based on factors not expressly included in the selection criteria, rather than negotiate any desired modifications after selection based on the stated criteria. Thalle submitted the low base Bid for the Project. Thalle’s proposed deduction for dam armoring, if selected, further reduces Thalle’s price. Thalle’s unit prices are also lower than Zachry’s. Thalle submitted the most economical bid by any measure. Thalle’s proposal was otherwise responsive to the selection criteria that were expressly stated in the SITB. As such, the Project Contract must be awarded to Thalle under the current procurement if it is to be awarded at all based upon the submitted proposals. An award to Zachry based on the current procurement would violate the law and policy applicable to it, as well as GBRA’s own statement in SIFB Section A that GBRAs committee would perform a “comprehensive, fair and impartial evaluation” of all CSPs based on the stated selection criteria.

Relief Requested

On or about January 7, 2021, Thalle’s President and COO, Steve Kohler requested an opportunity to discuss the scoring of its Proposal with GBRA. To date, Thalle has not received a response to this request. Thalle has therefore submitted this notice of protest. This notice is submitted with the understanding that Thalle may seek to have the award of the Project Contract declared void and its performance enjoined if the Contract is not awarded to Thalle.

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Thalle does not desire to delay the award or completion of the Project Contract. However, it believes it submitted the best and most economical proposal to GBRA. Even though its proposal is the “most economical” and objectively meets all stated selection criteria contained in the SIFB, as shown by prior discussions between Thalle and GBRA, Thalle is willing to negotiate times for performance and any desired QC features, all as permitted by applicable law.

Thalle has made a substantial investment in demonstrating it is the best contractor available to complete the Lake Dunlap Contract at the best price. In the absence of its award to Thalle, Thalle hereby reserves all of its rights and remedies at law or in equity, including its right to seek to have any contract awarded to any other proposer declared void under Government Code Chapter 2269 and its performance enjoined.

We hereby request the opportunity to inspect and copy Zachry’s written project proposal, GBRA evaluations of the Project proposals, and documentation of the basis of selection pursuant to the Public Information Act, TEXAS GOV’T CODE Ch. 552 and/or GOV’T CODE § 2269.056(c).

Do not hesitate to contact me, Steve Kohler or John Zupan with any questions, concerns or to schedule a meeting. Your attention to this letter is most appreciated and time is of the essence.

Very truly yours,

Vernon C. Howerton, Jr.

VCH|per

Enclosures Cc: Via Email and Federal Express

George "Tom" Bohl, J.D. General Counsel GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

Thomas Hill, P.E. Senior Advisor to the General Manager GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

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Dennis L. Patillo, Chair Board of Directors GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

Victor Castillo, Purchasing Manager GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

Via Email Only

[email protected]

Peter Tully, CEO Thalle Construction Company, Inc., a Tully Group Company [email protected]

Steve Kohler, President and COO Thalle Construction Company, Inc. [email protected]

Dennis Parces, General Counsel Thalle Construction Company, Inc. [email protected]

4827-0380-5398.2 Table 1 Lake Dunlap Spillgate Replacement and Dam Armoring GBRA BID #2021-001 Scoring Summary Zachary Thalle Category Archer Western Construction Construction

Team Qualifications (Prime Contractor and Subcontractors) and Similar Prior Experience

Project Team Structure and Key Personnel 7.40 7.60 8.00 Prime Contractor Qualifications, Experience, and Safety Record 6.40 7.00 8.50 Key Subcontractors Qualifications, Experience, and Safety Record 4.80 5.40 5.00

Crest Gate Manufacturer’s Qualifications and Similar Prior Experience

Crest Gate Manufacturer’s Team Structure and Key Personnel 10.00 5.40 10.00 Crest Gate Manufacturer’s Qualifications, and Experience (including hydraulic cylinders, hoist supports, associated valve 15.00 7.00 15.00 manifolds, and hydraulic power units for operation of crest gates)

Project Approach and Schedule

Project Approach and Quality Control 8.60 7.80 6.60 Delivery Schedule 9.80 9.00 6.40 Price Contractor Lump Sum Bid amount $34,798,440.00 $35,710,000.00 $32,410,000.00 Price 27.94 27.23 30.00

Total 89.94 76.43 89.50

Zachary Construction has been awarded the bid. Table 2 Lake Dunlap Gate Replacement (Corrected) and with Alternative Deductive Pricing Zachry Price Zachry with Alt. Thalle with Alt. Weight Zachry Corrected Thalle Deduct Deduct Team Qualifications 25% Structure and KP 10% 7.4 7.4 8 7.4 8 Q&E 10% 6.4 6.4 8.5 6.4 8.5 Sub Q&E 5% 4.8 4.8 5 4.8 5 Subtotal 25% 18.6 18.6 21.5 18.6 21.5 Crest Gate Manufacture 25% Structure and KP 10% 10 10 10 10 10 Q&E 15% 15 15 15 15 15 Subtotal 25% 25 25 25 25 25 Project Approach and Schedule 20% Approach and QC 10% 8.6 8.6 6.6 8.6 6.6 Delivery Schedule 10% 9.8 9.8 6.4 9.8 6.4 Subtotal 20% 18.4 18.4 13 18.4 13 Price 30% 27.94 27.79 30 28.15 30 Total 100% 89.94 89.79 89.50 90.15 89.50 Total Point Difference 0.44 0.29 ‐ 0.65 ‐

Deduct Dam Base Armoring Base with Deduct Zachry Price$ 34,798,440.00 $ 3,999,127.00 $ 30,799,313.00 Thalle Price$ 32,410,000.00 $ 3,400,000.00 $ 29,010,000.00 Δ$ 2,388,440.00 $ 599,127.00 $ 1,789,313.00

Table 3 Electronically Filed 1/19/2021 2:03 PM Linda Balk 21-0167-CV Guadalupe County District Clerk CAUSE NO. ______Diana Alaniz

THALLE CONSTRUCTION § IN THE DISTRICT COURT COMPANY, INC. § § Plaintiff, § § vs. § GUADALUPE COUNTY, TEXAS § GUADALUPE-BLANCO RIVER § AUTHORITY and ZACHRY § CONSTRUCTION CORPORATION § § Defendants. § ____ JUDICIAL DISTRICT

ORIGINAL APPLICATION FOR DECLARATORY RELIEF AND TEMPORARY AND PERMANENT INJUNCTIONS

Plaintiff, Thalle Construction Company, Inc. files this its Original Application for

Declaratory Relief and Temporary and Permanent Injunctions, complaining of Defendants,

Guadalupe-Blanco River Authority and Zachry Construction Corporation as follows.

Discovery Control Plan

1. Pursuant to Rule 190.1 of the Texas Rules of Civil Procedure, Thalle intends to conduct discovery in this case under Level 2.

Parties

2. Plaintiff, Thalle Construction Company, Inc. (“Thalle”) is a corporation organized and existing under the laws of the State of New York, duly authorized to transact business in

Texas and engaged in business as a heavy-civil contractor in Texas from its offices located at

10110 FM917, Alvarado, TX 76009 in the County of Johnson, Texas.

3. Defendant, Guadalupe-Blanco River Authority (“GBRA”) is a Texas water conservation and reclamation district created and existing under an act of the Texas legislature,

VCA Art. 8280-106, who can be served with citation by serving its General Manager, Kevin ______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 1 4850-5011-4775.1

Patteson, J.D at its General Office located at 933 East Court Street, Seguin, TX 78155. Pursuant

to VCA Art. 8280-106 and without limitation, GBRA “may sue and be sued in its corporate

name” and “make contracts” for the construction and maintenance of its structures,

improvements and facilities.

4. Defendant, Zachry Construction Corporation (“Zachry”) is a Delaware

corporation authorized to transact business in Texas with its principal place of business located

in the City of San Antonio, Bexar County, Texas. Zachry may be served with citation by serving its registered agent, C T Corp System, 1999 Bryan Street, Suite 900, Street, Dallas, Texas 75201.

Zachry is a real party in interest to this action because, if the declaratory and injunctive relief requested herein is granted, Zachry’s rights will be affected thereby.

Venue

5. Venue in this action is proper in Guadalupe County pursuant to § 15.002 of the

Texas Civ. Prac. & Rem. Code because GBRA’s principal office is located within Guadalupe

County, Texas and all or a substantial part of the events giving rise to this action occurred in

Guadalupe County, Texas.

Rule 47 Pleading

6. Thalle seeks a declaratory judgment that any contract awarded by GBRA to

Zachry under the procurement which is the subject of this action is void for failure to conform to

the competitive requirements of Texas law, as well as a temporary and permanent injunction

against the performance of any such contract. This court has jurisdiction to award such relief.

Pursuant to TEX. R. CIV. PRO. 47, Thalle seeks an award of monetary relief of not more than

$200,000, including costs and attorney fees, and non-monetary relief.

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 2 4850-5011-4775.1

Introduction

7. In September, 2020, GBRA solicited sealed proposals for a project titled “Lake

Dunlap Spillgate Replacement and Dam Armoring, (Bid No. 2021-001)” (the “Project”). As

described in the Invitation to Bidders (“ITB”) contained in the Project Manual,1 sealed by Todd

Schellhase, P.E., the Project generally consists of following:

Replacement of the three existing bear trap style crest gates at Lake Dunlap dam with new hydraulically actuated crest gates and dam armoring on the downstream embankment. The work associated includes demolition of the existing gates and associated structural concrete, demolition of existing gate valves and actuators, new equipment installation (hydraulically actuated crest gates, hydraulic power unit, emergency backup generator), concrete work, electrical work, instrumentation and control work, dam embankment armoring, site work, grading, and other work as shown on the Drawings and Specifications

(collectively the “Work”). As also detailed in the IFB, Supplementary Instructions to Bidders

(“SIB”) and Bid Form, Proposers were required to submit a Base Bid for all Work, including

Deductive Alternative for Dam Armoring should GBRA elect not to proceed with that defined

portion of the Work, as well as certain unit prices for flood clean up following a Flood Event and

Concrete Crack Repair and Concrete Surface Repair as directed by GBRA or its representatives.

8. Article 6 (TIME OF COMPLETION) of the Bid Form, as well as Article 4

(CONTRACT TIMES) of the Agreement Form to be signed by BBRA and the successful

Proposer, specified that all Work required for substantial completion of the Project was required

to be complete within 730 calendar days from the date when the Contract Times commenced to

run and ready for final payment within 760 calendar days from such date.

9. The IFB and SIB both specify that the procurement was to conform the

requirements of Texas Government Code Ch. 2269 for projects awarded using the Competitive

1 The Project Manual containing, without limitation, the ITB, SIB, Agreement Form, General Conditions, Supplementary Conditions, Specifications and Plans for the Project consists of approximately 772 printed pages and 113 drawings. The Project Manual made available to proposers by GBRA, together with various Addenda published in advance of GBRA’S receipt of proposals, is published at: https://www.bidnetdirect.com/texas/guadalupeblancoriverau/solicitation and incorporated herein. ______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 3 4850-5011-4775.1

Sealed Proposals (“CSP”) method. Under the CSP method, proposals are generally evaluated, and scored based on published criteria. The contract is then awarded based on the “best value” to the awarding authority – here GBRA. In the case of river authorities such as GBSA, under

Gov’t Code § 2269.003(d), the request for proposals and award must also conform to Water

Code § 49.273. Water Code § 29.273 requires an award that

will be most advantageous to the district and result in the best and most economical completion of the district's proposed plants, improvements, facilities, works, equipment, and appliances.

(Emphasis added).

10. This action arises, in part, from GBRA’s decision to award the Project contract to

Zachry at a cost of completion price ranging from $1.75 million (with Deductive Alternate) to

$2.38 million (without Deductive Alternate) more than he prices offered by Thalle for the same scopes of Work, rather than at Thalle’s best and most economical price. Additionally, although

GBRA rated Thalle as the most qualified proposer to complete the Project, GBRA ultimately awarded Zachry points in its evaluation of the proposals based upon factors that were not stated in the SIB as being among the criteria to be scored. This resulted in Zachry receiving a

“winning” combined score that was less than 0.5 points higher (out of 100 points maximum) than

Thalle’s combined score. Under such circumstances and as discussed herein infra, any contract between GBRA and Zachry arising from the current procurement is voidable as against public policy and its performance may be enjoined as failing to have been awarded in accord with applicable law. GOV’T CODE §§ 2269.451 – 52.

11. Though not required to do so, on the day Thalle received actual, formal notice that

GBRA intended to award or had awarded the Project contract to Zachry, Thalle notified GBRA of its intent to protest the award of the Project to Zachry or any other proposer based on the results of the instant procurement. A true and correct copy of Thalle’s notice of protest letter, ______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 4 4850-5011-4775.1

dated January 11, 2011 and attached hereto as Exhibit 1, is incorporated herein by references for

all purposes. Exhibit 1 includes the following Tables: 1 – “Project Bid Tab” with alterative and

unit pricing 2 – “Scoring Summary” with points awarded, and 3 – Thalle’s scoring summary

spreadsheet with “Corrected” point differences using Thalle’s price as the price point

denominator (discussed below) and scores based on the Alternative Deduction for Dam

Armoring.

12. Despite Thalle’s verbal request to discuss the scoring of the competing project

proposals and written request for inspection thereof, Thalle has received no response, verbal or

otherwise, from GBRA as of the filing of this Original Application. See Exhibit 1. Thalle

therefore files this Original Application out of an abundance of caution and to preserve its rights

under GOV’T CODE Ch. 2269.

Facts

13. GBRA received proposals from interested proposers on or before October 27,

2020. Upon opening, Thalle had submitted the low Base Bid for the Project in the total amount of $32,410.000.00. Zachry submitted the second low base bid of $34,798,440.00 Complete proposals were then submitted to a GBRA evaluation committee for scoring under Gov’t Code

Ch. 2269 prior to any decision on award.

14. The SIB stated the various criteria to be utilized to evaluate proposals.

Specifically, Section A of the SIB indicated proposals would be scored based on Team

Qualifications and Similar Prior Experience (25%), Crest Gate Manufacture’s Qualifications and

Similar Prior Experience (25%), Project Approach and Schedule (20%) and Price (30%).

15. Based on the Scoring Summary provided to Thalle by GBRA on January 4, 2021

(Table 2), Thalle scored 2.9 total points higher than Zachry for Team Qualifications and Similar

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 5 4850-5011-4775.1

Prior Experience and thus was considered the most qualified proposer to perform the work.

Thalle and Zachry received the same score on Crest Gate Manufacture’s Qualifications and

Similar Prior Experience, suggesting they selected the same manufacturer for this scope of work.

16. Thalle’s proposal included the low base Bid2 of $32,410,000.00 with an

alternative deduct for specified dam armoring of $3,400,000.00. Zachry submitted the second

low base bid of $34,798,440.00 with an alternative deduct for specified dam armoring of

$3,999,127.00. Zachry’s unit price bids of $250.00 and $230.00, respectively, for Concrete

Crack and Surface Repairs were significantly higher than Thalle’s unit price bids of $100.00

each. Thalle also submitted a substantially lower unit price bid for flood event clean-up of

$100,000.00 per event versus Zachry’s price per event of $250,000.00. Notwithstanding a

calculation error3 in Zachry’s favor, Thalle base Bid price was scored 2.06 total points higher than Zachry’s, without regard to the alternate and unit price differentials that also favored Thalle.

See Table 2.

17. The only criteria upon which Zachry scored higher than Thalle was Project

Approach and Schedule. GBRA’s evaluation team awarded Zachry two points more for its

Project Approach and Quality Control plan than it awarded Thalle. Zachry was awarded 3.4

points more than Thalle for its Delivery Schedule, which, upon information and belief, included an early completion schedule or similar commitment that, if met, would result in completion of the Project Work prior to the Contract mandated dates for substantial and final completion.

2 To the extent practicable, capitalized terms used herein have the meaning ascribed to them in the Instructions to Bidders. 3 The evaluators calculated the points awarded Zachry for price based on the difference between the base Bid of Thalle and the base Bid of Zachry as the numerator and Zachry’s base Bid as the denominator. SIB Section C.4 specifies that Price points will be awarded based on a “comparison with the lowest total Bid price proposal. Thus, the points awarded to Zachry should have been calculated based on the total price difference as a percentage of Thalle’s price, rather than Zachry’s. This calculation results in a point differential in favor of Thalle of 2.21 rather than 2.06. See Table 3. ______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 6 4850-5011-4775.1

18. The total point difference in Project Approach and Schedule with the price

differential error resulted in Zachry receiving a total score 89.94 points or a winning differential

of 0.44 points. If the price differential error is corrected, Zachry’s point total is 0.29 points higher than Thalle’s.4 This differential solely results from the evaluation team’s Project

Approach and Schedule scores and ignores the fact that Thalle’s proposal (a) contained all

content listed in the SIB selection criteria and (b) Thalle submitted the “most economical bid”

under any award scenario.

19. Notwithstanding Thalle’s low, most economical and responsive Bid / proposal,

Thalle was officially notified via publication on bidnetdirect.com on January 11, 2021 that the

Project Contract had been awarded to Zachry on December 30, 2020.5 Prior to the January 11,

2021 publication of the Notice of Award, Thalle had not been officially notified of the award to

Zachry.6 Thalle submitted its notice of protest letter, Exhibit 1, via email on the same day it

received notice.

20. Thalle protests any award of the Project Contract to Zachry because (1) Thalle has

submitted the proposal which will result in the “most advantageous” and “most economical

completion” of the improvements required for the Project and (2) any award to Zachry is

necessarily based on consideration of criteria not fairly described in the request for

Competitively Sealed Proposals and as required by GOVERNMENT CODE Ch. 2269.

4 For comparison purposes, the Project Bid Tab, including alterative and unit pricing, the Scoring Summary with points awarded, and Thalle’s Scoring Summary Adjustment Spreadsheet showing point differences, adjusted pricing using Thalle’s price as the price point denominator, and scores based on the Deduct Dam Armoring Alternate are attached to this letter as Tables 1 – 3, respectively and incorporated herein by reference. 5 See https://www.bidnetdirect.com/private/solicitations/1657011853/abstract?innerTabId=docs-items. 6 Archer-Western also submitted a proposal. Archer-Western’s total point score was over 10 points less than Thalle’s total point score and, as such, is not further discussed herein. ______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 7 4850-5011-4775.1

21. River authorities such as GBRA are allowed to award public works improvement

contracts for projects such as the Project based upon CSPs submitted in accord with GOV’T CODE

Ch. 2269. However, river authority contracts awarded under Ch. 2269 must still comply with

WATER CODE § 273. GOV’T CODE § 2269.003(d).

22. WATER CODE § 273 requires award based on the “most advantageous” and “most

economical” proposal, after consideration of other factors. Subsection (c) provides:

Thus, river authorities must award best value based contracts based on CSPs to the proposer

submitting the most economical Bid where the proposal is otherwise responsive to the stated

selection criteria.

23. The ITB and SIB both instruct that any award of the Contract is to be made based

on GBRA’s review of CSPs submitted by interested proposers / bidders, consistent with GOV’T

CODE Ch. 2269. Under it, in making an award under Ch. 2269, GBRA may consider:

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 8 4850-5011-4775.1

GOV’T CODE § 2269.055(a) (emphasis added). Essentially, the SITBs listed each of these permitted criteria as factors for consideration in awarding the Project Contract. Quality control and scheduling were listed other factors under item (8).

24. Concerning project approach and quality control, SITB C.3.a. identified the following things to be considered as part of the evaluation scoring.

a. Project Approach and Quality Control (10 points) i. Provide a narrative of the approach for how the Bidders will complete this project. ii. Provide a description of the approach for procuring long-lead items as well as for ensuring critical path items will be addressed adequately. iii. Provide a description of the approach specifically addressing the procurement of the following items: hydraulically actuated crest gates, hydraulic hoist system, gantry crane and engine generator. iv. Provide a description of the approach for protecting the work area against both high headwater and tailwater during construction. v. Provide any innovative ideas for cost savings (due to method or duration) for this project. vi. Describe the Contractor’s approach towards mitigating and managing potential unforeseen conditions should they be encountered on this project. Identify specific potential situations. vii. Provide a quality management plan describing how the Prime Contractor will ensure that necessary steps, safeguards, subcontractor oversight, Quality Assurance and Quality Control (QA/QC) process, and document controls are implemented in a rigorous manner as to ensure the completeness, accuracy, and successful completion of the project. Concerning schedule, SITB C.3.b. identified the following things to be considered in the evaluation scoring.

b. Delivery Schedule (10 points) i. Provide a Primavera or Microsoft project (CPM milestone) schedule. Include milestones and completion dates, purchase, manufacture and delivery activities for major materials and equipment, specific critical processes and critical path items, submittal preparation and acceptance of shop drawings, permits, approvals, coordination with stakeholders, weather delays and startup and commissioning. For purposes of preparing the schedule, the Bidder shall assume a Notice to Proceed date 120 calendar days following the Bid Date. This date is only an estimate and should not be considered the actual Notice to Proceed date. ii. Identify long lead items and critical path shop drawing submittals. ______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 9 4850-5011-4775.1

iii. Provide detailed fabrication schedule for the crest gates. iv. Provide details for the hydraulically actuated crest gates, hydraulic hoist, gantry crane, and engine generator procurement and delivery. Based on the description in the .3.a and .3.b criteria, proposers would only receive points for

providing the requested information. However, very little to no detail was included concerning how or if each sub-item in the listed criteria would be weighted or scored based on content.

25. For example and without limitation, there was no indication that a proposer could

receive a higher score for submitting an early completion schedule where substantial and / or

final completion were achieved prior to the expiration of the Contract Time. The Bid Form itself

at Article 6 only indicates that bidders must achieve Substantial and Final Completion within 730

and 760 calendar days, respectively, after the Contract Time commenced to run or pay liquidated

damages for delayed completion. See also Agreement at §§ 4.02 – 03. Gov’t Code Ch. 2269

required this information if points were to awarded based on content of information rather than

inclusion.

26. Section 2269.153 (PREPARATION OF REQUEST) states:

(Emphasis added). Section 2269.154(b) (EVALUATION OF OFFERORS) then provides “the

governmental entity shall evaluate and rank each proposal submitted in relation to the published

selection criteria” (emphasis added).

27. GBRA not only needed to describe the items to be evaluated, but also how they

would be scored if the scoring was based on anything other than inclusion of the specified

information. If GBRA hypothetically intended to award more points for a five point quality

control plan than it would for a four point plan, GBRA needed to advise prospective bidders of

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 10 4850-5011-4775.1

this fact. Likewise, if an early completion schedule would receive more points than an on-time completion schedule, GBRA needed to provide this information as a condition of scoring an early completion higher than an on-time schedule. This is confirmed in GOV’T CODE §

2269.155(a).

28. Thalle submitted the low base Bid for the Project. Thalle’s proposed deduction for dam armoring, if selected, further reduces Thalle’s price. Thalle’s unit prices are also lower than Zachry’s. Thalle submitted the most economical bid by any measure. Thalle’s proposal was otherwise responsive to the selection criteria that were expressly stated in the SITB. As such, the Project Contract must be awarded to Thalle under the current procurement if it is to be awarded at all based upon the submitted proposals.

29. An award to Zachry based on the current procurement would violate Texas state law, public policy applicable to it that requires open and fair competition, and GBRA’s own statement in SIB Section A that GBRAs committee would perform a “comprehensive, fair and impartial evaluation” of all CSPs based on the stated selection criteria.

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 11 4850-5011-4775.1 Declaratory Judgment

30. Thalle incorporates herein by reference the allegations set forth in paragraphs 1 –

29 of this Application.

31. For the reasons set forth above, any contract entered into between Zachry and

GBRA and arising from the current procurement is void or voidable under Chapter 2269 of the

Texas Government Code.

32. Pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code, Thalle is entitled to a declaration that any such contract or proposed contract be declared void.

33. Thalle is also entitled to an award of its costs of bringing this action and reasonable and necessary attorney fees, all as provided in Civ. Prac Rem. Code § 37.009.

Application for Temporary and Permanent Injunctive Relief

34. Thalle incorporates paragraphs 1 – 31 above herein by reference.

35. Notwithstanding Thalle’ protest and the facts set forth hereinabove, GBRA has

indicated it intends to award the contract for the Project to Zachry or has awarded the Project

Contract to Zachry.

36. If Zachry is awarded or allowed to perform the Project contract following

GBRA’s acceptance of its Project proposal, Thalle will suffer irreparable harm for which there is

no remedy at law, as will the customers of GBRA who will not benefit from the most

advantageous and most economical completion of the Project Work, without regard to its final

scope.

37. The only available remedy to Thalle in these circumstances is injunctive relief.

Thalle is entitled to temporary and permanent injunctions enjoining (i) GBRA from awarding the

Project contract to Zachry or any other bidder except Thalle pursuant to the present procurement,

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 12 4850-5011-4775.1 (ii) the performance of any contract entered into with any other proposer except Thalle pursuant

to the present request for proposals and (iii) the payment of any monies pursuant to any contract

entered into with any other bidder except Thalle pursuant to the present request for proposals.

WHEREFORE, PREMISIS CONSIDERED, Plaintiff, Thalle, respectfully requests the

following relief:

a. the court fix a time for hearing of Thalle’s Application for a Temporary

Injunction pursuant to Rule 685 of the Texas Rules of Civil Procedure;

b. GBRA and Zachry be cited to appear and answer herein;

c. after the hearing on the Application for Temporary Injunction, the Court enter a temporary injunction to be in full force and effect for the duration of this action so as to temporarily restrain and enjoin GBRA from (i) awarding the Project contract to any bidder other than Thalle; (ii) the performance of any contract entered into with any other bidder except Thalle pursuant to the present Project request for proposals and (iii) the payment of any monies pursuant to any contract entered into with any other bidder except Thalle pursuant to the present request for proposals

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 13 4850-5011-4775.1 d. upon trial of this cause, the Court declare any contract awarded to Zachry void as against public policy and contrary to applicable law, enter a permanent injunction incorporating the same terms as requested above, award Thalle its costs and attorney fees herein and grant

Thalle such other and further relief, at law and in equity, to which Thalle may show itself to be entitled.

Respectfully submitted,

______Vernon C. Howerton, Jr. Texas Bar No. 24011322 Timothy J. Fandrey State Bar No. 24100083

GRAY REED & McGRAW, LLP 1602 Elm Street, Suite 4100 Dallas, Texas 75201 Telephone: (214) 954-4135 Telecopy: (214) 953-1332 Email: [email protected] [email protected]

Joe Virene State Bar No. 24060779 Christian S. Dewhurst GRAY REED & McGRAW, LLP 1300 Post Oak Blvd., Suite 2000 Houston, Texas 77056 Tel: (713) 986-7000 Fax: (713) 986-7100 Email: [email protected] [email protected]

ATTORNEYS FOR PLAINTIFF, THALLE CONSTRUCTION OF TEXAS, LTD.

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS - Page 14 4850-5011-4775.1 Exhibit 1

______ORIGINAL APPLICATION FOR DECLARATORY RELIEF, TEMPORARY AND PERMANENT INJUNCTIONS 4850-5011-4775.1 V ERNON C. HOWERTON, JR. Licensed in: Direct Dial: 469.320.6058 Texas and Oklahoma Direct Fax: 469.320.6853 [email protected]

January 11, 2021

Via Federal Express, U.S. Mail and Email ([email protected])

Kevin Patteson, J.D. General Manager / CEO GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155

Re: Lake Dunlap Spillgate Replacement and Dam Armoring; Bid No. 2021-001 (the “Project”) Protest by Thalle Construction Company Inc.

Dear Mr. Patteson:

Background

The name, address, telephone number and email address of the proposer / protestor are as follows.

1601 ELM STREET, SUITE 4600 | DALLAS, TEXAS 75201 | P: 214.954.4135 | F: 214.953.1332 | GRAYREED.COM 4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 2

Thalle Construction Company Inc. ATTN: John Zupan, Project Executive 10110 E FM 917 Alvarado, Texas 76009 Phone: (972) 775-5838 Email: [email protected]

4827-0380-5398.2 GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 3

favor, Thalle base Bid price was scored 2.06 total points higher than Zachry’s, without regard to the alternate and unit price differentials that favored Thalle.

Bases of Protest

Water Code § 273 requires award based on the “most economical” proposal, after consideration of other factors. Subsection (c) provides:

4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 4

Concerning project approach and quality control, SITB C.3.a. identified the following things to be considered as part of the evaluation scoring.

4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 5

b. Delivery Schedule (10 points)

Section 2269.153 (PREPARATION OF REQUEST) states:

4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 6

Relief Requested

4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 7

Do not hesitate to contact me, Steve Kohler or John Zupan with any questions, concerns or to schedule a meeting. Your attention to this letter is most appreciated and time is of the essence.

Very truly yours,

Vernon C. Howerton, Jr.

VCH|per

Enclosures Cc: Via Email and Federal Express

George "Tom" Bohl, J.D. General Counsel GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

Thomas Hill, P.E. Senior Advisor to the General Manager GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

4827-0380-5398.2

GUADALUPE-BLANCO RIVER AUTHORITY January 11, 2021 Page 8

Dennis L. Patillo, Chair Board of Directors GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

Victor Castillo, Purchasing Manager GUADALUPE-BLANCO RIVER AUTHORITY 933 East Court Street Seguin, TX 78155 [email protected]

Via Email Only

[email protected]

Peter Tully, CEO Thalle Construction Company, Inc., a Tully Group Company [email protected]

Steve Kohler, President and COO Thalle Construction Company, Inc. [email protected]

Dennis Parces, General Counsel Thalle Construction Company, Inc. [email protected]

4827-0380-5398.2 Table 1 Lake Dunlap Spillgate Replacement and Dam Armoring GBRA BID #2021-001 Scoring Summary Zachary Thalle Category Archer Western Construction Construction

Team Qualifications (Prime Contractor and Subcontractors) and Similar Prior Experience

Crest Gate Manufacturer’s Qualifications and Similar Prior Experience

Project Approach and Schedule

Project Approach and Quality Control 8.60 7.80 6.60 Delivery Schedule 9.80 9.00 6.40 Price Contractor Lump Sum Bid amount $34,798,440.00 $35,710,000.00 $32,410,000.00 Price 27.94 27.23 30.00

Total 89.94 76.43 89.50

Table 3