Mt. Vernon Register-News

February 4, 2014

Rebidding of new high school carries risk



MT. VERNON — Rebidding construction for the new proposed Mt. Vernon Township High School carries the risk of receiving even higher bids this time around, due to potentially rising labor and material costs.

Even so, MVTHS officials say they are developing strategies to help make the bidders more comfortable so they submit lower estimates.

Some of these strategies include changing how the bids are structured, expanding the bidding field, and altering the bidding and construction timelines to give contractors more time to work on the project.

“There’s obviously some risk with (rebidding),” said Superintendent Michael Smith. “But in the interest of the taxpayers and the project as a whole, we have no choice but to rebid those. We’re looking at a number of things to minimize any risk.”

Chris Nisbet, project director for the McCarthy consulting firm, said the bid documents this time will be structured so that more modestly-sized contractors can submit estimates.

Each construction work category, he said, will be divided up into several smaller projects that can be bid on. That way, both small and large firms will have the chance to participate, Nisbet said.

“If we can make it more appealing to a smaller contractor, that’s what we want to do also,” Nisbet said.

Local business owner Dan Black said getting higher bids during rebidding is a real possibility.

Black, owner of Black & Sons Construction in Mt. Vernon, has served as an unofficial advisor to the MVTHS Board of Education regarding the new school project.

He has attended many of the board’s meetings and has offered advice on how to proceed.

“I’m trying to be a constructive voice and a helpful voice,” said Black, who is also a member of the Jefferson County Chamber of Commerce’s Past President’s Council.

One of the main factors that leads to higher bids is labor costs. Black said the prevailing wage for construction workers usually sees a 3 to 5 percent increase every July.

Now that the duration of the new school project has been extended, there will be two July wage increases during construction instead of just one. This will be a consideration when contractors decide what bids to submit, Black said.

“You know every July you’re going to get some kind of increase,” Black said.

Another development that could raise bid amounts is how the price of materials will likely increase now that the economy is picking up, Black said.

This is because there is more demand for construction materials like roofing and lumber, and the supply has to “try to catch up,” he said.

Twenty-five work categories for the new school’s construction were initially bid out in December. However, the bids came in at more than $6 million over-budget, prompting the MVTHS Board to look for ways to cut costs.

In late January, district officials announced they would likely rebid most of the construction on the advice of legal counsel.

This announcement came shortly after board members had discussed possibly eliminating the theater and football field from the new school’s construction plans, which led to a heated response from theater students and faculty.

Currently, the district is looking at rebidding all of the work categories except for about five of them that have not undergone changes during recent cost-cutting efforts.

Black said he is also concerned about the notable disparity in some of the bid estimates from December and the possibility of it happening again this time around.

In one work category, electrical, there was a $3.7 million difference between the low bid and the second bid, Black said.

“You just don’t know when you go out to bid,” Black said. “The second bidder could’ve made a mistake (or) put something in twice. It happens every day.”

Getting the new school project back in line with budget estimates is essential at this stage of the process, Black said.

“They don’t have a choice. They’ve got to get the estimated cost of the project close to their budget … so they don’t end up $5 or $6 million over a second time,” Black said.

Discussions will continue on the new school project at a special MVTHS Board meeting set for 4:30 p.m. today.