Economy, Timing Blamed For Higher-Than-Expected Bid
July 2, 2019 at 2:38 a.m.
By David [email protected]
The Warsaw Redevelopment Commission discussed the project before approving claims at its meeting Monday.
At the June 21 Board of Public Works and Safety meeting, the board rejected the single bid for the project from R. Yoder Construction Inc., Nappanee, for $1,996,692. City Planner said then that the bid was about a half million dollars more than what the engineering firm estimated.
The plaza will be near Center Lake on the north end of Buffalo Street and is part of the North Buffalo Street project, which includes upgrading the road and a housing development. The former Indiana American Water Co. building will become a mixed-use structure.
At Monday’s Redevelopment Commission meeting, member Rick Snodgrass said, “Based on the recent data on the plaza, the actual bid was one-third higher than American Structurepoint estimated. You indicated it could be, just a tiny, because everyone’s working ... but I think it would be prudent to mention to Structurepoint, because they’re working on our project, to be very careful with the estimates because I was shocked.”
City Planner Jeremy Skinner said it wasn’t the first time an estimate was off because “you do rest, on a certain extent, on (factors) that are somewhat complicated.”
He said, “We had a long conversation with them today to take the next steps in this project and move forward. So we’re working on it.”
Bid timing was not perfect, he said, “and the economy right now is robust to say the least so there’s more work than contractors, which is not helping us.”
Ten years ago, Skinner said it was great because you could bid a project out and have 10 bids and get great prices. “The down side of that is, when the economy is good, which we all want it to be, the prices are going to be higher because the work force is entirely depleted.”
He said he and other city representatives talked to American Structurepoint about some deficiencies in the documents themselves, which they agreed they could do a better job of addressing in the future.
“We’re going to go back through the plans, we’re going to make sure we’re all still on the same page and get a bid estimate and go from there,” he said. “Ideally, you always want the bid to come in lower than what the estimate is. Some projects that works out, some projects it doesn’t.”
He said the discrepancy on the plaza project was “somewhat shocking,” but then the Buffalo Street project is complex so he said he shouldn’t have been too surprised.
Commission President Tim Meyer said with one estimate and one bid, “You don’t know which one is too high and which one is too low.”
Skinner said he and city engineer James Emans looked over the bid estimate and they had a “long conversation” about it.
“We feel like the estimates were based on the information they had at the time. They were comparable pricing, it wasn’t like the pricing wasn’t right. But, given the time of the year, given the current work force, and some of the things we heard from the contractors ... one of them was there’s no concrete workers,” Skinner said.
He said if they are going to do concrete work, a high price should be expected because there are no concrete workers available in the area and they’d have to be brought in from Chicago or elsewhere at $300 an hour.
“It’s unfortunate, but at the same time it’s good that the economy is good,” Skinner said.
He said the documents will be reworked, new bids will be sought with a larger time frame and hopefully all will be well.
Later in the meeting, Mayor Joe Thallemer said he sat in on the meeting with Skinner, city attorney Scott Reust and American Structurepoint Monday morning.
“What I gleaned from the meeting was that, indeed, the timing to try and find a successful bidder was difficult because projects were already underway. Doing it in June, late May or so, is difficult,” he said.
“The other part of it was the fact that this is a pretty specific and difficult type of project with IDEM requirements and pilings down in the lake. ... It was a pretty complicated project. It’s not going to draw somebody that does roadwork or maybe some cement work.”
It has a boardwalk with Indiana Department of Natural Resources requirements, a fountain and artwork. Thallemer said it’s a project that requires a little bit higher expertise that not everyone is going to bid on.
Thallemer said there also were issues with documentation that could have been better and that was discussed.
Skinner said the project involves different trades, including brick and concrete work, decking work, building the gazebo and a working fountain. “It’s a little bit more complicated,” he said. Some of the trades needed for that work right are non-existant right now, he said. The hope now is to build it out with a 2020 deadline.
Thallemer said, “To be fair to the engineering firm, the DNR held that permit. It was delayed because of the permit. We had to work with our state legislator to finally get some action on the permit, so that was another factor. And that was, really, what I think, pushed the bidding back to May.”
Skinner agreed, adding, “Quite frankly we got to the point where we basically told them we were ready to bid.”
He said, unfortunately, they probably waited two months too long.
Thallemer said they finally got the permit in mid-June, about a week before the bid was opened.
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The Warsaw Redevelopment Commission discussed the project before approving claims at its meeting Monday.
At the June 21 Board of Public Works and Safety meeting, the board rejected the single bid for the project from R. Yoder Construction Inc., Nappanee, for $1,996,692. City Planner said then that the bid was about a half million dollars more than what the engineering firm estimated.
The plaza will be near Center Lake on the north end of Buffalo Street and is part of the North Buffalo Street project, which includes upgrading the road and a housing development. The former Indiana American Water Co. building will become a mixed-use structure.
At Monday’s Redevelopment Commission meeting, member Rick Snodgrass said, “Based on the recent data on the plaza, the actual bid was one-third higher than American Structurepoint estimated. You indicated it could be, just a tiny, because everyone’s working ... but I think it would be prudent to mention to Structurepoint, because they’re working on our project, to be very careful with the estimates because I was shocked.”
City Planner Jeremy Skinner said it wasn’t the first time an estimate was off because “you do rest, on a certain extent, on (factors) that are somewhat complicated.”
He said, “We had a long conversation with them today to take the next steps in this project and move forward. So we’re working on it.”
Bid timing was not perfect, he said, “and the economy right now is robust to say the least so there’s more work than contractors, which is not helping us.”
Ten years ago, Skinner said it was great because you could bid a project out and have 10 bids and get great prices. “The down side of that is, when the economy is good, which we all want it to be, the prices are going to be higher because the work force is entirely depleted.”
He said he and other city representatives talked to American Structurepoint about some deficiencies in the documents themselves, which they agreed they could do a better job of addressing in the future.
“We’re going to go back through the plans, we’re going to make sure we’re all still on the same page and get a bid estimate and go from there,” he said. “Ideally, you always want the bid to come in lower than what the estimate is. Some projects that works out, some projects it doesn’t.”
He said the discrepancy on the plaza project was “somewhat shocking,” but then the Buffalo Street project is complex so he said he shouldn’t have been too surprised.
Commission President Tim Meyer said with one estimate and one bid, “You don’t know which one is too high and which one is too low.”
Skinner said he and city engineer James Emans looked over the bid estimate and they had a “long conversation” about it.
“We feel like the estimates were based on the information they had at the time. They were comparable pricing, it wasn’t like the pricing wasn’t right. But, given the time of the year, given the current work force, and some of the things we heard from the contractors ... one of them was there’s no concrete workers,” Skinner said.
He said if they are going to do concrete work, a high price should be expected because there are no concrete workers available in the area and they’d have to be brought in from Chicago or elsewhere at $300 an hour.
“It’s unfortunate, but at the same time it’s good that the economy is good,” Skinner said.
He said the documents will be reworked, new bids will be sought with a larger time frame and hopefully all will be well.
Later in the meeting, Mayor Joe Thallemer said he sat in on the meeting with Skinner, city attorney Scott Reust and American Structurepoint Monday morning.
“What I gleaned from the meeting was that, indeed, the timing to try and find a successful bidder was difficult because projects were already underway. Doing it in June, late May or so, is difficult,” he said.
“The other part of it was the fact that this is a pretty specific and difficult type of project with IDEM requirements and pilings down in the lake. ... It was a pretty complicated project. It’s not going to draw somebody that does roadwork or maybe some cement work.”
It has a boardwalk with Indiana Department of Natural Resources requirements, a fountain and artwork. Thallemer said it’s a project that requires a little bit higher expertise that not everyone is going to bid on.
Thallemer said there also were issues with documentation that could have been better and that was discussed.
Skinner said the project involves different trades, including brick and concrete work, decking work, building the gazebo and a working fountain. “It’s a little bit more complicated,” he said. Some of the trades needed for that work right are non-existant right now, he said. The hope now is to build it out with a 2020 deadline.
Thallemer said, “To be fair to the engineering firm, the DNR held that permit. It was delayed because of the permit. We had to work with our state legislator to finally get some action on the permit, so that was another factor. And that was, really, what I think, pushed the bidding back to May.”
Skinner agreed, adding, “Quite frankly we got to the point where we basically told them we were ready to bid.”
He said, unfortunately, they probably waited two months too long.
Thallemer said they finally got the permit in mid-June, about a week before the bid was opened.
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