Negotiations with the contractor on a planned Montana Avenue Water Main Project were able to cut more than $100,000 from its proposed cost.
But that was not enough to move the project forward.
In the City Council meeting June 3, the council members unanimously decided to reject the only bid they have gotten on the project. Instead, it will be put out for a rebid with the hopes of getting more savings with multiple bidders.
According to Shannon Hewson of Brosz Engineering, the project bid was more than $500,000 over the assessment.
In addition, Western Municipal told Hewson just prior to the meeting that they would be able to come up with another $100,000 cut in costs.
“With that, we are still over the estimate by approximately $383,000,” he told the council. Funding wise, that meant that with a $5 million loan allocated from the county and other grants, would meet the costs, but it was over the original estimate for the project.
That small margin was just too small of a cushion for the city to take a chance with, council member Brittany Hoversland said. “I don’t think that is enough cushion. I am sure that there are other contractors.”
Hewson did admit that the city’s list has five prime contractors and that they did not get a bid from all the contractors on their list. He added that if the project was put out for a rebid, the completion date would have to be pushed back until the next year.
According to the mayor, the project could be put out for rebid as early as July. “We could see if we could get something going for the next year, given a better bid pool than where we were sitting at.
“With everything going on, it has just been hard,” Mayor JoDee Pratt said.
The grants in the project funding would be available through June 2023. “Basically, you’d have the 2022 construction season. If you chose to rebid, you’d have to push the project back one year, at least to 2021, Hewson told the council.
In addition, there would be some additional costs to rebid the project, but not much, he explained.
“The cost savings, if you got a better bid, would offset that,” he said. “But there is no guarantee to get a better bid.”
He added that he was still standing by his original estimate for the project of $4.25 million. “That is what I believe the costs would be.”
He also explained that in recent talks with the Montana Department of Transportation, they had told hom that the costs on municipal projects had come 25 to 30 percent over budget in the last three years. “We are approximately 10 percent over budget at this point.”
Council member Pat Ehret warned there was a problem with waiting. “If you wait longer, it is always going to get higher. So, we have to think about that too,” she said via telephone.
“Anything above the $6.35 million would have to come out of our regular operating funds,” Steve Zachmann said. “We would have to budget for that.”
With the second cut of $100,000 before the meeting, the project was under the budget limit, according to Hewson. “With their new proposed price, you are at $6.32 million, so you are under that ($6.35 million) and that includes $465,000 in contingency... or 10 percent of my original estimate. But is it a fair bid or not when you only have one bid?”
The mayor said the project is a priority for the city. “I know this is a project that has to go forward, but I also know that we need to watch what we spend. If we could put this out again... I am thinking to take that chance to try to rebid versus just taking this because this is the only bid we have got.”
The council also unanimously passed a motion for Brosz Engineering to prepare for the rebid of the Montana project.