A Lawrence-based construction company would land a $600,000 contract to install new water lines serving new and existing businesses at Lawrence Municipal Airport — unless city leaders decide to tap into a federal jobs-creation program to help finance the work.

If the city opts to back the project using federal bonds, the contract instead would cost $646,000 and go to an out-of-town contractor: Emery Sapp & Sons Inc., based in Kansas City, Mo.

Officials opened bids for the project Tuesday and, as of Wednesday afternoon, no final decision had been made about which way to go.

“It’s tough,” said Chuck Soules, the city’s director of public works. “We just have to figure out how we want to do this.”

R.D. Johnson Excavating Co. Inc. has submitted the lowest bid for the work, at $599,901. But that’s only if the project would be financed using bonds backed by local funds generated through utility bills paid by Lawrence water and sewer customers.

But if the city takes advantage of available federal bonds — allowing the city to save on interest costs, then pay the debt using money from utility bills — Emery Sapp would get the job. That’s because Emery Sapp’s $646,000 bid is the lowest one that complies with federal requirements, which stipulate that projects using federal bonds include higher wages for labor.

Roger Zalneraitis, the city’s economic development coordinator/planner, crunched the numbers Wednesday and determined that, at least so far, a financial case could be made for going either way.

“It’s a dogfight right now,” he said, looking at a spread sheet showing that one option might save the city as much as $8,000.

Or not.

“It’s close enough, when you factor in all the interest payments and projected payments over 20 years … that just some little changes can sway it back and forth between the two,” he said. “It’s a tough call right now. Some of this may come down to some qualitative decision-making.”

The decision already has been made to extend water and sewer service to an area of the airport where new businesses would be expected to locate, a move designed to add jobs and tax revenues to the city’s economy. Last month, commissioners were told the project would be expected to cost about $1.1 million.

Douglas County commissioners already have agreed to extend the city as much as $2 million in federal bonds for the project, money that would allow the city to recover 45 percent of its interest payments.

City commissioners will be expected to review the low bids — either R.D. Johnson’s using local funds, or Emery Sapp’s backed by federal bonds — during their next weekly meeting, set for 6:35 p.m. Tuesday at City Hall, Sixth and Massachusetts streets.

If commissioners decide not to take advantage of the federal bonds, the money could be used later to finance extension of sewer lines to the airport.

The city also has applied for a separate federal grant that could pump $500,000 into either project, without any requirement for paying it back. Officials expect to hear back about that application “any day now,” Zalneraitis said.