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Archive for Thursday, April 4, 2013

Editorial: Bid interest

The fact that bids for work at the former Farmland Industries property came in vastly below city estimates raises questions about the estimating process.

April 4, 2013

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Is it a cause for celebration in the days ahead?

Bids for major contracts to develop the former Farmland Industries property have come in millions of dollars below city estimates. Plans are to convert the former fertilizer plant adjoining Kansas Highway 10 at the east edge of Lawrence into a well-designed, 400-plus-acre business park.

The accepted bid for street construction, water line installation and lot grading came in at $4.98 million, about 40 percent below the estimated cost of $8.16 million. A second project for installing sewer lines received a low bid of $601,089, compared to the city estimate of $1.41 million.

What was the basis, one might ask, for the estimates in the first place?

But, not to look this gift horse in the mouth, what do these results imply for the $25 million city recreation center? Infrastructure work at the Rock Chalk Park will not be put out for bid. Instead, Thomas Fritzel’s Bliss Sports will use its preferred contractors and negotiate pricing.

The catch is that the city has agreed to pay 100 percent of the cost of the recreation center building itself, and then pay for infrastructure work until the city’s total cost maxes out at $25 million.

The estimated cost of the rec center building is $19.9 million. If that’s accurate, the city’s contribution to the infrastructure bill would be $5.1 million, or about 38 percent of the $13.5 million total estimate for the work. But let’s say the estimate for the infrastructure is off by 40 percent and the work can be completed for only $8.1 million. The city’s $5.1 million contribution then would represent about 63 percent of the total cost of infrastructure improvements. In other words, the city could have a larger share of the investment than it had anticipated.

Does it make a difference? It may if you’re the developer.

Everything is speculation until the bids are opened.

Let’s hope that contractors remain hungry and that the city and the school district find their construction dollars will be going further than expected as bids are opened for major projects like the library, street reconstruction, and facilities included in the $92.5 million school bond issue approved overwhelmingly in Tuesday’s election, as well as the recreation center.

If the results of the Farmland bids are not a harbinger of things to come, then perhaps somebody needs to look again at how those estimates are calculated.

Comments

Bob Forer 1 year, 4 months ago

This is disturbing news, especially in light of the fact that the city came close to signing what was essentially a "no bid" contract on Rock Chalk Park. There is a sound and compelling reason for competitive bidding. Unfortunately, in their haste to ensure that Fritzel got the job, Coreless and company recommended to the City Commission that they approve the initial no bid arrangements with Fritzel.

Incompetence? Dishonesty and corruption? Or both?

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grandpaD 1 year, 4 months ago

The bidding process of estimating the costs is flawed and has been for quite some time. The city hires a whole staff of engineers and architects to do this work. Historically the bids are always off base. It begs the questions of: Are the experts padding the bids to make the final bid look better are is it truly incompetence. It seems to be both. Regardless the citizens take it on the chin when we pay the taxes we owe or pay for the bonds.

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