Monday, September 08, 2008

Loose Debris on the I-10

From yesterday's T-P:


Two contractors hoping to build the next major piece of the ambitious Interstate 10 expansion have submitted bids 10 percent to 29 percent more expensive than the state's estimate for the job.
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James Construction Group quoted $35.6 million, and Boh Brothers Construction Co. bid $41.9 million. The state estimated the job to cost $32.5 million, but neither bid exceeds that amount by a margin large enough to scrap them and start over, Department of Transportation and Development officials said.


See how we get taken to the cleaners by the state contracting process? We need this road and the contractors know we need it. We're awarding contracts for individual sections of this road and quoting an estimate that we pre-allow to be exceeded by a certain amount. So construction companies like Boh Bros. and James Construction Group, both extremely politically connected, already know exactly how much they can screw us. We're locked in now to accepting bids 10%-29% above estimate.

Am I crazy?

Is it common practice in other states to publicly disclose the cost estimates? Doesn't it guarantee that many bids will come in right at the upper overrun limit and guarantee that the state constantly has to pay above their own estimate, especially for projects that will only see 2-3 bidders from the same local social/political/industrial circle?

4 comments:

Carmen said...

Two questions to ask are: when was the original estimate created by the state? This is a multi-year process. Gas and oil costs have increased, and oil products are used in such construction, I believe. Also, are the bids able to be negotiated on the part of the state? That would mean the necessity of scrapping them and restarting the process is less dire than implied by the article.

Clay said...

I've done a couple of estimates recently and they're tough right now. Commodity prices are rising so high it's impossible to completely factor them in. Asphalt, for surfacing, and steel, for rebar, have been incredibly unstable.

It used to be when you get a quote, you have a 30 days to evaluate it. Now, steel prices are so volatile, you get 7 days tops before you have to submit an order.

Honestly, project engineers are screwed right now when it comes to estimating projects. They're just too much play with too many numbers.

Clay said...

Eli,

You got an email for some offline comments?

-Clay

E said...

Clay, feel free to hit me up at eli dot ackerman at gmail dot com