August 7, 2014 at 2:33 AM
Lansdale Councilman Jack Hansen said environmental engineers Hazen and Sawyer owe Lansdale more than just one more estimate – and a new one at that.
Hansen was more than disappointed in the fact that the State College firm’s original estimation of $2.627 million for capacity upgrades to the borough wastewater treatment plant – an estimation that made it into the borough’s capital improvement plan – was nowhere near even the lowest bid on the project of $4.5 million.
That bid came from Blooming Glen Contractors. The highest bidder was C. Associates, Inc. at $5.2 million. There were three other bidders: PACT TWO LLC, JEV Construction, LLC and Worth & Company, Inc.
“Part of the problem,” Hansen said during Wednesday’s Public Works Committee report at council’s work session, “is the low bid that came in was nearly double what Hazen and Sawyer had estimated, and this project has to be done … I’m disappointed in Hazen and Sawyer in letting the quality control of assessment falter. I seriously think they owe us more than just one more estimate.”
Nearly two hours earlier, the borough Public Works Committee – chaired by council Vice President Steve Malagari, who is joined by Hansen and Councilman Tom Work – had voted to reject all bids on the project and go out for new bids at a reduced cost of $770,500, based on the hindsight recommendation from Hazen and Sawyer.
The project will add and modify the facility – which treats 4.5 million gallons a day – to allow for more biological treatment, pipe replacement, and an expansion of the influent pump station.
At the public works session, the committee discussed with utilities director Jake Ziegler and wastewater treatment plant superintendent Dan Shinskie on what can be cut from the project now, in order to reduce costs.
“He told us what we could cut, but it has to be done in the future. It will wind up costing us more money when it’s all done,” Hansen said. “We have to look at this very, very closely. It’s not good for this to happen. We had a budget. If the estimated cost on the project was higher, we would have budgeted for it.”
During his report, Malagari said there were two options presented as cost-reduction measures: one proffered $1.1 million in cuts and a second proffered $770,500 in reduced costs.
“I asked deliberately if the reductions would put a damper on the actual overall effectiveness of the project. We are confident that we can still reach our goals, but some things have to be taken care of in the future.”
Borough Manager Timi Kirchner said Lansdale now had to be “penny wise, pound foolish.”
“We could come back and say, ‘Cut $1.1 million out,’ but it gets us penny wise, pound foolish. Now, we say cutting $770,000 is reasonable, but they have to be done in future,” she said.
Kirchner said a recent high flow study and project engineering added “certain parts to all of it that made sense in making the plant more efficient.” The $770,500 cut list lifted some time restrictions on construction, thus bringing down costs, she said.
“Those parts are what drove up the cost of the bid as it came in,” she said. “In my opinion … we could go for $1.1 million and move that out, but it makes more sense to do certain parts of the $1.1 million now, because to delay it means that much bigger of a cost of that item in the future.”
Kirchner said the pieces on the $770,500 cut list have to be done down the road regardless.
“I have great confidence that we can improve the capacity of the plant, including efficiency of the plant, significantly, in lieu of the fact that we have a much bigger customer coming into the plant now,” Kirchner said, citing Merck, who, as of July, was sending 400,000 gallons per day to the treatment plant.
“There is the potential of thousands more (customers) in the next several years. It’s important to improve upon capacity,” she said.
Kirchner said there would be no additional expense from Hazen and Sawyer to complete a second bid.
“We are taking advantage of low interest rates now in order to do things that weren’t done, that should have been done a long time ago,” she said. “The construction world is in good shape. Their costs can go up.”
Councilman Ray Liberto wanted to know if the shortfall was because of the cost of labor or cost of materials. Shinskie said a lot of it was labor costs, and Kirchner added that the borough was “spot-on as far as all the pieces and parts” it needed.
“Was labor cost the amount of hours or the rate of salary?” asked Liberto.
“That, we weren’t given an answer to. Also, the overhead profit was underestimated,” Shinskie said.
“It sounds like an ‘hours’ thing. You know labor rates,” Liberto said. “If you underestimate it by half, it’s a pretty big deal.”
“That’s not an oversight,” added Councilman Leon Angelichio.
Last year, Hazen and Sawyer reported in a high flow (read: heavy rain) study that the borough sought to gain more revenue by increasing its processing capacity versus increasing its storage capacity.
The high flow study showed that bottlenecks in the treatment process should be widened to increase efficiency, as well as making an existing storage tank into a treatment-and-storage tank.