When one firm’s estimate to handle Hollister’s new sewer plant’s
second phase came back 36 percent under the next lowest bidder, one
of those competitors protested an immediate approval and got its
wish when leaders delayed a decision this week.
When one firm’s estimate to handle Hollister’s new sewer plant’s second phase came back 36 percent under the next lowest bidder, one of those competitors protested an immediate approval and got its wish when leaders delayed a decision this week.
It’s a valid and necessary examination considering the significance of getting this project done the right way and on time.
When Shimmick Construction Co. questioned the low bid, asking for another look at Overaa’s $8.7 million projection, the firm did the community a service by prompting the Hollister City Council on Monday to delay an approval until July 16.
The remaining four bids for the phase – the building of storage ponds – came back ranging from $13.6 million to $14.3 million. The city had estimated a much higher figure for the phase at $20 million, so the numbers, as a whole, are refreshing.
Not that the company did anything wrong, but before committing such a hefty chunk of taxpayer dollars to Overaa, a few cautions arise that officials undoubtedly will consider further.
First, how much could Overaa’s price tag rise once the project gets going and if the firm realizes its costs are much higher than estimated? Second, can the firm provide the same level of anticipated, imperative quality than the other bidders? And finally, was there simply a miscommunication of expectations?
It’s no secret that contracted projects’ estimated costs often rise as construction progresses, prompting staffers to go back to elected officials to ask for more money. It’s just part of the construction business. Sometimes costs change or unexpected problems arise.
Officials must, however, minimize the potential for ballooning costs by ensuring such bids accurately represent the best estimate possible.
City officials say delaying this decision won’t affect the phase’s timeline or Hollister’s ability to finish the overall project and get the state’s building moratorium lifted. So there’s no reason to rush an approval, and council members made the right decision by delaying it.
City staff members, appropriately, plan to meet with Overaa representatives to scrutinize the bid with a finer-tooth comb. We expect the two sides to analyze in particular the larger discrepancies, such as Overaa’s $792,000 bid for pump stations and pipelines – with the other four estimates ranging from $2.8 million to $3.6 million.
The project is too urgent and too fragile to have regrets later, and another look should give taxpayers peace of mind that Overaa and its $8.7 million projection is the right choice.
For the future, government leaders should consider whether a standard rule could be developed prompting more detailed examinations for such cases when project estimates so broadly vary.
