R96-118 ACCEPTING THE BID AND AUTHORIZING A CONTRACT

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The contractor was uestioned as to the relative dis r i n I� q p oport o ate deduction for Alternate B as compared to Alternate A. His response was that Alternate B is the most difficult section of pipe because of the flow velocities and the steepness of the pipe. These factors are considered to represent the greatest risk and challenge to bypass the flows and maintain an acceptable work environment. Staff has assessed the relative project budget implications and economic considerations based on the contractor's offer for an alternative bypass method. The attached tables were prepared as part of this process. The following statements summarize the information contained in the attached tables: 1. The estimated project costs, including engineering, for Alternative A with the deduction for the proposed bypass option is $853,030 or $111,030 over the approved budget. 2. The estimated project costs, including engineering, for Alternative B without the deduction for the proposed bypass option is $665,820 or $86,180 under the approved budget. The estimated project costs, including engineering, for Alternative B with the deduction for the proposed bypass option is $642,70 or $99,030 under the approved budget. 3. The estimated project costs, including engineering, for the deferred section of pipe to be rehabilitated in the year 2001 is $364,573 based on bypass pumping method and $351,723 using the proposed internal bypass method. 4. The estimated project costs, including engineering, for the deferred section of pipe in the year 2001 ranges from $959,736 based on a discount rate of 4 percent to $1,025,526 based on a discount rate of 8 percent. The corresponding difference between the present worth of these alternatives to Alternative A is $172,496 at 4 percent and $106,706 at 8 percent. This indicates that it will likely be more expensive in the long run to defer a portion of the project. Based on this economic comparison it would be to the City's advantage to complete the entire project at this time. Staff and BGM have an interest to proceed with the entire project at this time, but the funds to cover the estimated project overrun are not readily available. This relates to the current fiscal year being only 4 months old and the uncertainty in estimating the underrun on projects not yet started and estimating City revenues for the remainder of the year. Due to the poor condition of a major portion of the sewer, a deferral of the entire project until next Spring is not recommended. Therefore, it is recommended by staff that Alternative B for the Lower Broadway Sewer Rehabilitation be awarded to the low bidder, Parkway Construction Company, at their low bid price of $619,320.00 and that a change order for a deduction to the contract amount be negotiated with Parkway Construction Company for a modified bypass method.