Town of Cary
North Carolina

Staff Report

Cary Parkway and High House Road Intersection Improvements Construction Bid Award

Information

Department:Transportation and FacilitiesSponsors:
Category:Bid Award

Attachments

  1. Printout

Speaker:  Jerry Jensen, Transportation & Facilities

 

Executive Summary: The Town of Cary received a single bid for the Cary Parkway and High House Road intersection improvements project on August 10, 2017.  The bid received was substantially over the engineer’s estimate and budget.  Reasons that may contribute to the unusually high bid include: the difficulty of the project, risk associated with the project, and a variety of economic conditions in the workforce. The North Carolina Department of Transportation has also indicated that they would not concur with the bid award.  Staff plans to re-evaluate conditions prior to re-advertising this project for construction bids later this fall with construction anticipated to begin in Spring 2018.

 

Recommendation: That Council reject all bids for the Cary Parkway and High House Road Intersection due to the fact that bid prices received from the single bidder are substantially higher than the engineer’s estimate and over budget. 

Body

Background: The Cary Parkway and High House Road Intersection Improvements project has been advancing toward construction over the last ten years and was recently put out to bid.  This intersection improvement is complex for a variety of reasons. There are multiple risks associated with the project’s high profile location.  On any given day, the intersection accommodates about 55,000 vehicles per day.  In addition to these high traffic volumes, there are residential developments, approximately 40 businesses, six banks, churches, and a golf course that holds national events in close proximity.

 

Apart from the complexities that can be observed above ground, there are numerous underground utilities in this area which increases the difficulty and risks associated with this project. The Town has been taking care with preconstruction efforts to locate these utilities, however the full extent of these facilities will not be known until groundbreaking.   

Another factor that is affecting the bid market is the fact that this project lends itself to inefficiencies for the contractor. The project contains smaller quantities and tighter work areas than a larger widening or new construction project due to the nature of the turn lane widening.  Construction was also scheduled for the winter season, based on requirements of our municipal agreement with NCDOT, when weather conditions are not ideal for construction activities and construction material production. Staff has been working with NCDOT to achieve more flexibilities if it becomes necessary.

 

Contractors consider these factors while bidding on projects in order to minimize losses and ensure profitability. 

 

The current economic environment also adds complexity to the project.  Some municipalities, particularly in Wake County, are having difficulties receiving competitive construction bids for street projects.  As construction work, both public and private, continue to pick up, employment rates are still below pre-recession levels.  This worker shortage is a contributing factor to higher construction bid prices and lower number of contractors available to complete the work. These issues are not isolated to Cary.  We have contacted the City of Raleigh and Town of Holly Springs both of which stated that they have also experienced difficulties in bidding projects.

 

In the current economic environment, contractors are able to bid on other projects throughout the area that may not be as risky based on the factors explained above.

 

Discussion: The Town of Cary held a bid opening on August 2, 2017 and only one bid was received.  Per General Statue, a second bid opening was held on August 10, 2017 and again, only one bid was received.

 

Bid Result Summary

 

 

Total Amount Bid

Percent Difference from Engineer’s Estimate

Engineer’s Estimate

$2,197,136.70

-

S.T. Wooten Corp.

$3,275,995.00

49%

 

The one bid received is 49 percent over the engineer’s estimate and more than the remaining balance of the project. 

 

As a federally funded project, NCDOT has to concur with the bid award.  NCDOT has indicated that they would not concur with the bid award due to the fact that it is considerably over the engineer’s estimate.

 

Fiscal Impact:

 

Operating

As State maintained roadways, the street and asphalt will continue to be maintained by the NCDOT.  Cary will continue to be responsible for sidewalk maintenance. 

 

Funding

A total of $3,920,000 has been appropriated to the ST1231 Cary Parkway and High House Road intersection improvements project to date.  Due to the congestion improvements provided by this project, Cary has been able to leverage Federal Congestion Mitigation and Air Quality (CMAQ) funding through the Capital Area MPO’s LAPP Program to provide about 76% or $2,976,000 of the funding. 

 

Encumbrances/expenditures to date total $861,353 leaving an available balance of $3,058,647 to address the bid award.

 

Based on current estimates, due to increased construction costs and unforeseen utility conflicts, approximately an additional $1.5 million will be needed to complete the project.  CAMPO has a policy which allows requests for additional funds (at a 50/50 split of the additional funding needed) on LAPP Projects that come in over budget.  We will pursue that funding when we rebid and more exact construction costs are known.

 

Next Steps: In an effort to receive more competitive bids, staff will review plans and project specifications and make appropriate changes in an effort to attract a higher number of potential bidders.  It is anticipated that the project will be re-advertised this fall with construction beginning in Spring 2018.

 

Various private utility owners will continue with relocating and adjusting their facilities in advance of construction including, AT&T, Charter, Duke Energy Progress, and Celito.  Staff will continue to coordinate these relocation efforts and manage utility conflicts as they arise.