Contractors: High Bids on Project Are No Surprise

From NNY360

OGDENSBURG — A spokeswoman for the state chapter of the national Associated Builders and Contractors, Inc., said City Council members should not be surprised that bids for the city’s wastewater treatment plant came in over estimate.

“It’s not shocking, this is a pattern that we have seen with public works projects across New York state that are bid with project labor agreements,” Amanda Bertram, vice president of public affairs for the Empire State Associated Builders and Contractors, said. “Across the board, they all come in millions of dollars over engineering estimates. This is a trend.”

On Aug. 15, Ogdensburg City Manager Sarah Purdy reported that the city had received three bids for the estimated $35 million wastewater treatment plant. The apparent low bid was from Jett Industries of Colliersville and was more than $6 million over estimate. The high bid was more than $10 million over estimate. The only local bidder, Perras Excavation of Massena, had the middle bid, which was $6.5 million over estimate.

Ms. Bertram met with City Council in November of 2018 and said that a pre-existing agreement with organized labor, known as a project labor agreement, would not result in the financial savings and local job creation touted by union officials.

The small number of bids on the project, the Associated Builders and Contractors said in a news release issued Friday was due to the PLA.

The PLA is a pre-hire agreement requiring the bulk of the workforce comes from unions.

“Unions only account for 21 percent of the construction workforce across New York,” the news release states. “Therefore the PLA on this project effectively bars the majority of New York contractors, many of them local to Ogdensburg, and their workers from bidding and winning work that their own tax dollars fund.”

When Ms. Purdy released the bid figures, she noted that the bidder claimed the PLA helped keep labor costs down.

“EDR (the city’s consulting engineering firm) has told us that, in reviewing Jett Industries’ submitted bid with Jett Industries officials, EDR was told that the project labor agreement is helpful to them in creating labor cost efficiencies,” Ms. Purdy said.

An expert on construction costs and the bidding process Paul G. Carr told the Times in an earlier interview that the number of bids has more to do with the cost of a project than labor agreements.

Mr. Carr, former chief executive officer of Bernier Carr and Associates, an engineering firm in Watertown and an adjunct associate professor of civil and environmental engineering at Cornell University, said that what affects a project more than a project labor agreement is open and fair competition.

Mr. Carr has studied, as a major area of his research, the relationship between bidder participation and construction costs. The conclusion of his study is, “the greater the bidder participation, the lower the bid prices.”

A PLA restricts bids, Mr. Carr said. If a municipality restricts bids it can expect a cost penalty.

Ms. Purdy said the city is working with its engineers to see how the project can be altered to make up the difference between the money the city has secured for the project and the bid prices

Brian Sampson, president of the EmpireChapter of Associated Builders and Contractors said, in a news release, taxpayers will spend more, but get a lot less.

“As we’ve seen in previous PLA projects, major concessions to the original plans had to be made due to inflated costs,” Mr. Sampson said. “With a massive, multi-million dollar shortfall between the estimated project costs and the lowest bid, something has to give.”

In November of 2018, the city’s plan was to have work on the plant begin in May of 2019. That deadline was jettisoned to do the PLA study.

Ogdensburg has been under a Department of Environmental Conservation order to modernize its wastewater treatment plant for several years.

Constructed in 1965, the plant was partially updated most recently in 1978.

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