Prince Edward County Council has received and accepted a modified tender offer worth $8.7 million for the construction of a new water tower in Wellington.
Only one bid was received in response to the request for tender (RFT). This was from Landmark Structures Co. to the tune of $10,070,000 plus HST. In the staff report, this is noted as being “over the allocated capital budget.”
“The bid price was reviewed to identify specific items that exceeded the estimated value. The exceedances were then discussed with the bidder to find alternate construction methods and efficiencies which would reduce the cost. A Post Tender Addendum was issued that specified alternate construction methods and removed any items that did not impact the function of the water tower. The bid price was reduced by $1,352,600.00 to $8,717,400.00 plus HST,” wrote Garrett Osbourne, Project Manager with the municipality.
The revised bid price is $992, 72.15 which is, according to the report, over budget when combined with the non-construction costs and including a construction contingency.
The RFT also included the supply and installation of a permanent bulk water filling station as a provisional item. The tender price for the bulk water station was $284,600.00 plus HST which is available separately within the capital budget for this project.
Councillor Maynard had some questions for Osbourne about what was done to bring the cost of the bid down. She also asked whether it was customary to only receive one bid for projects of this nature.
“With the bid that came in, we were significantly over budget. Could you give me a summary of what we removed to lower the cost,” asked Maynard. “To that end, we had one bid-is this what we can expect in these sorts of tenders?”
Osbourne reminded Maynard there were two parts of the water tower project, the bulk water station and the tower itself and that the former project is within the budget.
“There were two parts of this project. The bulk water station was a separate capital project from the water tower itself. The water station did come in within the budget,” Osbourne explained. “As far as the water tower, the construction value came in a little over 10 million. The total capital construction budget was under $9.2 million, so we did need to reduce that because in addition to the $10,000,000 we would also have the non construction costs including site inspection, staff wages etc.”
Osbourne added a reduction in cost was arrived at by examining efficiencies and paring down costs not associated with basic functioning of the water tower.
“We did look at areas where we could reduce the cost. We achieved that in two ways. For one, by reviewing discussions with the bidder we were able to find efficiencies in how the tower is constructed. For example, we revised the foundation design. It’ll be better suited to the bedrock in that area. By revising the foundation design, it will be more cost effective and provide the same design parameters,” said Osbourne. “One thing we also looked at was handling of material on site. It was determined there’s low level contaminants on site, so what we are proposing to do is use of the on site material instead of paying to truck it off to a receiving site to be processed. We will be reusing some on site as a noise and visual berm so we’ll incorporate that into a landscape plan.”
Osbourne was careful to add that the function has not been compromised despite finding these efficiencies.
“As far as the bids, it was not unexpected to receive one bid. Landmark Structures is highly regarded in the water tower industry. They essentially invented the composite elevated water tower design. They construct most towers in North America,” Osbourne explained. “I think it’s a good sign that they did bid on one of our towers. That’s a positive. As far as the price itself, there are a few reasons the price went up. Site specific items such as contaminants in ground water and soil that we will have to deal with. Then, the price of materials has gone up. Unfortunately, the water tower is not immune to that.”
He further added that, based on all factors, he believes fair market value has been met for the water tower and is recommending construction proceed.
In speaking to Osbourne, Councillor Brad Nieman took issue with the cost of the generator associated with the water tower.
“I’m just wondering, was there any other option than a generator? I will say UPS’s. How come we’re not using those? They’re cheaper,” inquired Nieman.
Nieman explained a UPS is a battery pack wherein if the power goes out, it will provide the power for the analyzer, lights etc.
“It’s very small. We use them at work and a lot of other municipalities do the same. Then you aren’t spending the money on the generators as well as the room for the generator and the noise pollution from it, though I know some today have sound barriers,” said Nieman. “You can still hear them. The neighbours will hear them and may complain because they’ve never had that noise before. Has that been looked at?”
Osbourne responded that the generator was decided upon due to the large electrical load associated with the water tower. He also noted that it would not be running constantly-only when the power went out.
“When discussing the generator with our consultant, I think it was due to the electrical load that triggered the need for a generator. We did look at taking some of those items off to reduce the size of the generator but a few key items, such as the recirculation pump, are the main drivers and even if we deleted some of the smaller items, it didn’t reduce the electrical load enough to dramatically reduce the size of the generator required,” said Osbourne. “We looked at the noise being generated and there is a sound proof enclosure on the generator. We have located it on the opposite side of the water tower from the residential properties to mitigate some of that noise. The generator is not a diesel generator. It is natural gas, so that’s a contribution to keeping the noise down and it is ultimately for emergency back up power so it will only run in the event of a power outage.”
Nieman asserted the generator was still unnecessary and noted it would need to be run at least once a month to make sure it’s working.
“The generator may only run once a year but you still have to run it at least once a month to make sure it will work,” he said. “I’m a little confused as to whether the generator is really needed….I don’t’ agree with it.”
Ultimately, the report and recommendations were accepted by council.