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H2. Award Bid - Sand Shed3 201 P Avenue East PO Box 1997 i Kalispell, MT 59903 �I .. Phone: 406-758-7720 RBU � dPW. P R` 1VI£N Fax: 406-758-7831 www.kalispell.com Ipublic_works dixul-IM, 011111011 Date: March 14, 2017 TO: Doug Russell, City Manager FROM: Susie Turner, PE — Public Works Director, Mark Crowley - Construction Manager SUBJECT: Sand Shed Project MEETING: March 20, 2017 BACKGROUND: The Sand Shed is a planned Capital Improvement Project which will replace a deteriorating and undersized aggregate shed that has exceeded its useful life. The project is located at the City maintenance yard on First Avenue West. The current sand shed is undersized; both in its capacity and height. With Kalispell's growth, the decades old shed is no longer adequate to store the volume of sand and gravel that the City is required to keep on hand for regular road maintenance and emergency repairs. Bids were received and opened on March 9, 2017. Five responsive bids were received from local contractors. The bid results are as follows: Contractor Total Bid Price Outback Construction $190,000.00 Camas Creek Contracting $197,080.00 Davidson Construction $225,300.00 Kramer Enterprises, Inc. $260,516.00 The Construction Group Montana, LLC $272,921.89 Engineer's Estimate (after structural additions) $110,100.00 The low bid submitted by Outback Contraction was $80,000 over the Engineers Estimate. In reviewing bid prices with the local engineering firm there are several reasons for the cost difference between the bid and the engineer's estimate including: • The engineer's estimate was prepared over 14 months ago. Since that time the Kalispell area has experienced vigorous growth in the construction sector which has resulted in increased costs for local labor. • National growth has resulted in increased prices of raw materials like cement, which is a major component of this project. • Structural additions applied in the design phase to concrete foundation and walls due to soil conditions raise the cost. The Public Works Department has made efforts to keep the prices low by completing initial excavation and resurfacing with Department personnel. Unfortunately, these internal city tasks did not prove to be sufficient enough to produce lower bid costs. References for Outback Construction were contacted and interviewed. Outback was determined to be a responsible contractor successfully completing projects of similar size and scope in Northwest Montana. FISCAL EFFECTS: Design and construction funds totaling $103,084 were allocated in the FY 17 budget under line item 921 Sand/Cold Mix Storage Shed and split evenly between the stormwater, water, sewer, and special streets funds. The original budget included $7,900 for engineering and $95,000 for construction totaling just under $103,000. To date the remaining allocated money in line item 921 is $98,184. There are alternate budget sources available for this project to be completed in FY 17 in the sewer, water, and special streets funds under line item 922 Forest Service Building. Since the purchase and renovation of the Forest Service Building will not be utilized in this year's budget, those capital funds are presented to cover the difference between the low bid and the budgeted amount. The following is a breakdown of the funds available to support the construction and engineering inspection of the sand shed in FY 17. Line Item Stormwater Water Sewer Special Streets Total 921: Sand/Cold Mix Storage Shed $24,546 $24,546 $24,546 $24,546 $98,184 922: Forest Service Building $32,612 $32,612 $54,360 $119,584 Total FY 17 Funding $217,768 STAFF RECOMMENDATION: Award the bid for the Sand Shed Project to Outback Construction in the amount of $190,000. ACTION REQUESTED: Motion to award the bid for the Sand Shed Project to Outback Construction in the amount of $190,000. ALTERNATIVES: Motion to reject awarding the sand shed bid to any contractor due to budget limitations. A proposal for new appropriations for the sand shed construction would then be included for the FY 18 budget and the project would be rebid in the fall/winter of 2017/2018. Other alternatives as suggested and approved by the City Council.