The Kensington foot bridge over Ajax Coulee is one of four in the city part of a recent bid to complete maintenance and minor upgrades, though a single bid for the work is raising concerns about inflation and the effect of major grant awards on construction pricing.--News photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
City buyers and engineers are reconsidering some aspects of their construction projects as inflation and bids threaten to push budgets above the value of grants given to green-light COVID stimulus work.
Last week, council members expressed concern that only one bid was received for $1 million in planned bridge work, moved up thanks to the city receiving a wave of money for capital projects from other levels of government.
That bid came in an eye-popping three times higher than budget, but after closer examination included a host of optional work, inserted by the bidder, that was parred down by city purchasers.
Eventually a finalized budget of $1.04 million from Horseshoe Hill Construction was accepted, but council members quizzed administrators about the unusual circumstances and the potential of inflation to strain budgets.
“In some cases we went out with a certain scope, but in some cases had to do a reconsideration,” said Richard Connolly, manager of supply chain procurement in the city’s purchasing department, speaking generally with the News recently.
“We are seeing material – construction or just general supply – price increases. Right now we consider it a capacity issue due to COVID,” he said, adding contractors have “core competencies,” and working beyond that adds cost.
“It comes down to supply and demand.”
Coun. Brian Varga raised questions about having only one bid, while several others asked what effect inflation has had on bidding.
Coun. Phil Turnbull said higher prices for things like lumber and steel are well known, and considering governments green-lighting billions in infrastructure spending to aid the economy, it will likely get worse.
City administrators replied that contractor availability was being strained by the large amount of infrastructure spending across the province.
“Bridge work is a unique offering and (requires) some unique design and engineering skills,” said Pat Bohan, director of city assets. “It’s a troubling situation that we only have one bidder, but we’ve been successful in negotiating a reduction in scope … we’re comfortable moving forward will this.”
About $21 million in new projects were added to the city’s 2021 construction plan early this year thanks to provincial and federal grants meant to create jobs and bolster the economy coming out of the pandemic.
But, in the interest of getting more activity sooner, those projects must be complete by Dec. 31, leading to some worry that contractor availability might be stretched as well as increases in supply prices for wood, steel, concrete and other material. As well, contractors that have to add employees or pay overtime, or rent additional equipment to take on additional projects, add that cost into the bid.
In the case of bridge projects, much of the non-specialized work, like weed control and painting, was hived off the bid, and may proceed using general contractors at a later date.
Connolly doesn’t feel as though the changes will impact the ability for the city and its contractors to bring in quality projects.
It’s not the only city project that appears stalled in the bidding process.
Long-closed but yet to arrive at council are bids to extend trail networks and improve the local BMX track facility.
Bidding on the repaving and improvements on the 603 First Street parking lot, budgeted to cost $2 million, closed on June 10, with work set to begin in July.
Among $3 million in improvements at Athletic Park, work on a new shade canopy was tendered separately and bids were set to open June 3.
The expansion of city offices downtown was won by Wahl Construction with a $1.6-million bid for work budgeted to cost $2 million. However, what was billed originally as a second storey, now sees the facility expanding at ground level into a parking lot.
A winner and final design for a $2-million pickleball facility near the Family Leisure Centre is still out as well.
Bridge work consists of general repairs, some painting, concrete sealing and weld repairs at four locations, including Trans-Canada pedestrian bridge at Seventh Street, two bridges along Division Avenue that connect Riverside and Crescent Heights, and the Kensington foot bridge.
