TRANSMITTAL LETTER FOR BOARD MEETING OF AUGUST 14, 2008
COMMITTEE ON PURCHASING
Mr. Richard Lanyon, General Superintendent
Title
Authorization to increase cost estimate for Contract 01-103-2S, 39th Street Conduit Rehabilitation Phase I Bypass Tunnel, Stickney Service Area (SSA), in Chicago, Illinois, by $49,500,000.00 from $93,200,000.00 to $142,700,000.00, Account 401-50000-645600, Requisition 1240087
Body
Dear Sir:
On April 17, 2008, the Board of Commissioners authorized the Purchasing Agent to advertise Contract 01-103-2S, 39th Street Conduit Rehabilitation Phase I Bypass Tunnel, SSA, in Chicago, Illinois, for bids at an estimated cost of $93,200,000.00. The contract was advertised on May 7, 2008 and two bids were received at the bid opening on July 22, 2008. A report on the rejection of bids is being filed at this Board meeting.
The design engineering firm, Consoer Townsend Envirodyne Engineers, Inc. (CTE), reviewed the contract documents and cost estimate and adjusted the following four areas of the cost estimate. The revised estimate of the contract is $142,700,000.00.
1. Commodity/Inflation - The recent dramatic cost increases in the energy sector and commodities heavily dependent on energy for their productions likely contributed to bidders’ increasing their prices for fuel, electricity, concrete and steel.
2. Labor - The base union wage rates were reviewed and adjusted and labor hours were increased to account for unknowns that are inherent to deep underground construction.
3. Productivity - The cost estimate was adjusted to reflect a more accurate rate of the tunnel boring machine advancement and tunnel lining placement.
4. Bidding Climate - Due to a large amount of ongoing tunneling work nationally, the availability of tunnel boring machines and experienced tunneling crews is low. Bidders may have adjusted their production schedule to perform work toward the latter part of the 4.5 year contract duration. The cost estimate was revised to account for the higher prices for materials and labor due to cost escalation over time.
It is hereby recommended that the Board of Commissioners authorize the Purchasing Agent to increase the cost estimate for Contract 01-103-2S from $93,200,000.00 to $142,700,000.00.
Requested, Joseph P. Sobanski, Chief Engineer, NV:MLV
Recommended, Darlene A. LoCascio, Purchasing Agent
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Purchasing
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for August 14, 2008