BridgeTower Media Newswires
The Metropolitan Council for the Twin Cities has tweaked construction documents for major work on the $1.858 billion Southwest Light Rail Transit project, but it remains to be seen if those changes will have the desired effect of reducing project costs.
In addition, a bid solicitation released Monday includes a list of 36 subcontractors who performed design and engineering work for the project and are thus disqualified from the construction contract to avoid conflicts of interest.
Met Council spokeswoman Kate Brickman said in an email that the design subcontractors are disqualified from the construction contract “in alignment with FTA [Federal Transit Administration] best practice” and a commitment to “maintaining a level playing field for all our contracts.”
The 14.5-mile Southwest Light Rail Transit line will run between Minneapolis and Eden Prairie.
The list of disqualified companies includes a number of disadvantaged business enterprises, or DBEs, which raises concerns about the contractor’s ability to achieve the council’s 16 percent participation goal for small companies and those owned by women and minorities.
The Met Council has “communicated to the joint ventures that are still considering bidding the work that those firms are now precluded,” noted Tim Worke, CEO of the Associated General Contractors of Minnesota.
Brickman said in an email that the Met Council believes there are “plenty of qualified businesses that can perform the duties required,” and that the council had provided contractors with a list of qualified DBEs in the region.
Three of the previous bids included subcontractors who had worked with the Los Angeles-based AECOM on the design contracts, Met Council officials said in September.
The civil-construction contract is being rebid after the Met Council had tossed four previous bids on the grounds they were too high or “non-responsive.” The work includes everything from bridge and tunnel construction to street lighting and underground communications. The bid amounts ranged from $796.5 million to $1.08 billion.
In an email on Monday to council members, Council Chair Alene Tchourumoff said that changes in the solicitation include shifting construction schedules to reduce the need for overtime and modifying the documents to increase “risk-sharing” with the contractor.
One example: The new bid documents increase the “Limited Notice to Proceed” amount from $65 million to $216 million, which means in essence that more cash for the project will be available upfront and the contractor won’t have to carry as much cost.
Meanwhile, the team that submitted the lowest price in the initial bidding is back at the drawing board, combing through the new 405-page civil-construction bid document that hit the streets Monday. The previous bid document was 295 pages long.
In August, the team of Burnsville-based Ames Construction and Plain, Wisconsin-based Edward Kraemer and Sons submitted the low bid of $796.5 million for the package. Other bids ranged from $807.888 million to $1.08 billion.
“Our team will make another effort,” Bob Beckel, Minnesota regional manager for Edward Kraemer & Sons, said in an interview Monday.
“They made an effort to put language in that may or may not decrease cost. We are just scratching the surface of the new language. It’s too early to tell if it is going to make a substantial difference,” Beckel added.
Dean Thomson, a lawyer in Minneapolis who represented Ames and Kraemer in protesting the Met Council’s decision to reject the bids, said the Southwest contract still presents a “very high risk” for contractors.
“It exceeds industry expectations on how risk is allocated, which of course affects prices,” said Thomson, a shareholder with the Fabyanske Westra Hart & Thomson law firm.
Harry Melander, president of the Minnesota State Building and Construction Trades Council and a Met Council member, said during a Met Council meeting in September that he wasn’t sure the new bids would yield a better price.
Melander sounded a bit more hopeful on Monday. Speaking in his capacity as president of the building trades, Melander said he’s optimistic there will be an “active bidding process” for the contract.
“This is a great project for the region and we need to get shovels into the ground, people to work, to build a great new regional asset,” Melander said.
The rebidding process adds four months and another layer of uncertainty to the project. The project is still on schedule for construction to start in 2018, but the opening of the line will be pushed into 2022 instead of 2021, according to the Met Council.
The revised timeline also delays the Met Council’s application for the full funding grant agreement from the federal government. The federal share is capped at $929 million.
Bids are due Jan. 9 and a contract is expected to be awarded in April.