Bids to build NOAA center higher than expected

Costs may delay area's biggest construction project in years

Posted: Wednesday, June 05, 2002

Higher-than-expected bids could change when and how a federal fisheries center at Lena Point is built, officials said.

Cornerstone Construction of Anchorage was the apparent low bidder with a $42.5 million bid for the National Oceanic and Atmospheric Administration project. The construction estimate was $36 million.

Bids were opened May 23 in Seattle with Haskell Corp. of Bellingham, Wash., bidding $47.1 million, and McGraw Custom Construction of Sitka bidding $48.5 million, according NOAA.

The bid totals include the main project, plus additional work to do blasting for a University of Alaska Fairbanks fisheries center planned nearby. Project engineer Ken Bircher said NOAA has 60 days from the bid opening to award or cancel the project. Officials in Washington, D.C., are reviewing the options and will make the decision, he said.

"We could split it and award part of it to the low bidder, assuming we'll get more money in the future," he said. "They'll have to be rather confident that they'll get more. Or they could put the project on the shelf and hold it or just cancel it."

Putting the project on hold for a year may increase the project cost, or decrease it, depending on market conditions, he said. The total project cost for the center is $50 million, including design, project administration and contingency funds, according to NOAA.

The 69,000-square-foot federal fisheries research center at Lena Point will include offices and laboratories for about 100 National Marine Fisheries Service employees, many of whom work at the Auke Bay Laboratory. Plans called for construction work to start in July and be finished by spring 2004.

NOAA has asked for a report from the consultants who prepared the estimate, Bircher said. Higher bids likely stem from higher estimates from subcontractors, he said.

"Early indications are that everyone is really busy," he said. "If everyone is real busy, things get put on the back burner. ... It costs more to do a project if it's not primary work."

The NOAA bids were opened the same week the Juneau Assembly approved a contract for renovations at Juneau-Douglas High School to Coogan Construction, a Juneau firm, that exceeded projections by $2.8 million. Meanwhile, much of the work on a $41 million renovation and expansion project at Bartlett Regional Hospital is scheduled to start next spring.

Chad McGraw of McGraw Custom Construction said timing, along with the scope of the fisheries center project, contributed to the costs. Subcontractors see bigger risks with a project the size of the fisheries center, he said. And there are a limited number of mechanical and electrical subcontractors available to bid on larger projects, he said.

"It's been a extremely busy year for Alaska construction," he said. "To have it bid in late spring, early summer drives the project (cost) up. They're already busy."

Cornerstone Construction Co. declined to comment on the NOAA project. Officials at Haskell Corporation couldn't be reached.

Richard Cattanach, executive director of Associated General Contractors of Alaska, said the trade association is analyzing construction projects across Alaska this year to compare bids with estimates. Higher insurance and bonding costs have affected the construction industry nationwide, he said.

An estimate is an owner's guess as to what a project might cost, while a bid comes from a company that is willing to put its money on it, he added. "Sometimes we're assuming the estimate is correct and frequently it isn't," he said.

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