City to split high school construction contract

The city will split construction work on the planned high school in the Mendenhall Valley into two parts to attract more bidders, especially from Southeast, and gain some time in a very tight schedule for an August 2006 opening.

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The plan is not without financial risk, city Engineering Director Roger Healy told city and school district officials in two meetings last week. But if it works out right the city could save money and local contractors could get more work, he said.

That would mean more jobs for Juneau residents, contractors said.

Local contractors hire locally because they're familiar with the workers here, so the wages would stay in Juneau, said Wayne Coogan, owner of Coogan Construction of Juneau.

Originally, the city was going to ask for bids by early May on one overall construction contract.

But under the latest schedule the city would seek bids by early April to clear and prepare the ground for construction, for about $6 million. Then it would seek bids for the general construction work by early June, for about $39 million.

"I think that's a great idea," said Chuck McGraw of McGraw's Custom Construction in Sitka. His company often bids on Juneau projects.

"It definitely would work for more people being able to bid the project," he said.

The 218,700-square-foot, two-story school at Dimond Park will house up to 1,070 students. Of its $63 million budget, about $45 million is expected to go toward construction. The state will reimburse 60 percent of the total cost.

A limitation on contractors' ability to bid on projects is the amount of money they can be bonded for. Bonds, sold to contractors by insuring companies, assure the building's owner the work will be completed and subcontractors will be paid.

The smaller the contract, the more the number of companies that can bid on it without bumping against their bonding limits or tying up all their bonding capacity.

"It lets the little guy have a shot at it," said Max Mielke, business manager for the United Association of Plumbers and Pipefitters Local Union 262 in Juneau. He was thinking of general contractors, who oversee the project, and subcontractors, who do specialized work.

"It brings the cost of the job down because they sharpen their pencils a little more. There's a more competitive bidding process," he said.

But there can be downsides to splitting the work between two contracts, city officials cautioned.

It's not unusual for building owners to split up the ground work and the construction, but the construction often follows by nearly a year, Healy said. In this case, the building's construction is scheduled to begin six to eight weeks after the site work.

"Once you move them close, your risk goes up," Healy said.

If everything goes smoothly, the general contractor would be able to put in a foundation, erect a steel skeleton and largely enclose the building earlier than under a single contract.

"We're able to get the steel into the air six to eight weeks earlier than we would have otherwise," Juneau architect Paul Voelckers said.

The risk is the contractor preparing the site might not complete its work on time, delaying the general contractor's work to enclose the building before winter sets in, Healy said.

That possibility could cause general contractors to increase their bids to cover the higher expense of anticipated winter work, Healy said.

Or delays could cause conflicts with the general contractor, which might seek more money from the city to cover unexpected changes in working around problems.

On Thursday, Healy presented the Juneau School Board's Facilities Committee with the pros and cons of delaying the building's construction for a year and opening the school in August 2007. He repeated his presentation Friday for the city and school district officials who are planning the school.

Healy called an August 2006 opening "tight but doable."

The planning team agreed for now to work toward a 2006 opening. But it will revisit the issue in March, when construction drawings will be nearly complete and there's a new cost estimate.

Delaying construction for a year would have a cost, mainly about $750,000 in anticipated inflation, Healy said. But the city might be able to recoup that from its interest on the bonds that are paying for the project.

"I think the community would like to see this building built in their lifetimes," School Board member Alan Schorr said Thursday. "Putting it off for a year raises flags I would not like to see raised."

• Eric Fry can be reached at efry@juneauempire.com.