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Bid accepted for pipeline project

Staff Writer

The Pagosa Springs Sanitation and General Improvement District board voted last week to accept a bid from Hammerlund Construction Company for work on a pipeline and pumping stations needed to deliver wastewater from the town’s current lagoon site to the Pagosa Area Water and Sanitation District’s Vista treatment plant.

Art Dilione, special projects manager for Bartlett & West, the company tasked with handling the bidding process for the town, sent a letter to both town manager David Mitchem and Gregg Mayo, special projects director for PAWSD.

The letter, dated Nov. 19, explained how the project was originally bid on Oct. 2, but all of those bids came in well above the engineer’s estimate as well as the project’s budget, so those original bids were rejected and the project was rebid on Nov. 12.

“Bartlett & West’s engineering estimate of probable construction cost was $9,182,528.60,” Dilione’s letter continued. “The low bidder for the rebid was Hammerlund Construction with a bid of $9,100,000 for all three projects. This is 1% under our estimate.”

According to a spreadsheet accompanying the letter, the project consisted of three parts: force main 1 and pump station 1 (FM1-PS1), force main 2 and pump station 2 (FM2-PS2), and a water transmission main.

While the first two parts of the project concern the transfer of wastewater from PSSGID to PAWSD, the third part of the project deals with a pipe for potable water and is only the concern of PAWSD.

Seven other companies also submitted bids — Smithco ($10,428,640.50 total for all three parts), Velocity ($10,429,524.10), Crossfire ($10,433,199.60), K. R. Serdferger ($11,339,664.00), RMS ($11,635,100.50), Spiess ($12,319,523.00), and AUI ($12,500,667.30). Only four companies had submitted bids for the first go around.

“Bartlett &West’s estimate for the Wastewater Conveyance portion was $6,578,905.55,” Dilione’s letter stated, “and Hammerlund’s bid was $6,853,000.00. This is within 4% of our estimate. The other bids ranged from slightly over $10.4 million to $12.5 million. Bartlett & West’s estimate for the Water Transmission Main was $2,603,623.06 while Hammerlund Construction bid $2,247,000, which is 14% under our estimate.”

Dilione’s letter concluded with an evaluation of Hammerlund’s ability to complete the project. “Their project listing indicates that they have performed similar work before and should be capable of constructing the Wastewater Conveyance Project. All of Hammerlund’s references we contacted indicated that Hammerlund was a good to very good contractor, good to work with, had no issues with them on their projects and would allow them to work on other projects. Based on the information provided and comments received, Hammerlund Construction appears to be capable of performing this work in a competent manner and we were not told of any reasons why they should not be awarded these projects.”

Two hours before last week’s town council meeting, Dilione conducted a work session with Mitchem, Mayo and several others, including former town council member Mark Weiler. Weiler had volunteered to lead a committee to oversee the project, and was the first to speak during the subsequent presentation to the PSSGID board after the town council meeting.

The town council and the PSSGID board both consist of the same members.

“I want to thank the mayor and the town for asking me to work on this project three years ago,” Weiler began. “When I look back at my journal, the original projection was that next month was going to be the first flush. It’s taken a little bit longer and the journey has been a bit more arduous than what we had anticipated.

“The pipeline committee met earlier today to review all the bids with the engineer, and our unanimous recommendation is for the general improvement district board to award the contract to the low bidder, Hammerlund Construction for six million, eight hundred and fifty-three thousand dollars.”

Board member Tracy Bunning asked if there had been any changes made to the specifications of the project or if it was exactly the same for both sets of bids. Dilione explained there were a couple slight modifications concerning the removal of rock from the trenches and the pre-cast building structures.

However, Dilione went on to explain the timing of the first bidding process and how it set this project up in competition with everything that was going on along the Front Range after the flash flooding disaster in September, claiming contractors were getting paid top dollar for those emergency reconstruction efforts.

“I have also talked to CDPHE (the Colorado Department of Public Health and Environment) about Hammerlund,” Mayo added. “They are aware of them and they didn’t have any issues with them, based on their experiences in the past.”

“When this project was presented to the board originally,” board member David Schanzenbaker said, “it was sold on the basis of it being cheaper than a wastewater treatment plant. I looked back at some old minutes and 4.7 million dollars was the worst case scenario at the end of 2011. Now, when we get our construction bid, it’s 6.85 million? It doesn’t sound to me like it is going to be any cheaper than a treatment plant.”

However, none of the rest of the board was willing to explore the idea of going back to the drawing board to reconsider building a new wastewater treatment plant. “Personally, I think we are at the point of no return,” board president Ross Aragon argued.

Board member Tracy Bunning argued that even if the cost of a treatment plant came in less than the pipeline it would still be better to utilize the Vista Plant versus having a treatment plant in the downtown area, while board member Darrel Cotton expressed his belief that, with inflation, the cost of building a new treatment plant would also be quite a bit higher than the original estimate.

Board member Clint Alley asked when the project would get underway and if all the land acquisition issues had been taken care of. Mitchem explained the contractor would be ready to start breaking ground as soon as the weather allowed in the spring. He also promised that procurement of easements was underway, with survey and title work in the process of being completed, and would be finished in time for the contractor to get started.

“Another element of the issue,” Mitchem concluded, “is we have set aside and returned the financial package for an engineered plant, which we had negotiated with the USDA. If at this time we went back to an engineered plant as an option, we are starting over, not only from a financial point of view, but we are starting over in getting approval from the health department for a new set of plans.

“We would have to go back to the water authority and the Department of Local Affairs to reestablish loans and grants for an engineered plant rather than the pipeline. If this board made a switch back to an engineered plant it’s likely that would be a year to eighteen month process. At this point, what we have before us is a little less than the engineer’s estimate for an engineered plant. At this time it is prudent to move forward (with the pipeline).”

Alley questioned the logic of giving the contractor the go-ahead to get started when all of the easements are still not finalized, but Mitchem promised the easements would be in place in time and would not hold up the project, while Dilione explained the contractor has been given a deadline of Oct. 1, 2015, for the pipeline being ready for the first flush, so he needed to get started as soon as possible.

Cotton made the motion to award the sewer pipeline contract to Hammerlund Construction for $6.853 million, and to allocate $1.2 million from the district’s reserves to cover any shortfalls. Volger seconded, but before it went to a vote Schanzenbaker asked for an explanation of the reserve allocation.

Mitchem explained that DOLA had offered the town a grant for $1.25 million, the state water authority had offered a loan of $2 million, PAWSD would chip in over $2.8 million towards the financing, and the best estimate was there would be a shortfall of $1.2 million. However, the district had $1.5 million in reserves.

PSSGID director Gene Tautges reassured the board there were no outstanding issues concerning the district or its current equipment that would require a substantial draw on the districts reserves to repair or replace.

When Aragon asked for a vote on Cotton’s motion, Schanzenbaker was the only one to say “Nay.”

Afterwards, Tautges clarified there would be additional expenses related to the project, such as legal expenses for securing the land easements as well as the cost of running electricity to the pumping stations. These costs were not included in the project bid, and the $1.2 million was set aside to cover those or any other unforeseen costs.

ed.fincher@pagosasun.com

This story was posted on December 2, 2013.