10-06-2008 - Laserfiche WebLink

Commission Minutes-October 6,2008 3426 Mr. Berndt discussed unit price contracts. This type of contract includes estimated quantities of materials and contractors bid on unit prices for each line item. The bid price is used as a basis for determining the successful bidder, but the actual final amount paid to the contractor is based on the measured quantities used and paid at the unit price bid. He said unit price contracts are typically used on civil projects such as roads, bridges and dams, where exact quantities are difficult to determine prior to construction. Building construction contracts are typically completed with firm fixed price contracts, in which the contractor bids and is paid a fixed amount for completion of the project. He said the County Highway 17 project included 80 line items. With unit price contracts, as work progresses, units are measured and contractors are paid for actual quantities of materials used. While there are many advantages to unit price contracts, one disadvantage is that unlike fixed price contracts, with unit price contracts the final cost of the project may vary considerably from the estimated cost at the time the contract is awarded. He said his department's estimated quantities have typically been very close to the final measured quantities; therefore, the final price is close to the bid price. He said the objective on construction projects is to achieve quality construction within budget and on time. However, it has been his experience that if all three cannot be achieved, achieving quality construction is the best long term investment. Mr. Berndt provided status reports on various 2008 construction projects, including County Highway 17; Perley bridge; Highway 10 near the Tharaldson Ethanol plant; and Highway 10 overlay between West Fargo and Mapleton. Mr. Berndt said in May of this year, projected construction costs were $8.9 million. In June, the board approved a $1.3 million loan from the building fund to cover costs for 2008 with the stipulation the Road Department reimburse the building fund in 2009. Currently, projected construction costs are $10.3 million and he is requesting to borrow $2.3 million from the building fund. In order to cover the $1 million increase, he recommends canceling 2009 chip seal projects at a cost of $750,000 and the County Highway 31 overlay at a cost of $400,000. Mr. Berndt explained the reason for overspending his budget by $1 million-the majority of the costs were associated with the County Highway 17 project, including increased quantities needed for gravel base, asphalt and concrete as well as additional right-of-way acquisition costs. Mr. Pawluk discussed possible cuts to the 2009 budget to help pay back the building fund. He suggested the purchase of two trucks be deferred another year, which would save $385,000. He also suggested an external audit be conducted to address concerns about consultant estimates. Mr. Berndt does not object to either an internal or external audit. Mr. Wagner is also concerned about the $1 million overage on the County Highway 17 project, but supports the work of the county engineer. He questioned whether any liability falls on the consultant who prepared the estimates since they were not consistent with actual costs. He said the county has an obligation to pay contractors for work already completed on this project.