Haywood commissioners reject lone jail construction bid
Haywood County still needs its proposed $21.5 million jail expansion, but an unexpectedly high bid from the lone construction bidder has temporarily derailed the process — a delay that could become costly.
“We actually posted the notices that were required through the LGC [Local Government Commission, for permission to borrow] not to exceed $25 million. We thought we’d actually build some buffer in there if prices came in over our estimates, and then lo and behold, when we did open the one bid we received. It was about $28.1 million,” said Bryant Morehead, Haywood’s county manager, during a March 20 meeting.
Kris Boyd, assistant county manager, said that by receiving only one bid, which came from Hickory Construction, there would be no way to compare the price with offers by other companies. Boyd offered commissioners two options moving forward. The first is to simply rebid the project.
“One of the problems potentially with rebidding is asking contractors to hold a price on equipment for the duration of the construction, which could be 12 to 18 months,” he said. “With the fluctuating market, I think we all know that prices change most of the time weekly, but at least monthly. We think that’s one of the reasons the bid was inflated, to try to be able to guarantee those prices by the end of construction.”
The other option, Boyd explained, is “construction manager at risk.”
Called “CMAR,” the procurement procedure involves a general contractor setting a guaranteed maximum price after the contractor and the county look through the subcontractor bids for instances of price gouging, waste or other costly practices.
Commissioner Tommy Long pushed back on Moseley’s initial $21.5 million estimate, asking how they could have got it so wrong.
Dan Mace, vice president of Moseley Architects, said their cost estimators provided the estimate based on the drawings the county paid for, and that he felt it was reasonable at the time.
Mace agreed with Chairman Kevin Ensley that the $28.5 million bid was “way high” and also that it was “gouging” when Ensley pointed out that the bid price for concrete was 351% over estimate, site grading and drainage 255% over estimate and site water and sewer 272% over estimate.
“We’re in the midst of runaway inflation, contractors are picking their jobs and naming their price,” Long said. “There’s only so much concrete and rebar out there, and like you say, they want to stay closer to home to do their projects because there’s low-hanging fruit right in their own county, and you got all this ARPA funding floating around over the country, still COVID relief money floating around all over the country, and we’re just in a severely inflated climate right now.”
Commissioner Jennifer Best pushed for the CMAR option, saying it would hopefully result in more bids that would “proof out” the first one.
If additional bids continue to come in way over expectations, that just might reflect a new market reality and cause commissioners to rethink the entire project — especially in light of an as-yet undetermined tax hit the county will take when the Pactiv Evergreen paper mill closes in the next few months.
“I had a little heartburn to be honest with you over the $21.5 million,” said Commissioner Brandon Rogers. “It was hard to swallow because we had started out thinking it was going to be even lower than that, actually two different times. It’s a little tough for me at the $21.5 and here we are at $28.5. With that, and the economic impact we’re going to have at the mill, it grabs ahold of your heart and puts it on pause for just a second.”
Right now, the county has about $1.26 million into the project, including the needs assessment study, geotechnical work, a site plan, and right of way issues — all necessary components of any major capital project.
Morehead said that jail overcrowding costs the county money the longer the jail expansion isn’t in operation.
Last year, it was about $33,000 in fees the county paid to other counties to house its prisoners. That doesn’t include fuel costs, wear and tear on vehicles and pay for the law enforcement officers charged with operating the transport service.
Mace told commissioners that any new bid process would take a minimum of three months, and that his company wouldn’t charge the county anything additional for going through the process with them.
That timeframe torpedoes a planned meeting with the Local Government Commission over borrowing authority and could also have an impact on the county’s financing options — Truist, the county’s preferred financing agency, had only guaranteed its interest rates through mid-April. Since the guarantee, rates have only gone up.
After commissioners rejected Hickory’s bid, Morehead said he’d work with Mace to get the process back on track.