OCEAN CITY – Evidence of an ongoing trend with major resort infrastructure projects coming in with price tags well over what was budgeted, resort officials last week approved a pump station replacement in Montego Bay that came in over $1.1 million what was anticipated.
In July, the Mayor and Council opened bids for the Montego Bay wastewater pump station, the lowest of which was still considerably higher than what was budgeted. The Montego Bay wastewater pump station serves a large swath of the north-end residential community and is in dire need of replacement.
When the bids were opened in July, the lowest bid of two submitted for the project was $3.4 million, for a project budgeted at $2.3 million. The second bid came in at over $4 million. The council at the time voted to remand the bids to staff for a review and come back with a recommendation.
Last Tuesday, Public Works Director Hal Adkins came back to the Mayor and Council with a recommendation to accept the low bid at $3.4 million, citing given the current economic climate there was no reason to expect the cost to come down in the near future.
“We wanted to pause and take a closer look at this project before coming back to you with a recommendation,” he said. “The original budget for this project was roughly $2.3 million. The lowest responsive bid came in a $3.4 million, which is close to a 45% overage.”
Adkins said he and staff went back to the contractor for further discussion and looked for ways to maybe trim some of the cost for the project, but there was simply no wiggle room in the final bid estimate.
“We took a moment to talk to the contractor and we took a closer look at the documents,” he said. “We have no reason to believe inflation is going to come down any time soon. There is no interest on our part to shelve this project because I don’t believe there is any way to save any more money.”
Adkins explained the Montego Bay pump station replacement was critical and is one of the busiest in the town’s network of pump stations. When the bids for the Montego Bay pump station were opened in July and it was evident they were way over budget, there was some brief discussion about putting the project on hold and rebidding it at a later date. At the time, Adkins cautioned against waiting and reiterated that point last Tuesday.
“You have all heard watershed,” he said. “We monitor sewer-shed. This pumping station serves that entire neighborhood. In addition to that, the average daily flow at the station is 2.4 million gallons per day. In my career, we have rebuilt every single pump station, and this is the last one on the list.”
Adkins pointed to key members of his staff in the audience and explained how they were able to bring the fiscal year 2022 wastewater department budget in under what was projected by a considerable amount that will be directed to cover the substantial overage in the Montego Bay pump station project.
“With their good work, and the closing of the books on fiscal year 2022, they will be returning roughly $800,000 to the wastewater fund which will support this $1.1 million overage,” he said. “With that, I would like to award this project to the contractor in the amount of $3.4 million.”
Council Secretary Tony DeLuca made a motion to accept Adkins’ recommendation and award the Montego Bay pump station project to the contractor who submitted the lowest bid, despite it being $1 million over budget.
“Given the critical nature that this is a must-do project and the fact you can cover almost all of the overage out of wastewater fund balance and some other residual funding, I’ll make a motion to award the base bid of $3.4 million to the low-bid contractor,” he said.
The council voted unanimously to approve the recommendation to award the project to the lowest bidder.
