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Bidding open on Southwest 6 and 7 areas of utilities expansion; High level of competition expected

By Staff | Mar 28, 2008

With builders starving for work, eight subcontractors will be competing for a slice of the Cape Coral utilities expansion project as bidding for the Southwest 6 and 7 assessment areas opens today at City Hall. The bids play a major role in determining how much residents will have to pay for their assessments.

The project has been repeatedly thrust into the spotlight with residents complaining about high assessments, allegations of bid rigging, multiple audits and a series of lawsuits. After assessments topped out at nearly $18,000 for a two-lot site in Southwest 4, the figures for the next project area dropped several thousand dollars.

MWH Program Manager Larry Laws believes that market conditions should make Southwest 6 and 7 extremely competitive.

“We are very optimistic, given the macro-economical situation in Southwest Florida, that we’ll get very competitive bids,” he said. “There just isn’t a whole lot of other work out there right now.”

Elected officials will likely be watching the bidding process with close scrutiny.

“I would expect the costs would come in well below the previous areas we’ve had,” said Mayor Eric Feichthaler.

Though the lack of work and high demand for construction jobs should drive down the bidding prices, Laws also acknowledged that some project costs have risen since Southwest 5 began.

Oil prices have been extremely volatile, still hovering above $100 a barrel for weeks with gasoline rising to more than $3 a gallon. Because construction will not begin until at least August, there is some uncertainty over material costs.

“Subcontractors are pricing in what they believe what fuel prices are going to be and what pipe prices are going to be,” said Laws.

After collecting the sealed bids, which are based on estimates of complete installation per linear foot, MWH representatives will announce the winning figure. But that guaranteed maximum price will not necessarily translate into the final cost.

“We make sure that we pay for every linear foot installed but not an extra foot,” said Laws. “We do a detailed audit to make sure that we pay for only everything that is actually installed.”

Southwest 6 and 7 are being treated as one assessment area for bidding and construction. The bidding process will last through May as subcontractors vie for each of the construction areas.

“For the design purposes there are 12 areas, but for construction purposes they grouped them into seven,” said Jennifer Thomas, a spokeswoman for MWH. “They just decided that it makes more sense to condense them.”

As the bidding wars begin today, it is far too early to determine what the average homeowner will be assessed.

“As the next seven weeks go on, they’ll have a better idea,” said Thomas.

Feichthaler said he will not support going forward with the project unless assessments come in well below those in Southwest 5 because of a rise in impact fees. He said the fees have tripled over the last several years and are directly affecting homeowners just as much as the assessments.

“Either the bids need to come in lower or the council needs to follow my lead and say these impact fees need to be reduced,” the mayor said. “It doesn’t matter how we save the money, we need to save it one way or the other.”

Today’s bidding on the west central area is open to the public at City Hall in Conference Room 220A.