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<br />including project contingencies, construction services and specialty inspection, is approximately <br />$870,000. <br /> <br />In order to understand the reason for the difference between the engineer's estimate and the bids <br />received, staff held a meeting with Albay Construction Company, the apparent low bidder for <br />the project. The contractor presented his itemized construction cost to illustrate his construction <br />estimate; the contractor's profit markup for the entire project was 5-6%. The largest <br />discrepancy was for one item of work, (Division 16 & 17 Electrical and Instrumentation). The <br />contractor mentioned that the supply and demand for the specialty items was driving up the <br />costs for these items. <br /> <br />Based upon this meeting, City staff has decided to combine this project with the anticipated S-6 <br />Sewer Pump Station up-grade project as a single construction contract, and seek additional <br />funding for the subject project to reflect future anticipated construction costs. It is also hoped <br />that by combining with the future S-6 sewer pump station, we will be able to gain some <br />economy of scale to help reduce our level of future construction costs. In addition, staff will <br />investigate the potential cost savings of procuring pump station instrumentation equipment <br />separately for both the S-5 and S-6 rehabilitation projects. <br /> <br />The final design of S-6 rehabilitation has not yet begun. Bidding for a combined S-5 and S-6 <br />construction contract is anticipated to occur in fiscal year 2007/2008. <br /> <br />Respectfully Submitted, <br /> <br />k?A. 0 L-. <br /> <br />Rob Wilson <br />Director of Public Works <br /> <br /> <br /> <br />Nelson Fialho <br />City Manager <br /> <br />Attachment: Bid Summary <br /> <br />SR 06:255 <br />Page 2 of2 <br />