Aug 3,2007 - Tri City News
By Lara Gerrits The Tri-City News
Aug 03 2007
A contract isn’t written in stone when it comes to building multi-million dollar infrastructure projects in today’s hot construction climate.
A staff report to Coquitlam city council Monday revealed the new Chimo Aquatic and Fitness Centre — slated to open this December, more than a year after originally scheduled — will cost taxpayers $5.2 million (or 33%) more than the project’s post-tender budget of $15.5 million. Pre-tender, the project was estimated to cost $13.8 million.
And although a contract was signed between city hall and the contractor once the pool tender was awarded, there are allowances for the agreed-upon price to increase.
Early in the construction process, there were technical problems with underground infrastructure that both parties were unaware of, and thus, were not accounted for in the contract.
Remediating that problem took the project off its timeline and added to additional costs, such as securing tradespeople.
Council has approved three cost increase amendments, including the most recent figure released, said Edie Doepker, Coquitlam’s general manager of leisure and parks services. None of them has been made public.
Essentially, one major problem at the beginning of a development project can snowball right through to the end.
So what stops a contractor from low-balling its price during the bidding process, only to hike it up once the tender is awarded?
Nothing, Doepker said.
Some contractors will bid low on a project if they’re looking for a bridge between two jobs, she said, and there is nothing stopping them from doing that. But city staff examine bids “really carefully, line by line” and if one is quite lower than the rest, red flags are raised.
“We don’t automatically go with the low bid,” Doepker said. “We have a number of criteria that we evaluate bids by.”
During pre-bid meetings, city staff will go through each bid with its contractor to make sure everything is included and to discuss reasons for higher or lower costs (that is where a contractor may indicate its lower price is to secure work between two other major projects).
But it’s not like a contractor can arbitrarily increase its price once a contract is awarded; that can only happen if an element of the contract (such as the specifications of a site) turns out to be not what was signed up for.
To reduce such substantial cost overruns, however, the city is taking a new approach to major infrastructure projects — such as the expanded Dogwood Pavilion — by hiring a project management firm, which gets separate bids and contracts for each component of a project rather than hiring one contractor to do all the work.
That way, the city is “able to break it down and control each of these separately,” Doepker said.
The LEED (Leadership in Energy and Environmental Design) Chimo complex will include a six-metre lap loop, a leisure pool with three lanes, ramp access for people with disabilities, water spray features, a large whirlpool, a sauna and steam room, a 6,800 sq. ft. fitness facility and a wellness centre (to be leased to a private firm).
NOT AN ISOLATED PROBLEM
Coquitlam isn’t the only Lower Mainland city facing substantial cost overruns and delayed openings of major infrastructure projects.
The expansion and renovation of Port Moody’s rec centre has been marred by delays and cost overruns. Originally slated for completion in late 2006, the opening has now been pushed to January 2008.
As well, the latest cost estimate is about $26 million, up about $5 million from the price council originally approved.
Richmond’s new $178-million Olympic skating oval’s opening date has been pushed back to summer 2008 from its original October 2007 target.
And the Vancouver Trade and Convention Centre’s budget ballooned to almost $900 million this month — up about $100 million from its April estimate and $400 million from its initial estimate five years ago.