Drainage Repair Bids Awarded
Bidding was close for a drainage repair project let by the Palo Alto County Board of Supervisors on Tuesday morning. The repairs to Drainage Districts 80 and 175 were necessitated by high water levels from flooding that occurred in 2008, and will be paid for by the Federal Emergency Management Agency. Palo Alto County Drainage Engineer Don Etler opened four bids for the work during a bid opening, with two of the bidders present for the opening.
“As this is a FEMA repair project, we are required to get at least three bids on the project,” Etler noted. “We invited five contractors to bid on the project, but Holland Contracting of Forest City elected not to bid. However, the four bidders who replied are all highly qualified and reliable contractors.”
Etler divided the bid into two sections, the first being for repairs to DD80, with an engineer’s estimated project cost of $196,586.99. The second section, repairs to DD175, had an engineer’s estimated cost of $32,659.50, for a total joint project estimated cost of $229,246.99.
L.A. Carlson Contracting of Merrill submitted bids of $232,462.30 for the DD80 project and $36,280.00 for the DD175 work to total $268,742.30.
Reding Excavating and Gravel of Algona submitted bids of $258,560.00 for the DD80 work and $39,912.50 for the DD175 project, with a total cost of $298,472,50.
A bid from Reutzel Excavating of Burt totaled $195,480.70 for the DD80 work, and $23,796.50 for the DD175 project, for an overall bid of $219,277.20.
The final bid, from Valley Contracting of Estherville, bid $192,015.00 for the DD80 project and $31,530.00 for the DD175 project, for a total bid of $223,545.00.
“You do have the option of dropping the DD175 project from this and trying to negotiate with your contractor for a better price, but you cannot split the project,” Etler told the board. “It would probably be best in this case to award the bid based on the total bid price, and it would appear that Reutzel Excavating has the low bid.”
After a quick check of figures matched the bids, Etler recommended the Reutzel bid be accepted for the project. Supervisor Ron Graettinger introduced that motion, which drew a second from Supervisor Jerry Hofstad as the board approved the motion unanimously.
At that point, Lynn Carlson of L.A. Carlson Contracting asked the board about the county’s stamped warrants, a topic that had been broached in previous conversations by Etler to the board. “How set are you folks on the three percent warrants you offer? My bank will not touch them, and my bid here reflected that.”
Eric Anderson, owner of Valley Contracting, was quick to agree. “That’s that same deal for me. That’s why I was edged out. Three percent is tough to market. Valley is holding a lot of warrants, but not many at three percent.”
“We’re in a bid letting down in Webster County later today and they are offering their warrants at seven and a half percent,” Carlson noted. “I have no problem getting rid of those warrants, but a three percent one, my bank would discount it five percent, so it would cost me eight percent total. They’re talking about inflation coming soon and a three percent, these warrants won’t be worth anything to anybody.”
“What would you suggest as an interest rate on warrants?” Hofstad asked the pair.
“Five percent” was the unison answer from both Carlson and Anderson.
The contractors thanked the board for the opportunity to bid and left, bringing the meeting to adjournment.