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SEH <br />Building a Better World <br />for All of Us' <br />January 12, 2022 <br />Honorable Mayor & City Council <br />City of Ramsey <br />7550 Sunwood Drive NW <br />Ramsey, MN 55303 <br />Dear Mayor & City Council Members: <br />RE: City of Ramsey, Minnesota <br />Water Treatment Plant Trunk <br />Watermain Improvements <br />SEH No. RAMSY 159783 14.00 <br />On Tuesday, January 4, 2022, at 10:00 a.m., two (2) bids were received for the above -referenced project. <br />The bids ranged from a high of $8,391,994.66 to a low of $6,737,287.45 across two bid schedules. <br />Schedule 1 reflected a combination of open cut and horizontal directional drilling (HDD) installation <br />methods for PVC watermain construction while Schedule 2 reflected only the HDD installation method. <br />Contractor <br />Total Schedule 1 Bid <br />Total Schedule 2 Bid <br />1 <br />Park Construction Co. <br />$6,737,287.45 <br />$7,059,102.16 <br />2 <br />Forest Lake Contracting, Inc. <br />$7,652,529.55 <br />$8,391,994.66 <br />Engineer's Estimate <br />$4,875,068.50 <br />$4,916,194.50 <br />The low bid received was reflected in the Schedule 1 bid and was submitted by Park Construction <br />Company, of Minneapolis, MN in the amount of $6,737,287.45. This bid was approximately 38% higher <br />than the Engineer's Estimate of $4,875,068.50, mainly due to highly inflated PVC pipe costs reflected in <br />both bids. <br />Current volatility within the supply chain for components such as resin used for manufacturing PVC pipe <br />and labor challenges due to the pandemic drove pipe material and construction costs up substantially by <br />the end of 2021. If costs continue to rise in 2022, it will increase the likelihood of change orders as <br />contractors pursue claims to recover unforeseen costs not recognized in their bids. This will add <br />additional fiscal challenges for the project. The low number of bids received was likely reflective of the <br />highly inflated pipe material costs adding to the fiscal risk of prime contractor bonding for the work being <br />performed by a subcontractor performing the horizontal directional drilling component of the watermain <br />installation. <br />Accordingly, we recommend the project not be awarded at this time to allow material and construction <br />costs to be monitored during 2022 with the anticipation a rebid will present more favorable bids and <br />additional bidders. <br />Sincerely, <br />Chad E. Setterholm, PE <br />Project Manager <br />(Lic. MN) <br />ah <br />x:\pt\r\ramsy\159783\6-bid-const\_no recommendation of award Ietter.docx <br />Engineers I Architects I Planners I Scientists <br />Short Elliott Hendrickson Inc., 3535 Vadnais Center Drive, St. Paul, MN 55110-3507 <br />651.490.2000 1800.325.2055 1888.908.8166 fax I sehinc.com <br />SEH is 100% employee -owned I Affirmative Action —Equal Opportunity Employer <br />