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C� <br /> SEH <br /> Building a Better World <br /> for All of Us' <br /> January 12, 2022 RE: City of Ramsey, Minnesota <br /> Water Treatment Plant Trunk <br /> Watermain Improvements <br /> SEH No. RAMSY 159783 14.00 <br /> Honorable Mayor& City Council <br /> City of Ramsey <br /> 7550 S u nwood Drive NW <br /> Ramsey, MN 55303 <br /> Dear Mayor&City Council Members: <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 Total Schedule 1 Bid Total Schedule 2 Bid <br /> 1 Park Construction Co. $617377287.45 $770597102.16 <br /> 2 Forest Lake Contracting, Inc. $7,6527529.55 $873917994.66 <br /> Engineer's Estimate $4,8757068.50 $479167194.50 <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 letter.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 1 800.325.2055 1 888.908.8166 fax I sehinc.com <br /> SEH is 100%employee-owned I Affirmative Action—Equal Opportunity Employer <br />