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Bond 1995
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Bond News - February 29, 2000
A BID BELOW BUDGET DOESN'T MEAN MONEY'S LEFT OVER
When a construction bid comes in under the target budget, it doesn't necessarily mean there's money left over to reinstate building features originally cut to meet the target. Consider the recent bid for the Student Services Building, for example. The successful bid was $3,748,270, and the board-approved "target" budget was $3,944,842. It's tempting to assume there was $196,572 left over, but there wasn't. The reasons why illustrate the complexity of funding major construction projects.
First of all, after the target of $3,944,842 was established, $210,420 was added to make sure the building met ADA requirements, and then another $17,154 was added as an energy management incentive, bringing the total target to $4,172,416. Prior to going out for construction bids, the bond project manager identified $361,940 in labor and materials that could be performed, or purchased by the college. These "owner-supplied" items were therefore excluded from the contract document on which contractors bid. Since the owner-supplied items would be paid by the bond, the $361,940 had to be subtracted from the total target, leaving $3,810,476 as the conceptual target by which contract bidding would be gauged (whether the bids were "high" or "low" relative to the target). The successful low bid was $3,748,270, only $62,206 less than the conceptual target, and much less than the $196,572 which appeared to be "left over," if you didn't know all the details. The $62,206 is not available to add back features for three reasons. First, the money needs to be available to cover any unanticipated construction expenses during the project.
An example of such an expense on another project is the more-extensive-than-predicted rock removal for the Science Building site preparation. Second, the money needs to be available for any "change orders" that occur during construction. An example of a change order, again from another project, was when a parking lot had to be re-excavated to create a stronger base for parking at the Welding Building. Third, the Facilities Management Committee has adopted the position that when a project goes out to bid, it has been determined that the project meets the minimum requirements of the organization(s) and users involved. Minimum requirements cannot change for purposes of construction after a project bids. FMC decided that any money left after construction, unanticipated expenses, and change orders, will be returned to the bond general contingency account. The FMC then allocates this fund as it deems appropriate. The Bond Project Management Team hopes this helps explain how bond funds are allocated, and why money isn't necessarily available to add back features when a bid comes in under the target budget. If you have further questions, please contact Bond Project Manager Bob Mention, at Ext. 2747.
Questions and comments about any bond construction activity may be directed to 744-4154 or e-mailed to bond@lanecc.edu. All communication received will be regularly reviewed by the Bond Project Management Team (BPMT), the architects, and the Facilities Management Committee.
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