Council approves contracts for Convention Complex

CEDAR RAPIDS - The City Council on Thursday unanimously approved the main construction contract bids for the $75.6-million Convention Complex project despite bids for electrical and mechanical work coming in substantially higher than pre-bid estimates.

Project manager John Frew, a principal with Frew Nations Group, emphasized to the council on Thursday that certain pieces of a project may be over the pre-bid cost estimates but the project can remain under budget.

Even so, in approving bids Thursday for the project's general, electrical and mechanical contracts, Frew told the council that the project budget would need to eat up nearly all of its $3 million contingency fund in approving the three main construction contracts.

Council member Chuck Wieneke said using up most of the contingency fund - $266,583 will remain in it after the contract approvals on Thursday - before actual construction really started was “very bad business.”

Council member Don Karr noted that the Convention Complex involves renovating the 32-year-old U.S. Cellular Center arena as well as building a new convention center next door, and Karr, a longtime plumbing and remodeling contractor, said surprises always emerge in a renovation for which a contingency fund is needed.

“I'm concerned,” he said.

Council member Kris Gulick said the project remains within budget despite the unexpectedly high bids for electrical and mechanical work. But he said the project must work to stick with its overall budget.

“We may have to make some tough decisions on the budget for this project. Some trade-offs. We need to know we may have to do that,” Gulick said.

Frew told the council that his firm would look for ways to rebuild the project's contingency fund as the firm makes purchasing choices during construction. He and Kris Nations, also a principle at Frew Nations Group, thought that some savings could come in the project's budget for furniture, fixtures and equipment.

The cut into the project's $3 million contingency fund would be less deep except that the council agreed to several project add-ons totaling $734,185, according to Frew Nations Group figures, as part of the general, electrical and mechanical contracts.

After the meeting, Frew said the add-ons were essential to the project and included an outdoor canopy over the convention center entrance, roof screening to hide the heating and air conditioning system from view and special arena sports lighting.

Frew and Nations told the council that the pre-bid estimate for the project's electrical work was not as off from the actual bid as thought last week.

They noted that the published pre-bid estimate of $4.4 million for the project's electrical work should have been $2.6 million higher to include a technology bid package that had been incorporated into the electrical work. Contractors included the technology package in their bids, but the city's pre-bid estimate did not, Nations said.

Even so, the low base bid for the project's mechanical work was about 45 percent above the estimate and the low base bid for the electrical work was 14 percent above the adjusted pre-bid estimate.

Frew told the council that the project would be delayed four to six months if the council chose to change the project's features so the mechanical and electrical contracts could be rebid.

Even then, Nations said he feared that the project's current low bidders could move on to other of several other building projects in the city and the bid prices on the Convention Complex would be no better than now.

Mayor Ron Corbett noted that such a delay would prevent the city from completing the arena part of the project in time for the girl's state volleyball tournament in the fall of 2012. Missing the deadline, he said, could cause the city to lose the tournament for good, an event which brought $2 million in spending into the city in 2010, Marilee Fowler, president/CEO of the Cedar Rapids Convention and Visitors Bureau, told the council.

Frew said he was not asking the council to approve the construction contracts so the project would meet the deadline, but he said it wouldn't meet the deadline if they contracts were delayed.

In fact, Frew said other issues could surface that would prevent the project from meeting the volleyball deadline, but Corbett quickly intervened to emphasize that the project is on schedule.

The council's votes on Thursday awarded the project's general construction contract with add-ons to Miron Construction Co., which has an office in Cedar Rapids, for $28,273,698; the electrical contract with add-ons to Paulson Electric of Cedar Rapids for $8,437,635; and the mechanical contract with add-ons to Modern Piping Inc. of Cedar Rapids for $10,917,000.

Nations reported that the project has saved a total of about $1 million in costs over pre-bid estimates on steel and demolition and the general contractor's base bid was about $2 million under the pre-bid estimate.