Today is Wednesday, August 16, 2017

Questions abound with new LHS bid

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First, all the bids originally submitted were rejected due to a technicality in the bid requirements by the State. The Architect stated the bid envelopes were required by State of Tennessee Annotated Code to contain not the mechanical contractor licensure information but rather the geothermal information on the exterior of the envelope. The Architect stated this requirement was not known until just days prior to the bid due date and it did not allow time to issue an addendum requiring this new information on the envelope. While it is industry standard to not issue addenda less than 3 – 7 days prior to the bid date due to the time required to get the information to and quotes from the sub-contractors, in this instance it would have been acceptable to send out this addendum. This was minor in nature and only required a change of information on the envelope not a change in bid price and could have been sent the morning of the bid or the bid could have been postponed a few days to allow time for the new information to be provided properly. Also, the Architect should have NEVER opened the bids without the required information on the envelope; this is also a State Law. Now we have waited nearly two months to receive the new bids and look at how much time has been wasted. All this did was to allow bidders to see what each other’s bids would be. Interestingly enough, Hewlett-Spencer did not bid originally.

In the Oct. 3 issue of the Lebanon daily newspaper, it was reported that three bids had been submitted on Oct. 2 for the new LHS. Two of these bids were for $55 million and $56.5 million, a difference of 3 percent, a very acceptable difference in bids on such a large amount. However the third bid from the construction manager firm Hewlett--Spencer was for $48 million, a difference of 12.5 percent from the next lowest bidder. My professional experience tells me there is a problem with this lowest bid because there is such a huge difference between this one bid and the other two. Normally this difference is due to something being left out of the bid or reduction in the quality of materials meaning the materials bid will not meet the specifications of the contract documents. This is not an apples to apples bid.

In the same article, we find Steve Hewlett quoted as saying “. . . our value engineering approach is $6.9 million less than the lowest price submitted to the county today using an alternative process.” What does this mean? Value engineering is an industry term that simply means the owner, architect and contractor look for various ways to reduce the cost AFTER the bid or quote is provided to trim cost from the project. The reduced costs are normally changes in quality of materials and /or building size. It appears from Mr. Hewlett’s statement that his firm has taken it upon themselves to change the specifications of the materials to reduce their bid. Keep in mind that since the original bids were rejected they and all other contractors knew the approximate bid prices for the revised bids since the original bids were opened. Since it appears Hewlett-Spencer has changed the specifications and will “shop” the bids out after they awarded the contract, their bid should be THROWN OUT! The only way their bid should be retained is if they guarantee to build the facility for their bid price with the quality of materials and design standards as specified in the contract documents by the Architect.

After reading another article on Oct. 10 about the higher specification standard used for the roofing system, I decided to ask sales representatives in Lebanon and Nashville about the LHS bid and the specifications in particular. All have told me the quality of materials and design standards are far higher than those used at Wilson Central or Mt. Juliet High Schools. On the surface this appears to be a good thing, however, what it has allowed is for the original rejected bids and the bids of those bidding the project as specified to be artificially inflated so as to make the bid by Hewlett-Spencer appear to be such a great bargain for the County. This has been accomplished by the two higher bidders bidding the higher standards at higher cost while the lowest bidder has bid per their previous experience and substituting less costly materials and standards. For example, the lighting design standard for the football field produces a light level that is almost equal to NFL requirements far exceeding the light levels at Wilson Central and Mt. Juliet. Will Hewlett-Spencer provide this same light level in their reduced cost? Lighting representatives have told me they have already reduced their costs and will not reduce the cost further without a change in specifications. The same is true for doors, hardware, electrical systems and interior lighting systems.

So what is a construction manager? Under Tennessee Law a construction manager is not required to be a licensed general contractor. So who is the licensed general contractor for the Hewlett-Spencer bid? Is it Hewlett-Spencer or another entity? In Tennessee only a licensed general contractor or the owner may obtain a building permit. Also, a construction manager does not save the overhead cost because you still have the fee for the construction manager on top of the fee for the general contractor and the other major sub-contractors. The only savings is through a reduction of quality and/or quantity by the construction manager by that person being the entity in charge of all items from site selection to program requirements to architect selection to material standards to size of facility. Give any person or entity a blank canvas and a blank check and they can provide the construction for a facility at guaranteed maximum cost he or she develops. Why does our County continue to use this method when other Counties are moving away from this?

If you think our facilities are to the standards of our surrounding county facilities you should go tour them some time. If you compare the schools in Rutherford and Williamson County that were built at the same time as Wilson Central, you will find there is no comparison.

Now that the Wilson County Commission has required the school system to accept hard bids, in my opinion a new way has had to be found to make sure Hewlett-Spencer is awarded the LHS contract. They have done this by a technicality requiring the bids to be rejected, publicizing the original bid amounts, and accepting the bid from what appears to be a bid using inferior materials from what was specified and bid by other bidders that does not meet the design standards. Kaatz Binkley Jones Morris (KBJM) and Hewlett-Spencer have partnered on many projects across Tennessee. Will KBJM be willing to bite the hand that has been feeding them? It is my hope that KBJM, the County Attorney, School Board, and County Commission will do what is right and throw out the bid by Hewlett-Spencer unless they are willing to guarantee their bid price based on zero changes to the current contract documents.

Editor’s Note: Wayne Oakley is an architect and a resident of Lebanon.

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