BATON ROUGE – Faced with a bid nearly $100 million higher than anticipated for the first phase of the La. 1 toll project, the state Department of Transportation and Development announced Friday that it has begun the process to reject the bids opened Wednesday in order to rebid the project with modifications.
Department Secretary Johnny B. Bradberry said the decision came after meetings Thursday and Friday with the original bidders, bond rating agencies and the companies that provided the original estimate for the project to rebuild a portion of the only road leading to Port Fourchon and the barrier island of Grand Isle.
The department received bids from two contractor groups at the bid letting Wednesday for Phase I, which will replace the old bridge over Bayou Lafourche at Leeville and build an elevated section to Port Fourchon. The James Construction/Flatiron LLC group was the apparent low bidder at $251,860,090. The Massman/Trailer Brothers LLC group was the second bidder at $254,599,496.32.
The department had projected construction costs in the range of $154 million --$97 million less than the lowest bid received.
Bradberry called the decision to rebid “the only viable course for the department.”
The secretary, who is committed to applying business principles to the governmental agency, added, “I will not allow this project or any other to cost more than the worst-case scenario, which in this case would be to start from scratch.”
Bradberry said the department remains committed to collecting tolls on a new La. 1 roadway before 2009.
“Through re-issuance of the bid, we’re hopeful that we’ll see more competition. And we fully expect to be within the original estimate and within an acceptable time frame to meet department obligations with respect to financing.”
Department officials plan to work through the holiday weekend with federal highway officials and consultants comparing unit prices in the bids and in the estimates to determine where the disparities lie and to fully understand the higher pricetag.
Already, Bradberry said, findings indicate the department should consider changing the schedule to complete the work and the possibility of dividing the project to allow multiple companies to participate in building the project.
Bradberry noted that one issue that is out of the department’s area of influence is the high volume of bridge work under way in Southern states.
For example, he said, “Florida alone has undertaken some $1 billion in bridge construction, so the precast concrete industry is really maxed out.”
After the department firms up its proposal revisions, the project must be advertised for bids 30 days ahead of the letting (when bids are opened and publicly read). Then comes committee review and contract paperwork.
Meanwhile, the secretary has requested Wilbur Smith & Associates – one of the outside agencies that provided the original $154 million projection – to report, at its expense, a rationale for the huge disparity in pricing. A similar request will be made of SJB Group Inc.
The agencies’ estimates and that of DOTD personnel all projected estimated costs within 1 percent of each other.
The department has worked for the past three years with the La. 1 Coalition and other statewide and local stakeholders on the La. 1 toll project. DOTD signed an agreement May 19 with the U.S. Department of Transportation for a $66 million loan from the federal Transportation Infrastructure Finance and Innovation Act, or TIFIA, the first for the state, to help fund construction. The loan will be repaid through tolls that initially will range from $12 for commercial trucks to 50 cents for area residents.
Other revenue sources include state, local, and other federal highway funds.