Bidders for the Portage Cove boat-launch project exceeded the engineer’s cost estimate by roughly $1 million, causing an executive session last week for staff and assembly members to discuss options.
Southeast Roadbuilder’s Roger Schnabel bid against Hamilton Construction, a company based in Skagway. Schnabel’s bid was $173,473 higher than his competitor at $6 million.
Borough manager Debra Schnabel said that, because the bids were both similarly in excess, the borough assembly would meet to decide how to proceed.
The borough intended to spend about $700,000 of grant money on the project, but is now deciding how it will come up with an additional $1 million.
Following the executive session, Schnabel recused herself from further discussions, citing her relationship with brother Roger Schnabel as a potential conflict of interest.
“I am recusing myself from deliberation on this matter because the resolution has potential impact to my brother in his capacity with Southeast Roadbuilders, and regardless of any possibility of my neutrality, I am bound to ethical standards that demonstrate my neutrality,” Schnabel wrote in a memo to designated staff.
She appointed public facilities director Brad Ryan to lead a team of harbormaster Sean Bell, clerk Alekka Fullerton and borough attorney Brooks Chandler to resolve the matter.
“We want it to be as clean as possible, so we are completely taking (Debra) out of the picture,” Ryan said.
According to bid documents, engineers estimated the work to cost between $4.5 million and $5.5 million. Southeast Roadbuilders was willing to complete the project for about $6 million and Hamilton Construction for about $5.8 million.
“To make the whole contract go, the borough needs to come up with $1.7 million,” Ryan said.
The Haines Borough is funding the upgrade with an expected $4.1 million Alaska Department of Fish and Game grant and state grant money. The assembly can decide to use more grant money than previously allocated, but Ryan said that would take away from funding intended to eventually pay for permanent moorage floats.
The borough’s options are to use the grant money and award the entire contract, reopen the bidding process, rebid portions of the project, Ryan said.
The project consists of a base bid of main work and five possible additions of smaller projects, such as water, sewer and electrical.
Ryan said the borough is currently combing through documents to find areas of cost savings and decide how to move forward.
The borough will release a decision within 90 days, which is how long contactors are required to hold their price.