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Thursday, April 17, 2008

Steel costs led firm to yank bridge bid

By Mary E. O’Leary
Register Topics Editor
NEW HAVEN
— The increasing cost of raw steel scared off the low bidder for work on the Pearl Harbor Memorial Bridge, officials said.
The Walsh Construction Co., which had submitted the low bid of $110.5 million for the foundations for the south span and the Interstate 95 and Interstate 91 north ramp of the bridge, withdrew its bid after being asked to extend it two weeks.
Judd Everhart, Department of Transportation spokesman, said refusing to extend a bid until the DOT sought more answers from Walsh was very unusual.
Walsh, which has offices in Boston and Chicago, apparently had discussed a price for steel with its suppliers that the suppliers would not hold beyond the original April 2 date of the contract, state officials said.
Donald Gillis, vice president of Walsh, said since bids were submitted to the DOT on Feb. 13, there had been two cost increases for steel and another was expected May 1.
“Anything you can attach a magnet to is just like gold,” said Gillis from his office in Boston. “It’s very, very problematic,” Gillis said of bidding on projects with a lot of steel.
The state DOT had a project escalator for the 3,000 tons of steel plate girders that will be part of the superstructure, Gillis said.
But the cost of an another 10,000 tons of steel for the deep shafts in the river and reinforcing steel was not protected. Walsh decided it was too much of a risk with prices up $2,000 a ton since the beginning of 2008 for raw steel before it is fabricated.
Gillis said he hasn’t seen cost increases like this since 2003 when he remembers three price increases in one day. He said his company is the seventh largest construction company in the country.The second low bidder is Cianbro Construction and Middlesex Construction Corp., which in a joint venture had bid $137.5 million.
H. James Boice, acting DOT commissioner, said the state is proceeding to award the contract to Cianbro and Middlesex and was coordinating this with the Federal Highway Administration, which is funding 80 percent of the cost of the contract. “They are anxious to get started. They will be in the water this summer,” Brice said.
The acting commissioner said the $27 million increase in cost to the state “won’t have a significant impact on our capital program this year.”
Gov. M. Jodi Rell wants a detailed answer on the bridge project by Friday.
Brice mentioned the changes with the Pearl Harbor Memorial Bridge at a legislative hearing on the ballooning cost of railyard maintenance facilities in New Haven, which will cost $1.17 billion, rather than the initial expected cost of $300 million.
The DOT is now looking at 10 percent inflation, rather than 3 percent, for multi-year projects and smaller increments of bonding for planning purposes.

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