State Prison Expansion Program Update

On March 5 the state’s Department of General Services (DGS) issued revised Request for Proposals for the first two of the remaining four state correctional institute expansion projects that were held up from contracting last summer and fall. Best value design/build proposals will be taken for the $14.5 million, 200-bed expansion of the SCI-Forest in Jenks Township, outside Marienville and the new 1000-bed, $181.5 million unit at the SCI-Benner (formerly known as Rockview) just east of State College.

Technical proposals were due back for Forest on April 6, with cost proposals due May 11. For the Benner facility the technical proposals are due April 13, with costs due May 25.

In response to judicial decisions regarding overcrowding, the Department of Corrections is utilizing the DGS best value procurement system, adapting it to a design/build delivery system. Design/build is most efficiently delivered under a single contract and DGS is satisfying the requirements of the Separations Act by mandating that the successful construction manager/design builder take separate bids from HVAC, plumbing and electrical contractors.

Several hurdles still exist for the prison projects. One main problem is budget. While the SCI-Forest project has likely been given a maximum cost that exceeds the actual cost (similar “butterfly” units bid last year at about $11 million each), the SCI-Benner maximum cost of $181.5 million was 20% below the level of the median original bids last summer.  Because the ground rules have changed, requiring design/build proposal teams to bond that their proposals are below the maximum cost before bidding, the possibility exists that few or no teams will risk that surety unless some significant reductions in scope are apparent in the early reviews of the plans.

Additionally, the delivery system of the project is abnormal for PA public bidding and could potentially be challenged, even though the process was thoroughly vetted by DGS, the Governor’s office and the state’s attorney general’s office.  Project labor agreements have been made optional, which makes labor an opponent; and, the lack of separate contracts held by the owner (the Separations Act will be satisfied by having the design/build team take separate HVAC, lumbing and electrical bids) could give the mechanical and electrical contracting associations a reason to protest or challenge legally.

Whatever obstacles, if any, arise will need to be ironed out on this round of bids so that the two remmaining prison projects can proceed without encumberance.

Proposals for the 2,000-bed, $400 million expansion of SCI-Graterford in Montgomery County should be taken later this spring. Site selection for the $200 million SCI-Fayette expansion is being finalized and design/build proposals will be requested later in 2010.

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