That Sigh of Relief is Coming from Mt. Lebanon

Wednesday afternoon Mt.LebanonSchool District took a second round of bids for its new high school campus project. All along the project has had a budget of $85-90 million but the design was not in line with that the first go around this spring, when bids totaled about $112 million. The re-design worked. Yesterday’s bids were $84.5 million, giving the district some room to maneuver and add some alternates that will make the building operate better. Nello Construction was low on the general portion at $49 million. The best bids on the other major contracts were from McKamish on the HVAC at $14.9 million and Farfield on electrical at $10.96 million (although some controls options could put Lighthouse in the driver’s seat).

 For all the good news from the bid opening I’d be concerned if I was the district about the fact that only two general contractors bid a job this big and the other, Massaro Corp. was $8 million higher than Nello’s bid. Nello’s a very experienced school builder so it’s not likely they will find an $8 million mistake in their bid and leave the project suddenly over budget but a variance of 15% between first and second would give me pause. If the documents aren’t air tight (and they rarely are) there could be costs coming that will up the final price before the job is done. And with a three-year plus duration, this job has a lot of uncertainty that will be impossible to bake into the bid. What will diesel cost in 2014? How tight will labor be in 2013? How do major subcontractors respond to 10% or 15% inflation in a basic material in a couple of years (would you want to bet against that)?

Another project that was being tracked more quietly is the new $50 million Mylan Labs Headquarters in Southpointe. Mylan selected PJ Dick Inc. to be the contractor for the job, which should get underway in early 2012.

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