When the contract to build a new fire hall in Springwater Township was first awarded last May, the cost was $7,784,489.
Six months later, it went up $1,628,950 when the original contract was terminated and the second-lowest bidder, Pegah Construction, was awarded the contract for $9,413,439.
Last night, Springwater council approved another $1,750,000 for the new fire hall, bringing the final cost, as of now, to $11,616,006.
That's $3,831,517 — almost 50 per cent — more than the original contract for the project, located at 1132 Snow Valley Rd., at Highway 26.
Some members of council were not happy with the news.
“I do have concerns in general about our RFP (request-for-proposal) process and the fact that on the first one, we awarded an RFP that couldn’t actually do the job without a significant amount of extra funding so we pulled back,” said Coun. Danielle Alexander.
“We awarded a second one that also wasn’t accurate so now we’ve substantially, $1.7 million is a big number in terms of the overall budget of this project," she added. “We’re not talking about a one per cent increase — we’re talking a big increase.”
Alexander said she is also concerned about ‘scope creep’ — referring to how a project’s requirements tend to increase over a project's life-cycle.
"To have this amount of scope creep without even having shovels in the ground concerns me," the councillor said.
Other members of council voiced similar concerns.
Coun. Phil Fisher said it was a “pretty serious issue,” but stopped short of blaming anyone. Instead, he took the disappointing news in stride, deciding to look at the situation as a cautionary note for future endeavours.
“I think this serves as a warning to us,” he said. “We need to really think as we embark on the next project, how are we going to manage this. I see this a problem not on any individual, but it’s a problem that just can’t be repeated on a large scale.”
Mayor Jennifer Coughlin agreed.
“I think it’s been 10 years now since I’ve been sitting here and I think it was under $3 million the first time it was brought to us,” she said. “Two point two, then 5.7 and then 7.9 — it just keeps going up and up and up.
“We need to get those shovels in the ground and get this built. It’s not going to get cheaper tomorrow,” Coughlin added.
According to Jeff Schmidt, the township's chief administrative officer, Springwater has been working with Pegah since last November to move the project forward.
During those discussions, it was brought to the township’s attention that there was other work required that was not in the original scope of work for the project.
The required works that were excluded:
- Supply and installation of a culvert along the entrance to the property
- Construction of the apparatus bay driveway connection to Snow Valley Road
- Supply of all granular material
- Change in hydro connection (from pole mounted to a pad-mounted transformer).
Township staff have estimated that the additional costs would be just over $1 million.
The big-ticket items include construction of the apparatus bay driveway ($317,000); supply of granular material, which was originally to be supplied from township pits, but was found to be unsuitable for the project ($380,000); and the change in the hydro connection ($280,000).
Additionally, Schmidt said, there was no contingency fund allocated in the contract.
Contingency fees are typically between 10 and 15 per cent of a project’s total cost. The township is suggesting a contingency fee of about seven per cent, or almost $680,000 for this project.
The contingency will cover costs for approved additional work. The contractor has recommended that the following extra work be included in the project:
- Building layout changes, which include an additional 34 square metres to the building footprint and changes to the mezzanine layout
- Additional site and exterior work including additional sidewalks, line painting, snow storage area, garbage enclosure, three additional parking spots and concrete aprons.
The extra work is estimated at $435,712.
The recommended work, in addition to the required work, totals about $1.5 million.
Council’s approval of $1.75 million provides the township with some flexibility in the budget to consider any other recommended changes by the contractor and not have to seek additional funding.
According to Schmidt, the construction company has applied for a building permit and is ready to begin construction in June.
