Road Runner: Contractor bids for Tucson's Downtown Links project way over estimates

The engineer’s estimate for the city-managed RTA project was $39 million. The three bids that came in for the project, however, surpassed that figure by many millions, leaving some concerned that elements of the project could be compromised.

The lowest came from Granite Construction, which said it could complete the project for $55.4 million, or 42 percent over the estimate. At $63.3 million — more than 62 percent over the estimate — Pulice Construction submitted the highest bid. The bids are still in evaluation and no contract has been awarded. City officials previously told the Road Runner that construction would begin within several months of the contract being inked.

“It’s very unusual in the industry to have that much of a difference between the engineer’s estimate and the low bid,” said RTA Director Farhad Moghimi. “We really need to analyze it, look at every bid item and truly understand what caused that differential between the two.”

And that’s exactly what’s occurring.

The Tucson transportation department “is currently working with procurement to evaluate the bids,” the department’s interim director, Robin Raine, said in an email to the Road Runner on Tuesday. “This is our typical process when bids come in over the engineer’s estimate.”

In response, the Road Runner asked to speak with Raine about possible next steps and potential impacts to the scope of the project — one of the largest in the RTA — but she did not respond to a request for an interview. A procurement official also did not respond to a request for comment.

“We saw pretty much increases across the board from the engineer’s estimate,” the RTA’s Jim DeGrood said at a recent meeting of the project review task force. He also said contractors have recently seen volatility in some materials costs.

“So, what are you going to do Robin?” an attendee asked Raine about the gap between bids and the estimate, according to a recording of the meeting obtained by the Road Runner.

“Yeah, good question,” she responded.

Without an understanding of what occurred, Moghimi was reluctant to comment on potential impacts of the high bids on the broader RTA effort, or what could be done to ensure delivery of Downtown Links.

Councilman Steve Kozachik, whose ward includes much of the third phase, was less restrained.

“The RTA is going to have to get serious about rescoping projects and/or cutting some,” he said, referencing what he feels have been questionable financial assumptions at play with both RTA revenues and project cost estimates.

The mere fact that the bids came in high sets the project apart. Last fall, the Road Runner reported that the vast majority of RTA projects were coming in under estimates, some by wide margins. The average figure was 17 percent, which itself can come with its own problems.

“If they overestimate the amount of money that it’s going to cost to do a project, then those are funds that are tied up, that can’t be put on other projects,” the RTA’s Jim DeGrood previously told the Road Runner. “That’s not a good thing.”

He also said that there are signs of the construction industry picking up steam, meaning project costs could rise.

Far worse than overestimating, argued then-city transportation Director Daryl Cole, is underestimating a project’s cost, as appears to have occurred in a big way with Downtown Links.

“If I’m going to be on one side of that benchmark, I want to be on that side,” he previously told the Road Runner of high engineer’s estimates, adding later that coming in under winning bids is “much worse for the public, and industry.”

News of the high bids has the residents of Dunbar/Spring on edge. Many in the heavily impacted neighborhood are Downtown Links skeptics, if not out-and-out opponents, but have resigned themselves to the project in part due to the promise of several amenities. Most important is a so-called deck park, which would sit on top of where Sixth Street dives under the Union Pacific railroad.

Bike paths and other non-motorized elements were also critical in securing whatever support exists in the neighborhood. The Road Runner spoke with two residents concerned about what the bids could mean for those features.

Karen Greene, president of the neighborhood association, said that as recently as January city transportation officials had told residents that bids were going out soon and “everything would be hunky-dory.”

“My biggest concern is the deck plaza ... That was our deal with the devil,” she said, adding later: “It’s not OK for them to take that away, and they’re going to need to figure that out.”

Sky Jacobs, the association’s treasurer, said the bids came as no surprise to him and many of his neighbors.

“The project scope and the things they’re trying to accomplish with the amount of money they have, it never seemed like it would be enough to us,” he said. “And we’ve asked that specific question numerous times, ‘What happens if you run out of money?’”

Members of the task force were also skeptical of the ability to pay for all of the elements of the project, including the deck park. But if it’s taken out, Raine said there was a risk that the mayor and council “will decline to build the project.”

Raine later discussed at the meeting some measures that could save a “few million” on project costs.

“But you’re looking for $10 million,” one task force member responded, according to the recording.

“I know,” Raine said.

“$20 million!” another interjected.

DOWN THE ROAD

• The city will be repairing a sewer line at West Alameda Street and North Grande Avenue in front of the Ward 1 office starting Monday. The initial work will take place from 9 a.m. to 3 p.m. and is expected to be completed in several days. Repaving will happen next week, and the city anticipates the project will be complete by the end of April. At least one lane of traffic will remain open.

• The Pima Association of Governments is seeking members for its Citizens Advisory Committee, which will help the metropolitan planning organization update its long-range transportation plan and also assist with plans to extend the RTA. Applicants will serve for up to three years and must be county residents and of voting age. Here’s a link to the application form, which must be submitted by 5 p.m. April 19: tinyurl.com/ydxgttue