Staff requested nearly 56 percent increase so Blue Goose Construction can finish current projects
FORT PIERCE – The Fort Pierce Utilities Authority voted unanimously Nov. 5 to authorize an emergency mid-contract increase of $576,000 so a local construction firm can finish the projects it currently has underway.
Supervising Engineer James Carnes provided FPUA members a brief overview of Fort Pierce-based Blue Goose Construction Corporation’s relationship with the Utility, which began when additional new projects became too complicated for the FPUA’s other contractor.
“When we initially awarded the uniprice contract, we only awarded it to Mas Tec North America because they were the lowest bidder,” he said. “Due to strategic planning and growing the city and growing the utility, we came up with expansion projects and other capital projects that were outside the capabilities of Mas Tec to perform. So we contacted the second lowest bidder, Blue Goose, and asked if they would like to be our second uniprice contractor and they said yes and would honor the prices.”
Although the FPUA approved the Blue Goose contract a year ago last September, Mr. Carnes said the limited liability corporation soon discovered it was losing money and told Utility officials that it needed more funds to complete its projects. Blue Goose began working on a utility expansion project in the Fleetwood Acres subdivision before taking on the installation of a six-inch forced water main along Orange Avenue.
“They’re working today based on numbers from 2016,” he emphasized. “So… this is the most least-intrusive way for them to be profitable and for us to get our expanded capital projects completed.”
The company’s increased charges reflect more than a 50 percent increase in the contract value, for which the supervising engineer is now requesting $1.6 million and referred to as “an overall third percent in Blue Goose’s current uniprices.”
“On Sept. 18, 2018, the Board approved a uniprice contract with Blue Goose for the installation of underground utilities in an amount not to exceed $1,024,000,” he explained. “The contract was based on prices submitted in 2016; however, the material and labor pricings are insufficient to support the current material and labor expenditures. Staff and Blue Goose have agreed that the most efficient and fair solution is to harmonize the pricing between both of our uniprice contractors, Mas Tec as well as Blue Goose. The net change would only apply to Fiscal Year 2020 as this contract is up for renewal in Fiscal Year 2020.”
Board Member Frank H. Fee, IV wanted to know the extent of FPUA’s contract with the company, and Mr. Carnes said the firm had only finished one project to-date.
“We originally had them start the Fleetwood Acres project, and we ran into some permitting issues, so we moved them into the Iroquois Municipal Service Benefit Unit,” he explained. “The Iroquois MSBU was the project that exposed these price deficiencies. We slated that project to cost somewhere around $350,000, [but] we paid them $240,000. They honored the prices because they agreed to, but they came to us and said if we were to move forward, we needed to try and do something different, and this is what we proposed.”
“Their contract is up for renewal in 2020?” Mr. Fee asked.
“Both of them are, Mr. Carnes answered, referring the both the Blue Goose and Mas Tec contracts.
“I don’t see where we have much of a choice,” Mr. Fee continued. “When their contract’s up, they may choose not to do business with us.”
For her part, Vice-Chairwoman Glynda Cavalcanti wanted more clarification on how Utility staff could have underestimated the costs to such a substantial degree.
“I guess I’m still confused,” she said. “I mean I understand there’s been price increases since 2016, but we missed it by 50 percent?”
Her question appeared to take Mr. Carnes by surprise, who struggled momentarily to find the proper words and then insisted the request should have actually been divided into two separate agenda items.
“That’s different – the agenda item really has two requests, as we read into it,” he answered. “The first request is to increase their contractual prices... and the other one is just to increase their purchase order to complete the two projects we have. It is one to increase their material and labor prices to match those of Mas Tec so they can make a profit and complete the projects. Part two is to increase the purchase order that we have with them because right now it’s only $1,024,000, and we need $1.6 million in order to complete the two projects. Without the increase in prices, they’re not going to be able to perform the work.”
“It sounds like you’re making the best of a sort of iiffy situation here,” Authority Member Linda Hudson said in response.
“That is correct,” Mr. Carnes replied, “especially with the time that we have.”
Board Member Charlie Frank Matthews then made the motion to approve the request, which was seconded by Ms. Hudson and passed 4-0, with Chairman Darryl Thomas-Bey absent.
Both Mr. Carnes and FPUA Community Relations Manager Jan Widmayer failed to respond to Hometown News email requests for clarification by deadline.