City authorities estimated that the project to upgrade Ogdensburg’s wastewater treatment facility would cost $34,891,700.
Well, bids came in a tad higher than anticipated — the lowest one $6.2 million over budget, to be exact. In an email to the Watertown Daily Times, City Manager Sarah Purdy said that people involved with the project would analyze the bids to determine what can be done to lower expenses.
“Ogdensburg has no choice but to modernize its wastewater treatment plant and has been under state Department of Environmental Conservation order to do so for the past several years,” according to a story published Aug. 22 by the Watertown Daily Times. “The current plant can process 6.5 million gallons per day and services residential, commercial and industrial users within and adjacent to the Ogdensburg city limits. Constructed in 1965, the plant was partially updated most recently in 1978.”
One of the issues with how Ogdensburg has pursued this work is its call for a project labor agreement. PLAs require that the bulk of the workforce on a project be unionized labor.
City Councilors Timothy Davis and Daniel Skamperle prompted the council to consider whether using a PLA would be beneficial. Mayor Wayne L. Ashley said he also believed this may be worthwhile.
They argued that including a PLA would offer local firms the opportunity to bid on certain parts of the work. Without a PLA, the lowest bids could well come from out of state.
“It is common for large public works projects to be awarded to the lowest bidder, but adding a pre-existing labor agreement to a project is seen as a way to bolster union hiring while helping ensure that small companies have a chance to bid, according to proponents,” a May 17, 2018, Times story reported. “The PLAs can also set wage standards and other construction site requirements.”
A study proclaimed that Ogdensburg could save $900,000 with a PLA. So the City Council voted earlier this year to go this route.
As we’ve seen, the process didn’t go as officials had hoped.
Paul G. Carr, an adjunct associate professor of civil and environmental engineering at Cornell University, is an authority on construction costs and the bidding process. He is former chief executive officer of the Watertown engineering firm of Bernier Carr and Associates.
He told the Times that what lowers bids the most is wider competition. PLAs, however, limit companies that can bid on a project, he said. The result is higher bids when fewer firms compete.
“It’s not shocking, this is a pattern that we have seen with public works projects across New York state that are bid with project labor agreements,” Amanda Bertram, vice president of public affairs for the Associated Builders and Contractors/Empire State, said in a story published Saturday by the Times. “Across the board, they all come in millions of dollars over engineering estimates. This is a trend.”
Associated Builders and Contractors is a national trade organization representing those in the construction industry who don’t belong to unions. Ms. Bertram met with City Council members in November to discuss the disadvantages of using PLAs.
“Unions only account for 21 percent of the construction workforce across New York,” according to a news release issued Friday by the group. “Therefore, the PLA on this project effectively bars the majority of New York contractors — many of them local to Ogdensburg — and their workers from bidding and winning work that their own tax dollars fund.”
Officials need to re-examine if a PLA is the best option here. Judging from what bids have come in so far, our guess would be that it’s not.