The university will have to spend an extra $5 million renovating three sorority houses after a move to obtain a cheaper and quicker contract failed.
The Board of Regents originally approved $9.7 million to gut three sorority houses – chapter houses for Delta Gamma, Alpha Delta Pi and Alpha Chi Omega – and add sprinklers, new electrical and heating systems and other upgrades, said Carlo Colella, director of architecture, engineering and construction.
When Facilities Management put out a solicitation for a contract in 2005, it opted to look for a contractor willing to both finish the building designs and do the renovations, a maneuver that usually saves time and money compared to working with two different contractors.
Usually several contractors make competitive bids and the price is driven down. But in this case, only one company responded to the solicitation, and the lack of competition resulted in an over-budget price. Rather than accepting the bid, Colella said the department decided to hire a design firm to finish the plans and then look for a general contractor to do the construction.
Aside from the extra cost of hiring two contractors, prices of materials and labor increased since the delay, resulting in a more expensive project than originally anticipated.
Facilities spent $550,000 to finish the designs. Colella said it would have been cheaper if he had been able to secure a single contract for design and construction, but he couldn’t break down the costs of a single contract and determine how much the design work would have cost.
None of the sororities involved will be affected financially, nor will any other construction projects lose funding, said Director of Fraternity and Sorority Life Mike Hayes. He said the university has a reserve fund set up that plans for projects as far as 20 years in the future, and so all upcoming projects are already funded, and the $5 million dent in the reserves will be repaid through future students’ fees.
“While the delay is frustrating, financially the three chapters will not be impacted,” Hayes said. “The inconvenience of not being in their homes certainly is troublesome, and if schedules are altered, we will work with the chapters to mitigate any concerns we can that arise.”
Last year, the department of fraternity and sorority life offered to provide housing for the three chapters throughout the renovations, and members of Alpha Delta Pi and Delta Gamma currently live together in a house provided by the department.
The university generally solicits separate contracts for the design and build phases because it allows for greater control over the final design plans. There are also many more companies who can do either design or construction only, whereas relatively few firms can do both.
Colella said he usually seeks a single contract for simple projects in which he doesn’t need to oversee the designs. Single contracts are also advantageous because the contractor is responsible for any conflicts between what the designers plan and what the construction crews can actually build, he said. Parking garages are a good example of a project where the single contract method would be beneficial, he said.
However, renovating the sorority houses is much more complicated than building a parking garage, Colella said. He said the plan would have been effective if more companies were interested and drove prices down during the bidding process, but what amounts to bad luck ended up costing the university millions of dollars.
“It’s a question of timing,” Colella said. “There’s a lot of work going on in the area. This project is maybe too small for a big company and too big for a small company,” but he added that he couldn’t be certain of the exact reason that more companies didn’t want to bid on the contract.
“The work itself is standard work, there’s nothing that is extraordinary,” Colella said.
The Board of Regents’ finance committee already recommended approving the request for extra funding, and the whole board will vote on the request at the next meeting Oct. 19.
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