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The long and winding (unpaved) road
(by Karen F. Mrnarevic - July 08, 2008)
The Pascack Valley Cooperative Pricing consortium, which formed earlier this year to consolidate services and bid jointly on capital projects faced a serious setback this week when its largest project to date, an eight-town road paving project, hit a wall. The contractor to which the consortium awarded the bid declared that it is unable to complete the job for the price originally quoted as a result of the steadily rising cost of petroleum, based materials and fuel – in this case, asphalt.
The contractor, D&L Paving, was awarded the $1,343,105 road paving contract on May 19 by the consortium’s lead agency, the Borough of Westwood. The eight towns participating in the paving program are Emerson, Hillsdale, Old Tappan, Oradell, Park Ridge, River Vale, Westwood and Woodcliff Lake. Based on engineer’s estimates, the participating towns stood to save an average of 28 percent by bidding jointly versus going out to bid individually.
Unfortunately, over the last two months, the price of asphalt has risen $10 per ton; according to Woodcliff Lake Borough Administrator Ed Sande, D&L Paving said this would add approximately $140,000 to the cost of the project. Woodcliff Lake Councilman Jeff Bader questioned the legality of the contractor’s bailing out of the project and suggested that in the future the borough and the consortium be wary of working with D&L.
Sandve said that the group of municipal administrators who make up the consortium met last week to discuss the next step in the process. “We have spent a lot of time working out whether there is something we can do to make the project move along,” he said. “They [D&L] are not [legally] obligated to meet their bid price. The recourse is for us to call their bid bond.” In that case, said Sandve, the consortium may have to go back out to bid on the project, an unattractive option at this point. “When the project went out to bid asphalt prices were $62 and change per ton. Prices now are $85 to $90 per ton. Our cost would be tremendously higher if we were to proceed at this point through that process,” he said.
Hopefully, the consortium will be able to go back to the second lowest bidder, Joseph Sanzari, Inc., whose original bid was $1,349,187. Mark Madaio, borough attorney for Woodcliff Lake, clarified, “the bid bond covers the price differential between them [D&L] and the next highest bidder. The problem is the next highest bidder is probably going to feel about the same way.” In other words, even if the borough does award the bid to Sanzari, there is a chance that Sanzari will not be able to do the job for the price originally quoted either. Sanzari was given until Tuesday, July 8, to respond to the consortium’s correspondence informing the company that it is now the lowest bidder on the project.
The administrators who make up the group may be dismayed with D&L’s decision to back out, but they are not exactly surprised. Emerson’s borough administrator, Joe Scarpa, said that with the exception of Sanzari, whose bid was close to that of D&L, the other contractors who submitted bids back in May must have taken into account the rising price of asphalt. That, he said, explains why their bids were so much higher; approximately $100,000 on average.
Scarpa said he does not know why D&L apparently miscalculated the price of the asphalt in its bid. “These guys are in the paving business,” he said in a phone interview. “So it should be no surprise to them [that asphalt prices are rising].” Nevertheless, said Scarpa, “It’s indefensible what they did. It’s not right.”
Karen F. Mrnarevic's e-mail address is Mrnarevic@northjersey.com.
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