MARCH 18, 2016: This is an update to the February 2016 Bid and Rebid notice. On March 8, 2016, in response to the re-issue of the Request for Bids for the Towns of Duck, Kill Devil Hills and Kitty Hawk beach nourishment projects, four bids from dredge contractors were received. The bids received were as follows: Great Lakes Dredge & Dock: $38,520,850; Weeks Marine: $45,071,250; Manson Construction: $47,841,900; and, Dutra Group: $48,205,055. Subsequent to the bid opening, complete bid packages were reviewed by the project’s consultant engineers, CPE-NC, who determined that Great Lakes Dredge and Dock Company is the lowest responsible bidder. The proposed timeline submitted as a part of the bid package from Great Lakes Dredge & Dock indicates that the project will begin in the Town of Duck on April 1, 2017 with a projected completion in Duck early summer. Kitty Hawk, and Kill Devil Hills projects will follow.
Dare County Board of Commissioners met on March 17 at 8:30 a.m. to review the bids received, and it was unanimously approved by the Commissioners to issue a Notice to Award the construction contract to Great Lakes Dredge & Dock. The Town of Duck has updated the Nourishment Project FAQ’s.
UPDATE JUNE 8, 2016: The award was contingent on Local Government Commission (LGC) approval of the financing of the project. Formal approval for the Special Obligation Bonds was received from the LGC on June 8, 2016 allowing the project to be under contract prior to the end of June 2016 as planned.
The February information and Rebid FAQ’s are available below for reference:
POSTED FEBRUARY 19, 2016: The Town has been working on the beach nourishment project since the original “Erosion and Shoreline Management Feasibility Study” was completed in May 2013. Over $1 million has been spent to date in engineering, permitting and legal fees (costs related to obtaining easements) to bring the project to construction. These costs have not been funded through revenue derived from the Municipal Service District taxes that went in place July 1, 2015, but from General Fund revenues and funding provided by Dare County.
To clarify briefly, the timeline for this project has always included a one-year window within which the contractors could complete the Duck, Kill Devil Hills and Kitty Hawk projects. It was expected that the project would be under contract by April of this year, which would have made the one-year window for its completion April 2016 through April 2017.
On February 9, 2016, bids were received by Dare County (the contracting entity) from three contractors as follows: Dutra Group, $52,344,555; Great Lakes Dredge & Dock, $52,240,200; and, Weeks Marine, $48,376,250. All three bids were over the project budget of $43,518,043, with the low bid $4,858,207 higher than the available funds. The decision was subsequently made by Dare County, in consultation with the Towns, to reject the bids and re-issue a Request for Bids for the project. This is expected in March 2016.
The Town is providing this list of Frequently Asked Questions (FAQ) to assist in responding to questions and concerns about the project and to elaborate on the statement above. In addition, at the Town Council’s Annual Retreat, which will be held on March 8th and 9th, the Town’s engineering consultants, Coastal Planning and Engineering (CP&E) will be providing an update on the project. This update is scheduled for 1:15 p.m. on March 9th.
The Town shares in the disappointment that the construction of the project has been delayed from the original timeline; however, to be clear, the Town remains committed to the completion of this project as quickly and as expeditiously as possible.
The available funds for the Duck, Kill Devil Hills and Kitty Hawk Beach Nourishment Project is $43,518, 043. The low bid received for the project was $48,376,250; a difference of $4,858,207. For the Duck project, specifically, the low bid was $16,672,000, which is $2,944,666 higher than the project construction (minus engineering and permitting fees) budget of $13,727,334. Funding is not available in calendar year 2016 to make up this difference.
Further, while the low bidder, Weeks Marine, indicated that they could commence work in the fall of 2016 on the project, beginning in Duck, this became a moot point since funding is not available to make up the $4,858,207 total project budget shortfall or the $2,944,666 Duck portion in calendar year 2016. Dare County has indicated that the funding shortfall for both the total project and the Duck portion of the project could be covered using additional occupancy tax revenues that will be available in 2017.
Therefore, by reissuing the Request for Bids (RFB) for the project allowing calendar year 2017 for its completion, it is hoped that all bids received will be closer to the project budget and if the bids are higher, that occupancy tax funding will be available to make up the shortfall.
Although reluctant to divulge specifics regarding their bids, contractors have indicated that a great deal of dredge equipment is tied up in other projects that were not expected to be online in 2016. The RFB issued by Dare County for the Duck, Kill Devil Hills, and Kitty Hawk projects specified that a portion of the project had to be completed in 2016. In order to accomplish this, equipment would have to be demobilized from existing projects and remobilized to Dare County just to meet that requirement of the RFB. This increased the cost to the contractor.
Bids received on February 9th were as follows:
Dutra Group: $52,344,455
Great Lakes Dredge and Dock: $52,240,200
Weeks Marine: $48,376,250
Yes, the Town is fully invested in completing the project as expeditiously as possible. At this time, the project is expected to be completed before the end of the 2017 calendar year. Once the results of the RFB are received a preliminary project schedule will be available. There is a possibility that work could begin on a project in 2016.
The Request for Bids (RFB) for the project are expected to be reissued before the end of February and due the second week of March. It is expected that a contract will be executed before June 30th.
Contractors indicated that much of their equipment was tied up in other projects that were not expected to be online in 2016. Because the original RFB required a portion of the project to be completed in 2016 some contractors did not respond to the RFB and others charged a premium to demobilize their equipment and remobilize it to Dare County. The re-issued RFB will allow the project to be started and completed in 2017 allowing for more flexibility for the contractors which should translate to project costs that are closer to the funds available for the project. In addition, because the original bids were rejected, contractors have a much clearer picture of the range that the bids need to be in to be accepted.
By allowing for a calendar year 2017 completion date, additional revenue will have accumulated in the Dare County Shoreline Fund from occupancy tax revenues. Provided that project costs do not exceed the original low bid received for the project, this revenue should be sufficient to cover a budget shortfall. The Town will not increase general ad valorem taxes or Municipal Service District taxes to make up any shortfall.
At this time the project scope will not be altered to lower the cost of the project.
There will not be an increase in taxes, either general ad valorem taxes or Municipal Service District taxes to cover project cost shortfalls. Municipal Service District revenue collected for this project will be applied to the debt service related to the project as intended. The debt service will continue to be based on a five year amortization schedule and this will not change. It should be noted however, that the MSDs are expected to remain in place at some level after the debt has been paid to fund maintenance costs. Decisions related to this will be determined once the project is completed and maintenance plans are developed.
Municipal Service District revenue that has been collected for this project must be used for the project. In this case, the revenue generated for the project was based on the anticipated debt service to fund the project. The revenue is being held in a separate fund and used for this purpose. If the Town fails to enter a contract for the project by June 30, 2016, MSD revenue is required by law to be returned.
There are no current plans to construct an interim project. The Town is focused on completing the beach nourishment project as expeditiously as possible.
A contract for the beach nourishment project must be in place by June 30, 2016 or MSD revenue collected for the project is required by law to be returned. The Town expects a contract to be in place for the project prior to June 30, 2016.
The Town must receive approval from the North Carolina Local Government Commission to enter into debt for the Town’s portion of the costs of the beach nourishment project. The rejection and re-issue of the bids for the project is not expected to adversely impact the timeline for the financing of the project.
We expect the bids to be due the second week of March 2016. Following analysis of the submitted bids, we will have a tentative schedule as a part of this project. It is still possible for construction to start in 2016, however, due to factors stated in this FAQ, work should not be anticipated until 2017.