Bids for new elementary higher than expected

By ELIOT DUKE
Of the Record staff
Posted 5/25/21

The Harnett County Schools Board of Education received some unfortunate but not totally unexpected news regarding its latest endeavor.

Consultants on the new Northwest Harnett Elementary School …

This item is available in full to subscribers.

Please log in to continue

Log in

Bids for new elementary higher than expected

Posted

The Harnett County Schools Board of Education received some unfortunate but not totally unexpected news regarding its latest endeavor.

Consultants on the new Northwest Harnett Elementary School project briefed board members on the bidding process and unveiled a price tag that came in several million dollars over original estimates. Architect Tom Hughes on Monday morning cited an increase in building materials pretty much across the board as a key reason why the school generated a guaranteed maximum price of $39.6 million, which was considerably higher than expected.

“Things didn’t turn out quite the way we expected, although they were somewhat understandable given the context of where we’re at with the environment, especially with materials and labor that we are experiencing today,” Hughes said. “This market has experienced an unprecedented, and I would highlight the word unprecedented, escalation in materials, especially steel, wood and petrol chemicals. We are still suffering immensely under the aspect of COVID. Even the little things like the fuel shortage that just hit us was right in the middle of our bid period.”

Metcom President Aaron Thomas said a majority of the project came within budget except for anything steel-related. The cost of steel alone drove the price of the school up more than $2 million, and the cost of wood jumped more than 275% in the past few months.

“It really is unprecedented in respect to what kind of price increases there have been on commodities in the last couple months,” said Thomas. “Wood and steel particularly have gone absolutely crazy.”

While many small businesses shuttered or closed altogether last year, Amazon experienced a banner year in 2020 as the COVID-19 pandemic kept people at home and shopping online, many with government stimulus money. The company decided to invest in a surge of distribution centers which sapped the market dry of key materials such as steel, Thomas said, particularly products like bar joists that are used to build schools. Thomas said up to four schools could fit into one of Amazon’s proposed centers.

“Amazon, which seems to be taking over the world, said they were going to build 88-million square feet of distribution centers,” Thomas said. “They have bought up the country’s supply of bar joists, or a large majority of it. There are four manufacturers of joists ... and Amazon went to the joist manufactures willing to pay cash upfront. They’ve bought up their plant capacity. This created a two-edged problem: They’ve driven the price of steel up dramatically and, No. 2, it’s even a problem being able to get it.

“Because of that, most joist manufacturers aren’t even bidding any more new work. The rest of the construction market is bidding for remaining reserve capacity, driving price up. If you order joist right now, you won’t get it for 10 months. That’s a problem.”

HCS Superintendent Dr. Aaron Fleming said original hopes were the project would come in at around the same price as the new Erwin Elementary School or approximately $31 million. With the cost now expected to exceed $37 million, Fleming said the school system is paying the price of inflation.

“Building supplies are so high,” said Fleming. “Steel is hard to get right now and wood products are very expensive as well. Everything that came in higher had some sort of metal or wood product. The cost of the project went up because of, one, the time we’re in with the escalating cost, but also with this demand for steel. Everybody is building right now.”

HCS received a $10 million grant from the state this year in exchange for 5 years worth of lottery proceeds, but the higher than expected price tag still hurt.

“I think the unfortunate piece is we’re just at a time when costs are high,” Fleming said. “We know with the $10 million grant we’ve got, we’re able to cover the cost. I’m just disappointed because we’re a growing county that needs these facilities but yet, the cost just goes up so much.”

Part of the bid process included a 120-day price freeze, giving the board time to meet with Harnett County commissioners and get the project approved and moving forward. With prices climbing every day, Thomas said waiting too long could result in paying significantly more down the road.

“Inflation is crazy right now,” said Thomas. “Costs overall are going up this year and we’re expected to see 6% inflation. On a project of this size, a 6% increase is $200K per month.”

Deputy Superintendent W. Brooks Matthews, who also serves as chairman of the Harnett County Board of Commissioners, wasn’t surprised by the news.

“Unfortunately [bids] came in a little higher than what we were projecting,” Matthews said. “I’m sure it’s no shock to you as you’ve already heard about what’s happening with building materials and even the availability of building materials for that matter.”

School board members seemingly agreed that waiting any longer on the project would only make it more expensive.

“Every day we wait, the cost is going to increase more and more,” Chairman Eddie Jaggers said.

Fleming said the maximum $39.6 million accounted for everything, including various fees, and the price could be lower when it’s all said and done.

Eliot Duke can be reached at eduke@mydailyrecord.com or at 910-230-2038.

Comments

No comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment