The lowest bid for phase one of the Big Eddy Water project came in at 28 per cent more than budgeted, causing staff to look at the rest of the $5.7 million project.
"With the tendered price approximately 28 per cent higher than the engineer's estimate, an evaluation of priorities for the remaining funds will ensure the best use of these funds for the Big Eddy residents and businesses," wrote Mike Thomas, the city's director of engineering in a report to council. "An updated work plan for future phases will be developed in the coming months and presented to council for information, this will detail the recommended allocation of the remaining funding to the project works and provide an update on the project scoping."
Mounce Construction came in with the lowest bid for phase one at a price of $2,564,245.90, beating out Acres Enterprises and Speers Construction.
The winning bid is more than $500,000 higher than the $2 million the work was expected to cost. Council still needs to approve the contract at its next meeting on Apr. 25.
The city budgeted $5.7 million for the project, two-thirds of which is from the federal and provincial governments. Big Eddy property owners are on the hook for the remaining $1.9 million.
Phase one includes building a dedicated pipe from the wells to the reservoir and replacing the main pipe down Big Eddy Road.
Thomas' report says that the units prices in all bids are higher than in other recent projects in the Okanagan, "however as all three bids were within approximately 10 per cent spread, this is not a cause for concern in the validity of the bid prices or bid process for this project."
One of the big concerns is what this means for the city's other two major water projects scheduled for this summer — the Thomas Brook water system and replacement of the Illecillewaet water crossing pipe. Both could end up costing more than budgeted.
Thomas says staff and consultants are looking at how the higher unit prices will impact those and other future capital projects.
The report also notes some of the challenges of the project, including that it involves digging in an archeologically sensitive area, which Thomas says may have increased the bids.
He also wrote the lack of major road money in the 2017 budget means that roads that were going to be replaced during construction will now only be patched over to repair the damage done.
Council is set to discuss Thomas' report on Tuesday, April 25. We will write a follow-up story after the meeting.