SACRAMENTO -A lone bidder submitted a $1.4 billion plan to build the
steel-laden suspension segment of the Bay Bridge, at a cost nearly
double state engineers' estimates.
a five-minute bid opening in a basement conference room, state officials
refused to publicly wear long faces, but the lack of multiple bidders
and a cost that well exceeds their budget can only be described
as a body blow.
"We'll be taking
the bid under advisement with our partners at the Metropolitan Transportation
Commission and the Federal Highway Administration while we consider
our options," said Sunne Wright McPeak, secretary of Business,
Transportation and Housing.
Caltrans estimated last
year that the suspension span with its 525-foot steel tower and
steel decks would cost $740 million.
A joint venture of American
Bridge Co. of Pennsylvania, Nippon Steel Bridge of Japan and Fluor
Enterprise bid $1.8 billion if it uses U.S.-made steel or $1.4 billion
with foreign steel.
The foreign bid will
prevail in this case because the price is low enough to lift federal
rules requiring the use of domestic steel.
With state transportation
coffers depleted, it's uncertain where the money would come from
to pay for the soaring bridge costs. The Metropolitan Transportation
Commission hopes to avoid a toll hike.
Caltrans expected at
least two bidders, possibly three. It's unclear why the other bids
failed to materialize, although several bidders had requested delays
because they needed more time to obtain steel prices.
Steel industry experts
and others have been predicting a massive cost increase on this
span for months. The bid opening has been delayed four times in
15 months as Caltrans responded to contractors' concerns.
Steel prices have spiked.
Construction insurance costs have skyrocketed. The unique design
of what will be the largest self-anchored suspension span in the
world poses significant financial risk and engineering challenges.
The bidding climate has
been further complicated under a federal mandate to use domestic
steel. The U.S. lacks adequate steel fabrication facilities to build
the bridge, although that may no longer matter if Caltrans accepts
the foreign-steel bid.
It's too soon to know
why only one consortium bid came in, and at such a dramatically
high price, said Caltrans Acting Director Tony Harris.
He said the agency will
spend the next 60 days studying the bid documents and talking with
contractors that did not submit bids.
"We need to understand
the components of this bid before we can make a decision about where
to go next," Harris said. "We need to debrief with the
Caltrans can reject the
bid, accept it or ask the contractor for an extension.
The state has rejected
a single bid on this project in the past, for foundation work, after
it came in substantially higher than estimates.
rebid the work. In another example, officials recently rejected
a single bid to build the Woodrow Wilson Bridge on the East Coast
and rebid the project for a better price.
It cannot, as some have
suggested, abandon the self-anchored suspension design and replace
it with a less costly utilitarian concrete skyway. The suspension
design is specified in state law, and any change would require legislative
But if Caltrans moves
ahead with the bid, state lawmakers would likely have to help find
a way to pay for it. Caltrans has burned through its financial reserves.
The Metropolitan Transportation Commission, the Bay Area planning
agency that selected the design and oversees a share of bridge toll
proceeds, will also play a key role.
The commission has suggested
it take over the bridge construction finances and use aggressive
investment tools it has successfully employed in the past to cover
cost overruns on the Benicia bridge.
we can't absorb the size of this bid," said commission spokesman
Randy Rentschler. "But we will be working closely with Caltrans
to help in any way we can."
The state had intended
to open the new span in 2010. If the state must rebid the suspension
segment, it may be forced to extend that date.