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Caltrans may be able to take lower bid for Bay Bridge

May 28, 2004 Reposted from the San Francisco Chronicle
  By Michael Cabanatuan, Chronicle Staff Writer


Caltrans may be able to take lower bid for Bay Bridge State agency says it can use foreign steel to build span, although that's still double the original construction cost estimate

Caltrans officials believe they'll be able to accept a bid using foreign steel -- and saving $500 million -- for the new Bay Bridge's signature single-tower suspension span, they said Thursday.

That would cut the cost of the 1,860-foot span -- the western portion of the new 2.2-mile eastern part of the Bay Bridge that connects Oakland with Yerba Buena Island -- to $1.4 billion. But that bid is still twice what Caltrans estimated and still breaks the budget for the bridge project.

Transportation officials were stunned Wednesday when the only bids on the new suspension span, both from a joint venture of American Bridge, Nippon Steel Bridge and Fluor Enterprises, came in at $1.4 billion and $1.8 billion, the latter more than a billion over estimate.

Because the bridge project is subject to federal Buy America requirements, the contractor was allowed to submit two bids -- one using only steel from U.S. firms, one using foreign steel. Under the policy, the foreign steel bid must be at least 25 percent less than the domestic steel bid for it to be accepted.

On Wednesday, when the bid was opened in a Caltrans basement in Sacramento, it appeared that the agency would have to go with the $1.8 billion domestic steel bid, unless it chose to reject the bid and start over.

But transportation officials said Thursday that the way the cost differential is calculated would allow the state Department of Transportation to take the lower bid -- and use foreign steel.

"The way everyone thought it works apparently isn't,'' said Randy Rentschler, spokesman for the Metropolitan Transportation Commission, a partner with Caltrans in building the new Bay Bridge.

Dan McElhinney, Caltrans deputy district director, said that as long as the bid is deemed "responsive and responsible" and in tune with market conditions, Caltrans is free to use the foreign steel bid.

Now, the real issue is whether Caltrans will accept the bid, and if so, how the state would pay for the new bridge with a total cost estimated at $3.5 billion.

Caltrans has said it will take the next two months to carefully study the bid, talk to the contractor about the reason for the high costs and find out why other contractors failed to bid on the span. Caltrans could then either accept the bid or reject it and seek new bids.


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