The City of Plymouth is moving ahead with its 9.8-million-dollar Wastewater Treatment Plant improvement project.
Earlier this year, the Board of Works chose Midwest Engineers to do the design work for the project. Usually, the next step would be to ask for bids from contractors to do the construction work, but on Monday, the Board of Works took a slightly different approach, approving the use of a Guaranteed Savings Contract.
Plymouth utility superintendent Donnie Davidson explains how it works, “Basically what it allows us to do is to select a contractor based on qualifications, at a not-not exceed contract. Basically, they’re selected based on qualifications and then also on their proposal.”
He says that’s different from the usual bid process, in which the choice of contractor is based on who puts in the lowest bid, “A lot of times, on a normal bid project, you will get the project’s bid, and then the contractor will find a lot of flaws. There’s always questions, ‘Why did they do it this way?’ ‘Why did they do it that way?’ The beauty of doing it in this method is that everybody’s working together on the project. The owners, the contractor, the engineers all sit down, and we determine what the best method is to accomplish what we want to accomplish.”
In order to use a guaranteed savings contract, the city has to choose from a list of contractors that have been approved by the state. Davidson says an advantage of taking this approach is the additional oversight it gives the city, “What I like about the project and doing it this way is that there’s open-book pricing. There would be an agreed profit margin for the contractor, and we would be able to see all the invoices and pay claims and things like that and be assured that we would be only being billed for that particular amount.” Additionally, if contractors’ costs come in under budget, those savings would be returned to the city.
The Guaranteed Savings Contract is designated specifically for projects that aim to lower a facility’s energy or operating costs. As such, the contractor and the city have to send a report each year to the Department of Local Government Finance, to prove the savings are actually being realized. If they aren’t, the contractor has to refund that difference back to the city at the end of the term of the contract.
The City of Plymouth explored the possibility of using a Guaranteed Savings Contract at the request of Midwest Engineers. Davidson says they visited Fishers and Huntington, which have used the process for wastewater projects. He says both municipalities reported having success with the system.
For now, the next step for Plymouth will be to publish a notice with a request for qualifications or request for proposals. Contracts will not be finalized until after bonds are issued for the project in spring or summer of next year.
