Utility work in South End delayed over escalating costs

PALM BEACH — The next phase of utility undergrounding in the South End, which was scheduled to begin next month, is on hold after the town and contractor couldn’t agree on a price.

The Town Council approved a contract in February with Whiting-Turner Contracting Co. as construction manager for Phase 2 South of the utility burial, from Sloan’s Curve to Via Vizcaya. The area includes President Donald Trump’s Mar-a-Lago Club.

Whiting-Turner solicited bids from potential subcontractors and submitted a “guaranteed maximum price” to the town Aug. 24. But the price was more than $2 million above the town engineer’s estimate,” which is $4.7 million, according to Public Works Director Paul Brazil.

Whiting-Turner and the town negotiated but failed to agree on a price that town staff could recommend to the Town Council, Brazil wrote in an Aug. 29 memo to Mayor Gail Coniglio and the council. Whiting-Turner has agreed to withdraw its bid, and town staff is recommending the council accept the withdrawal and cancel the contract at its meeting on Thursday, which begins at 9:30 a.m. in Town Hall.

Brazil said he doesn’t know how long Phase 2 South will be delayed.

“Staff also acknowledges that prices increased beyond the inflation rate included in the [town’s undergrounding] master plan and there’s no guarantee prices will come down in the future,” he wrote.

Whiting-Turner is manager of the Phase 1 South undergrounding project, from Sloan’s Curve to the south town limit, and was the only qualified bidder for the Phase 2 South project. Staff is suggesting the town hold a workshop in hopes of expanding the pool of applicants for Phase 2 South and consider combining it with the next phase of undergrounding in the south in hopes that a larger project will attract more bidders and help keep the overall townwide undergrounding project on schedule, said Steven Stern, who manages the underground utilities program.

Eight phases are planned to bury all cable television, phone and power lines on the island by 2027. The first phase began in the far north and south ends of town last year and is expected to be complete early next year, officials have said. Construction on Phase 2 North, from Onondaga Avenue to Ocean Terrace, starts this month and should take about 15 months to complete, Stern said. Burkhardt Construction has been awarded a $4.3 million contract, which is 16 percent higher than the town engineer’s estimate of $4 million, Stern said.

Stern said the strong economy is driving costs higher than had been expected. “It’s a hot and strong, robust construction market right now,” he said. “These construction people are very much in demand.”