Flawed cost estimates delay Coffman project

Mark Baumgarten

When the Twin Cities Student Union Board of Governors rejected bids from three contractors for the renovation of Coffman Union Friday, they concluded that the project would be delayed. Many officials were not surprised.
The announcement of the delay followed months of difficulties involving the search for a general contractor — a task scheduled for completion by spring 2000.
“There was no way the Union was going to be completed by Fall 2001,” James Turman, chair of the building advisory team, said. “It’s an 18-month to two-year construction project. By mid-summer we knew we were off the timeline.”
The three bids offered up Friday by PCL Construction Services, Mortenson Construction and Knutson Construction all exceeded the set budget of $32 million for hard construction: renovation work not including demolition and asbestos removal.
“If the budget is $32 million, it is obviously not reasonable for the scope of work for the project,” Greg Clark, vice president of estimating at Mortenson Construction, said. “In order to meet that budget, there would have to be a substantial redesign.”
The lowest bid, made by PCL construction, came in at $41 million, while the highest bid, made by Knutson Construction, remained at $53 million.
University officials said they are tentative to pinpoint the reason for the underestimated budget.
“There is no indication that what happened (Tuesday was) due to the fact that anything wrong happened,” Vice Provost Robert Jones said. “Clearly I hope that if we get into this process and learn it was factors within or outside of our controls, we will learn from it.”
In planning the renovation, University officials decided to operate under a design-bid-build method. This method involves hiring an architect to design a project and do the cost estimate on the project. The University then requests bids from contractors on the project, and, after a contractor is chosen, the construction begins.
This, said Clark, is a main reason for the disparity between the Universities budget and the contractors’ bids.
“I think the problem the University is having is just that the early cost estimates they are receiving are inaccurate,” Clark said. “Typically (at the University) the architect does the price estimate, and then we come in and give an estimate that is much different, and you run into things like (the Coffman renovation problem).”
Clark added that the University’s practice of design-bid-build is now fairly uncommon in large construction projects, citing that most construction projects are design-build projects, in which the general contractor is involved in cost estimating throughout the project.
Vice President of University Services Eric Kruse defended the University’s program plan as essential to preserve the historic values of the Union.
“We use (the design-build method) also on some projects on the campus but it’s something that at the time that we were making the decision of how to proceed with Coffman Union, we did not have a tremendous amount of experience with,” Kruse said. “Our concern was in dealing with the historic structure and historic nature of Coffman Union, that we get it designed appropriately.”

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