How are Village Roads projects put out to bid?
This post discusses the process the Road Commission of Oakland County (RCOC) uses in bidding out road projects, including the Village projects and how the winning contractor bills for the project work. It also addresses how costs are accumulated and what happens if all the money in the SAD is not spent.
Background
As background, RCOC owns the Village roads. In 2018, at least 50% of the residents on every street in the Village signed “Expression of Interest” forms requesting RCOC to assess the condition of our roads and develop a plan and cost estimate to fix them. The plans and cost estimates we are working with today in petitions for the Gold and Yellow sections are the result of our request to RCOC in 2018.
After a sufficient number of residents of a section sign petitions in support of fixing their roads, Bloomfield Township conducts the first public hearing — the Hearing of Necessity. Residents can express their opinions, both for and against the project, and the Township Trustees will vote on whether to advance the project to the next step — requesting RCOC to finalize the project plans and bid the project.
Finalizing project plans
RCOC develops a detailed engineered plan for each street and accumulates the construction steps and materials into “pay items”. For each Pay Item, RCOC:
Lays out specifications defining the requirements for that item, for example:
specific material to be used, including specific quality requirements;
specific measures for the material (for example, 4 inches of crushed stone);
specific equipment to be used;
specifications on how it is to be performed (full width paving, for example);
testing that it must meet when completed; and
other elements specific to that construction step.
The specifications for the Pay Items are accumulated into a specification book; the spec books for the PINK and BLUE section projects run 162-164 pages for about 30 Pay Items.
Accumulates total project quantities for that Pay Item.
The bid package will lay out a list of Pay Items, with associated quantity for that Pay Item.
Bidding Process
RCOC utilizes a national portal, BidExpress, to bid all of its road projects, including the Village projects. BidExpress is an open portal, available to any contractor interested in bidding on RCOC projects. (One doesn’t need to be a contractor to open an account in BidExpress - residents can register for a free account.) The process:
RCOC posts “request for bid” for the project in BidExpress. The request for bid includes:
engineering plans for the project;
list of Pay Items and quantities for each Pay Item;
the specifications book;
due date and time for final bids.
For example, the bid packages for the PINK and BLUE sections were posted on March 5, 2024, with bids due at 11 am on March 26, 2024.
RCOC places advertisements in local papers and in trade publications to advertise the request for bid. Road contractors also utilize various tools through BidExpress and trade publications to be notified when projects are posted for bidding.
During the period the project is open for bidding, one can see the contractors accessing the bid packages in BidExpress. However, no bidding information is available or visible.
On the date and time specified in the request for bid, bidding is closed. Once bidding is closed, the bids for the project are opened on-line. Upon bid opening, contractors who bid and their bids, including costs for each Pay Item and the total bid, are visible on BidExpress from that point forward. The lowest qualified bidder wins the contract.
If the lowest bidder is not known to RCOC, they will investigate the contractor to ensure they have the qualifications to do the job (investigate background, whether they have the requisite experience and equipment, etc.) If the lowest qualified bidder is not qualified to do the work, the next lowest bidder will be awarded the work.
Once the winning bid is accepted, RCOC and the winning bidder will enter into contracts for the work.
Project Costs
Throughout the project, RCOC and its inspectors are on site every day, ensuring that the contractor and sub-contractors are performing the work in accordance with the project specifications. Materials are tested and work is inspected; and if they don’t meet the specification, the contractor will have to redo the work on his own dime. Materials used are measured to ensure the project is billed only for what is actually used. Various construction steps are counted (drainage structures lined, drainage structures replaced, fire hydrants moved, ADA ramps installed, for example); the contractor can only bill for work actually performed to the RCOC specifications. The contractor bills for actual quantities/work at the prices quoted in the bid. If there are Pay Items (mailboxes, for example) that are included in the bid, but for which no work is done, nothing can be billed for that Pay Item. There are a handful of Village street signs that may need to be removed and reinstalled during the project; the “mailboxes” line item may be where that work would be billed.
One Pay Item that has raised questions from some residents is “Maintaining Traffic.” This Pay Item will include all the signage for the project, cones, barricade, etc., as well as the labor required to move signs/barricades/cones, etc. throughout the project. Flaggers and other workers involved in directing traffic during the project fall under this Pay Item too. It may also include other costs and/or some element of contractor profit. Of note, there are no Pay Items for mobilization costs or project management by the lead contractor (which is Ajax Paving for the Pink and Blue sections). Contractors can take different approaches to their bids. Some may include mobilization and project management costs as part of the individual Pay Items; others may include such costs as part of “Maintaining Traffic”, while others may use some combination of those approaches. “Maintaining Traffic” may also be the Pay Item contractors use to adjust their overall price to compete for the project and try to ensure they are the lowest bidder.
Project billings
Project billings submitted to the Road Commission will include quantities being billed for each Pay Item, priced at the quoted unit price for that item per the contractor’s bid. Where quantities used on the project or work performed on the project exceeds the estimated quantity in the bid, the contractor will be paid for the actual quantity. (That is, the total the contractor is paid for that Pay Item will be more than the amount bid, because there was more work done.) Similarly, if the quantity of material actually used or work actually performed is less than the estimated quantity in the bid, the contractor is only paid for the actual material used/work performed, at the price quoted in the bid. The Road Commission reviews and validates the contractor’s billings. Bloomfield Township utilizes proceeds from the bonds sold to fund the project to pay the Road Commission for the project costs.
What happens when the project is completed?
All costs incurred in the project are accumulated by Bloomfield Township and accounted for separately from other SADs or the general funds of the Township. Once all costs are incurred and all of the assessments are collected over the 15-year term of the SAD, there may be money left over in the SAD. By statute, if the excess in the SAD is more than 5% of the total SAD cost, that excess must be refunded to the residents at the end of the 15-year term of the SAD. If excess is less than the 5% threshold, by statute, the money is to be retained by Bloomfield Township; Township policy provides that the funds are to be used for maintenance of the roads improved by the SAD.