Bid price tag soars in Henniker

In an unprecedented move, the Henniker selectmen allowed an asphalt contractor to hike his estimate up $24,660 from the company’s original bid for a paving project, due to abruptly rising costs for petroleum products.
The selectmen chose Advanced Excavating and Paving to repave Bacon Road in June. At that time Advanced bid $62 a ton to bring in 2,466 tons of asphalt for the project. But because the company must now pay $60 a ton for the asphalt, leaving only $2 a ton to transport it, Advanced notified the Highway Department that it needed to increase their bid to $75 a ton, which would have pushed the price for the job up to $184,950 for the job, or $32,058 more than the original bid of $152,892.
Road Agent John Margeson spoke with the contractor about the price after that, and Advanced then agreed to do the job for $72 a ton, if they could begin the job by Thursday. Margeson said the problem was not unique to Henniker.
“This wasn’t a surprise to me. It’s been on the public workNet since the middle of July,” said Margeson. “Everybody is ranting about what their contractors are doing with pricing. Basically he can’t do the job at the price he quoted. I don’t believe his intention was to bid low and then raise the price once he got the job.”
Margeson said he called other companies that bid on the project. He didn’t get any return calls from Pike Industries, but he did get United to give him a call.
“United basically told me that if you are anywhere in the vicinity of $70 a ton, you ought to jump on it. Those were his exact words,” Margeson said.
Worse yet, another $15 per ton hike is expected on Aug. 15, putting the selectmen in a bind. To put the job out for bid again would cost the town even more per ton by the time the bidding process was over.
“We put three other contracts out for rebid last year. But they were totally different types of circumstances where the specifications were the issue, not a national emergency, certainly a regional emergency, with regard to the wholesale cost of fuel, ” said town administrator Peter Flynn. “There is a risk of going out for a total rebid, in that we’d have to give another week or two and it would be a gamble in getting bids above $72. Probably in the meantime, if we put it out for bid, we probably would have to pay more than the increase he proposed.”
“What is not so good with this is we sort of awarded it to someone who had a slight advantage, as I recall, in the price, and now I’m not rebidding it,” chairman Tom Watman observed. “I really find it distasteful no matter what the circumstances are.”
Margeson agreed, pointing out that he thought such a large industry could afford to absorb some of the cost.
“The general rule of thumb is the price per ton that they pay and they add $12 a ton to truck it, and he’s paying $60 a ton at the plant to buy it. And his bid was $62 to truck it from Hooksett to Henniker and then lay it out and finish it,” Margeson explained. “I got a price from Brocks at $70 a ton cash and carry to pick it up, so add $12 a ton to that. . . . It’s never been the case since I’ve been here that this has happened.”
“I would like to make sure that we protect the bidding system by checking into what type of actions we might take to protect our interests when we open these bids,” said Watman. “And the reason I’m saying that is I’m not so certain that if there was a decrease in the price that they’d be rushing to us telling us, jeez, congratulations, we just cut it $8 a ton because we’re not paying as much.”
Margeson agreed, saying that other public works people were saying the same thing on the public workNet.
“So this may be an exception. It’s August and we have roads to do and so on, but I’d like to see the finance officer or the town administrator check with the lawyers and the Local Government Center and see what it is we can do,” said Watman. “There are other petroleum-based products and we may end up in this same type of thing, and who knows for how long. So I think we ought at least check into it.”
Selectman Joe Damour then asked about how long the bid was good for.
“Has it been more than 30 days? And did they specify that?” Damour asked. “Quite frankly, if I give a proposal and I say it’s good for 60 days, it doesn’t matter what happens, I have to eat it.”
“That’s the way most places go,” Watman agreed.
But when the selectmen looked at paperwork from Advanced they found there had been no time limit specified.
“We awarded it at a certain time,” selectman Cheryl Morse pointed out. “We can’t be held liable and accountable because they chose not to do the job for six weeks.”
Margeson agreed, but was concerned about consequences with pricing down the line “if we try and hold him to his price.”
“We’re over a barrel with this one,” Morse agreed.