Bids for Charlotte streetcar’s new phase came in millions over budget

The Charlotte Area Transit System is rejecting the only two bids it received to build the second phase of the Gold Line streetcar because both contractors exceeded the city’s budget for construction work – one by more than 30 percent and one by nearly 40 percent.

CATS said it plans to negotiate with the two construction firms – Conti Enterprise and Balfour Beatty Infrastructure – on a lower price so the 2.5-mile extension can move forward.

The streetcar line today is 1.5 miles and runs from Time Warner Cable Arena to Novant Health Presbyterian Medical Center.

The city budgeted $80.3 million for the extension’s construction, plus another $12.9 million in improvements that aren’t for the streetcar but will be cheaper and faster to do while the road is already torn up – things like upgrading traffic signals and water lines. That was the part of the project up for bid.

In addition, the city budgeted nearly $70 million in non-construction costs for the project, including about $41 million for seven new streetcars that will replace the green-and-yellow replace trolleys used today. Conti and Balfour Beatty weren’t bidding on those parts of the project.

Here is the breakdown:

▪ For the streetcar extension, expanding the existing line to Johnson C. Smith University to the west and to Sunnyside Avenue to the east, Conti bid $89.5 million and Balfour Beatty bid $102.2 million. Budgeted: $80.3 million.

▪ For the improvements that aren’t actually part of the Gold Line (additions David McDonald of CATS said were typical on construction projects), Conti bid $33.9 million, Balfour Beatty $26.3 million. Budgeted: $12.9 million.

▪ Totals: For a budgeted $93.2 million in construction work, Conti bid $123.3 million, more than 30 percent over the budget. Balfour Beatty bid $128.5 million – nearly 40 percent over.

The city planned to award a contract in late summer. McDonald said he doesn’t think the project will be delayed significantly.

The second phase of the Gold Line is scheduled to open in late 2019 or 2020.

The federal government has agreed to pay for $75 million of the construction costs. The city plans to pay the other $75 million with money from the general fund budget. CATS isn’t paying for the project.

The federal government’s contribution is capped at $75 million, which means the city will have to pay the extra costs, whether they end up being $5 million or $30 million.

“One of the things we’ll be looking at during negotiations is if we can see areas where they saw risk or uncertainty,” McDonald said.

He said some of the non-streetcar-related improvements might be cut from the project.

“We have a little more flexibility with the city improvements,” he said. “We believe we have some room to work with there.”

This story was originally published July 20, 2016 at 6:09 PM with the headline "Bids for Charlotte streetcar’s new phase came in millions over budget."