Contract renewal could save thousands in future construction costs
Published 12:00 am Wednesday, December 1, 2021
LAPLACE — Financial savvy thinking by St. John the Baptist Parish engineering consultant Joseph Savoie could potentially save the parish thousands of dollars in future construction costs, especially on materials used to remove and replace sidewalks, driveways and street panels.
By petitioning the Parish Council to extend the current contract with LA Contracting Enterprises LLC for another year, the parish is guaranteed the prices originally submitted by the company in late 2020. Peter Montz, director of purchasing and procurement for the parish, said Savoie identified two clauses in the existing contract with LA Contracting that would legally allow for the extension, the first being if the original work could not be completed because of an act of God. Montz pointed out Hurricane Ida is considered an act of God that brought projects to a halt.
Secondly, a provision also allows for an extension as long as both parties are in agreement.
“It’s a potential cost savings,” Montz said. “The cost of new materials has risen greatly. We know costs will likely continue to go up.”
Parish President Jaclyn Hotard agreed that locking in the pricing per unit will likely result in “substantial savings.”
“We have the opportunity not to be hurt with these cost increases,” she said, acknowledging that any savings could be put back into the budget and fund additional projects.
Savoie based his projections on current pricing trends, which in some cases are rising daily, as well as discussions with contractors.
During the discussion, Councilwoman Tonia Schnyder questioned the legality of the extension.
“I want to make sure we are doing this fairly and not blocking out another contractor,” she said.
At one point, Schnyder recommended the council reject the extension proposal and go out for bid, but Councilwoman Tammy Houston pointed out that scenario could result in added costs to the parish.
LA Contracting president Jeremy Landry said LA Contracting Enterprises cannot legally change the current unit pricing. He admitted the company will absorb a hit to its net profit but agreeing to the extension will assist its revenue stream.
Landry revealed that a 6’ x 6’ wire mesh unit that was recently priced at $40 per unit is now up to $80 per square. The bid for concrete in the original contract was $103 per cubic yard, which remains locked in, and now that same concrete is costing $130 per cubic yard.
Councilman Kurt Becnel said he has witnessed mesh wire rolls increase from $68.50 per roll to $122 per roll in recent months.
“I commend you (for being able to sustain the current pricing structure),” Becnel told Landry.
“I can’t believe some of the prices I’m seeing,” Councilman Robert Arcuri said. “This is to the parish’s advantage.”
A copy of the contract was made available to the L’OBSERVATEUR and the two clauses that Savoie referenced were present, including the key clause allowing for an extension if both parties agree.
The motion passed 5-1, with Schnyder dissenting. Three council members were absent.