IBJNews

'Buy local' law doesn't sting Indy sewer project

Back to TopCommentsE-mailPrintBookmark and Share

A new state law that could add to the cost of public works projects didn’t impact one of Indianapolis’ most sizable bids this year.

Bids for a section of a massive sewer project came in between $5 million and $90 million below the estimated cost of roughly $275 million, officials from the city’s Department of Public Works said Friday. 

State law used to stipulate that bids be awarded to the firm that offered the lowest price and met specified criteria, but a new so-called “buy local” law requires municipalities to give preference to local bidders. 

David Sherman, the city’s public works director, said none of the nine firms that bid on Indianapolis' massive project were local.

Because of the level of expertise required for the project–a deep rock tunnel to add storage capacity for raw sewage–the bids were from big players in the tunneling field, Sherman said. Most were joint ventures.

“The nine we got are big-name firms,” Sherman said. “We got all the national and international players.”

The apparent low bidder is a partnership between California-based J.F. Shea Co. and Nebraska-based Kiewit, which offered a bid of $185.4 million. The bids will be awarded in October.

City officials estimated the so-called “buy local” law had the potential to drive up costs for the project by about $3 million, but some legal experts who have studied the law say it could have been millions more.

The law, which went into effect July 1, stipulates that firms in counties where public works projects are bid–or adjacent counties–get a leg up in the bidding process by receiving a price preference on their bids.

For projects of $100,000 or more, local governments must adjust a local firm’s bid to be 1 percent lower than what the firm actually offered. But the firms, according to some interpretations of the law, still get paid what they originally offered. That could result in local governments paying more for projects, should the local bidders be awarded the contract.

Others say the law goes further, requiring government units to award the bid to the local firm, regardless of cost.

Sherman said it’s likely the “buy local” law will impact future Indianapolis public works projects, which will include road and street work that require less-specialized bidders. He said it’s unclear how it will impact the cost of those projects, though, since most of the bidders for those kinds of projects tend to be local, anyway.

Citizens Energy Group, which will become the utilities’ official owner Aug. 26, will select the winning bidder in the deep rock tunnel project. Sherman said the city bid out the project prior to the transfer to meet federally mandated timelines.

Savings on the deep rock tunnel bid will reduce the overall cost of the $3 billion sewer overhaul project. That will help curb rate increases that are needed to fund the project.

ADVERTISEMENT

  • Local?
    Crown Point isn't in an adjacent county. It's about as far away as you can get and still be in Indiana, in fact - Lake County. The "Buy Local" law is just that - LOCAL. In order to receive the bid preference, it would have to be within the metro area - Indianapolis/Marion County or one of the "donut" counties: Boone, Hamilton, Madison, Hendricks, Hancock, Morgan, Johnson, and Shelby.
  • Oops
    I meant to say there was ONE Indiana company instead of Indianapolis in my previous comment.
  • Not True
    Regarding the comment released by David Sherman regarding the bids for the Deep Rock Tunnel project bids there was ONE Indianapolis company who bid this project and that was Walsh/VINCI Joint Venture, 1260 East Summit Street, Crown Point, IN 46307. 219-661-2450.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. Great article and post scripts by Mike L (Great addition to IBJ BTW). Bobby's stubborn as a mule, and doubt if he ever comes back to IU. But the love he would receive would be enormous. Hope he shows some time, but not counting on it.

    2. When the Indiana GOP was going around the State selling the Voucher bill they were promising people that the vouchers would only be for public charter schools. They lied. As usual.

    3. I am Mr. Morris Ray, a Legitimate And a Reputable money Lender. We lend funds out to individuals in need of financial assistance, we give loan to people that have a bad credit or in need of money to pay bills, to invest on business. Have you been looking for loan? you have not to worry, because you are in the right place i offer loan at low interest rate of 2% so if you are in need of a loan i want you to just contact me via this email Address: morris_ray123@outlook.com

    4. Jim, your "misleading" numbers comment is spot on. This is the spin these posers are putting on it. News flash, fans: these guys lie. They are not publicly traded so no one holds them accountable for anything they say. The TV numbers are so miniscule to begin with any "increase" produces double digit "growth" numbers. It's ridiculous to think that anything these guys have done has awakened the marketplace. What have they done? Consolidate the season so they run more races on consecutive weekends? And this creates "momentum." Is that the same momentum you enjoy when you don't race between August and March? Keep in mind that you are running teams who barely make ends meet ragged over the summer to accomplish this brilliant strategy of avoiding the NFL while you run your season finale at midnight on the East Coast. But I should not obfuscate my own point: any "ratings increase" is exactly what Jim points to - the increased availability of NBC Sports in households. Look fans, I love the sport to but these posers are running it off a cliff. Miles wants to declare victory and then run for Mayor. I could go on and on but bottom line for God's sake don't believe a word they say. Note to Anthony - try doing just a little research instead of reporting what these pretenders say and then offering an "opinion" no more informed than the average fan.

    5. If he's finally planning to do the right thing and resign, why not do it before the election? Waiting until after means what - s special election at tax payer expense? Appointment (by whom?) thus robbing the voters of their chance to choose? Does he accrue some additional financial advantage to waiting, like extra pension payments? What's in it for him? That's the question that needs to be asked.

    ADVERTISEMENT