Water plant cost rises $3.2 million following dispute

Wednesday, February 9, 2005

By JOHN CASTELLUCCI, Journal Staff Writer

PAWTUCKET -- The price of the city's new water treatment plant has shot up $3.2 million as a result of the dispute over which company to award the lucrative contract.

Documents disclosed at last night's Water Supply Board meeting showed that the base construction price rose from $41.9 million to $45.1 million as the dispute dragged on 15 months and cost escalators kicked in.

The documents were prepared by Paul Eisenhardt, the Water Supply Board's consultant on the water treatment plan procurement. They were submitted to the board in response to a claim by Earth Tech, the successful bidder, that the final base contract price should be at $45.8 million once the effect of the cost escalators was factored in.

Eisenhardt disagreed, slicing $700,000 from the base contract price.

Pamela M. Marchand, chief engineer and general manager of the Pawtucket water system, asked the Water Supply Board to endorse Eisenhardt's conclusion, in effect setting the contract price at $45.1 million.

But key Water Supply Board members balked, concerned about the effect of the vote, and the implications.

Rather than approve the $45.1 million contract price, the board decided to table the matter until Sean O. Coffey, its lawyer on the water treatment plant procurement, has had a chance to say whether a vote is necessary and, if so, what the consequences could be.

A new water treatment plant is being built because the existing plant, on Mill Street in Cumberland, is considered too antiquated to meet tough new federal safe drinking-water standards.

Four companies submitted bids for the ambitious design-build project. Two were deemed qualified: Earth Tech and US Filter, in January 2002.

But a lengthy dispute between the Water Supply Board and City Council delayed the award of the contract until April 2003. The City Council wanted US Filter; the Water Supply Board wanted Earth Tech. The matter went to court. A judge decided that the council had the power only to ratify, not award the contract.

The council still balked. Mayor James E. Doyle and the Water Supply Board warned that continued delay raised the specter of catastrophic failure of the existing plant, built when Franklin Delano Roosevelt was president. Finally, the council gave in.

The 20-year contract to design, build and operate the new plant was awarded to Earth Tech early last year. Construction of the plant started in July.

The base construction price would have increased no matter which company was the successful bidder, because both US Filter and Earth Tech were entitled to the escalator clauses, Water Supply Board members said.

But nobody knew for certain what the final base contract would be until last night, when documents by Eisenhardt calculating the effect of the escalator clauses were submitted. At least one Water Supply Board member sought reassurance that the final figure was really final.

"Everybody knew that we were going to come up with a new base price," said city Finance Director Ronald L. Wunschel, an ex-officio member of the Water Supply Board. "Is this it, final, no more?"

"This is it," Marchand answered. Then, referring to Earth Tech, she added, "Except for any claims they might want to put in."