WV Water Tank Bids Face Cost Increases

FRIDAY, FEBRUARY 11, 2022


City officials in Wheeling, West Virginia, recently solicited bids for the repainting of two water tanks and were surprised by the increase in costs for the work.

The Wheeling City Council met at the beginning of the month to read an ordinance authorizing the contract amount of $495,840 with Worldwide Industries Corp. of Butler, Pennsylvania, to repaint two city water tanks.

The bid was reportedly the lowest of the three received. Two other contactors, John B. Conomos Inc. of Bridgeville, Pennsylvania, and Almega Company Inc. of Upper St. Clair, Pennsylvania, submitted bids for the projects for $881,855 and $1,014,635, respectively.

“Prices have gone through the roof,” said Wheeling Public Works Director Rusty Jebbia. “The bids surprised us, too. Costs have gone up.”

One of the water tanks, on a hillside off Springdale Avenue, holds 800,000 gallons. The other tank, located in Washington farms, can reportedly hold 50,000 gallons. According to officials, both the Springdale and Washington Farm tanks are expected to have the inside and outside be sandblasted and repainted.

Jebbia noted that the city has a regular rotation for tank painting, with the extent of the work depending on the condition of the individual tanks.

“We try to paint tanks once every 20 years, and we try to do a project every year or so when we can,” Jebbia said.

“The frequency depends on the tank itself, and also depending on the tank, sometimes it’s inside and outside,” City Manager Robert Herron added. “The city maintains a tank painting fund in which each year, funds are set aside for our tanks.”

The city maintains 19 water tanks in total, with most in the city limits but some reaching as far away as Pennsylvania. The project will be charged to the city’s Water Department Tank Rehabilitation Fund, according to the ordinance.

Worldwide Industries reportedly has more than 50 years of experience in the industrial and municipal tank painting business, including preparation, painting and maintenance of water tanks, fuel storage tanks, wastewater tanks and process tanks.

Increased Industry Costs

The increase in bid costs could likely be attributed to the ongoing inflation of raw materials and supply shortages, affecting overall labor costs and project prices.

At the end of last year, the British Coatings Federation issued a statement citing raw materials account for about 50% of all costs in the industry. Increases in energy and oil prices also reportedly more than doubled in the last 12 months, upping production costs.

The impact, BCF said, is “obviously very severe” with resins and related materials seeing a 36% price hike. For example, the average price for Solution Epoxy Resin is reportedly up 124% in September from this time last year.

According to survey data from AlixPartners, more than 60% of manufacturers reported a resin shortage in October last year. Even worse, some management consultants think that the issue could persist for up to three years or until production can catch up with demand.

According to recent reports from the Associated General Contractors of America, the increased prices of materials are outpacing the rate at which contractors are raising their bids.

“Prices for nearly every type of construction material are rising at runaway rates,” said Ken Simonson, the association’s Chief Economist. “These costs are compounding the difficulties contractors are experiencing from long lead times for production, gridlocked supply chains, and record numbers of job openings.”

The association further reported that the steps currently being taken to address these issues are insufficient and is again urging public officials to redouble their efforts.

According to an analysis by AGC of government data last month, construction material prices jumped nearly 20% in 2021, despite moderating in December.

In a survey issued by the association, 86% of contractors rated material costs at their top concern for 2022, more than any other concern. Availability of materials and supply chain disruptions were the second most frequent concern, listed by 77% of the more than 1,000 respondents.

As part of its report, the AGC released a chart of the gap between input costs and bid prices.

   

Tagged categories: Bidding; Contractors; Contracts; Government contracts; NA; North America; Painting Contractors; Program/Project Management; Raw materials; Rehabilitation/Repair; Supply and demand; Tank exteriors; Tank interiors; Tanks; Tanks; Water Tanks

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