Hardin County awards HMGP detention-pond construction to low bidder despite $1.7M shortfall

Hardin County Commissioners voted Jan. 27 to award a Hazard Mitigation Grant Program (HMGP) construction contract for the Lumberton detention pond to the low bidder, MK Constructors, even though contractor bids significantly exceeded the available federal construction funds.

Judge McDaniel moved to award the project to MK Constructors and to commit the county’s HMGP construction award of $5,195,700; Commissioner Young seconded the motion, which the court approved. The vote authorizes county staff, the city of Lumberton and the low bidder to negotiate contract scope and cost and return to the court with a proposed contract and recommendation.

The county’s purchasing agent, Misty Sims, presented bid results showing multiple contractors submitted proposals that were higher than the HMGP construction award. Grant administrator Melinda of Trailer and Associates explained the discrepancy: the project budgeted construction funding in earlier years, but excavation volume, the cost and disposal of large quantities of dirt, rising labor and material costs since the original application and changes to federal modeling requirements all pushed bid prices higher. Melinda told the court that the final construction portion available for this project is $5,195,700 and that current low bids create ‘‘a deficit right now of just over 1,700,000’’ between the HMGP funds and the lowest responsive bid.

Melinda also described recent federal-rule changes that affected the Benefit-Cost Analysis (BCA). ‘‘At the time the BCA was prepared we could use historical damages; now you have to use modeled damages and the discount rate changed from 3% to 7%,’’ she said, adding those changes reduced the project’s calculated annualized benefits and contributed to the shortfall.

Commissioners and city representatives discussed options to close the gap. County staff said they can award the bid and then negotiate change orders with the low bidder to reduce scope or quantities; allowable change-order maximums cited during the meeting were 18% for counties and 25% for cities. County and city officials said they would also explore whether the City of Lumberton or other local sources could contribute funding; the court did not commit county contingency funds at the Jan. 27 meeting.

The court directed staff to negotiate with MK Constructors, the City of Lumberton and the project engineer and to return with contract documents and a recommendation (staff aimed to return by the Feb. 10 meeting if possible). The award authorizes moving to negotiation and does not by itself obligate the county to pay the $1.7 million overage unless and until the court approves a contract or local contributions.

A handful of residents and local officials spoke in support of moving the project forward, emphasizing long delays since the grant application was first developed. The court and staff repeatedly attributed delays to protracted state and FEMA reviews of the BCA and to turnover at federal and state offices that review HMGP projects.

Next steps: staff will pursue value engineering and scope reductions with the low bidder, continue discussions with the City of Lumberton about local funding options, and return to the court with a proposed contract and funding recommendation.