We have a developing story regarding the demolition of Baptist Hospital’s “legacy campus.” Pensacola Mayor D.C. Reeves announced Tuesday that City Attorney Adam Cobb has upheld a bid protest from North Star Contracting Group for the Baptist Hospital demolition project.
The city’s initial decision to award the contract to Sessler at $14,410,797 rather than Independence Excavating, which submitted the lowest bid of $10,665,500, has prompted Escambia County Commissioner Mike Kohler to voice concerns about the city’s use of the $2 million in county funds committed to the project.
- No Impact: Sessler vs. North Star: Mayor Reeves emphasized that the change from Sessler to North Star would have “zero operational impact or financial impact” on the project at this juncture. “Two things I can share with you proactively. Number one, there is no consequential financial impact to this change, and there’s no, at this point, no substantive timeline impact to this change.”
Actual Bids
When I asked about providing specific bids for the project, Mayor Reeves indicated he would check what information could be publicly shared at this stage of the procurement process.
At 12:52 a.m. on Wednesday, I received from City Public Information Officer Jason Wheeler a procurement summary prepared by City Economic Director Erica Grancagnolo. See Summary Demolition Bids
The City shortlisted firms—Sessler Wrecking, Northstar, Independence Excavating, and Renascent—after an evaluation process that included site tours and formal presentations. The contractors submitted bids ranging from $10.6 million to $14.4 million.
Independence Excavating submitted the lowest bid at $10,665,500, while Sessler came in with the highest among finalists at $14,410,797. In early April, Mayor Reeves announced Sessler would be awarded the contract. However, through the North Star’s bid protest, the City learned Sessler did not have the required Florida general contracting license. The City has selected the next highest bidder, North Star.
| Sessler | $14,410,797 |
| Northstar | $13,498,800 |
| Independence | $10,665,500 |
| Renascent | $12,419,000 |
County Funding at Risk
The City’s decision not to select the lowest bidder has raised concerns with Escambia County Commissioner Mike Kohler because the county has committed to provide $2 million toward the demolition. Kohler has questioned whether the City needs county funds.
PNJ reporter Jim Little brought the issue up at the presser yesterday. “Commissioner Kohler told the News journal that he understands that the bids came in under $15 million and he said, ‘It just seems like the City was trying to get more than what would’ve been in the best interest for Baptist or the county, and he doesn’t feel that he’s going to support the $2 million, so I just wanted to get your response ”
Mayor Reeves responded:
“It’s shortsighted, as I mentioned already, to look at a number and say, ‘This one’s a $100 and this one’s $95, so why don’t you take the cheapest?’ And oftentimes with governance, that’s the mentality that gets you in trouble because that means things haven’t been dotted and crossed when you look at it as just a number.”
The mayor defended his staff. “I certainly hope our staff isn’t doing that. I hope our staff is making sure that the community in the surrounding areas is respected with what’s being done..”
- Reeves added, “It’s not simply always about cost. And if you want the lowest quality or something unreliable or something, then just look at the cost. If you want to make sure that everything is done the right way, then you have to look at things outside of cost. So that’s why my advice would be to not necessarily react to what the numbers are or aren’t, and actually, reading that would be my recommendation.”
The mayor said he would welcome having a conversation with Commissioner Kohler, noting the $2 million isn’t on the Board of County Commissioners’ agenda for May 1. “When he’s ready, I’m happy to have a conversation with him, and he puts it on the agenda. So we expect to have those questions, and we also already have those questions answered. So that’s the good news.”
- Then he took a jab at the commission chairman. “But my position on that would be before you talk to the newspaper, have all of your facts. And so that would be my position on that. So if he can call me anytime, he can call our staff anytime…We’re happy to have that conversation anytime before or during May 15th to explain our position.”
City Explanation
In its procurement summary, the City provided additional explanation for the bids’ differences. See Summary Demolition Bids
Some reasons that the cost estimates are different:
- Different approach to a project unknown – whether there is asbestos in the vapor barrier, and whether there is black mastic on the basement foundation wall:
- The lowest cost estimate did not include any remediation for these unknowns in their estimate. They provided an hourly rate that would be billed as a change order and would increase the project cost.
- The higher cost estimates included some level of budget for these unknowns. Sessler offered a deductive change order to the City in the range of $300,000 – $ 3 million if remediation was not needed. This would decrease the overall project cost.
- Cost of road repair – not included in all estimates
- Concrete crushing vs. hauling concrete offsite.
Total Anticipated Project Cost: In addition to the cost of the demolition contractor, the City will need an owner’s representative on site for all construction activities. A project contingency will also need to be included in the overall budget.