Steel is Down, the Aud is Up
The price of steel has fallen through the floor, potentially making demolition of the Buffalo Memorial Auditorium less desirable for Ontario Specialty Contracting, who stands to increase the value of their $1.3 million demolition bid by selling the Aud's steel for reuse. The lowest of 11 bidders for the job, OSC has seen steel prices plummet since submitting their bid.
There is speculation, however that the slide will be short-lived, as in this article.
In the meantime, the contract between OSC and the Erie County Harbor Development Corporation is being processed in NYC - without amendment in consideration of steel prices - and will be presented to OSC shortly.
"It is our hope that Ontario Contracting will still want to move forward," according to ECHDC Director of Communications Matthew Davidson. If OSC doesn't accept the contract, they will forfit a $130,000 bid bond, and the offer will be presented, down the line, to the remaining 10 bidders in the hope that one of them will accept the contract.
Slated to begin demolition in mid-November, the project is still considered to be on schedule, and depending on the results of the contract, could stay that way if the contract is accepted and OSC mobilizes. With the start of construction of Bass Pro to begin on the site in the fall of '09, contractor delays could be a detriment to that project.
Asbestos remediation at the Aud has been completed, and Davidson points out that the act of removing the asbestos from the upper levels, walls and floors has already gone a long way toward demolition. "Now it's a matter of getting the contract signed and moving forward," he said.
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NewBuffalo
another reason why you NEVER take the lowest bid. Sounds like the other 10 contractors were smarter and did not bank this on reselling the steel. Force them to move forward. If they lose money because of this too bad. Do they think this is like the stock market?
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benfranklin
It's surprising there is no futures market for steel scrap. Being able to buy or sell at a future date at a set price would eliminate the contractor from taking on the risk of price fluctuation.
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lastcall4am
I think there was a reason that they were such a low bidder.....Does OCS know what they're doing?
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billo
I think the bids on demolition came in lower than anticipated, so sending an additional 100-200k to OCS as a gesture of goodwill is reasonable. It's better to just get it done rather than risk additional weeks or months of bureaucratic delays, assuming changing the contract price will not blow the whole thing open, which is probably presumptuous on my part.
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whynot
There is always a loophole in Buffalo.
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bufflow
This was on TV news and in paper last week. What's new here?
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bufflow
This was on TV news and in paper last week. What's new here?
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UrbanGuy
So you sign a contract locking you into doing the work and then when what you were planning on to keep your project cheap doesn't happen you want to renegotiate!? Yikes. Talk about stones!! How about you have some foresight before you provide a bid? If the price of steel skyrocketed OVER what they estimated would they give back the profit?!?!
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meanoldman
tell um urban guy! they should bite the bullet then hold the steel till the price goes up.(consider it an investment) sue them if the contract is not honored, and tell the rest of the country of there bad practice.
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heathersmiles
I read that the contract was still with the Legal Dept and was not signed by the contractor.
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gaustad
this town can not get out of its own way...does anything ever go smoothly around here....
What do you mean they did not lock in the contract
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