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Sunday, May 1, 2016

Lower Jail Bids and Interest Rates Put New Jail on Track

Wednesday, December 19, 2012

Photo by Richard Irby Larson Tate, of Tate General Contractors, was one of several contractors who handed in their bids on a new Fulton County Jail, just minutes before the 2 p.m., Dec. 13, bid opening. Tate Contractors of Jonesboro was the apparent low bidder at $1,749,000. A contractor will likely be officially chosen in January. [Order this photo]
There have been many frustrating, bad days for county officials, since voters authorized a spending plan allowing a new Fulton County Jail to be built. But, County Judge Charles Willett declared Thursday, Dec. 13 "a good day."

On Dec. 13, construction bids were opened, a process that will soon lead to the hiring of a general contractor to build the jail.

The bid opening comes months later than planned because the county had to find a new architect and overcome other delays before moving forward.

Dec. 13 was a good day to Judge Willett, Sheriff Buck Foley and Justices of the Peace Jack Haney and Jim Bicker, who were present, because nine companies submitted bids and, as hoped, competition to win the bid led to some low offers that are within the amount of money the county has to work with.

The City Hall Conference Room gradually filled up with contractors' representatives and onlookers in anticipation of the 2 p.m. bid opening. Architect James Langford had his telephone alarm set for 2 p.m., the time at which he would announce the deadline to hand in a bid had passed. In the ten minutes before the deadline, representatives of four companies appeared to hand over their bids and, shortly after the alarm rang, Steve Littleton, who has been named Project Manager by Spirit Architects, declared, "We will commence opening bids."

The county has been approved for a low interest loan of $1.8 million. An additional $300,000 from a federal stimulus grant will provide the rest of the $2.1 million estimated total cost.

Bids needed to come in around $1.7 million dollars to allow the project to be built as designed.

The first two bids opened were for $1,980,000 and $1,843,000, slightly above the desired bid range.

The third bid, from Tate General Contractors of Jonesboro, was for $1,749,000. The fourth bid, from NOACON, was just $19,438 higher, at $1,768,438 -- both in the needed price range.

Three of the remaining five bids were for more than $2 million.

"That concludes the opening of the envelopes," Littleton said. "We appreciate everyone's interest in the project. We are going to take all these bids under the advisement and the owner (the county) will make a decision."

As bidders filed out of the room, one approached Larson Tate, of Tate General Contractors, and said, "Looks like you have a job."

Tate agreed that it appeared his company had the low bid, but there was still a waiting period as architects evaluate every bid.

Besides making a base bid, contractors were asked to give three additional bids, lowering their price by certain amounts if it was determined that some parts of the original bid would have to be cut to meet the budget. The three alternative bids called for eliminating some paving, or not building a sally port or cutting back on some interior features of the jail.

As the crowd cleared out, Judge Willett's reaction to the bids was, "We couldn't ask for better than that."

Sheriff Foley agreed saying, based on the lowest bids, "I think we'll have a jail."

Favorable bids were not the end of the good news.

Carolyn Woehl of the USDA Rural Development Office in Harrison announced that the loan interest rate, which had been locked in at 4 percent, has dropped to 3.18 percent, if the approved loan is closed between now and March.

According to Woehl, the interest rate drop of nearly one percent could cut the county's monthly payment by almost $1,000.

"Over 40 years, that's about a half million dollar savings," Willett said. "Man, I'm telling you, that's great."

Woehl, who was accompanied by USDA Area Manager Johnny James, said, if the project needed additional money, the USDA would allow the county to keep its monthly payment at the scheduled $7,191 a month, and take up to $243,000 in additional cash for the project.

The initial reaction among county officials was to use the lower interest rate to reduce the monthly payment to USDA.

Langford said his company would analyze the bids and make a recommendation as to what company had the lowest and best bid as soon as possible. Willett said he hoped Quorum Court could have a recommendation to pass at its January meeting.

Architects and county officials want to work as quickly as possible to get their work done, so the matter of hiring a contractor and revising the budget the company will follow can be turned over to USDA for approval. That would allow for the loan to be closed and money to become available to start construction.

Langford said it is likely that construction can start in late January or early February.

After bids were opened, Langford spoke briefly with Larson Tate, the apparent low bidder.

"Unofficially, have you (Tate General Contractors) ever done a jail?" Langford asked.

"We did a project in Craighead County," Tate replied. "We did an addition (to the jail) there seven to 10 years ago."

As he left, Tate said to county officials, "I don't know if you all know James Blevins ( a Salem resident and contractor) or not."

"He's the one who put this bid together."

"I didn't know he could write," Sheriff Foley joked about Blevins.

Tate told The News that he feels fortunate his company had the low bid, narrowly edging out a competitor.

"Those were tight bids," Tate said, agreeing that, in a struggling economy, contractors are keeping their bids as low as possible to try to land the fewer jobs that are available.

After the excitement of favorable bids and a lower interest rate, it's back to a waiting game for county officials.

"So whenever (architect) Jim gets everything finalized, we'll get together and decide exactly what we want to do (about hiring a contractor)," Willett said.

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