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The Honolulu Advertiser
Posted on: Wednesday, December 20, 2006

ON THE MONEY TRAIL
Small road is costing big bucks

By Jim Dooley
Advertiser Columnist

When the first phase of the Lahaina bypass road project on Maui was put out to bid last year, the low bidder was Hawaiian Dredging Construction Co. at $33.15 million.

It's a one-mile, two-lane section of road. That pencils out to $537 per inch of roadway. The route is mostly gullies and scrub land, so the job calls for construction of a long aqueduct. It's a high-priced proposition that has now gotten a lot more expensive.

There were problems with the bid. Two other companies that competed for the job Dick Pacific Construction Co. Ltd. and Kiewit Pacific Co. offered $56.96 million and $65.6 million, respectively. Seeing such a huge gap between the low bidder and the other competitors should have made the state suspicious of the numbers from Hawaiian Dredging, the state later acknowledged.

But the company's bid was within the range of what the state had estimated the job should cost, $30 million to $45 million, so it went ahead and awarded the job to Hawaiian Dredging on March 31, 2005.

Two weeks later, the company told the state it wanted to withdraw its bid "due to four errors discovered after a comprehensive check of our estimate." And the company wanted to withdraw without the state going after the million-dollar performance bond the company had posted as part of the bid.

First the state said OK; it would simply award the job to Dick Pacific, the second-highest bidder. Then officials decided they couldn't do that under Hawai'i procurement law. So the state notified the bidders that it was "rescinding" the "clearly erroneous" contract award to Hawaiian Dredging. And it asked the three bidders to issue "best and final offers" to new project specifications that had been "reduced in scope."

Dick Pacific filed a formal protest, citing the "unauthorized and highly irregular procedure" the state followed. In September 2005, hearings officer Craig Uyehara ruled that the state should re-bid the job.

This year, only Hawaiian Dredging submitted a bid: $52 million. The state then further scaled down the scope of the work it wanted done and negotiated a final price of $48 million. That works out to $758 per inch of roadway for a project that has twice been reduced in scope. State and company officials said the higher price was caused by steep price increases for asphalt and cement.

Keep in mind that this is only phase one of the project, with two more phases still on the drawing board.

Phase two is now supposed to be completed by 2010 and phase three by 2016. No telling what the final price tag will be.

The amazing thing about the Lahaina bypass road is that the state has been talking about getting it done for more than 30 years.

The route was chosen 10 years ago and the state condemned private residences to make way for the new road. Nothing happened.

Maui residents have been agitating for relief from Lahaina-area traffic woes for a long time. There's even a Web site dedicated to the subject: www.lahainabypassnow.com.

The company is supposed to start work next month on phase one and be finished in 750 days.

If you know that a particular money trail will lead to boondoggle, excessive spending or white elephants, reach Jim Dooley at 535-2447 or jdooley@honoluluadvertiser.com