Nov 7
2009

Reuters MediaIt is a bit late in the posting, but Reuters has a story about the low bids that have been coming in on construction projects funded by American Recovery and Reinvestment Act (ARRA) money.  They are reporting that bids are coming in 30% below estimates.  This is in keeping with observation by the Public Water Supply (PWS) section of the NC Department of Environment and Natural Resources (NCDENR).  The section has been distributing ARRA funds for water projects across the state and bids are most definitely coming in low as a rule.

The article goes on worrying that contractors are bidding below cost to win the projects and will be unable to recover funds because of redistribution of funds.  My understanding, however, is a bit different.  The PWS funding promises are based on the original estimates.  Even though contracts may come in lower, PWS is still liable for the same amount until the project is completed and all change orders have been dealt with.  Therefore, so long as there is legitimate cause for a change order, there is still opportunity for contractors to recover costs.  The only strings attached that I am aware of are that funding may be prorated according to the portion of work that has been contracted by the February 17, 2010 ARRA deadline and that no work will be compensated that has not been performed by February 17, 2012.  As a result, the biggest concern is speed and not compensation.

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Jun 26
2009

Reuters Media The Supreme Court recently upheld a permit issued under the Bush administration by the Army Corps of Engineers to allow a mining company to dump tailings from an Alaskan gold mining operation into Lower Slate Lake, which is located in the Tongass National Forest.  The Clean Water Act is supposed to prevent such discharges into natural waters, which is essentially what the appeals court had said in its previous ruling that the Supreme Court has now overturned.  Instead, the mining company, Coeur d’Alene Mines Corp, argued that the lake was the most practical and environmentally sound method of disposal.  Though this is likely to kill all aquatic life in the lake, it was argued that the lake could always be restocked with fish and restored once mining operations had ceased.  This claim seems suspicious to me, however, as gold mining operations have usually been associated with arsenic and I would suspect that such high levels would persist for some indefinitely long period of time.  Nonetheless, the 6-member court majority had said that deference must be paid to the “reasonable” decision made by the Corps of Engineers.  Unfortunately, what I read into this description is that one can get away with whatever the regulator can be convinced into allowing, however that might be accomplished.

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