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County seeks study to verify office complex budget

Thursday, November 6, 2014 by Mark Richardson

Travis County Commissioners are asking for a second opinion on whether the budget to construct a planned office complex at 416 West 11th St. is realistic, or whether they should put the project back out for bids. The initial budget for the Ronald Earle Building came in about $10 million over the county’s $34.5 million budget.

Commissioners directed county staff Tuesday to find a qualified third-party consulting engineer to study the $45 million budget submitted by the original contractor, Oklahoma-based Flintco contractors. Judge Sam Biscoe said he wants the consultant to tell them whether the numbers are good or if the county should terminate Flintco’s contract and look for another firm to act as construction manager. Staff will report with their recommendations at the commission meeting Friday (held early because Tuesday is Veterans Day).

The Ronald Earle Building will house the Travis County District Attorney’s staff and related operations. Ronnie Earle was a longtime Travis County DA who was also known for his controversial prosecutions of allegedly crooked politicians as the head of the state’s Public Integrity Unit. He retired in 2008 after almost 30 years on the job.

The issue exposed a significant difference of opinion between two county department heads, Facilities Management Director Roger El Khoury and County Purchasing Agent Cyd Grimes, who disagree over how the project should proceed. El Khoury advised Commissioners to cancel Flintco’s contract and issue a new invitation to bid for the project, while Grimes recommended that the county re-evaluate its original budget, which she believes is too low.

El Khoury told Commissioners that Flintco’s contract was on a “construction manager at risk” basis, and the company was supposed to find a way to construct the building at or below the budget it was given. He said the Facilities Management staff rejected Flintco’s guaranteed maximum price on the project, and he believes the county can still build the structure within its original budget.

However, Grimes told Commissioners that Facilities Management’s recommendation would only delay the project and increase the costs. She said changing the contract from a construction manager at risk would mean the county would be on the hook for any additional costs. Grimes said she believes that the county’s original budget is too low.

“If I had to make the decision, I would increase the budget,” Grimes said. “We have taken out all of the things we can take out. I’ve sat in meetings for two days going through the specs. … You’re looking to re-scope it to bring it within budget, and it’s going to mean time and delays and extra work on facilities.”

Page, the county’s architectural engineering firm for the Ronald Earle Building, told Commissioners in a letter that even despite Austin’s “hot” construction market, it believed the Flintco guaranteed maximum price proposal was too high for the project. Page officials said competitive bids could significantly bring down the cost of construction.

At that point, it was clear that El Khoury and Grimes were not going to agree.

Flintco Executive Vice President John Martin pointed out that the Austin construction marketplace is very volatile, and that costs on projects tend to increase even during the time it takes them to complete an estimate on a project. Nonetheless, he said that soon after they began working on the job, it became clear that the budget was too low.

“A week after you selected us and we began to look at the project, our first estimates indicated that the budget was too low and had to be increased,” Martin said.

In hopes of reinforcing his point with Commissioners, Martin suggested they consider hiring a third-party consultant to run the numbers on the project and get an unbiased estimate of what it should cost. He estimated that a consultant would take about three or four weeks to perform the task and cost the county about $25,000 to $50,000.

The project’s original deadline for occupation was April 2016, but that could be delayed by several months depending on what Commissioners decide.

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