22 Freeway’s Latest Setback: High Bids

High bids from two road builders could jeopardize long-awaited improvements to the heavily congested Garden Grove Freeway, a project already hampered by the loss of $170 million in state funds.

Officials for the Orange County Transportation Authority said Monday that bids from Kiewit Pacific and Granite Construction well exceed an official estimate of $185 million to overhaul the main part of the 22 Freeway, from Brookhurst Street in Garden Grove to Main Street in Orange.

No major improvements have been made to any part of the roadway -- which includes the dreaded Orange Crush, its junction with the Orange and Santa Ana freeways -- since it opened in the 1960s.

“We have a serious budget problem we must deal with if we are going to build this project,” said Arthur T. Leahy, OCTA’s chief executive officer. “We are disappointed. The bids are significantly higher than our engineers’ estimates.”

If further negotiations with Kiewit and Granite fail, OCTA officials say, the authority might seek new competitive bids, a process that could delay the project up to two years.

The overall plan calls for $383 million in improvements to 12 miles of the Garden Grove Freeway, including right-of-way acquisitions, widenings, carpool lanes and improvements to on- and offramps.

In addition to the five-mile main phase from Brookhurst to Main, the overall plan includes two options to extend improvements east from Main Street to the Costa Mesa Freeway and west from Brookhurst to the San Diego Freeway.

Last year, the project lost about $170 million in state funds that OCTA had counted on to bankroll almost half the project. Since then, the authority has come up with a contingency plan to improve sections of the highway as money becomes available. The five-mile stretch from Brookhurst to Main is the highest priority.

“These projects are tough projects, and it’s a tough economy today,” Leahy said. “But we are going to keep at this project until we get it done.”

The bids may be the result of a jump in the cost of construction materials, transportation officials suggested.

OCTA officials discussed the bids Monday morning during a meeting of the agency’s Regional Planning and Highways Committee, a panel of five board members that makes policy recommendations to the main board of directors.

Leahy, one of four people at OCTA who know the bid amounts from Kiewit and Granite, said the figures could not be disclosed because of the authority’s procurement rules. To prevent any participating company from gaining a competitive advantage, bids are not made public until shortly before a contractor is selected.

In hopes that Kiewit and Granite will lower their bids, OCTA will evaluate the bids and ask the contractors to submit their best and final offers. Those could go before the board of directors in July.

“I want to go forward with the bid evaluations on the technical and financial sides,” said county Supervisor and OCTA board member Bill Campbell. “If both make it through, we can do a best and final offer. We need to give them one more shot to sharpen their pencils.”

Leahy said OCTA might want Kiewit and Granite to bid on the main phase plus one of the options, a change that might make it cheaper overall to do two parts of the project together rather than separately.

“By combining segments, it might give the companies more stability and an incentive to lower costs,” Leahy said. “We need to get a more economic approach to the project.”

OCTA officials say the high bids might stem from inflation in the construction industry. The industry has been beset recently by dramatic cost increases for fuel, steel and lumber. The price of steel, which reinforces pavement and bridges, rose at least 20% in the first quarter this year.

Because of increasing demand for construction in the United States and abroad, some forecasts show that construction costs overall will rise more than 25% in the U.S. this year.

Garden Grove Mayor Bruce Broadwater, who is running for county supervisor, said he hoped the high bids wouldn’t jeopardize the city’s attempts to resolve its dispute with OCTA over freeway improvements.

The city, whose lawsuit against OCTA argues that the project doesn’t take city traffic needs into account, wants city underpasses widened as part of the project. Both sides say they are close to an agreement.

Broadwater and Campbell said OCTA should take money from the $1.2-billion CenterLine light-rail project and give it to the freeway project, which they consider more important.

“They ought to quit pouring money into CenterLine and fix what they need to fix,” Broadwater said. “Everything else in this county has been fixed before this freeway.”

To help shore up the project’s finances, the highway committee recommended Monday that OCTA do just that by shifting $30.8 million from CenterLine to the freeway project. OCTA officials said the money earmarked for light rail could be recovered from future federal funds.

The panel also reaffirmed support for seeking $75 million more in federal funds for new connectors between the Garden Grove and San Diego freeways.