Memorandum
City of
Public Works
|
TO: |
Dave Corliss,
Debbie Van Saun, Terese Gorman, Steve Lashley |
|
FROM: |
Chuck Soules |
|
Date: |
August 16, 2006 |
|
RE: |
Asphalt Pricing
Adjustment August 22, 2006
Agenda Item |
The cost of construction has significantly increased during the 2006
construction season because of increased asphalt pricing:
|
2004 |
$33 / Ton of asphalt |
|
2005 |
$35 / Ton of asphalt |
|
2006 |
$44 / Ton of asphalt |
The extreme volatility of asphalt oil has made it difficult for
contractors to provide competitive pricing.
In June KDOT adopted a specification
for the price adjustment of asphalt materials.
This specification is very specific, using current market conditions and
specific percentage of asphalt and oil used in the various mix designs used by
KDOT. The attached specification
simplifies a price adjustment for asphalt oil increases/decreases, but is based
on the same principals used by KDOT.
This policy has been reviewed by our local contractors.
KDOT’s website provides the following oil prices:
|
June |
$350 / Short Ton |
|
July |
$354 / Short Ton |
|
August |
$375 / Short Ton |
KDOT did not provide a price adjustment in June/July; however, in
August a $20 increase over July pricing would incur a $1.00/Ton adjustment in city
projects.
This year the city Mill and Overlay Projects included:
|
Phase 1 |
10,500 Tons |
|
Phase II |
5,500 Tons |
|
Phase III |
6,000 Tons |
The adjustment will be made monthly with the base price being
established in the month the bid was received.
This will provide better competitive bids for the city and provide a
comfort level for the contractor to provide competitive pricing.
Please let me know if you have any questions.
ACTION REQUESTED: Approve specification for the price adjustment of asphalt materials.
Respectfully submitted,
Charles F. Soules, P.E.
Director of Public Works
Attachment: Specification