PIERRE --—Despite being millions of dollars short of the estimated amount needed to fully pay for the project, Gov. Dennis Daugaard agreed last week to conditionally accept the bid by Scull Construction of Rapid City to build the new State Veterans Home at Hot Springs.
Last winter the Legislature approved $41.3 million of spending from federal, state and other revenue. But all four construction bids came in higher than that last month, with Scull’s $42.7 million as the lowest.
Kent Larsen of TSP, the architecture and engineering firm that provided the design work and cost estimates, apologized in an email message May 14 for misjudging the Rapid City-area construction market.
The governor and Jim Scull reached agreement on May 23 to avoid the need for the project to be bid a second time. There was a 30-day window from the April 24 bid tabulation.
Lt. Gov. Matt Michels explained the details Wednesday.
Conditional acceptance of a contract is legal under South Dakota law, Michels said, but it would be illegal to proceed without the Legislature’s approval of the higher spending.
He said the total price looks to be about $50.2 million without any alternate features and about $51.3 million with an enclosed delivery port for transferring residents, a maintenance building, special roofing material and some utility changes.
That total amount includes $3.5 million for architecture and engineering, about $400,000 for technology infrastructure, $1.5 million for furnishings throughout the eight-wing single-story building and $2 million for contingency.
Michels, who has been overseeing the project at a high level, said the estimate was missed by about $5 million for construction and labor and about $3 million for engineering work.