That's what happens when you select the lowest bidder. There's a reason the lowest bidder is the lowest bidder!
The other 2 bidders for the Pape renovation were significantly higher; $23.5 million and $26.1 million. Probably reasonable to expect that the cost will end up in that range.
In fairness to Dufferin Construction doing VP, TTC and Council have made various changes that were not part of the contract.
Glass enclosure for the bus bay was not in the tender.
The Ward Councilors has asked for other items to be added that was not in the tender after it closed.
TTC decided to do a few things different not in the tender.
All these changes or extra's have to be approved by TTC and they must make sure the money is there to cover the cost.
TTC then issue a change order to Dufferin who then goes to it's subcontractor and ask how much is this change order going to cost as well a time line to do it. Once all the subcontractors submit their price, Dufferin looks at them to see what it going do to the timetable to built this project and add their cost and markup and submit it to TTC for approval to proceed.
Some contractor will low ball a price knowing they can makeup the different in change orders as well make an extra profit at the same time. Some prices end up been low as the contractor or subs need the work badly to keep the doors open. Then it can be a case of having the decimal in the wrong place or Opps!! I miss that.
Any good person who is calling the tenders ""MUST"" review each Bidder to make sure it comply with what was call for. They ""Must"" review the bidder track recorder to see if they can do the work on time as well how have they perform on other projects. By ""RIGHT"", which TTC does not do, is to go back to various bidder when they see something is minor wrong with part of the document to allow the bidder to fix it as it could mean bidder could change places after the tender close where the low bidder does get the job or moves up the ladder.
If the low bidder has had a bad track record, then it becomes a decision to use them and hope there is no repeat or you go with the 2nd lowest bidder.
Each bidder submits a performance bond as insurance that they can do the job. If the bidder defaults on the condition of the terms of the contract and fails to comply with written demand notices to comply with the terms of the contract, then TTC can terminate the contract.
At this point, then TTC goes to the company that supplied the performance bond and advised them the contract is breach. The bond holder then has 2 choices as allowing TTC to hire someone to finish the project or they do it themselves. Doing it themselves puts them as a less risk of lost than having TTC doing it as they must pay that contractor price to finish the project.
Once the project is completed, then TTC pays the bond holder the money remaining on the contract. If the money is less than what it cost to complete the project, the holders then goes after the contractor for the difference. If this happens, the contractor will have to pay a higher rate for the next bond or will have to look for someone else to supply them with one.
If there is money left over and does happen a lot, the money goes back to the contractor.
At the end of the day, TTC should ""NOT"" be out of money other than a delay project. Sometime, there could be no delay.
On the other hand, if TTC is at fault for having the contractor with holding service and TTC goes the the route above, then a court case will take place. If the contractor has a strong case, TTC will be on the hock for all the extra cost as well court cost.
As for the higher bids, it could be they have a lot of work on hand and want a good profit to do this project and hope no one will under cut them. Their subs are in this boat of lot of work and must carry a low bidder as a contractor cannot do all the work themselves. A number of reason for this.
