There were weather delays and mechanical delays during the big renourishment project on Fort Myers Beach. The company that did the work, Ahtna Marine & Construction, is now telling the town they lost over $4 million on the project.
Ahtna was the lower of three bids for the project which had a budget of $22 million. Ahtna came in at $21.7 million while Callen Marine came in at $37.2 million and Weeks Marine submitted a bid of $38.8 million. Callen actually considered filing a protest over Ahtna being awarded the bid, because they claimed “Ahtna Marine does not possess the available dredge(s) or other equipment to safely perform the project.” Nobody got hurt during the project but machinery malfunctions certainly added to delaying its completion. There was also Hurricane Helene and Hurricane Milton to contend with.
In addition to claiming they lost over $4 million on the project the Fort Myers Beach Town Council had a contractual option to withhold over $800,000 from their final payment to Ahtna because the project took 6 months longer to complete than what the company agreed to when they signed the $22 million deal back in the Summer of 2024.
The town’s contract with Ahtna had a provision that allowed the town to withhold $3,570 per day for every day the project was not completed on time. At 192 days late that totals $685,440. That amount is called liquidated damages. There was another $148,590 in actual damages to the town for additional construction management and observation, shorebird monitoring, and surveys. The total the Town Council will consider withholding from their final payment to Ahtna is $834,030.
In the end, between the dredging project and truck haul projects, 1.17 million cubic yards of new sand was added to Fort Myers Beach.
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This is a contractual business transaction that should proceed in accordance with the agreed-upon terms. Failing to withhold the specified amounts may lead to issues for the Town of FMB in future contractual engagements. It is important that we do not selectively enforce contractual provisions, as this could create enforcement challenges moving forward.
Most contracts account for potential delays caused by weather or other natural factors. The concept of a “loss” is subjective, and without access to their detailed accounting records, we are unable to substantiate any claimed losses.
Give them the money they did a great job!!!! You cannot control hurricane and other weather events! The town needs to do the right thing for once !
Yes. In the art of compromise like adults and realize that neither side has any control of the weather and may as well just write it into the contract that both sides should agree when & if a hurricane happens both have to agree on which days or how many that will add to the job.
Contractors sometimes describe:
• Reduced margin
• Opportunity cost
• Corporate overhead allocation shortfall
as a “loss,” even if project-level EBITDA was near breakeven. For example, the delay in project completion, means they could not do other work..opportunity cost. The bid included a profit margin. They could have lost their profit, but still covered their actual out of pocket costs. “Loss” doesn’t mean the same thing to everyone.
They did a great job despite the delays.
Give them the money. Still less expensive than anyone else
Hurricanes Helene and Milton were pretty big events, and legitimate causes for some of the delay. I feel the alleged $4 Million loss is the contractor’s problem, but in all fairness isn’t there room for compromise on the $834K hold-back? It would be nice to avoid legal wrangling. After all, the Town got the work done at what seems like a bargain price!
Give them the money. They worked hard.they couldn’t control the weather. Without them we would have spent millions more anyway.we have a beautiful beach back .we may need them again someday.
As a former business owner and responsible for estimating jobs, I was always skeptical when I saw one estimate much lower than the others. That’s why you always get three bids, so you can see if the bidders know what their doing .. Taking the low bid isn’t always the best choice 🤷♂️
Consideration should be given for delays caused by unpredictable weather, but the contractor knew the risks and, although the beach looks great now, he failed to finish on time.
So the company had a catastrophic failure at bidding the project to make a profit. Sounds like a “them” problem.
AHTNA bid of 22 M was 15-17 million dollars less than other two contractors. The town should appreciate the large savings from AHTNA for the project.
I guess you get what you pay for.
A deals a deal.
Not the town’s problem the contractor lost money. Sounds like a budgeting and bidding problem….they failed to finish on time! FMB should withhold the 800k for their massive delays!