Madison district approves $108m Nine Springs upgrade despite BABA-driven cost hikes

Madison district approves $108m Nine Springs upgrade despite BABA-driven cost hikesThe Madison Metropolitan Sewerage District has greenlit the second phase of its liquid processing improvements, navigating a $16 million total project cost increase attributed to inflation, design refinements, and strict new domestic sourcing rules.

The commission awarded a $90.9 million construction contract to C.D. Smith Construction, increasing the total project budget from $92 million to $108 million.

Project costs were driven up by a 20% to 30% increase in stainless steel prices and procurement challenges related to Build America, Buy America (BABA) compliance.

The Phase 2 project will overhaul the plant's activated sludge process to meet anticipated 2050 nutrient loading and future nitrogen permit requirements.

The district also approved a $3.2 million contract amendment for Strand Associates to provide construction-phase engineering and startup services.

The Madison Metropolitan Sewerage District commission voted on July 30 to award a $90.9 million construction contract to C.D. Smith Construction for Phase 2 of the Nine Springs Liquid Processing Improvements project. To accommodate the bid, the commission authorized a $16 million increase to the total project budget, pushing it from $92 million to $108 million. Project Engineer Kailyn Hackeloer-King attributed the escalation to design developments since the initial 30% estimates, general inflation, and strict Build America, Buy America (BABA) requirements. Hackeloer-King noted that BABA-compliant stainless steel has jumped 20% to 30% in cost, adding that manufacturers are still navigating the relatively new sourcing rules. The Phase 2 upgrades are designed to address aging infrastructure and adapt the plant's biological nutrient removal and activated sludge processes to meet projected 2050 flow and loading requirements. The district aims to run the plant at lower dissolved oxygen levels to preemptively address anticipated future nitrogen limits. The sweeping project encompasses 445 new assets, including aeration blowers, diffusers, and new post-aeration channels. The sheer scale of the contract drew scrutiny from the commission after only two bids were received—the winning bid from C.D. Smith and a $92.9 million proposal from Lunda Construction. Some commissioners questioned whether breaking the massive project into smaller components might have attracted more competition. However, Executive Director Eric Dundee and district engineering staff defended the bundled approach, arguing that slicing the project into smaller contracts would prolong the timeline, multiply facility shutdown requirements, and ultimately cost more due to complex construction sequencing. Alongside the construction award, the commission approved a $3.2 million contract amendment for Strand Associates, bringing their total professional services agreement to nearly $9.5 million. Strand will provide construction-phase engineering services, including submittal reviews, special inspections, and manufacturer training for district staff as the new systems come online. Construction is slated for substantial completion by March 2030.