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South Bend <br />Regular Me <br />edevelopment Commission <br />ing - October 17, 1980 <br />6. NEW BUSINESS <br />b. coHtinued... <br />Mr. McMahon: Since I certainly have a great deal <br />of respect for the need for a general policy in <br />re iewing bids as they come in, particularly when <br />YOL are dealing with a large number of contractors <br />on repetitive work and in the case of a program <br />l e the 31Z'Program where we have a number of <br />di ferent households that are benefitting, I think <br />onE thing that the Commission might like to look at <br />is whether or not any modification of the policies <br />that the Bureau of Housing has been using should be <br />modified. I would think that when we receive a low <br />bi from a contractor that does have an established <br />re utation in this area, and if it is the case that <br />thE Bureau of Housing has no conflict with him on <br />an3 current job or on any past job, and if the low <br />bi and the difference between the estimate and <br />hi bid has been pointed out to the contractor, he <br />ha an opportunity to review it and he still feels <br />that that bid is legitimate, then I would think <br />that under those circumstances the Commission might <br />consider that contractor and allow the 312 Program <br />and the homeowner to benefit from the lower cost. <br />In absence of any type of a conflict or.problem <br />wi h the contractor, I personally feel uncomfortable <br />wi h rejecting that type of a bid. <br />Mr Nimtz: I believe that 20% is a HUD regulation <br />or recommendation, isn't it? <br />Mr;. Baumgartner: The HUD recommendation is a 10% <br />fi ure above or below the cost estimate figure for <br />rejection. We have spoken to them and have.settled <br />on a 20% figure as our cost estimate. Our cost <br />estimate book is not as sound as we would like it <br />to be. We have just recently added a cost estimator <br />to our staff to update that book. I might also <br />point out, in regulations which will become effect- <br />iva in February for the 312 Loan Program, any esti- <br />mate that is chosen that exceeds the 10% level, <br />particularly 10% higher, that contractor then has <br />to deposit into the 312 Loan Account the difference <br />between the 10% figure over the cost estimate and the <br />amount of the loan. So, in that particular case, <br />11 <br />