College officials are proud of the new SouthShore Center, but they expected to pay closer to $12 million than $19 million for it. Staff photo by JAY NOLAN

TAMPA - When it started looking for a construction manager, Hillsborough Community College was planning to spend $10 million to build its campus in south Hillsborough County.

By the time the project was finished, the campus was smaller than HCC had planned, it was six months late in opening, and it cost about $17 million.

HCC officials say they're proud of their new center, a collection of modern-looking buildings designed to conserve water and energy. They say they did their best to keep costs under control.

But records show HCC entered into a contract with a project manager, Sweden-based construction giant Skanska, before locking in a cost. By the time President Gwen Stephenson and her staff told trustees about the overruns, work had begun; it was too late to replace the company.

The overruns arose from the method HCC used in the project, beginning with a "request for qualifications." That meant HCC would base its selection not on a construction price, but on the contenders' capacity to carry out the work.

"It's done all the time," said Barbara Larson, HCC chief financial officer.

But even under this method, widely used in Florida but not nationwide, a project that exceeds cost projections by 30 percent is "just unacceptable," said Brian Perlberg of Associated General Contractors of America, a contractors advocacy group based in Arlington, Va.

"If you're going to use these unconventional bidding methods, you need to be especially focused throughout the process," Perlberg said. "You need to say, 'This is my budget. What can you give me for this price?'"

The Hillsborough County school district uses the same process, but it's rare for the budget to go up after a construction manager is hired, said Rory Salimbene, the district's head of construction.

"We know what we want going into these projects, and we work closely with the construction manager," Salimbene said. "If we're going to have problems, we know right away."

A vision and a contractor

HCC spent years planning its fifth campus to meet a growing demand for community college services in the Riverview and Ruskin areas. Administrators envisioned more than 60,000 square feet of classrooms, laboratories and administrative offices on a 60-acre former tomato field west of Interstate 75.

HCC began writing solicitations for the SouthShore project in 2005. The land came through a donation from a farming family, the Dickmans.

In October 2005, HCC advertised a request for qualifications. The chosen company would manage the project, working with an architect in the design and development of the buildings, finding subcontractors through competitive bidding, then setting a final "guaranteed maximum" price.

It's a common approach in Florida, but nationally, "it's not the norm," said Perlberg, with the contractors advocacy group.

"For design-build projects, I would say a combination of price and qualifications is more common. Price has to be a factor in the proposal," Perlberg said. "There are so many complexities in big construction projects, it behooves the owners to establish some control from the start."

Skanska beat 10 other contractors who responded to HCC's ads. HCC officials scored the finalists on a half-dozen criteria, including their understanding of the project, proposed approach and references. There was no mention of price.

When the HCC board voted to hire Skanska, in February 2006, its construction budget was $9.8 million. But that number was based on estimates that were a few years old, HCC spokeswoman Ashley Carl said.

Over the next several months, in meetings with college officials, designers and subcontractors, the estimated costs bobbed from $15 million to $13 million and up to $20 million before dropping to $12.2 million.

Price balloons, project shrinks

In October 2006, Skanska assured HCC it could meet that price, though it would require some changes. Instead of eight buildings in a courtyard arrangement, there would only be five. The basic design would remain the same.

This $12.2 million wasn't, however, the "guaranteed maximum" price.

According to the process HCC was following, Skanska wouldn't propose a guaranteed price until after getting bids from all the painters, electricians, equipment installers and others who would construct the campus.

Still, based on the company's assurances, the HCC board voted in November and December to spend about $2 million on site development and $3.5 million on steel and foundation work.

The bad news came just one month later.

Skanska said subcontractor bids came in much higher than expected. The new cost: nearly $19 million.

Larson, the school's chief financial officer, reacted sharply.

She wrote on Feb. 23, 2007, "We continue to review our options here as your current construction estimates remain significantly above the College's $12.2 million construction budget agreed to throughout this process."

In a memo to Nancy Watkins, one of five people on the school's board of trustees, President Stephenson said a Skanksa official conceded that the company had been "overzealous" in its assurances the campus would cost only $12.2 million.

But HCC still didn't have the power to hold Skanska to that price.

The school's only option was to trim further. Working with Skanska and the architect, Gould Evans, it found about $2 million in savings.

As a concession for the problems, Skanska forfeited its fee, which would have been about $580,000. But it received nearly $1.3 million from HCC as reimbursement for expenses it reported.

Gould Evans reduced its fee, too.

Serious problems

At its April 2007 meeting, the HCC board voted to accept Skanska's guaranteed maximum price of $16.8 million.

Watkins objected, according to minutes of the meeting. A certified public accountant, she didn't like paying $4 million more than she had expected six months earlier.

Board member Daniel Coton asked if the board could delay approval.

But board members Thomas Huggins and Ed Gonzalez urged the board to move ahead to avoid future increases. Also, staff members noted that HCC had already spent $5.5 million on the project.

The board accepted the $16.8 million guaranteed price by a 3-2 vote, with Huggins, Gonzalez and then-board member Chappella Hill voting in favor.

Huggins had worked as a consultant for Skanska in 2004. The contract with his company, Ariel Business Group, ended a year before HCC began seeking a SouthShore construction manager, so there was no conflict of interest, according to state ethics laws.

As for the construction delays, Skanska blamed several factors in letters to HCC, including changes in building plans, and delays in permitting and getting designs from the architect.

HCC staff said the architect denied that contention.

In October 2007, HCC denied Skanska's request for extra time. But it finally relented after Skanska said it would seek a remedy "through the avenues available to it through the contract."

In a memo to trustee Watkins, Stephenson, who has announced her retirement at the end of this school year, conceded there were serious problems with the project. To meet a 2008 opening deadline, HCC allowed work to begin before the design documents had been finished, she wrote.

Also, SouthShore was pursuing certification as a "green" building, which it achieved but at a higher cost.

In the future, Stephenson said, she would bring in consultants early to verify cost estimates. Also, she would consider getting price commitments up front.

HCC SouthShore opened to students in June 2008 and held its grand opening five months later, with Huggins lauding it as a school of the future.

Nearly 3,550 students enrolled at the SouthShore campus this fall.

It's growing so fast, Larson said, HCC is looking at installing portable classrooms on the campus.

Reporter Lindsay Peterson can be reached at (813) 259-7834.