Saskatoon library project shelved due to construction bids ‘substantially higher’ than budget

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CaDCR staff writer

Plans to build a new central library in Saskatoon, Saskatchewan are on hold after construction bids eclipsed the city’s budget.

Saskatoon Pubic Library issued the construction tender last spring for the new central library after both Class A cost estimates we received aligned with the project budget.

However, construction bids received in late August were substantially beyond the budget available. As a result, SPL has cancelled the construction tender.

Officials say they are committed to building the new central library and working with the construction industry to reduce costs through design revisions. A Request for Proposal for Construction Management Services will be issued to find a construction manager to work alongside the design and engineering teams to provide pre-construction services and help identify efficiencies that allow us to construct the library within the project’s budget. The extent of the design changes required will not be known until early 2024.

“The situation we have found ourselves in is very disappointing, but it only represents a temporary setback for the project. The work ahead will help us better understand the discrepancy between the cost estimates and tendered bids and allow us to chart a path forward with confidence,” said Jim Siemens, SPL’s board chair. “We firmly believe that Saskatoon needs a new central library and we remain committed to delivering a building that supports the lifelong learning needs of our community. It will just take us a little longer to get there,” he added.

Construction will not begin this fall as scheduled, and the opening of the new central library is likely to be pushed into 2027, depending on the extent of design changes required. Because the current central library has been sold, with possession set to change in December 2026, SPL is preparing plans to minimize disruptions to library service.

SPL has taken steps to manage the budget:

  1. Hired two independent cost consultants.
    At the end of each design phase, both cost consultants received the architectural drawings and provided cost estimates based on those drawings.
  2. Completed five cost estimates between April 2021 and April 2023.
    If an estimate exceeded the budget, both cost consultants initiated a value engineering process. This process recommended cost savings options for consideration by SPL, and any changes adopted were implemented in updated design plans before and the design team revised the plans to align the design with the construction budget before proceeding to the next stage. Typically, a project of this scale completes up to three cost estimates by a single consultant.
  3. Increased the escalation allowance as the project progressed.
    When the cost escalation began increasing beyond historical industry standards, we had our project assessed for inflationary impacts. As a result, we increased the escalation allowance from 3% to 15% of the construction budget. The Building Construction Price Index for Saskatoon for non-residential buildings from Q1 of 2019 to Q1 of 2023 increased by 15.75%.
  4. Reallocated the project budget to increase the construction budget.
    Construction cost estimates increased from $73.3 million after the first cost estimate to $81.1 million in the final cost estimate. Increases to the construction budget were addressed by reallocating funds from within other project budget line items.

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