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February 15, 2011 <br />Patrick Flynn <br />Ranger Construction <br />P.Q. Box 14589 <br />Ft. Pierce, FL 34979 <br />Re: Unanticipated fuel cost increase for material processing <br />Dear Mr. Patrick Flynn: <br />As per our discussion of last week we are forwarding to you our calculation of the <br />additional fuel costs associated with both phase I and phase II of the sector 3 project. <br />In order to accurately depict the material volume/fuel cost relationship, it is <br />necessary to present the fuel consumption per c.y. for both the dredging and screening <br />portions of the work These figures are as follows: <br />1. Dredging —1 c.y. = 0.286 gallons of fuel <br />2. Screening/loading —1 c.y. = 0.29 gallons of fuel. The combined total for <br />dredging/processing is 0.567 gallons per c.y. During phase I, a total of+% <br />325,000 c.y.'s of material was produced at a total fuel volume of 184,275 gallons. <br />The anticipated fuel volume for phase 11 with an estimated 310,000 c.y.'s will be <br />175,770 gallons. <br />The cost over run associated with the rising fuel prices is demonstrated as <br />follows: <br />Phase 1325.000 +/- c.v.'s <br />At the time of bid acceptance, the national average for off road diesel was $2.10 <br />per gallon. During the period from December 2009 thru May 2010 325,000 +/- c.y. was <br />produced consuming 170,100 gallons of off road diesel fuel. During the same period, fuel <br />cost rose to $2.30 a gallon, an increase of $0.20 per gallon amounting to a $34,020.00 <br />increase in fuel cost. The per cubic yard cost was $0.13. <br />Phase H <br />To depict the gain in fuel cost since bid award, the national average for off road <br />diesel was $2.10 per gallon. As of February 1, 2011 the cost for off road diesel has risen <br />to $3.07 per gallon $0.97 over the cost at bid award. Based on a 310,000 c.y. production <br />schedule, the cost over run would amount to $170,469.90 the cubic yard cost is $0.55. <br />Page 1 of 2 <br />124 <br />