QUINCY — The Quincy City Council agreed to pay $638,617 to extend a water pipeline to the industrial wastewater treatment plant.

The council awarded the bid to Othello-based Pegram Construction.

This is part of the city’s project to use reclaimed water from both the municipal and industrial wastewater treatment plants for cooling in the Microsoft data center.

The construction company will install pipe from 13th Avenue Southwest, near Lauzier Park, south to the industrial wastewater treatment plant, said Larry Julius, a principal with the engineering firm Gray and Osborne. This will carry water from the cooling towers at the data center, to the plant, where it will be treated and sent back to the data center.

“It’s all part of the recycle and reuse process that has been ongoing and since we had funding available from the state legislative appropriation. We went out to bid for this project,” he said.

The state-awarded $4.5 million grant needs to be used by June. The city spent about $2.2 million of it to extend the pipeline from the municipal wastewater treatment plant to the Microsoft data center.

About $1 million of the grant was spent on engineering and construction administration. Part of this went to a project to use industrial wastewater for cooling as well.

The city received 10 bids.

“Pricing is still mind-boggling,” Julius said. “There’s still a lot of hungry contractors out there, still a lot of contractors coming from the west side of the state.”

Pegram worked in the city before, including a joint project between the city and the port to install water and sewer pipes, he said.

“We have checked references. We have checked with the state. They meet all of the qualifications. They’re very interested and are ready to start work,” Julius said.