HomeMy WebLinkAbout09/20/1994, C-8 - AMENDMENT NO. 2 TO CONTRACT WITH BLACK AND VEATCH FOR CONSTRUCTION SUPPORT SERVICES FOR THE WATER TREATMENT PLANT MODIFICATION PROJECT AND STATUS REPORT CONCERNING CONTINGENCIES AVAILABLE FOR PROJECT COMPLETION. MEEnNG DATE:
d►I�I�I �IIu����ll City Of San LUIS OBISPO September 20, 1994
COUNCIL AGENDA REPORT 1TQ"'NUMBER: 1120
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FROM: John Moss ewN Prepared By: Gary W. Henderson 4wta
Utilities Director Water Division Manager
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SUBJECT: Amendment No. 2 to Contract with Black and Veatch for Construction Support
Services for the Water Treatment Plant Modification Project and Status Report
Concerning Contingencies Available for Project Completion.
CAO RECOMMENDATION:
By Motion: 1. Approve Amendment No. 2 to the contract with Black and Veatch for
construction support services for the Water Treatment Plant Modification
Project increasing the maximum compensation by $70,250.
2. Approve appropriation of$70,250 from the Water Fund balance to cover
Amendment No. 2 to Contract with Black and Veatch
DISCUSSION:
The City's water treatment plant has been undergoing a major renovation necessitated by the
1986 amendments to the Safe Drinking Water Act. The construction bids for the project were
received on November 18, 1992 with bids ranging from $7,675,000 to $9,526,000. The
apparent low bidder requested that their bid be withdrawn due to an error made in preparing the
proposal. In January 1993, the City Council approved the withdrawal of the low bidder and
authorized the award of the contract to R.P. Richards in the amount of $8,510,000. R.P.
Richards submission was approximately $600,000 less than the next lowest bidder and the
engineers estimate.
A project of this magnitude requires significant construction management expertise to insure a
high quality project and to minimize construction problems that can lead to increased costs due
to change orders. Black and Veatch was retained to provide the construction management for
the project with a maximum compensation of $750,000. Amendment No. 1 to the original
agreement was approved by Council on April 5, 1994 increasing the maximum compensation
to $885,000.
Amendment No. I
Amendment No. 1 was necessary due to additional submittal review and required attendance at
meetings with subcontractors to R.P. Richards. The increased compensation was based on an
estimated completion date for the project of July 1994. The staff report for Amendment No.
1 indicated that City staff and Black and Veatch had reservations concerning the ability of the
contractor to meet the July completion date. It was estimated in the report that an additional
$120,000 may be required if the project completion date was extended to October 1994.
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COUNCIL AGENDA REPORT
Black and Veatch Amendment No. 2
Page 2
Amendment No. 2
The project completion date is currently September 24, 1994 but is likely to extend to the end
of October. Black and Veatch have been actively monitoring charges to the City in an effort to
minimize any additional financial impacts. The extension of the project completion to the end
of October requires a supplemental amendment to Black and Veatch's contract for construction
management services. The additional compensation is required for construction administration
and startup services as outlined in Attachment 1. The estimated additional compensation
required is $70,250. This is less than the previous estimate of$120,000 due to the efforts made
by Black and Veatch as noted above.
Previous Council action for Amendment No. 1, authorized the City Administrative Officer to
approve use of project contingency funds for the additional costs incurred due to the project not
being completed on time. Amendment No. 1 utilized $135,000 from project contingency funds.
There may norbe sufficient funds available in the project budget for anticipated change orders
and this amendment.
Black and Veatch has committed an additional staff person three days a week onsite in an effort
to expedite the completion of the project and assist the onsite engineer. City staff have been
closely monitoring the progress and have daily contact with the onsite engineer and contractor
personnel to resolve problems to minimize further time delays to project completion.
Project Contingencies
The original project budget had $595,700 for construction contingencies. Amendment No. 1 to
Black and Veatch's contract reduced the contingencies by $135,000 to $460,700. The current
approved change orders to date are $335,646.31. This is approximately 73% of the available
project contingencies. It is anticipated that there will be additional change orders required to
reach project completion which may require a significant portion of the remaining contingency
funds. Therefore, funds necessary to support Amendment No. 2 will need to be appropriated
from fund balance (Water Fund).
FISCAL IMPACT
The total project budget for construction of the project, including construction management and
contingencies is $9,855,700. Amendment No. 2 will increase the total project budget by
$70,250 to $9,925,950. The appropriation of$70,250 from the Water Fund balance will leave
approximately $2.9 million, which is in excess of the 20% fund balance requirement.
Attachments: 1. Letter from Black and Veatch
2.. Amendment No. 2 to Contract with Black and Veatch
09/07/94 10:16 BLACK 8 UEATCH -* 17198PPP010231920405 N0.365 001
Attachment 1
BLACK & VEATCH
2300 Clayton Road,Suite 1200,Concord,Colilornio Q4520-2100,(510)246.8000, Fax:(510)674.0458
City of San Luis Obispo, California B&V Project 23192.405
Water Treatment Plant Modifications S&V File G.1.11
September 7, 1994
Mr. Ger± Henderson Post-rt"brand fax transmittal memo 7671 •ef
Water i)ivfsion Manager °'e"'
City of San Luis Obispo 10&V-"r rain
Ilepartmant of Utilities xe to `°
955 Morro Sheet °` ham' <o Z41- POW
San Luis Obispo, CA 934D1 Paz0 s 8J— 7/9 ''x'
This:litter provides a summary of. our;project financial stetusl fol CollBtruction Administration on the
above referenced project. We will present separate information 'on the office support services and
the &4-fiervices. The revised numbers reflect discussions you had yesterday with Ron Snedegar,
Black & Veatch Regional Manager.
TASK 4A CONSTRUCTION ADMINISTRATION/START-UP SERVICES
Through the month of July there was $14,924.00 remaining in the budget for this task. As we
discussed last week, the upper limit has now been reached and passed. At this point we are
approximately $15,312 beyond the budget Based on the continuing "moving target' of the
contractor's completion date we will need a contract amendment to complete this task. (This is
assurning the contractor can complete his work within the next two month time frame.)
Understanding the Cities' current financial situation and our desire to help minimize cost for the
remainder of this project, Black & Veatch is willing to complete the remaining work (Task 4A) an a
cast-of-service basis. To do that, we will lower are multiplier on direct salaries by approximately
10-percent.
Fallowing is a summary of costs we anticipate incurring during the next two months, the column
titled 'Current Multiplier" shows salaries and expenses per our existing contract and the column
titles "Revised Multiplier" shows the reduced costs:
Current Revised
August Tasks Staff DaysieMultiplier
$15;300' $14,750'
09/07/94 10:17 BLACK L VEATCH y 1?19$PPP010231920405
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City of San Luis Obispo, California BW Project 23192.405
Mr..Gary Henderson September 7, 1994
Sgatember tasks
Complete Submittals 3 $ 2,500' $2,250'
Complete 0&M Review 3 $ 2;500' $4-250'
Project Administration 4 $ 3;500'
Site Visit 2 $ 2,000' $1,800'
BegricWPunch Usvwap Up 5 $ 4,500' $4;200'
On-site I&C Configuration 21 . $16,0001 $14.950'
September Subtotal J= IZL600
October:Tasks
Project Administration 4 $:30500' $3,150'
Substantial Completion/
Walk through & Training $ 7,500 $6,850
Record Drawings $ 7,000 $6,400
On-slte l&C Configuration 4 $ 410001 $3,750'
DHS Operating Permit Report S 7.500 $6:850
October Subtotal $2 $27000®
August, September; & October Totals M& 7 L2 5.0
14tems resulting from Contractors inabTity to complete work on Schedule
As you can see by the above we have a significant amount of work remaining and have been
severely,impacted by the contractor's late finish. To site just one example:
The Instrumentation & Controls (I&C) Configuration services remain.-6-constant source of
frustration. Many items of construction work that were to have been:compieted, so our staff
09/07/94 10:17 BLACK 8 VEATCH 17198PPP010231920405 N0.365 903
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City of San Luis Obispo, California BW Project 23192.405
Mr. Gary Henderson September 7, 1994
could properly perform control system start-up, were either not complete or were not installed
correctly. These resulted in additional work on our part beyond that which was budgeted.
We would like to discuss the above and see what steps we can take to help reduce these potential
costs. R we cannot reduce the costs, as it now stands, we will need to request a contract
amendment totalling $70,250 for Task 4A to take us through the end of October, This assumes
that Substantial Completion is reached:by the end of September.
TASK 500 • CONSTRUCTION INSPECTION
As of this date, we still have approximately $35,000 remaining in the Task 500 budget. A
summary..of the next two months follows.
Sentemhtr .Tasks
Ynco Miller on-site full time for month $:15;000
Steve Henness on-site approx. 1/3 time 511:000
September Total
OctobK Tasks
Vince Miller off-site, follow up trips x 2
Steve 'Hienness on-site 5 days S 4.4D0
October Total
September, & October Totals $3®
There appears to be sufficient budget remaining for this task. Again, this is based on the
presumption the contractor will achieve Substantial Completion by the and of September and Final
Completion before the end of October, 1994,
In summary, establishing solid budgets at this point of the project is difficult at best. This is
compounded by the fact the Contractor states he is done, when we all know he is not It is
difficult -"to estimate exactly when he will finally complete the project
We are j= concerned about the cost impacts of this delay in project completion and understand the
difficult .position In which this situation places the City. We have strived very hard to provide
quality services to the City throughout the project. The fact,that the contractual completion dates
09/07/94 10:18 BLACK 8 VEATCH 17198PPP010231920405 10.365 PO4
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City of San Luis Obispo, California B&V Project 23192.405
Mr. Gary. Henderson September 7, 1994
have come and pone — and are still undefined — only exacerbates the situation. Unfortunately, until
the contractor commits to (and achieves) a firm completion date much work remains to be done.
If you have any additional questions or comments, please do not hesitate to contact myself or Ron
Snedepar-at the number above..
Very truly yours,
BLACK & VEATCH
Ronald E. Henderson, P.E
Project Manager
AMENDMENT NO. 2 Attachment 2
CONSULTANT SERVICE CONTRACT
BETWEEN CITY OF SAN LUIS OBISPO
AND BLACK AND VEATCH CONSULTANTS
THIS AMENDMENT NO. 2, made in duplicate and entered into this day of
September, 1994, by and between the City of San Luis Obispo (herein referred to as City) and
Black and Veatch (herein referred to as Consultant), provides for changes to the Consultant
Service Contract (as amended to date) dated September 22, 1992, as follows:
WITNESSETH
WHEREAS, Consultant was hired by the City to provide construction management
services associated with the "Water Treatment Plant Expansion Project";
WHEREAS, Consultant has the expertise to insure compliance with the plans and
specifications for the project construction work;
WHEREAS, Consultant has offered to provide the required services necessary to assure
adequate construction management and inspection of the construction project;
NOW, THEREFORE, in consideration of their mutual covenants the parties hereto agree
as follows:
1. Description of Project. The basic description of the Project, as provided in
Exhibit A to the Agreement remains unchanged.
2. Compensation. The cost estimate in the AGREEMENT shall be changed to
increase the maximum compensation by $70,250 to $955,250.
3. All other terms and conditions of the consultant service contract dated September
22, 1992 remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT on the
year and date first written above.
CITY OF SAN LUIS OBISPO BLACK AND VEATCH CONSULTANTS
By:
Mayor
ATTEST: Approved As to Form:
City Clerk t tto y
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