HomeMy WebLinkAbout11/20/2007, C5 - CHANGE ORDERS AND CONSULTANT CONTRACT AMENDMENT FOR THE WATER TREATMENT PLANT IMPROVEMENT PROJECT N Ccouncil °;; Zo.
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CITY O F SAN LUIS O B I S P O
FROM: John Moss, Utilities Director
Prepared By: Gary W. Henderson, Water Division Manager -4�'a
SUBJECT: CHANGE ORDERS AND CONSULTANT CONTRACT AMENDMENT FOR
THE WATER TREATMENT PLANT IMPROVEMENT PROJECT NO. 90225C
CAO RECOMMENDATION
1. Approve a change order in the amount of $169,456.72 for replacement and installation of a
new water booster pump station for the Water Treatment Plant Improvement Project.
2. Declare the existing booster pump station surplus.
3. Approve a change order with Stanek Constructors for extension of the time for the
completion of the project and compensation for extended overhead costs for a portion of the
time extension.
4. Approve Amendment No. 6 to the contract with Black and Veatch for construction
management services for extended construction oversight and other project related issues.
5. Authorize transfer of$282,780 from Water Fund working capital to the project account.
DISCUSSION
The Water Treatment Plant Improvement Project has been under construction since July of 2006.
The project involves major upgrades to the City's water treatment plant which includes
construction of two new steel water storage tanks, a new transfer pump station, installation of a
ballasted flocculation system (Actiflo), installation of a package water recycling system and other
facilities. The contract specifications identify the completion date for the project as December
21, 2007. The project has been proceeding well for a project of this magnitude. The contractor
(Stanek Constructors) has been extremely good to work with on construction issues and the
construction workmanship is excellent.
There have been a number of unforeseen issues and design related problems that have impacted
the overall project schedule. Some of the delays could be attributable to the contractor's
oversight but the majority of the project schedule impacts are due to issues that were beyond the
contractor's responsibility.
Water Plant Booster Pump Station
The water treatment plant requires a pumping facility to provide onsite water for plant
operations. The replacement of the existing 40+ year old pumps and related equipment was
included in the overall construction project. Upon installation of the new package water booster
pump system, it was determined that the facility was not properly designed and could not provide
the necessary water pressure or volume for proper plant operations. An investigation revealed
problems with the assumptions used during the preliminary design for the project. While staff
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was, involved in the review of the studies and the final development of the plans and
specifications for the project, staff identified that a large portion of the problem is attributable to
our engineering consultant. Staff has negotiated with Black and Veatch relative to their shared
responsibility for the costs associated with replacement of the incorrect package pump station
with a new (larger) pump station. The contract amendment for additional construction
management services (Attachment 3) has been reduced by $100,000 to reflected Black and
Veatch's share of the costs for this change order. The total cost for replacement of the booster
pump station has been negotiated with the contractor for an amount of$169,456.72. In addition
to other negotiated items, the contractor agreed to a reduction in the markup allowed by the
specifications for this change order which reduced the overall cost by approximately$9,000.
Following Council's approval to surplus the incorrect booster pump station, staff will investigate
options for advertising the availability of the system. Having the correctly sized pump station is
essential to the operation of the Water Treatment Plant. The pump station, among other things,
provides critical cooling water for the ozone generation equipment.
Stanek Constructors Project Time Extension
Stanek Constructors has been an extremely good contractor. The overall construction
workmanship is excellent and the project has been very successful. There have been a number
of issues that have caused delays to the project, As discussed above, some of the delays are the
responsibility of the contractor but the majority of the delays were caused by design issues or
unforeseen circumstances during construction. Overall, the contractor's evaluation indicated that
his schedule was impacted by at least 42 days for Owner caused delays due to design issues. The
original milestones for substantial completion and final project completion were November 27,
2007 and December 21, 2007.
The contract specifications allow the contractor to be compensated for extended overhead costs
associated with delays caused by the Owner(City). Staff has negotiated the terms of the change
order related to the contract time extension with the contractor. Approval of change order #62
will extend the milestones for substantial completion and final completion to February 5, 2008
and March 5, 2008 respectively. The contractor has agreed to only 30 days of extended overhead
in exchange for additional time for project completion as noted above. In addition, the contractor
has negotiated in good faith with City staff relative to the daily compensation for their extended
overhead costs. City staff has conferred with our outside legal construction counsel and their
input indicates that the costs are reasonable based on other similar projects. Exact extended
overhead costs for a project like this is very difficult to determine but staff analysis indicates that
the contractor has been reasonable in the negotiation of this change order.
Amendment No. 6 with Black and Veatch
Black and Veatch has provided the engineering services for the Water Treatment Plant
Improvement Project. Black and Veatch provided the preliminary design report, oversaw the
pilot testing of the ballasted flocculation system (Actiflo) during preliminary design, prepared the
final plans and specifications, and has provided the construction management services for the
project.
Water Treatment Plant Improvement Project Page 3
A large, retrofit project such as this will typically have issues arise during construction that are
unexpected. Many of these issues require change orders and redesign of facilities. This has
resulted in additional services required from our consultant's which have impacted their original
budget. In addition, the extension of construction management oversight required due to the
extension of the project completion date will require additional compensation. Staff has
negotiated the recommended compensation identified in Amendment No. 6 with Black and
Veatch at an additional amount not to exceed $93,846. This negotiated amount includes a
significant reduction in the compensation amount to pay for the consultant's share of
responsibility ($100,000) for the errors which resulted in the change order noted above for the
water booster pump station. The recommended contract amendment provides construction:
management services through the proposed completion date of March 5, 2008. The current
project schedule indicates that construction may be completed earlier and if that proves true, the
compensation for construction management oversight will be reduced accordingly.
Partnering Efforts
The project success has been enhanced by the use of a facilitator in a process referred to as
"Partnering". This process has been used for a number of years on large construction projects
and was proposed by Stanek Constructors at the beginning of the project. Stanek Constructors
requested City staff to consider participating in the process and sharing the expense on a 50-50
basis. City staff were aware of this process but had never used it on a City project. It can be very
successful depending on the team of people involved in the project and the City agreed to sharing
the cost for the Partnering workshops.
The first workshop was held in July of 2007, shortly after start of construction. The participants
included the general contractor's representatives, major sub contractors, Black and Veatch staff,
and City staff from Utilities and Public Works. The workshops involved 4 hour sessions where
participants identified common goals for the project, potential obstacles to achieving the goals,
ideas for overcoming potential obstacles, and a shared vision for making the project successful.
This type of effort only works if all participants are committed to the idea and discuss issues
openly and honestly. A total of 6 workshops where held with the final one completed in October
of 2007. At the end of each workshop, each member was asked to.rate the overall success of the
Partnering efforts on a scale of one to ten. After the first.session, the overall score for the group
was 6.8. The quarterly sessions continued with the score rising until the fourth session, when the
scores dropped. This was a result of conflicts and issues relative to time delays and design
problems as noted previously in this report.
This is where the Partnering efforts really provided positive results. Instead of the normal written
documentation back and forth, project representatives used the open communication developed
through the workshops to discuss the issues. When the issues could not be resolved at the field
level, they were elevated to the next level in the agreed upon decision making process. One of
the goals identified in the first Partnering session was to resolve all conflicts within the
Partnering team. The open communication proved very successful and all issues have been
resolved within the team. Stanek Constructors is to be commended for recommending the use of
the process for this project and their solid support and commitment to the overall philosophy of
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the Partnering process. This was an extremely beneficial program and enhanced the overall
success of this project.
It should be noted that the final partnering session was held on October 9, 2007. The overall
score by all participants for the Partnering efforts was 9.2. The facilitator noted that "only about
5% of our jobs get in the "9's" and that a project at this level would be classified as World
Class." The last session also included nominations for the individual(s) who provided the most
to the success of the project. The City's Water Treatment Plant Supervisor(Dean Furukawa) and
Stanek Constructors General Superintendent (Frank Arnold) were recognized for their
contributions.
Summary
The construction work for the Water Treatment Plant Improvement.Project has progressed well
for a project of this magnitude. Stanek Constructors has been an excellent contractor to work
with and has provided quality construction. Impacts have arisen with the project that require
additional financial resources and warrant an extension of the completion time for the project.
Black and Veatch has provided timely engineering services relative to design changes necessary
due to unforeseen circumstances during construction. The contractor and our consultant have
negotiated with City staff very reasonably for the extended services necessary to ensure a
successful project.
CONCURRENCES
The Public Works Department has been involved in the discussion relative to the recommended
change order for Stanek Constructors and concurs with the recommendation.
FISCAL IMPACT
The table below shows the budgeted project amounts for construction, project contingencies, and
the amount of contingencies that have been committed to date (including the recommended
additional costs identified in this report). While the project contingencies were used for
construction related change orders, other uses of contingencies on this project included:
geotechnical testing services, amendment to construction management services and purchase of
computer hardware and software for the water treatment control system. There are still several
change orders that are being done on a time and material basis that will require additional
contingencies. In addition, other issues may arise in the last four months of the project which
could require additional funds. Funding to increase the Water Treatment Plant Improvements
Project construction contingencies is not available within budgeted resources. As such, staff
recommends transferring $282,780 from Water Fund working capital to the project account.
Water Fund working capital will still be above the policy minimum even after this supplemental
appropriation. Any funds not utilized to complete the project would be returned to Water Fund
working capital following project closeout.
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Table 1: Construction Costs
Type Amount
Low Bid $12,130,858
Original Contin encies $850,042
Continizencies Committed to Date $847,319.42
Additional Construction Contingencies $200,000
Additional Management Contingencies $82,780.
Total Project Contingencies $1,132,822
ALTERNATIVES
Do not approve change orders and time extension. The terms of the recommended change
orders have been negotiated with all parties and staff feels they represent a fair share of
responsibilities for the issues and impacts that have arisen on the project. Therefore, this
alternative is not recommended.
ATTACHMENTS
1. Contract Change Order#61 for the Water Booster Pump Station
2. Contract Change Order#62 with Stanek Constructors for Extension of the Milestones for
the Project and Compensation for Extended Overhead
3. Amendment No. 6 to Contract with Black & Veatch for Construction Management
Services
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CITY OF SAN LUIS OBISPO, CALIFORNIA
CONTRACT CHANGE ORDER
Change Order No.: 061 Sheets:
Date: October 29, 2007 Project, Water Treatment Plant Improvement
To: _George Foote, Stanek Constructors Specification No.: 90225C
As requested by: City of San Luis Obispo
You are here hereby authorized and directed to make the herein described changes from the plans and
specifications, and/or to increase or decrease contract quantities, as follows:
Procure and install new water booster pump station, remove and store existing pump station and provide all
required electrical work.. Reference PCO#071 (RFI #156, CIC#040, &CIC #042).
Reference Contract Change Order#62 for additional time extension associated with this change order and
other project issues.
Total cost of change shall not exceed: $169,456.72
We, the undersigned contractor, have given careful consideration to the changes proposed and hereby
agree, if this proposal is approved,that we will provide all equipment, furnish all materials, except as may
be noted above and perform all services necessary for the work above specified, and will accept as full
payment therefore the prices shown above.
Accepted by: Contractor's Authorized Agent Date accepted
Submitted by: Resident Engineer Date submitted
Submitted by: Project Manager Date submitted
Approved by: City Engineer Date approved
Change Order over$25,000 Change Order over$100,000
Date Approved: Date approved by City Council: Nov.20,2007
By:City Administrative Officer
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CITY OF SAN LUIS OBISPO, CALIFORNIA
CONTRACT CHANGE ORDER
Change Order No..: 062 Sheets:
Date: October 31, 2007 Project: Water Treatment Plant Improvement
To: George Foote, Stanek Constructors Specification No.: 90225C
As requested by: City of San Luis Obispo
You are here hereby authorized and directed to make the herein described changes from the plans and
specifications, and/or to increase or decrease contract quantities, as follows:
This contract change order documents the extension of time for specific milestones and provides
compensation for extended overhead costs incurred by Stanek Constructors. The City acknowledges the
Completion of Milestone No. 1 specfied in Section 01010 and Supplementary Conditions SC-8.6 and in
addition modifies the following milestone dates from those specified in Supplementary Conditions SC-8.6.
Substantial Completion February 5, 2008
Final Completion March 5, 2008
Total cost of change shall not exceed: $138,570
We, the undersigned contractor, have given careful consideration to the changes proposed and hereby
agree, if this proposal is approved, that we will provide all equipment, furnish all materials, except as may
be noted above and perform all services necessary for the work above specified, and will accept as full
payment therefore the prices shown above.
Accepted by: Contractor's Authorized Agent Date accepted
Submitted by: Resident Engineer Date submitted
Submitted by: Project Manager Date submitted
Approved by: City Engineer Date approved
Change Order over$25,000 Change Order over$100,000
Date Approved: Date approved by City Council: Nov.20,2007
By:City Administrative Officer
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AMENDMENT 6 TO AGREEMENT
THIS AMENDMENT TO AGREEMENT is made and entered in the City of San Luis Obispo on this
day of ,by and between the CITY OF SAN LUIS OBISPO,a municipal
corporation,herein after referred to as City,and BLACK AND VEATCH,hereinafter referred to as Consultant.
WITNESSETH:
WHEREAS, on February'26, 2003 the City entered into an Agreement with Consultant for preparation of
the preliminary design report for the Water Treatment Improvement Project,Specification 90225;and
WHEREAS, on November 24, 2003 the City entered into an Agreement with Consultant for preparation of
the final plans and specifications for the Water Treatment Improvement Project;and
WHEREAS,the City desires to amend the scope of services to provide additional inspection services at the
Water Treatment Plant and Consultant has submitted a proposal for this purpose that is acceptable to the City.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter
contained,the parties hereto agree as follows:
1. For providing the additional inspections services, City will pay and Consultant shall receive
additional compensation of$93,846 for a total sum not to exceed$2,490,574.
2. All other terms and conditions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year
first written above.
ATTEST: CITY OF SAN LUIS OBISPO
By:
Audrey Hooper,City Clerk David F.Romero,Mayor
APPROVED AS TO FORM: CONSULTANT
By:
onatha Lowell,City Attorney
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