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Approve Change Orders for Seventeenth Street Water <br />Main Improvements: Bristol Street to Broadway <br />December 15, 2015 <br />Page 2 <br />current contract be terminated for convenience pursuant to the Contract, specifically the provisions found <br />in the Standard Specifications for Public Works Construction, which is incorporated into the City's standard <br />construction contracts. <br />As part of the recommendation, the second phase of construction would be rebid so that competitive <br />pricing would apply to the realigned improvements. It is staff's opinion that pricing for the second phase <br />will be more competitive if it is rebid compared to the current contract which would rely on change orders <br />to establish prices. The change order process to establish prices is inherently a non - competitive method <br />and exposes the City to inflated costs compared to bidding. <br />Staff has directed Paulus Engineering to complete the first phase of the project so that it would be <br />completed as a stand -alone project. While all costs related to the first phase have been established and <br />mutually agreed upon, there were construction materials, however, which were acquired at bulk prices by <br />the contractor for the entire project. Consequently all of the material remaining for the second phase has <br />been inventoried and accounted for, and is under storage at the City Corporate Yard. Staff therefore <br />recommends approving a change order to cover the cost of materials which will be used to complete the <br />second phase. The inventory of materials will reduce the construction bid for the second phase by an <br />amount equivalent to this recommended change order. <br />At this point, if authorized by the City Council, the contractor would be informed that the City is terminating <br />the contract for convenience and order them to demobilize. The completion of the first phase as a stand- <br />alone project will reduce any potential clams by the contractor. <br />The table below summarizes the status of the construction contract <br />City Council Authorized Expenditures <br />Construction Contract $1,593,540.00 <br />Construction Contingency $239,031.00 <br />Maximum Authorized $1,832,571.00 <br />Staff Approved Work <br />Contract (Bid Quantities) $1,593,540.00 <br />Change Order 1 $333,990.49 <br />Change Order 2 $178,184.15 <br />Change Order No. 3 (Quantity Adjustments) ($818,547.00) <br />Total Approved Work $1,287,167.64 <br />LEGAL REVIEW <br />Our City Attorney has analyzed the contract, change orders, and cost summary, and has asserted that <br />Change Order No. 1 in the amount of $333,990.49, representing a 20.96 percent increase in the contract, <br />is within the 25 percent change order umbrella contained in the Contract Standard Specifications for <br />Public Works Construction, known as the "Green Book," which was previously approved by the City <br />Council when the contract was awarded. This change order by itself does not exceed the maximum <br />authorized expenditure. <br />However, upon adding Change Order No. 2 (Exhibit 2), the new contract total would exceed the 25 <br />percent limit. Moreover, Change Order No. 3 (Exhibit 3) effectively terminates the contract by reducing the <br />23A -2 <br />