HomeMy WebLinkAboutReg 2019-05-20 Item 4C - Change Order #4 - 42nd Avenue South Phase III with Active Construction for $1,050,000COUNCIL AGENDA Siwosis
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05/20/19
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ITEM INFORMATION
ITEM No.
4.C.
STAIT SPONSOR: HENRY HASH
ORIGIN , AGENDA DATE: 05/20/19
AGENDA ITEM TITLE 42nd Ave S Phase III Project (S 160th St - Southcenter Blvd)
Construction Change Order No. 4 with with Active Construction, Inc.
CATEGORY DiSeusston
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Motion
05/20/19
EI Resolution
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SPONSOR Councii Major 0 HR EIDCD DFinance Fire ZITS OP R
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SPONSOR'S Change Order No. 4 to Contract No. 17-090 is for additional construction costs for the 42nd
SUMMARY Ave S Phase III Project. 42nd Ave S has had major issues with the Gilliam Creek Culvert
and utility conflicts which have caused delays and cost overruns. After extensive
negotiations, Active Construction's Change Order No. 4 will resolve all disputes. Council is
being asked to approve Change Order No. 4 with Active Construction for $1,050,000.
REVIEWED BY
•C.O.W.
Mtg. lij CDN Comm
Arts Comm.
Finance
Comm. E]Pubhc Safety Comm.
Comm. [1:1 Planning Comm.
CHAIR: ZAK IDAN
1 Trans &Infrastructure
[1] Parks
COMMITTEE
DATE: 05/07/19
RECOMMENDATIONS:
SPoNsoR/ADmiN,
COMMITTEE
Public Works Department
Majority Approval; Forward to Regular Consent Agenda
COST IMPACT / FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED
$1,050,000.00 $15,166,000.00 $
Fund Source: 103 RESIDENTIAL STREETS (PAGE 2, 2019 CIP)
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
05/20/19
IVITG. DATE
ATTACHMENTS
05/20/19
Informational Memorandum dated 0 /0 9
Page 2, 2019 CIP
Active Construction's Change Order No. 4
Minutes from the Transportation and Infrastructure Committee meeting of 05/07/19
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Public Works Department Henry Hash, Director
INFOR ATIONAL E ORANDU
TO:
FROM: Henry Hash, Public Works Director
BY: Peter Lau, Senior Program Manager
CC: Mayor Allan Ekberg
DATE: May 3, 2019
SUBJECT: 42nd Avenue South Phase III & Gilliam Creek Culvert Replacement Projects
Project Nos. 99410303 & 99341208, Contract No. 17-090
Change Order No. 4
Transportation and Infrastructure Committee
Allan Ekberg, Mayor
ISSUE
Approve Change Order (CO) No. 4 with Active Construction, Inc. (ACI) to resolve all new claims and disputes for the
42nd Avenue South Phase III Project.
BACKGROUND
Due to continuous issues with excessive ground water interference during excavation, changes and conflicts for
Seattle City Light (SCL) facilities, design issues, some inefficiencies by the contractor, and other unanticipated utility
conflicts, the 42nd Avenue South Phase III Project encountered schedule delays and cost overruns.
DISCUSSION
Change Order No. 3 was a compromise between the City and ACI to resolve outstanding construction disputes
through May, 2018, which was approved by Council in July, 2018. The execution of CO No. 3 avoided potential
claims and a .possible legal battle with substantial legal fees by both parties and produced cost savings for the City.
After the execution of CO No. 3, PW staff and ACI worked cooperatively together to move the project forward.
However, for the reasons stated above and more unanticipated issues, the project cost overruns continued.
After extensive discussions and negotiations between PW staff and ACI, a mutual agreement was reached and
both parties agreed that it is in their best interest to complete the project in the most efficient way possible. The new
compromise is documented in Change Order No. 4.
In summary, CO No. 4 will:
• reduces the 14% mark-up rate (established in CO No. 3) to 12.5%, which still covers ACI's bond,
insurance, other general and administrative overhead costs, and profit. This change will result in a
savings of $164,000 for the City;
• enables City project staff to continue to work cooperatively with ACI's construction crew, in order to
efficiently complete the construction project with the least amount of cost;
• requires ACI to physically complete the project within six weeks after the utility conversion work is
completed;
• resolves all outstanding claims and disputes between the City and ACI and agrees not to pursue
legal action against each other when this CO is strictly followed.
W:\PW EngIPROJECTS1A- RW & RS Projects142nd Ave S Phase III (99410303 94-RS03)1Consfructiont#,500 - Project Payments1030 - Change Proposals & COs1C0 #4 - Cost Plus 211nfo Memo for CO #4 91050319, pl,gl
042519.docx
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Infmmational Memo
42nd Ave S CO 4
Page 2
FISCAL IMPACT
The table below shows the project budget and expenditures, with the inclusion of CO No. 4:
Design CM Construction Budget
CH2M Hill Design & Staff $1,563,995 $1,564,000
AECOM Original CM & Sups No. 1 & 2 $1,768,424 1,897,000
CH2M Hill Supplemental No. 7 & 8 79,272
AKANA Consultant Contracts 79,450
Widener & WSDOT JA 9753 18,000
Active Construction Contract 17-090 $6,599,266 1 ,705,000
Active Change Orders No. 1 & 2 916,864
Active Change Order No. 3 w/ sales tax 2,741,136
Active Change Order No. 4 w/o sales tax 1,050,000
Construction Contingency 349,593
Total $1,563,995 $1,945,146 $11,656,859
Grand Total $15,166,000 $15,166,000
The current 2019 CIP project budget is sufficient to cover the cost of Change Order No. 4 and will leave a $349,593
construction contingency. CO No. 4 would require an increase of 33 working days for ACI to physically complete 42nd
Ave S Phase III construction project.
RECOMMENDATION
Council is being asked to approve Change Order No. 4 to Contract No. 17-090 with Active Construction, Inc. in the
amount of $1,050,000 for the 42nd Avenue South Phase III and Gilliam Creek Culvert Replacement Projects and
consider this item on the Consent Agenda at the May 20, 2019 Regular Meeting.
Attachments: 2019 CIP, page 2
Change Order No,4
W:IPW Eng1PROJECTSIA- RW & RS ProjectsI42nd Ave S Phase III (99410303 94-RS03)1ConstructionIt500 - Project Payments1030 - Change Proposals & COsICO #4 - Cost Plus 21Info Memo for CO tt4 91050319, MI
042519.docx
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CITY OF TUKWILA CAPITAL PROJECT SUMMARY
2019 to 2024
PROJECT: 42nd Ave South Phase III Project No. 99410303
DESCRIPTION: Design and construct street improvements, drainage, sidewalks, bike facilities, and driveway adjustments.
JUSTIFICATION: Provide pedestrian and vehicle safety, drainage, and neighborhood revitalization.
STATUS: Phase III (S/C Blvd (154th) - S 160 St), Design began in 2012, construction in 2017. Project No. 99410303
Phase IV (S 139 St - S 131 PI) in beyond. Project No. 99410301
Phase I 90-RW15 (SIC Blvd (154) - 144 St) $3,796 & Phase II 94-RS02 (144-139) $1,850, both completed.
MAINT. IMPACT: Reduce pavement, shoulder, and drainage work.
COMMENT:
Only Phase III is shown in active years. Project includes Surface Water's Gilliam Creek 42nd Ave S Culvert project
for $1.3m and is part of the Walk & Roll Plan. Seattle City Light's funding is a 60/40 underground split.
FINANCIAL Through Estimated
in $000s)
2017 2018 2019
2020
2021
2022
2023
2024
BEYOND TOTAL
EXPENSES
Design
1,564
1,564
Land (RAN)
0
Const. Mgmt.
809
688
400
1,897
Construction
2,232
5,231
2,100
9,563
Under -grounding
508
1,634
2,142
TOTAL EXPENSES
5,113
7,553
2,500
0
0
0
0
0
0
15,166
FUND SOURCES
Seattle City Light
1,285
1,285
Surface Water
1,415
2,881
4,296
Other Utilities
1
575
576
Bond
6,487
6,487
City Oper. Revenue
(2,790)
2,812
2,500
0
0
0
0
0
0
2,522
TOTAL SOURCES
5,113
7,553
2,500
0
0
0
0
0
0
15,166
2019 - 2024 Capital Improvement Program
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2
DATE:
CITY OF TUKWILA
CONTRACT CHANGE ORDER NO. 4
April 15, 2019 BUDGET NOs.: 103.98.595.300.65.00
412.98.594.382.65.00
PROJECT NO.: 99410303 CONTRACT NO.: 17-090
PROJECT NAME: 40th — 42nd Avenue South Phase III Project
TO: Active Construction, Inc.
You are hereby directed to make the herein described changes to the plans and specifications or do the following described work not
included in the plans and specifications on this contract:
NOTE: This change order is not effective until approved by the "Owner" and a notice to proceed is issued.
Conditions:
A. The following change, and work affected thereby, are subject to all contract stipulations and covenants;
B. The rights of the 'Owner" are not prejudiced;
C. All claims against the "Owner" which are incidental to or as a consequence of this change are waived; and
D. The Contractor must submit all Field Overhead and Home Office Overhead Rates for approval in advance of all change orders.
CHANGE:
See Attached Exhibit "A," incorporated herein by this reference.
We the undersigned Contractor, have given careful consideration to the change proposed and hereby agree, if this proposal is
approved, that we will provide all equipment furnish all materials, except as may otherwise be noted above, and perform all services
necessary for the work above specified, and will accept the prices shown above and below as full payment for .
ACCEPTED: Date
By
or
Contractor: Active Construction, Inc.
Title
Original on ct (without tax) $ 99,266.04 APPROVED BY THE CITY OF TUKWILA
Prevp‘Change Order $ 3,345,367.97 Date
This Change Order (without $ 1,050,000.00 By
Mayor
REV. CONTRACT AMOUNT
Previous Contract Time: 321 Working Days City Engineer )/C
Additional Contract Time for this Change Order: 33 Working Days
Updated Contract Time: 354 Working Days
$10,994,634.01
ORIGINAL: City Clerk (1 of 2)
Contractor (2 of 2)
PW Project Finance File
cc: Finance Department (w/encumbrance)
Project Management File
49
40th -- 42nd Avenue South Phase III Project
Contract Change Order No. 4
EXHIBIT A
DESCRIPTION OF WORK
Change Order (CO) #3 for the 401h — 42nd Avenue South Phase 3 Project, which was a compromise between the City and the
construction contractor (ACI) on resolving all the outstanding construction disputes through May 20, 2018, was executed on July 17,
2018, However, three months after the execution of CO #3, ACI started to alert the City that the cost increase from CO #3 would be
insufficient to pay for all the remaining contract works.
As a result, the City requested ACI to provide justifications for the cost increase beyond the new contract amount from CO #3. After
reviewing ACT's provided cost increase justifications, the City contended that ACI was partially responsible for causing the additional
cost increase. ACI disagreed with the City's contention. After months of further monitoring of the actual project cost increase, and
negotiations between City project staff and ACI, another compromise has been reached between the parties. This new compromise is
herein documented in this CO #4.
In this CO #4, the City and ACI have mutually agreed to work collaboratively to physically complete the project within 6 weeks after the
utility conversion works were completed by all utility companies. The City also agrees to a reduction of the 14% markup rate
(previously generated from CO #3) to 12.5%, of the actual overall cost of construction. The 12.5% markup is to compensate ACT's
general and administrative overhead cost, and profit.
The actual overall cost of this 40th — 42nd Avenue South Phase 3 Project refers to all the direct expenditures spent by ACI on this
particular construction project, includes the mobilization/field overhead cost, but excludes the indirect overhead cost. However, for
costs incurred after the date of this CO #4, if the expenditure was caused by ACI's own negligence, such expenditure will not be
counted as part of the actual project costs to be paid by the City, and ACI will remain fully responsible for such expenditures. As for all
the subcontracts among ACI and it's subcontractors, this CO #4 will not apply to any subcontracts executed prior to the execution of
CO #3, and all the corresponding Bid Items paying for these subcontracts. The City will just continue to pay for these subcontract
costs and with the new 12.5% markup. As a result, the existing payment mechanism among ACI and it's current subcontractors will
continue to be preserved. After the execution of CO #4, all new subcontracts among ACI and it's future subcontractors will be
subjected to the new 12.5% mark-up as the subcontractors' direct costs.
ACI's actual cost for this 401h 42nd Avenue South Phase 3 Project will continue to be subject to a detailed review monthly before the
issuance of the monthly pay estimate for such work, and before the issuance of the final payment by the City. At the option of the City,
the actual cost reviews and verifications may continue to be conducted by a Certified Public Accountant or other City of Tukwila
designated representatives: The current projected total cost for ACI to complete this 401h — 42nd Avenue South Phase 3 Project is
$9,773,008.01, per the enclosed projected cost breakdown provided by ACI. Adding 12.5% to the projected cost of $9,773,008.01, it
would result in $10,994,634.01 as the cost.
Both the City and ACI agree that after the execution of this CO #4, the City's construction management team will continue to have the
option of determining the means and methods of ACI in constructing this project.
The execution of this CO #4 supercedes the previous COs #1 and #2 on the payment and bid item parts, but the scope issues and
Contract time increase will remain in effect. This CO #4 also supercedes CO #3 on all applicable and conflicting Contract terms and
conditions.
Both the City and ACI agree that mutual execution of this CO #4 continues to resolve any and all outstanding disputes between the
parties relating to the Project, including any claims for prior delays, and ACI and the City hereby release each other from any such
claims. Both the City and ACI agree not to pursue legal action against each others if both parties strictly abide by the terms of this CO
#4. The parties agree to continue to discuss and negotiate when necessary, in order to resolve any additional Contract disputes that
arise after the execution of this CO #4.
Page 2 of 3
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The City looks forward to continuing to work with ACI to complete this important project.
CONTRACT TIME
Per CO #3, the Contract time was to expire on November 13, 2018. CO #4 will add 33 working days to this Contract, since
• ACI vacated the project site on November 16, 2018, allowing the utility companies to continue the utility conversion works.
Therefore, between November 13 and 16 of 2018, 3 working days of Contract time extension is needed.
• The construction project will be retroactively suspended starting from November 17, 2018, until the utility conversion works are
completed.
• ACI will have 30 working days to complete all remaining works for the construction project, including all the punch list items.
Therefore, the Contract time will need to be increased by 33 working days total.
As part of this CO #4, the parties agree that the Contract time will not be extended further, with the exception of:
• weather related delays;
• delays encountered that are out of the control of the Contractor or the City;
• and unanticipated changes to the work where extension of Contract time would otherwise be determined in accordance with
Section 1-08 of the WSDOT Standard Specifications, 2016 version.
Page 3 of 3
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Transportation & Infrastructure Committee Minutes
May 7, 2019
D.
Staff noted that this could be a policy issue and/or on the Council's legislative agenda. Staff
also noted that Tukwila has one staff and one business representative on Seattle City Light's
Review Panel. Chair Idan asked if staff could quantify the cost incurred by Seattle City Light
related delays and staff will provide that information. Councilmember Kruller said she
appreciated staff's response to the resident who was unhappy with work occurring on the
weekend without notification. MAJORITY APPROVAL. FORWARD TO MAY 20, 2019 REGULAR
CONSENT AGENDA.
Change Order: 42" Avenue South Phase III & Gilliam Creek Culvert
Staff is seeking Council approval of Change Order No. 4 with Active Construction, Inc. in the
amount of $1,050,000 to resolve all claims and disputes for the 42nd Avenue South Phase III
Project. This project encountered schedule delays and cost overruns due to issues with
excessive ground water interference during excavation, changes and conflicts for Seattle City
Light facilities, design issues, contract inefficiencies, and other utility onflicts. Change Order
No. 3 was negotiated to resolve outstanding disputes through May 2018 and avoided potential
clams and legal fees, but unanticipated issues resulted in more costly delays. Change Order
No. 4 was extensively negotiated and agreed to by both parties. It will reduce the 14% mark-
up rate established in CO No. 3 to 12.5%, enable City staff to continue cooperative work with
ACI, requires physical completion of the project within six weeks after utility conversion work
is done, and resolves all outstanding claims and disputes with agreement for no future legal
action. The current project budget is sufficient to cover the cost of Change Order No. 4 and
leaves a $349,593.00 contingency. Chair !clan mentioned the importance of the construction
schedule. MAJORITY APPROVAL. FORWARD TO MAY 20, 2019REGULAR CONSENT AGENDA.
E. Waste Management Contract Status Update
Staff updated the Committee on the ongoin negotiations with Waste Management. The
current contract will expire on October 31, 2019 but has a provision for up to two 2-year
extensions, whichstaff recommends pursuingdue to the favorable rates. The contract
extension proposal wilt be brought to the next Committee meeting. Terms will include a 5%
rate increase and 10%utility tax increase forcommercial customers and trash collection at the
bus stops along Tukwila International Boulevard. The rates will still be comparatively
favorable with thesencreases, which are due to the changes to the international recycling
market and the impacts to roads by the heavy trucks. Councilmember Kruller expressed
concerns about impacts to the business community. Councilmember Hougardy said that it will
be important to consider the history of the issue when the contract is next bid, and that
messaging to the business community should include the information about the rate
compared with other Cities. Councilmember Kruller suggested reaching out to the Chamber.
Waste Management will also be messaging the community about the increase. Chair Idan
suggested that the Council would benefit from education on pavement conditions citywide.
DISCUSSION ONLY.
III. SCATBd/RTC
There was no report.
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