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09-0721_M.S. CONSTRUCTION_D1_Agenda Report • • CRA 7/21/2009 AGENDA REPORT D1 TO: Joe Tait, Interim Executive Directo q, FROM: Douglas Dumhart, Economic Development Manager SUBJECT: Consideration of Change Order No. 2 to the Construction Contract with M.S. Construction Management Group, Change Order No. 1 to the Personal Service Agreement with MTGL Inc., and Appropriation of Additional Funding for the Affordable Housing Development Project Little Hollywood Phase Il. (Council Priority No. 4A). RECOMMENDATION: By motion, 1. Approve, and direct the Interim Executive Director to sign Change Order No. 2 to the Construction Contract with M.S. Construction Management Group for an addition of $56,158.20 to the existing contract, for additional work performed due to field conditions; and, 2. Approve, and direct the Interim Executive Director to sign Change Order No. 1 to the Personal Service Agreement with MTGL, Inc. for an addition of $14,300 to the existing contract, for additional soils monitoring necessary due to field conditions; and, 3. Approve the appropriation of $100,000 from Housing Bond Proceeds to the Little Hollywood Construction Project. SUMMARY: The Community Redevelopment Agency (the "Agency') Board approved the construction contract for Little Hollywood Phase II on January 20, 2009, and authorized a budget of $2.68 million for the project. The project is slightly ahead of schedule and is approximately 70% complete. Staff anticipates that the approval of these two change orders and an appropriation of $100,000 to the project budget are needed to complete the remaining work. BACKGROUND: The Agency established a $2.68 million budget for the project to cover the construction, project monitoring, permit and development fees, and a contingency. A summary of the budget is as follows: Agenda Report • • July 21, 2009 Page 2 Construction Contract $2,083,853.33 Monitoring Tasks $94,851.50 City Fees $300,518.42 Contingency _ -- ._-- __.. _... ._. $200,000.00 Total Fee Cost $2,679,223.25 Construction has moved swiftly over the past six months, and the project is expected to complete earlier than estimated. Although construction has proceeded smoothly, activities impacting the budget have been unavoidable. The primary activity which impacted the budget was the payment of Utility Fees not originally included within the fee assessment. These fees resulted in an immediate use of $129,431.47 of the contingency funds. Additionally, the contingency has been used for an Orange County Flood Control permit, a Gas Company installation fee, and a construction change order totaling $24,425.96. Due to the site conditions and construction processes, the construction contractor and geotechnical monitor have requested change orders which exceed the remaining contingency funding. A breakdown of the contingency use is as follows: Contingency $200,000.00 Utilities Fee $129,431.47 OCFCD Permit $2,773.94 MTGL, Inc. Change Order No. 1 $14,300.00 The Gas Company Utility $3,409.81 M.S. Construction Change Order No. 1 $24,425.96 M.S. Construction Change Order No. 2 _ $56,158,20 �_� Sub Total _ <$230,499.38> TOTAL <$ 30,499.38> Two requests have been received from contractors for change orders which will adjust the budget allowance. The first is from M.S. Construction Management Group ("M.S.C.") for $56,158.20, and the second is from MTGL Inc. for $14,300. It is anticipated that $100,000 will be sufficient funding to accommodate these and any future requests. Staff recommends the approval of the two requested change orders and appropriation of $100,000 from the Affordable Housing Project fund for the remaining tasks in the Little Hollywood Phase II Project. M.S. Construction Management Group Request: M.S. Construction Management Group has provided the Agency with excellent service over the past six months. The construction company has communicated all successes Agenda Report • • July 21, 2009 Page 3 and concerns throughout the project and has cooperated well with the City inspectors, geotechnical and archeological monitors, and project manager. M.S.C.'s work ethic has allowed the project to move forward successfully. It is common for construction projects to experience situations which necessitate field changes. Situations have arisen through the Little Hollywood Phase II Project requiring changes to ensure the success of the project. M.S.C. has worked to find resolutions to the changes and has striven to prevent postponement of construction. The following table details the required construction changes, and the fiscal impact of each change. M.S.C.'s proposed change order has been included in the report as Attachment 1. Construction of a Requirement for equestrian bridge from bioswale. Item originally excluded from specs. $ 11,037.91 !Rip-Rap ' (LH ) Additional Water Gas line along Ramos St. required water line $ 5,168.78 Line Work detour (LH #5) :Additional Headwall Requirement for pipe inlets to bioswale. Item $ 2,721.29 j& Pipe Gates originally excluded from specs. (LH #6) Additional Gas Line Requirement for gas connection, per The Gas $ 32,293.56 Trenching Co. (LH #7) Raise Existing 'Manhole, originally to be removed, required to $ 4,936.66 Manhole to Grade be raised to finished grade 4 ft. LH #9 TOTALS $ 56,158.20 The addition of the rip-rap, and headwalls, not originally included in the specifications, are necessary for site drainage, and the health and safety of future residents. The three field changes were unavoidable due to the site conditions and unexpected gas line characteristics. MTGL Inc. Request: The preliminary steps of the Little Hollywood Phase II Project included a geotechnical assessment of the site. This initial assessment recommended certain grading and backfilling requirements for residential use on the site. Due to the recommendations it was determined a geotechnical firm would be contracted to monitor the following tasks: • Trenching and installation of sewer lines, storm drains, water lines and dry utilities; • Rough and precise grading of the site; • Foundation and anchor bolt stability; and, • On site pavement. MTGL, Inc. provided the Agency with a proposal which satisfied the geotechnical Agenda Report • • July 21, 2009 Page 4 monitoring needs of the Little Hollywood Phase II Project for $14,450. This proposal was for 200 hours at "On-Call as Needed" bases. On June 9, 2009, MTGL Inc. provided staff with a budget impact letter (Attachment 2) indicating that an additional 168.5 hours of monitoring had been utilized over the originally anticipated 200 hours, and that an estimated 24 additional hours would be required for the completion of the project. These time overages have resulted in $14,300 in excess of the original budget. MTGL Inc. related to staff that the initial professional proposal was misjudged due to the rate of work being done on the site, the on-site conditions, and the highly liquefiable site conditions encountered during the construction phase. MTGL's proposed change order has been included as Attachment 3 for review. Staff appreciated MTGL Inc.'s efforts to maintain the construction schedule and momentum. Throughout the project MTGL Inc. has worked with the contractor to ensure the most efficient monitoring and assisted in reducing postponement. Funding Allocation: Fiscal Year 2008-2009 Little Hollywood Phase II Project budget included approximately $2.68 million for remaining architectural and engineering tasks, construction contract, construction monitoring, organizational fees, and a 10% contingency. The contingency funds will be expended with the approval of the second change order with M.S.C. and the request from MTGL Inc. The Little Hollywood Phase II Project is about 70% complete and additional contingency may be necessary for the final 30% of the project. Staff is recommending an additional $100,000 be allocated to the project's construction fund to accommodate the current change order requests and any unforeseen future requests. The below table identifies the Project Tasks, Expenses to Date and the Task Status. Construction Contract $1,380,768.08 74% Complete Monitoring Tasks $41,715.00 44% Complete City Fees $300,518.42 100% Complete Contingency $160,041.18 80% Complete Total Project $1,883,042.88 70% Complete NOTIFICATION: • M.S. Construction Management Group: Mike Saghafi, President • MTGL, Inc.: Steven Koch, Vice President Agenda Report • • July 21, 2009 Page 5 RECOMMENDATION: By motion, 1. Approve, and direct the Interim Executive Director to sign Change Order No. 2 to the Construction Contract with M.S. Construction Management Group for an addition of $56,158.20 to the existing contract, for additional work performed due to field conditions; and, 2. Approve, and direct the Interim Executive Director to sign Change Order No. 1 to the Personal Service Agreement with MTGL, Inc. for an addition of $14,300 to the existing contract, for additional soils monitoring necessary due to field conditions; and, 3. Approve the appropriation of $100,000 from Housing Bond Proceeds to the Little Hollywood Construction Project. Respectfully submitted, Prepared by, Douglas Dumhart, 4Lauraitoikt2 Economic Development Manager Housing/Redevelopment Coordinator Attachments: 1, M.S. Construction Management Group Change Order No. 2 2, MTGL, Inc. Budget Impact Letter 3, MTGL, Inc. Change Order No. 1