HomeMy WebLinkAboutStaff Report 3995CITY OF
PALO
ALTO
City of Palo Alto
city Council Staff Report
Report Type: Consent calendar Meeting Date: 9/16/2013
(10 # 3995)
Summary Title: Amendment to Turner Contract. for Mitchell Park Library
Title: Approval of Amendment No.1 to Contract C13149552 with Turner
Construction Company to Increase Compensation by $785,000 for a Total
Amount Not-to-Exceed $1,485,000 for Additional Construction Management
Services for the Mitchell Park library & Community Center Project
From: City Manager
Lead Department: Public Works
The amendment to WMB No.1 (September 16 calendar item #6) was included in the packet.
Therefore, attached is the actual Turner Amendment No.1 for the above subject-referenced
item scheduled for the September 16 Council meeting.
J M . ael artor
Pu\:) ic Works Director
City of Palo Alto (ID # 3995)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 9/16/2013
City of Palo Alto Page 1
Summary Title: Amendment to Turner Contract for Mitchell Park Library
Title: Approval of Amendment No. 1 to Contract C13149552 with Turner
Construction Company to Increase Compensation by $785,000 for a Total
Amount Not-to-Exceed $1,485,000 for Additional Construction Management
Services for the Mitchell Park Library & Community Center Project
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council approve and authorize the City Manager to
execute Amendment No. One to Contract C13149552 with Turner Construction
Company (Attachment A), to increase the compensation by $785,000 for
additional construction management services for the Mitchell Park Library and
Community Center project for a total time and materials contract amount of
$1,485,000 and a total payment to Turner of $6,615,334.
Executive Summary
The Mitchell Park Library and Community Center (MPLCC) project has
experienced substantial construction delays and a large number of change orders
and claims. The current schedule from the prime construction contractor, Flintco
Pacific, Inc. (Flintco), indicates the project will be completed in late 2013,
approximately one and a half years later than the originally scheduled date for
project completion. The delay is primarily the result of construction problems,
particularly Flintco’s failure to properly schedule, coordinate and manage the
work and inspections, and the City’s rejection of non-compliant work.
As a result of the delays, change orders, claims, and non-compliant work, Turner
City of Palo Alto Page 2
has had to remain on the job past the original contractual time period.
Accordingly, staff recommends to increase Turner’s contract time and
compensation by $785,000 in order to compensate Turner for extra work
performed and to be performed during the construction phase from June 1 to
November 30, 2013 (the currently estimated completion date), and to provide
post-construction services for the period of December 1, 2013, to November 30,
2014.
Background
Measure N, which passed on November 4, 2008, allowed the City to sell bonds to
fund the renovation of the Downtown Library, construction of the Mitchell Park
Library and Community Center (MPLCC), and renovation and expansion of the
Main Library.
The City issued a Request for Proposals (RFP) for the construction management
services for all of the Library Bond projects and Turner was selected. On
September 14, 2009, the City and Turner entered into Contract C10131631. Five
amendments were approved by Council to add construction management
services and compensation for all of the Library Bond projects and to specify an
end date of June 1, 2013, for the construction phase services for the MPLCC
project. Also, in entering into the contract amendments, the City agreed to defer
any claims against Turner relating to project delay and to set aside the amount of
$850,000 as partial security for those claims.
When it became apparent that the MPLCC project would extend beyond June 1,
2013, Turner requested that its fixed price contract be transitioned to a time and
materials contract. On May 20, 2013, Council approved contract C13149552 with
Turner for $700,000 to provide construction management services on a time and
materials basis through the completion of the project, including $525,000 for
Turner’s construction phase staff services from June 2 to October 31, 2013. The
new contract includes safeguards to ensure City review of monthly invoices
exceeding $140,000.
Discussion
City of Palo Alto Page 3
Turner’s construction phase services include: analyzing, estimating and processing
change orders and claims; reviewing schedules; coordinating construction and
inspections; inspecting and cataloging defective work; and assisting the City and
Flintco in resolving construction issues.
In May 2013, Turner and staff estimated the amount of work Turner would
provide during the first five months of the new contract (June – October 2013).
This estimate assumed that Turner’s time and fees would diminish as the project
neared completion. However, that has not been the case. Although Flintco has
recently stepped up their efforts to complete the project by November 30, 2013,
change orders and claims submitted by Flintco have continued, as have failed
inspections and non-compliant work. Additionally, the City’s twenty public art,
fixtures, furnishings and equipment contractors are now beginning the
installation of their work. Although Flintco is contractually obligated to
coordinate these contractors’ work with their own, they have generally failed to
do so and Turner has had to become involved. The result of all this is that Turner
has been unable to wind down their services.
An additional $785,000 for Turner’s staff services is recommended in Amendment
No. One of the new contract. This includes $325,000 for Turner’s additional
services during the construction phase for the months of June to October 2013 as
well as one additional month of service in November 2013. It also includes
$460,000 for Turner’s post-construction services from December 1, 2013 through
November 30, 2014. These post-construction services are primarily for work to
deal with construction deficiencies, the punch list, change orders, claims and
warranty issues as staff anticipates that it likely will take a considerable amount of
time and resources to negotiate and finalize all of the outstanding claims and
issues with Flintco after construction is completed. Turner’s assistance during this
period is essential as they will have the expertise and historical knowledge and
documentation to deal with unresolved issues. Should the issues with Flintco be
resolved sooner than anticipated or with fewer resources, staff would direct
Turner to suspend their services and would only pay for services rendered up to
that point.
Resource Impact
City of Palo Alto Page 4
Funds for the recommended amendment to the Turner contract are available in
the Mitchell Park Library and Community Center project (CIP PE-09006). The
original contract with Turner, including five amendments, totals $5,130,334 for
MPLCC. Amendment No. One to the new contract with Turner adds $785,000 for
a total contract amount of $1,485,000. Turner’s total accumulated payment for
services in relation to the Mitchell Park project would be $6,615,334.
Flintco’s bid and original contract amount for the project were well below the
engineer’s estimate, however the City has authorized $3,781,522 in change
orders accumulatively for Flintco through July 2013. Turner’s and the City’s
architect, Group 4’s, contracts exceed the amounts originally budgeted for their
services. However, the total estimated budget for project costs as are still below
the $50,000,000 bond budget and the $49,043,000 engineer’s estimate, as shown
below.
Flintco original contract $24,365,000
Flintco contingency $ 4,873,000 (over $1,000,000 remains)
Group 4 contract $ 6,020,725
Turner old contract $ 5,130,334
Turner new contract $ 1,485,000 (including the $785,000 add)
Other City contractors $ 2,936,781 (including contingencies)
Allocated Atty & Expert Fees $ 1,050,000
Permits, fees $ 487,174
TOTAL $46,348,014
Policy Implications
Amending the contract with Turner does not conflict with any current City policy.
Timeline
Construction of the new Mitchell Park Library and Community Center began in
September of 2010 and staff anticipates the facility opening in late 2013.
City of Palo Alto Page 5
Attachments:
Turner Amendment (PDF)
CITY OF PALO ALTO CONTRACT NO. C13149552
AMENDMENT NO.1 TO CONTRACT NO. C13149552
BETWEEN THE CITY OF PALO ALTO AND
TURNER CONSTRUCTION COMPANY
This Amendment No.1 ("Amendment") to Contract No. C 13149552 ("Contract") is
entered into and made cffecti~e on September 16,,2013, by and between the CITY OF PALO
ALTO, a California chartered municipal corporation ("CITY"), and TlJRNER
CONSTRUCTION COMPANY, a corporation in the State ofNe:w York, located at 60 South
Market Street, Suite 1100, San Jose, California 95113 ("CONSULTANT").
RECITALS:
WHEREAS, on June 2, 2013, the CITY and CONSULTANT entered into the Contr:act
concerning the Mitchell Park Library and Community Center ("Project"); and
WHEREAS, the parties have agreed to enter into this Amendment to increase the
compensation by $785,000 to provide additional construction management services in
connection with the Project.
NOW THEREFORE, in consideration of the covenants, terms, conditions, and provisions
of this Amendment, the parties agree:
SECTION 1. ,SECTION 4 ofthe Contract, "NOT TO EXCEED COMPENSA TTON" is
hereby amended to read:
The compensation to be paid to CONSUL:rANT for performance of the Services described in
Exhibit "A", i'iIcluding both payment for professional services and reimbursable expenses? shall
nol exceed One Million Four Hundred and Eighty-Five Thousand Dollars ($1,485,000.00) (the
"Cap"). If the CITY wants CONSULTANT to perform the Services so that CONSULTANT's
compensation (for both professional services and reimbursable expenses) would exceed the Cap,
CONSULTANT will not be required to perform those Services unless and until the City Council
approves a written contract amendment to increase the Cap accordingly. In the event Additional
Services are authorized, CONSUL T ANT shall be compensated on a time and material basis.
The applicable rates CONSULTANT will charge and the schedule of payment are set out in
Exhibit "C-I ", entitled ':HOURL Y RATE SCIIEDULE," which is attached to and made a part of
this Agreement.
Professional Services
Additional Services, if any, shaH be authorized in accordance with and subject to the provisions
of Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services
performed without the prior written authorization of CITY. Additional Services shall bc defined
as set forth in Exhibit "A", and mean any work that is determined by CITY to be necessary for
the proper completion of the Project, but which is not included within the Scope of Services
described elsewhere in Exhibit "A" .
. SECTION 2. EXHIBIT "A" entitled SCOPE OF SERVICES is hereby amended to add
the foHowing paragraph at the beginning of Phase III: Post eonstruction Services To Be
Provided On A Time And Material Basis:
"Post Construction Resolution Services: Consultant shaH assist the City in:' ensuring the
Contractor completes the punch list; analyzing, documenting and resolving outstanding
construction deficiencies or non-compliance with the Contractor; and analyzing, documenting
and resolving outstanding ehange orders and claims from the Contractor."
SECTION 3: EXfUBIT "B" entitled SCHEDULE Of PERFORMANCE is hereby
amended by revising Task 2 to read, "2. Post Construction (5 months after CO) March 31,
2014"
SECTION 4. EXHIBIT "C" entitled COMPENSATION is hereby amended to read as
set forth in the following attachment to this Amendment.
SECTION 5. Except as herein modified, all other provisions of the Contract, including
any exhibits and subsequent amendments thereto, shall r"wain in full force and effect.
{REMAINDER INTENTIONALLY BLANK -SIGNATURE PAGE FOLLOWS]
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3.
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Name: Kevin T Antonelli
Title: VP & General Manager
EXHIBIT "C"
COMPENSATION
The CITY agrees to compensate the CONSULTANT on a time and materials basis for
professional services performed in accordance with the terms and conditions of this
Agreement. Compensation shall be calculated on a time and material basis for the
performance of the services specified in Phase II, Construction Phase Services in Exhibit
"A". The hourly rate schedule attached as exhibit C-l will be used to compensate
CONSULTANT for personnel assigned to each task set forth below. The budget per task
below will be used by the CITY for internal accountin~.
For Subconsultants, such as Inspections, special inspections, electronic document services,
and photographic documentation services, the CITY agrees to compensate the
CONSULTANT for services performed in accordance with the terms and conditions of
this Agreement and as set forth in the budget schedule below. Compensation for the
CONSULTANT shall be calculated based upon the actual cost ofthe subconsultant, plus a
fee of five percent (5%), up to the not to exceed budget amounl set forth below.
The compensation to be paid to CONSULTANT under this Agreement for the
performance of services described in Exhibit "A" ("Basic Services") and reimbursable
expenses shall not exceed $1,485,000 (the '~Cap"). If the CITY wants CONSULTANT to
perform the Services so that CONSULTANT's compensation (for both professional
services and reimbursable expenses) would exceed the Cap, then (a) prior written
authorization from the CITY will be required, and (b) CONSULTANT will not be
required to perform those Services unkss and until the City Council authorizes a written
contract amendment increasing the Cap accordingly. Any work performed or expenses
incurred for which payment would result in a total exceeding the Cap without prior
authorization from the CITY shall be at no cost to the CITY.
CONSULTANT's work shall be performed on a Time and Materials basis and shall
perform the tasks and categories of work as outlined below. In the event Consultant's
Task 1 Staff Costs exceed $140,000 in any month, CONSULTANT shall promptly notifY
the City Manager and Public Works Director in writing once it becomes aware that such
Staff Costs have been incurred. CONSULTANT shall submit detailed time records and
reimbursables backup in a form acceptable to the CITY. The CITY's Project Manager
may approve in writing the transfer ofbudgct amounts between any ofthe tasks or
categories listed below provided the total compensation for Basic Services, including
reimbursable expenses, does not exceed $1,485,000.
4
;.
BUDGETSCBEDULE
Task 1 Staff Costs
(PhaSe II~Section A:Constnjction Phase)
Task 2 .-Jlt:
(phase II, Section B: Testing & Inspection)
Task 3
(Phase II, Secti()l1C:.Electronic Documents)
;;-~
'~')~:_i~';~~~~.).
TaskS
(Phase.IIl:PQst Constnlction)
Maximum Total Compensation
NOT TO EXCJ:ED AMOUNT
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are
included within the scope of payment for services and are not reimbursable ~xpenses.
Then CITY will reimburse CONSULTANT for approved subcontracted services billed at
cost plus 5%.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY's pn~ject manager's
request, shall submit a detailed written proposal including a description of the scope of
services, schedule, level of effort, and CONSULTANT's proposed maximum
compensation, including reimbursable expense, for such services based on the rates set
forth in Exhibit C-l. The additional services scope, schedule and maximum
compensation shall be negotiated and agrced to in writing by the CITY's Project
Manager and CONSULTANT prior to commencement of the services. Payment for
additional services is subject to all requirements and restrictions in this Agreement
TIME AND MATERIAl"S WORK
Notwithstanding any other provision or anything to the contrary herein, it is expressly
understood and agreed by both paI1ies that this contract is for Hourly and Time and
Materials work, and that Consultant will provide staff and services up to the total contract
authorization of$I,485,000 only, regardless of the status of construction, the status of the
project, the performance or actions of the Contractor, the status of milestone dates, or thc
status of the Construction Schedule. Consultant will keep the City advised at reasonable
intervals as to how the Construction Management compensation is approaching the total
authorization of $1,485,000, and will work with the City to manage the level of stafY and
the services to work towards the $1,485,000 authorization.
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EXHIBIT "C-l"
HOURLY RATE SCHEDULE
Rates for Services Performed in 2013
Project Executive $261
Project Manager $185
Superintendent $179
Project Engineer $118
Administration $ 71
Scheduling $174
Accounting $113
Estimator $188
Estimating Engineer $174
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Rates for Services Performed in 2014 (because
anticipated warranty period extends into 2014)
Project Executive $270
Project Manager $191
Superintendent $184
Project Engineer $122
Administration $ 73
Scheduling $179
Accounting $116