On March 22, 2016, City Council awarded a Contract to O'Duffy Bros., Inc. ("Contractor") in the amount of $2,397,058 for the Glenbrook Tract Water and Street Improvements, Project 7452 ("Project"). The Project rehabilitated/resurfaced the existing pavement of the residential streets in the Glenbrook Tract neighborhood bounded by Birch Street to the north, Orange 57 Freeway to the west, Greenbriar Lane/Hillhaven Drive to the south, and the Brea Union Plaza to the east. This Project also replaced approximately 12,700 linear feet of water main, services, gate valves, fire hydrants, and appurtenances. Lastly, this Project replaced damaged and/or uplifted sections of curb, gutter, and sidewalk, and reconstructed curb access ramps to be in compliance with Americans with Disabilities Act (ADA) requirements.
During construction, the Contractor incurred additional costs due to unforeseen conditions related to numerous unmarked or mis-marked underground utilities (i.e. SCE, Gas, AT&T, street lighting and existing water main) which required additional potholing, deeper excavations, hand digging, realignment of water mains, and additional pipe fittings. Furthermore, staff requested to reconnect three additional water main connections in the existing easement by the Glenbrook Club House to provide less disruption to the residents during routine maintenance and fixing water leaks.
In order to pay for the aforementioned extra work, City staff requested to increase the Construction Contract contingency from 10% to 22%, which brought the Construction Contract budget to $2,922,058 ($2,397,058+$525,000). On April 4, 2017, the City Council approved this contingency increase and adopted Resolution 2017-108, which amended the 2016-2017 Capital Improvement Program budget and appropriated an additional $314,000 to the Project. The total amount of the Contract Change Orders ("CCO's") No. 1 – 5 for the extra work is $471,860.
As previously stated, since a portion of these CCO's are related to underground utility conflicts with various utility companies (Gas, SCE and AT&T) staff submitted an invoice to these companies with a request for reimbursements for the mis-marked/unmarked facilities that caused the Contractor significant delay. The total amount submitted to these companies was approximately $144,000. Staff has received some responses from the utility companies regarding the reimbursement requested, but without a commitment of payment. Therefore, staff will continue to work with the utility companies to obtain a reimbursement resolution to the extra project costs associated with their utility conflict.
Subsequent to the City Council approval of additional funds, the Contractor encountered further unforeseen conditions that resulted in more delays and additional costs, which exceeded the April 4, 2017 City Council approved budget adjustment.
The additional changes were as follows:
- Encountered unmarked street light conduit and removal and restoration of additional unstable pavement sections in various areas as directed by the City Engineer to provide long-term pavement stability and diminish early reflective surface cracking ($41,143.56) (CCO No. 6).
- Adjustment of original Contract quantities to reflect actual quantities based on field measurement. One of the major cost items that increased above the original Contract quantities was the asphalt tonnage at various locations. This was mainly due to variations in the existing thickness of the asphalt in some locations, which needed to be adjusted in the field to address proper pavement tie-in at curbs with a focus on increasing the stability and integrity of the pavement at these locations ($99,965.85) (CCO No. 8).
The Contractor completed the Project (including punch list items) on June 6, 2017. Subsequent to the completion of the work, the Contractor presented a claim of approximately $150,000 for Extended Field Office (i.e. yard rental, field office, staff salaries, etc.) and Home Office overhead. Staff negotiated this claim with the Contractor, which resulted in a mutually agreed amount of $49,467.54 for the extended overhead costs (CCO No. 7). Therefore, the total amount of these final CCO's (No. 6 – 8) is $190,576.95, which exceeds the remaining contingency budget by $137,436.48. The following is summary of all CCO's (No.1-8) with Contingency amounts:
| CCO # |
Description |
Status |
Amount
($) |
| 1 |
Realigned new water line at Fig Street due existing water line conflict; numerous utility conflicts at various locations; Additional water valves and fittings at Chevy Chase, Valverde and Glenbrook Clubhouse parking lot (Phase 1). |
Approved |
77,170.33 |
| 2 |
Modifications to Water connection and various utility conflicts. Additional water valves and fittings at Chevy Chase, Valverde and Glenbrook Clubhouse parking lot (Phase 2). |
Approved |
68,264.32 |
| 3 |
Complete additional water connections at Chevy Chase, Valverde and Glenbrook Clubhouse parking lot (Final Phase). Numerous utility conflicts at various locations. |
Approved |
122,468.89 |
| 4 |
Realigned new water line due to fiber optic cable conflict and numerous utility conflicts at various locations. |
Approved |
99,457.34 |
| 5 |
Unexpected deeper high pressure main line to be abandoned at Birch and Redbay. Numerous utility conflicts with house water services. |
Approved |
104,498.65 |
| 6 |
Encountered unmarked street light conduit; remove and replaced 1.5 inches of pavement at various locations. |
Pending Approval |
41,143.56 |
| 7 |
Extended Overhead Costs due to project delays |
Pending Approval |
49,467.54 |
| 8 |
Final Quantities - Adjustment of original Contract to reflect actual quantities based on field measurement. |
Pending Approval |
99,965.85 |
| 1-8 |
Total CCO Costs (28% of Contract) |
|
662,436.48 |
| |
Approved April 4, 2017 Contingency (22%) |
|
525,000 |
| |
Contingency Amount Increase |
|
137,436.48 |
The sum total of the final CCO's (1-8) for this Project amounts to 28% of the original Contract amount as shown in the table. Therefore, staff is requesting the City Council consider increasing the Project Construction Contingency amount from $525,000 (22%) to $662,436.48 (28%) to cover the CCO's. Furthermore, staff is requesting the City Council consider appropriating additional funds to the Project budget through a Resolution in order for staff to process the final payment of the Contract with the Contractor (see Fiscal Impact Section of this Report for budget details).
As stated previously herein and as discussed within the April 4, 2017 City Council staff report, the majority of the CCO's for this Project involved unforeseen utility conflicts, which delayed the Contractor from installing the water line improvements. The plans and specifications did provide existing utility information that was provided during the design phase from the individual utility companies. However, additional utility exploration and pot-holing was not completed during the design phase to further identify potential conflicts between the new water line and existing underground utilities, which could have minimized the delay and costs. Therefore, to minimize this potential utility conflict issue in the future, the Public Works Department will require that all utility information obtained from each utility company be supplemented with field exploration and pot-hole work to identify and resolve any utility conflicts as part of the design phase of a project prior to bid.
Furthermore, as part of this Project, there was an increase to the AC pavement item which was necessary to provide a proper stable and optimum surface to sustain a prolonged life of the local roadways within this subdivision. This extra AC pavement work was within the control of the City staff with design and construction management/inspection consultants. Therefore, to assure the design provides a complete assessment and appropriate AC pavement design in the future, staff will utilize additional pavement exploration work in coordination with the Pavement Management Plan, such as AC coring and dig outs, during the design phase. There will be an increased cost within the design phase for both the utility and AC pavement exploration efforts, however, this proactive design approach will minimize the potential utility conflicts and AC pavement overage during construction, hence, reducing the CCO's and contingency budget. |
The total approved April 4, 2017 budget for the Project was $3,214,000 with funding coming from a combination of Measure M ($663,000), Sewer ($30,000), Urban Runoff ($7,000), and Water ($2,514,000) funds. The final CCO's for this Project exceed the approved contingency of $525,000 (22%) by $137,436.48 bringing the total construction contingency to $662,436.48 (28%). However, staff was able to keep the construction engineering and administration costs to $264,371, which is less than the April 4, 2017 approved budget of $291,942. Therefore, staff is requesting the City Council consider an additional $125,000 to the Project budget with $63,750 from the Water Fund (Fund 420) and $61,250 from Measure M (Fund 260). This will complete the funding for the Project and allow staff to process the Final Payment for the Construction Contract inclusive of the final CCO's.
Additionally, a Resolution appropriating the added funds from Fund 420 and Fund 260 to the Project is attached for City Council consideration and approval. There is no General Fund impact from this action. The following table provides a breakdown of the construction and construction engineering budget with the requested additional funds:
| Original Contract Amount |
$2,397,058 |
| Change Order Nos. 1-8 |
$662,436.48 |
| Final Construction Contract Amount |
$3,059,494.48 |
| Asphalt Repair by City's Maintenance Contractor |
$15,134 |
| Construction Engineering (i.e. inspections, administration, CIP Management) |
$264,371 |
| TOTAL CONSTRUCTION COST (Rounded) |
$3,339,000 |
| April 4, 2017 Approved Budget |
$3,214,000 |
| Shortfall |
($125,000) |
The Project installed approximately 12,700 linear feet of water line and resurfaced/rehabilitated the street pavement in the Glenbrook Track neighborhood. This Project also encountered unforeseen conditions including numerous utility conflicts and other unanticipated work as well as extra needed water connections, additional asphalt and extended office overhead that resulted in additional costs, which exceeded the Project budget.
The Contractor has completed the Project and fulfilled its obligations to the City per the subject Contract. Therefore, staff is recommending the following consideration from the City Council:
- Accept the Project as complete and authorize the City Clerk to record a Notice of Completion (see attached NOC).
- Authorize the City Clerk to release the Payment and Performance Bonds upon notification from the Public Works Department.
- Appropriate additional funds of $125,000 to the Project budget (see attached Resolution).
- Increase the construction contingency from $525,000 (22%) to $662,436.48 (28%).
|