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Agenda Item 14.
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| City Council Meeting |
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| Subject: |
| Amendment to Professional Services Agreement with MTGL, Inc. for Additional Construction Materials and Soils Testing Services on Capital Improvement Projects |
| RECOMMENDATION |
| Approve Amendment to Professional Services Agreement |
| BACKGROUND/DISCUSSION |
On July 1, 2015, the City Council approved a Professional Services Agreement (PSA) with MTGL, Inc. to provide Construction Materials and Soils Testing (Geotechnical) services for various Capital Improvement Projects on an "As-Needed (On-Call)" basis. The PSA includes a not-to-exceed amount of $50,000 per year with an initial one-year term and provisions for three-one year extensions making the total possible term four (4) years. To date, the PSA term has been extended twice with the current term from July 1, 2017 to June 30, 2018 without the need to amend the annual amount.
During the July 1, 2016 to June 30, 2017 term, MTGL has provided Geotechnical and Material Testing services on several high-priority projects including The Tracks at Brea, Segments 6, 2 and 3 (CIP 7873), and Laurel Elementary Magnet School/Lagos de Moreno Park Upgrades Project (CIP 7929) totaling approximately $41,278, which was less than the $50,000 annual threshold.
As stated previously, MTGL is currently providing Geotechnical services for CIP 7929, which has encountered several issues necessitating an increased geotechnical, special inspection, and material testing presence, such as, but not limited to: 1) unforeseen six inch (6") sewer lateral replacement work which serves the school; 2) Contractor-caused construction delays due to lack of performance; 3) re-occurring site visits for special inspection and materials testing due to the Contractor's unorthodox means and methods; and 4) re-occurring site visits for re-inspection of Contractor's work. Collectively, these issues have pushed the completion of the project past the original completion date of November 28, 2017 to the Contractor's recently submitted schedule of June 2018. As a result, MTGL has requested additional services for the project up to June in the approximate amount of $140,000 (which includes approx $20,000 for added sewer line geotechnical work) over the original Purchase Order ("PO") amount of $20,790. It was estimated that the original PO issued in June 2017 would cover the associated services up to the original completion date of November 2017. Unfortunately, that was not the case.
Therefore, in order to proceed with the PO Change amount of $140,000, the annual PSA amount of $50,000 will need to be increased accordingly. The majority of the cost overruns related to the MTGL services for this Project will be reimbursed from the School District associated with the sewer line work, subject to their Board approval, and from the Contractor through payment deductions for re-inspecting and standby time, as well as liquidated damages assessed against the Contractor for the added costs associated with their delays.
Staff has prepared a PSA Amendment (Amendment No.1) to increase the annual not-to-exceed second term amount from $50,000 to $140,000, which will cover the added CIP 7929 project costs of $120,000 (not including the Sewer Line work of $20,000) plus $20,000 for other projects needing MTGL services up to July 1, 2018. See Amendment No. 1.
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| COMMISSION/COMMITTEE RECOMMENDATION |
| The Finance Committee at their March 27, 2018 meeting directed staff to reduce the MTGL PSA Amendment amount by the costs associated with the Sewer Line work that will be reimbursed by the School District. Staff will pursue the School District commitment for the reimbursement of this MTGL cost as well as the Contractor (LBI) and Construction and Management costs (Onward) associated with the Sewer Line Change Order work and return to the Finance Committee with a second Amendment to the MTGL PSA upon reimbursement approval from the School District. The Sewer Line work cost from MTGL is approximately $20,000, therefore, the Amendment No.1 has been reduced by this amount and this Staff Report has been updated accordingly to reflect this direction. |
| FISCAL IMPACT/SUMMARY |
Amendment No. 1 to the MTGL annual "as-needed (on-call)" basis PSA for Geotechnical services will allow staff to obtain a PO change in the amount of $120,000 for CIP 7929, which will cover the work up to June 2018. This PO change will not include the added costs associated with the Sewer Line Change Order Work, which will be completed as part of a second Amendment to this PSA. Additionally, this will allow continuity of services and avoid further time delays and added costs that would be associated with bringing in another firm to provide these services. Therefore, staff recommends amending the PSA with MTGL to increase the not-to-exceed amount from $50,000 to $140,000 for the second extended term only to cover the $120,000 PO change for CIP 7929 (not including the $20,000 added costs for the sewer line work), with $20,000 remaining in the amended annual amount for other CIP projects needing these services.
All costs related to MTGL services are included in the approved budget for the aforementioned project. Furthermore, the majority of the cost overruns related to the MTGL services for this project will be reimbursed from the School District associated with the sewer line work, subject to their Board approval, and from the Contractor through payment deductions for re-inspecting and standby time as well as liquidated damages assessed against the Contractor for the added costs associated with their delays. The following table reflects the approved budget, expenses to date, and remaining balance for project CIP 7929:
| CIP # |
Project Name |
Approved
Budget |
Expenditures
To Date |
Remaining
Balance |
| 7929 |
Lagos De Moreno Park |
$ 2,546,545 |
$ 1,585,351 |
$ 961,194 |
On June 6, 2017, the City Council approved the budget for the project, which is funded by the Capital & Mitigation Improvement Fund (Fund 560) ($1,155,072), the Park Development Fund (Fund 250) ($1,141,473), and School District funding ($250,000). As indicated by the table above, there are still sufficient funds within the project to cover the increased not-to-exceed costs in the PSA Amendment No. 1 with respect to the PO change for CIP 7929. Therefore, there will be no impact to the General Fund. |
| RESPECTFULLY SUBMITTED: |
William Gallardo, City Manager
Prepared by: Steve Kooyman, P.E., City Engineer
Concurrence: Tony Olmos, P.E., Public Works Director |
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