Staff recommends that the City Council approve a General Contractor/Construction Manager (GC/CM) Standard Agreement and General Conditions contract with COP Construction, LLC for W.O. 19-12: West End Raw Water Pipeline Project.

Identifying and securing an alternate and additional source of treated water for the City of Billings is a priority to the City. Through FY23, the City has $126 million in funding budgeted to design and build the projects needed for the new water system.  Over the next year, design and start of construction is planned for a new water treatment plant, river water intake and associated pump station, reservoir, and approximately 5 miles of transmission pipeline.

On February 8, 2021, Council approved Resolution 21-10925 allowing the use of an alternative project delivery method as authorized by MCA 18-2-502 for construction of water system projects on Billings' West End, including the raw water pipeline under current consideration.  The City has elected to move forward with the General Contractor / Construction Manager (GC/CM) contract format, since the contracting structure is more conducive to ensuring integral City staff involvement in project direction and decisions as developed by the project Team consisting of City staff, the Engineer, and GC/CM Contractor.  Some major benefits of GC/CM contracts are that they bring the contractor, procured through an open public process, onto the project team as early as possible in order to take advantage of the expert contributions the contractor can bring to the project design and early cost development.  GC/CM contractors are often able to identify opportunities to reduce overall project costs by introducing concepts for the team that are potentially more cost-effective to build.  Information is gained quickly about actual construction means, methods and materials, which leads to improved design accuracy and completeness.  During the pre-construction phase, the GC/CM contractor brings a level of cost certainty to the project before the design is complete, which informs overall budgets and the scope of current and future projects.

On August 23, 2021, City Council approved a Pre-Construction Services Contract with COP Construction in the amount of $98,987 for the raw water pipeline.  The project Team consisting of City staff, HDR Engineering and COP Construction, are working through the project design that HDR has advanced to approximately 60% completion. The Team is working on a project management plan, reviewing major project risks and refining the project cost model.  A number of field reviews have been conducted and opportunities identified to reduce project costs, primarily though pipe size and material selection (36-inch ductile iron) and alignment decisions to minimize the number of large pipe fittings and construct outside the road section to minimize pavement restoration.  COP's early (January 2022) cost estimate was approximately $14 million; however, the Team will develop progressively more detailed and accurate cost estimates as the design advances and current materials quotes are collected.  All pricing information is "open-book" and reviewed by the project Team.

Council is asked to approve the foundational or base Standard Agreement and General Conditions construction contract between COP (GC/CM) and the City of Billings.  This base agreement outlines the contract details including, but not limited to, general provisions, responsibilities of the parties, compensation, changes to the work, payment, indemnity, insurance, bonds, termination, and dispute resolution.  This base agreement does not include a contract value or construction duration.  The contract value will be assigned with subsequent contract amendments.

Due to the long lead-times of materials in the current economy, the Team plans to develop and present to City Council the first amendment to this base agreement to secure pipe and valves as soon as possible.  This strategy will bring greater cost certainty to the project and enable COP to begin working as soon as possible.  At the end of the pre-construction phase, COP will present an overall Guaranteed Maximum Price (GMP) to construct the entire project for Team review, which City Council may or may not approve at that time.  If Council does not approve the GMP, the Contract allows for the City's relationship with COP Construction to be terminated, with the City then proceeding with other options to construct the project.  If Council approves the GMP, another amendment to this agreement will be presented for City Council approval.

City Council may:

• Approve a General Contractor/Construction Manager (GC/CM) Standard Agreement and General Conditions contract with COP Construction; or,
• Not Approve a contract.  If this project is not completed, the City will be unable to proceed with the plans needed to provide for the present and future drinking water redundancy and capacity needs of City of Billings residents.

Execution of the GC/CM agreement has no fiscal effect, but future amendments to the agreement for material procurement and construction will have fiscal effects.  These amendments will require Council action.  The W.O. 19-12: West End Raw Water Pipeline Project was budgeted in FY23 using water funds.  The amount budgeted was $21 million to include the raw water intake, pump station and pipeline projects.  The early cost estimate for the pipeline project is $14 million.