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Item 1.D.
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| City Council Regular | |
| Date: | 02/27/2023 |
| Title: | W.O. 19-42: West End Water Treatment Plant Project, GC/CM Preconstruction Services Contract, Amendment No. 1 |
| Presented by: | Jennifer Duray |
| Department: | Public Works |
| Presentation: | No |
| Legal Review | Yes |
RECOMMENDATION
Staff recommends that the City Council approve Amendment No. 1 to the City’s General Contractor/Construction Manager (GC/CM) Preconstruction Services Contract with Garney Companies, Inc. for W.O. 19-42: West End Water Treatment Plant (WEWTP) Project in the amount of $471,747.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
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 water treatment plant 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 to consist of City staff, Burns & McDonnell (Engineer), and Garney Companies, Inc (GC/CM). 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 September 27, 2021, City Council approved a Preconstruction Services Contract with Garney Companies, Inc. in the amount of $273,035.20 for the West End Water Treatment Plant. Under this Preconstruction Services Contract, the project Team continues to work through project design that Burns & McDonnell is advancing toward 60% completion. Preconstruction efforts have resulted in the team implementing a number of project cost reduction measures including condensing the facility into a single building, utilizing membrane filtration technology, eliminating the Zone 2 transmission main and sludge lagoons, and relocating the WEWTP. The Team will continue to look for opportunities to value engineer the project and will develop progressively more detailed and accurate cost estimates as the design advances.
Based on anticipated long lead times for manufacturers to supply raw water treatment equipment to the project, the project team is initiating early procurement of the required equipment. Garney solicited and received competitive pricing from suppliers on all the equipment. After evaluating the bids and incorporating value engineering measures, the project team has selected solids removal equipment, horizontal flocculation equipment, inclined plate settlers, and membrane filtration equipment for the project.
City Council is asked to approve Amendment No. 1 to the City’s preconstruction contract with Garney in the amount of $471,747 in order to authorize Garney to enter into contracts with selected equipment manufacturers to work on providing the equipment submittals required by the project specifications. Approved submittals provide critical information to advance the project design. The $471,747 total value of the supplier contracts represents 6% of the total $8.0 million equipment value. City Council would consider actual procurement and manufacturing of the equipment under a future and separate construction contract with Garney.
After the project team further advances the design, Garney may present a Guaranteed Maximum Price (GMP) to construct either an initial phase of the project or the entire project. City Council may or may not approve the GMP and associated construction contract at that time. If Council does not approve the GMP, the current preconstruction contract allows for the City's relationship with Garney to be terminated. The price and terms of the Garney equipment purchase orders are transferrable to the City if the City elects to continue with the suppliers to procure the equipment but terminate their relationship with Garney. The City could then proceed with other options to construct the project.
On September 27, 2021, City Council approved a Preconstruction Services Contract with Garney Companies, Inc. in the amount of $273,035.20 for the West End Water Treatment Plant. Under this Preconstruction Services Contract, the project Team continues to work through project design that Burns & McDonnell is advancing toward 60% completion. Preconstruction efforts have resulted in the team implementing a number of project cost reduction measures including condensing the facility into a single building, utilizing membrane filtration technology, eliminating the Zone 2 transmission main and sludge lagoons, and relocating the WEWTP. The Team will continue to look for opportunities to value engineer the project and will develop progressively more detailed and accurate cost estimates as the design advances.
Based on anticipated long lead times for manufacturers to supply raw water treatment equipment to the project, the project team is initiating early procurement of the required equipment. Garney solicited and received competitive pricing from suppliers on all the equipment. After evaluating the bids and incorporating value engineering measures, the project team has selected solids removal equipment, horizontal flocculation equipment, inclined plate settlers, and membrane filtration equipment for the project.
City Council is asked to approve Amendment No. 1 to the City’s preconstruction contract with Garney in the amount of $471,747 in order to authorize Garney to enter into contracts with selected equipment manufacturers to work on providing the equipment submittals required by the project specifications. Approved submittals provide critical information to advance the project design. The $471,747 total value of the supplier contracts represents 6% of the total $8.0 million equipment value. City Council would consider actual procurement and manufacturing of the equipment under a future and separate construction contract with Garney.
After the project team further advances the design, Garney may present a Guaranteed Maximum Price (GMP) to construct either an initial phase of the project or the entire project. City Council may or may not approve the GMP and associated construction contract at that time. If Council does not approve the GMP, the current preconstruction contract allows for the City's relationship with Garney to be terminated. The price and terms of the Garney equipment purchase orders are transferrable to the City if the City elects to continue with the suppliers to procure the equipment but terminate their relationship with Garney. The City could then proceed with other options to construct the project.
ALTERNATIVES
City Council may:
- Approve amendment No. 1 to the General Contractor/Construction Manager (GC/CM) Preconstruction Services Contract with Garney Companies, Inc.; or,
- Not approve Amendment No. 1. 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.
FISCAL EFFECTS
The W.O. 19-42: West End Water Treatment Plant (WEWTP) Project was budgeted in FY23 using Water Funds. There is sufficient budget to award this contract.