Adopt Resolution #25-128 Approving Change Order No. 3 for Improvement Project #21-09, Centralized Water Treatment Plant 

Purpose:
The purpose of this case is to adopt Resolution #25-128 approving Change Order No. for Improvement Project #21-09, Centralized Water Treatment Plant.    
 
Background:
Advanced Engineering and Environmental Services, Inc. (AE2S) was hired by the City of Ramsey to design and prepare final plans and specifications for the Water Treatment Plant (WTP).  AE2S was also hired by the city to provide construction services during construction.
 
Magney Construction, Inc. (Magney) was awarded the construction contract for construction of the WTP.
 
When the project was bid, bid alternate #1 was added in response to comments received from contractor’s during the pre-bid meeting that the project schedule was very tight and that adding several months to the project schedule may help reduce bid prices since contractors tend to increase their bid prices if they have concerns that liquidated damages may be assessed if completion deadlines are not met. Magney therefore submitted a bid deduction for bid alternate #1 in the amount of -$50,000 based on a 28-month construction schedule versus a 24-month schedule per the base bid.  When the city awarded the contract for construction, only the base bid was awarded meaning Magney had 24-months to complete the project.  
 
During construction, the city approved 2 Change Orders and 2 Engineering Amendments as follows.

• Change Order #1 – Increased project costs $794,153.71 to apply prevailing wages so awarded grant funds could be used.
• Change Order #2 – Extended completion dates by 88 days due to delays in obtaining DOLI and building permits.  No cost increase was associated with this CO.
• Engineering Amendment #1 – Increased construction services fees $225,100 due to construction schedule extension.
• Engineering Amendment #2 – Increased construction services fees $2,683.15 due to building permit requirement for as-built survey.  Also included $14,640.69 for engineering services due to plan revisions needed to address new DOLI code and city site plan review process.

 
Magney Construction, Inc. has submitted a request for Change Order #3.  Through Change Order #3, Magney is requesting a time extension of 79 calendar days to the Substantial Completion date, and 64 calendar days to the Final Completion date.  If approved, this would result in a total project time extension of 167 calendar days to the Substantial Completion date, and 152 calendar days to the Final Completion date from the original construction schedule.  Magney is requesting this time extension based on their assessment of the current project schedule and discussions with their subcontracting partners regarding the time that will be needed to complete the project in full accordance with the approved plans and specifications.
 
Attached is a copy of Change Order #3, along with a cover letter from AE2S detailing the time extension requested by Magney Construction.   
 
Change Order #3 was discussed in detail during the July 8^th regular City Council meeting, as well as at tonight’s work session.  Additional details are included in that case. 

Notifications are not required for this case.   

Alternatives:
Alternative #1 – Motion to adopt Resolution #25-128 approving Change Order No. 3 for Improvement Project #21-09, Centralized Water Treatment Plant.   
 
Alternative #2 – Motion to deny approval of Change Order No. 3 for Improvement Project #21-09, Centralized Water Treatment Plant, as presented. 
 
Alternative #3 – Motion of other. 

Change Order #3 does not include a direct request for additional funding.  However, to ensure adequate inspections and project representation are provided during the extended project schedule, an Engineering Amendment with AE2S would be required up to the amount of $184,300.  If approved, Sewer and Water Funds would pay for the additional construction services provided by AE2S.   

City staff support Alternative #1 due to concerns that the contractor cannot achieve the current Substantial and Final Completion deadlines so if Change Order #3 is not approved, the contractor and/or their subcontractors may complete their work with minimal coordination and/or direction from AE2S and city staff, which could result in cutting corners and the need to make future modifications to the WTP that may cost more in the end and/or negatively impact operations.  

Dependent on the outcome of tonight’s work session discussions.