Clean Water Facility Hoffman Construction Guaranteed Maximum Price #7 Deep Concrete Work 4/5/2016 City Council Meeting
City Council Meeting
Clean Water FacilityHoffman Construction
Guaranteed Maximum Price #7Deep Concrete Work
4/5/2016
City Council Meeting 2
Tonight’s Topics
4/5/2016
• Reminder of GCCM decision process• Overview of GMP #7• Definition of “Heavy Civil” and reasoning for self-performed
work • Third party validation process for GMP #7 cost• Recommended action
City Council Meeting 3
Why GC/CM?
4/5/2016
• Why GC/CM?• Allows the City to identify project risks early in the project• Added value by including contractor feedback early• Allows the project to be constructed quicker than design-bid-build
• Selection based on fee, in addition to other factors• Hoffman was low bid at 4.28% which includes bonds & insurance
(±2%)• Actual profit to manage project = ±2.28%
City Council Meeting 4
• GMP#7 includes the following• GE/Zenon (GMP#1) contract revisions• Sheet pile change of conditions (shattering erratic rocks)• Allowances • water testing• crack repair• mechanical detailing
• Emergency repair to RBC surge tank (not charged to project)• Deep concrete work for MBR & aeration structures
GMP #7 Overview
4/5/2016
Needed whether we bid or negotiate the concrete work
City Council Meeting 5
GMP #7 Summary
4/5/2016
Category AmountDirect Costs $ 6,239,185Negotiated Support Services $ 1,697,069Risk Contingency (3.5%) per RCW 39.10 $ 277,769Owner Contingency (2.0%) $ 158,752Specified General Conditions $ 599,200GCCM Fee (4.28%) $ 384,400GMP Total (w/o sales tax) $9,355,968Sales Tax $813,969GMP Total (w/o sales tax) $10,169,937
City Council Meeting 6
Cost Item AmountDeep Concrete Work $5,444,830GE/Zenon Changes $42,278Sheet Pile Change of Conditions
$76,942
Allowances $225,000Emergency repair $45,000Other site work $405,135Total Direct Costs $6,239,185
Direct Costs
4/5/2016
Negotiated“Heavy Civil”
City Council Meeting 7
Why use “Heavy Civil”?
4/5/2016
• Greater control of the schedule• Fewer change orders• Reduction in management costs• Larger number of knowns vs. unknowns in the concrete work• Increased ability to find cost savings• Already value engineered -$100k• Greater savings possible if schedule and manpower can be reduced
• Ability to make changes on the fly as the plans are finished
City Council Meeting 8
Deep Concrete Work
4/5/2016
• “Heavy Civil” per RCW 39.10 (Negotiated Work)• Cost plus• Known Elements• Concrete cost and quantity (validated cost per yard)• Rebar cost (bid)• Good estimate of manpower (resource loaded schedule)
• Managed Elements• Manpower & Schedule
City Council Meeting 9
Deep Concrete WorkValidation of Negotiated Work
4/5/2016
• Cost must be independently validated per RCW 39.10.350(5)• Cost Negotiation• Staff
• Cost Validation• KBA Cost Validation Letter (Attachment C)• Reviewed by OAC
• Cost Accounting• System in place to monitor resource loaded schedule• Daily, weekly and monthly project tracking
City Council Meeting 10
Why is there a “Heavy Civil” fee?
4/5/2016
• Hoffman is assuming greater risk• If the concrete work were bid, the fee would be included in the
bid• If we were bidding, any efficiencies wouldn’t be transparent• If we cut a month off the schedule, the City wouldn’t see the
benefit.
City Council Meeting 11
Is the “Heavy Civil” fee reasonable?
4/5/2016
• Data on other recent “Heavy Civil” Bids - Hoffman
City Council Meeting 13
Is the “Heavy Civil” fee reasonable?
4/5/2016
• Data on other recent “Heavy Civil” Bids - Hoffman• What about the industry publications? – OAC
City Council Meeting 15
Is the “Heavy Civil” fee reasonable?
4/5/2016
• Data on other recent “Heavy Civil” Bids - Hoffman• What about the industry publications? – OAC• How does WSDOT look at this type of work? - KBA
City Council Meeting 16
• Percentages for overhead, general company overhead, profit, bonding, insurance, B&O tax and any other costs incurred (WSDOT 1-09.6)• Labor = 29%• Materials = 21%• Equipment = 21%• Services = 21%• Subcontractor markup = 7% for amounts greater than $100,000
WSDOT Force Account
4/5/2016
City Council Meeting 17
Is the “Heavy Civil” fee reasonable?
4/5/2016
• Data on other recent “Heavy Civil” Bids - Hoffman• What about the industry publications? – OAC• How does WSDOT look at this type of work? – KBA• How do “Heavy Civil” and Bid work compare? - Staff
City Council Meeting 18
“Heavy Civil” vs. Bid“Heavy Civil”
Direct Cost $ 4,427,156
GC's $ 614,354
Insurance and bonds 0% $ -
Profit 8% $ 403,321
Subtotal $ 5,444,830
GC/CM Fee 4.28% $ 233,039
Total $ 5,677,869
Bid (5% profit)
4/5/2016
Direct Cost $ 4,341,510
GC's $ 700,000
Insurance and bonds 2% $ 100,830
Profit 5% $ 252,075
Subtotal $ 5,394,415
GC/CM Fee 4.28% $ 230,881
Total $ 5,625,296
City Council Meeting 19
“Heavy Civil” vs. Bid“Heavy Civil”
Direct Cost $ 4,427,156
GC's $ 614,354
Insurance and bonds 0% $ -
Profit 8% $ 403,321
Subtotal $ 5,444,830
GC/CM Fee 4.28% $ 233,039
Total $ 5,677,869
Bid (10% profit)
4/5/2016
Direct Cost $ 4,341,510
GC's $ 700,000
Insurance and bonds 2% $ 100,830
Profit 10% $ 504,151
Subtotal $ 5,646,491
GC/CM Fee 4.28% $ 241,670
Total $ 5,888,161
City Council Meeting 20
Hoffman Contract Summary
4/5/2016
Service
Contract Amount
w/o Sales Tax
Preconstruction $ 790,050
GMP#1 - MBR/UV $ 2,553,317
GMP#2 - Outfall $ 1,991,249
GMP#3 - Site Prep A $ 836,130
GMP#4 - Site Prep B $ 5,109,549
GMP#5 - Solids Dryer
$ 2,028,222
GMP#7 - Site Prep C $ 3,966,503
GMP#7 – Deep Concrete $ 9,355,968
Total $ 26,630,988
City Council Meeting 21
• Authorize the Mayor to sign AIA Document A133 – 2009 Exhibit A (GMP #7) in the amount of $9,355,968 plus Sales Tax ($813,969) with Hoffman Construction for Deep Concrete Work at Area 30 & Misc. Changes.
Recommended Action
4/5/2016