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WHAT WENT WRONG

Contracts ArchivesConversations

Contract and Bid Documentation

Previous LFUCG Council Meetings, Video Feeds

with Citizens, Fellow Business Owners

OBLIGATIONS

“Folks have an obligation to show up and inquire…. Tonight, when we look out, I don’t see a vast array of folks from the South Limestone corridor present to complain about how we are proposing to move forward.”

- Mayor NewberryJuly 7th Council Meeting

Where was everyone?

RUSHED PROCESS

5/22 First public notice for bids

RUSHED PROCESS

5/22

6/1926 calendar days, 18 business days

RUSHED PROCESS

5/22

6/19

First public notice for bids

Bids received, opened

RUSHED PROCESS

5/22

6/19

6/29


10 days to evaluate bids

RUSHED PROCESS

5/22

6/19

6/29



Purchasing: One qualified bidder (ATS)

RUSHED PROCESS

5/22

6/19

6/29

7/2



3 days

RUSHED PROCESS

5/22

6/19

6/29

7/2




First reading of ordinance

RUSHED PROCESS

5/22

6/19

6/29

7/2




First public discussion of project

RUSHED PROCESS

5/22

6/19

6/29

7/2

7/7




5 days (Holiday weekend)

RUSHED PROCESS

5/22

6/19

6/29

7/2

7/7





Second reading, approval of ordinance

RUSHED PROCESS

WHAT’S THE HURRY?

WHAT’S THE HURRY?

7/1/2010

WEG 2010

WEG 2010

WEG isn’t a sufficient reason

We can’t showcase Lexington

to the world by gutting our economic vitality

WEG 2010

“It would be pretty silly to have this beautiful streetscape and have a bunch of empty buildings along it...”

- CM Julian Beard

LACK OF CLARITY

LACK OF CLARITY

5/22

6/19

6/29

7/2

7/7






LACK OF CLARITY

There was no public discussion

of the length and severity of the

South Limestone closure.

LACK OF CLARITY

7/1/2010

LACK OF CLARITY

7/1/2010Date mentioned in context of all four streetscape projects

LACK OF CLARITY

Did council understand?

LACK OF CLARITY

5/22

6/19

6/29

7/2

7/7






LACK OF CLARITY

Did council understand?One week (including a holiday weekend) to understand a complex, 1000+ page,

multimillion-dollar contract immediately prior to summer break.

LACK OF CLARITY


LACK OF CLARITY

“Those folks can’t stand one month of downtime, let alone 4 or 4 ½ months (whatever it’s up to now) of downtime…”

- CM Julian Beard


OBLIGATIONS

“Folks have an obligation to show up and inquire…. Tonight, when we look out, I don’t see a vast array of folks from the South Limestone corridor present to complain about how we are proposing to move forward.”

- Mayor NewberryJuly 7th Council Meeting

Council (& LFUCG) have an obligation to communicate

with citizens in a transparent & timely fashion

COMPLIANCE

COMPLIANCE

3 major areas of concern:1. Access to Property2. Notice of Disruption3. Site Clean-up

COMPLIANCE

COMPLIANCE

Access to PropertyCONTRACTOR shall:2. Move stored products that interfere with the operation of

OWNER and/or property owners.5. Not interfere with the operation of OWNER and/or adjacent

property owners.7. Maintain continuous access to private property interests at all

times.

Limits on CONTRACTOR’s use of site are:5. CONTRACTOR shall not block any access to private property

and adjacent businesses

From SUMMARY OF WORK, Section 1.6, Subsections B & C.

COMPLIANCE

Notice of Disruption

COMPLIANCE

Notice to owners and authorities of properties adjacent to the work:A. Notify owners of adjacent property and utilities when

prosecution of the work may affect them.B. When it is necessary to temporarily obstruct access to property,

or when any utility service connection must be interrupted, give notices sufficiently in advance to enable the affected persons to provide for their needs. Conform notices to any applicable local ordinances and, whether orally or in writing, include appropriate information concerning the interruption and instructions on how to limit the inconvenience caused thereby.

From SUMMARY OF WORK, Section 1.8, Subsections A & B

COMPLIANCE

Site Clean-up

COMPLIANCE

CONTRACTOR shall:3. Obtain and pay for all additional storage or work areas

required for his operations

Project SiteCONTRACTOR shall confine construction equipment, the storage of materials and equipment and the operations of workers to the Project site and the land and areas identified in and permitted by the Contracts Documents […] and shall not unreasonably encumber the premises with construction equipment or other materials or equipment.

From SUMMARY OF WORK, Section 1.6, Subsections B & C;GENERAL CONDITIONS, Sections 5.13.1 and 5.13.2

COMPLIANCE


Technically, ATS appears in compliance with the

South Limestone contract.

The “Out” Clauses

COMPLIANCE

OWNER May Order Change:Without invalidating Agreement and without notice to any surety, OWNER may, at any time or from time to time, order additions, deletions or revisions in the Work.

EXTRA WORKThe OWNER, without invalidating the Contract, may order extra work or make changes by altering, adding to or deducting from the Work, the Contract Sum being adjusted accordingly.

From GENERAL CONDITIONS, Section 9.1;Repeated in multiple locations, incl. CONTRACT AGREEMENT, Section 8

COMPLIANCE


WORK ESTIMATES

WORK ESTIMATES

Estimates

Two construction seasons’ worth of work (Two years)

2Seasons

WORK ESTIMATES

PremiumEstimates

per Mayor Newberry, 7/7/2009

Two construction seasons’ worth of work (Two years)

2Seasons

1.5Million

$

WORK ESTIMATES

Premium WorkdaysEstimates


ATS Work ScheduleTwo construction seasons’ worth of work (Two years)

2Seasons

1.5Million

$

8Hours

WORK ESTIMATES

Premium WorkdaysEstimates


ATS Work ScheduleTwo construction seasons’ worth of work (Two years)

2Seasons

1.5Million

$

8Hours

7/1/2010

CONTRACT DESIGN

CONTRACT DESIGN

7/1/2010

CONTRACT DESIGN

7/1/2010No performance incentive to pull completion date forward

NOTE: This slide is incorrect.As Commissioner Webb outlined in his presentation, there is a small

incentive clause which I didn’t have in my bid materials. It amounts to about 1% of the bid price for pulling in the entire schedule by a month.

In a contract where time was of the essence, why

didn’t we include a performance premium?

NOTE: This slide is incorrect.As Commissioner Webb outlined in his presentation, there is a small

incentive clause which I didn’t have in my bid materials. It amounts to about 1% of the bid price for pulling in the entire schedule by a month.

WHAT WENT WRONG

Rushed Bid and Approval Process

Lack of Clarity about Project

Lack of Compliance with Contract

Work Estimates

Contract Design Issues

WHAT WENT WRONG

Rushed Bid and Approval Process

Lack of Clarity about Project

Lack of Compliance with Contract

Work Estimates

Contract Design Issues

Clear and timely communication

Compliance (w/ broken promises)

Better estimatingPerformance-based contracts

Unfortunately, all of this is backward-looking

It is only useful as we look forward to future projects

FUTURE PROJECTS

True Costs of Traffic

45 mins = 5% of waking hours

Retail Office Service Quality of Life

Not buying at stores or restaurants

Not working or producing

Not delivering goods and services

Not spending time with family and friends

TRAFFIC

Downtown

of Local Economy

8%

Impact

Hit to Downtown Businesses

-5%11

Billion

Lexington

Size of Economy

$

84 to 92Million

Business Costs$ $

Lost Business Attributable to South Lime Closure

A 2x economic multiplier assumed for loss calculations

TRUE COST

84 to 92Million

Business Costs$ $

Lost Business Attributable to South Lime Closure

360,000$

per Day

TRUE COST

How do we accelerate the South Limestone project from its current state?

The “Add” Clauses

ACCELERATION

OWNER May Order Change:Without invalidating Agreement and without notice to any surety, OWNER may, at any time or from time to time, order additions, deletions or revisions in the Work.

EXTRA WORKThe OWNER, without invalidating the Contract, may order extra work or make changes by altering, adding to or deducting from the Work, the Contract Sum being adjusted accordingly.

From GENERAL CONDITIONS, Section 9.1;Repeated in multiple locations, incl. CONTRACT AGREEMENT, Section 8

Ask for more people / effort from utilities

SEEDS TO SOLUTION

Ask cement company to stay open past 5PM

Deal with noise ordinances

Uncomfortable

Uncomfortable

Uncomfortable

We ask that Council unite to invest in speeding the South

Limestone project for the economic benefit of our city

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