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 12

Negotiated Work Profit

4/5/2016

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 144/5/2016

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

City Council Meeting 224/5/2016