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Agenda Item - 2019-05-21 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us Subject: City Hall Project – Early Work Site Preparation and Material Procurement Approval Meeting Date: May 21, 2019 Staff Member: Sidaro Sin, Redevelopment Manager Department: Lake Oswego Redevelopment Agency (LORA) Action Required Advisory Board/Commission Recommendation ☒ Motion ☐ Approval ☐ Public Hearing ☐ Denial ☐ Ordinance ☐ None Forwarded ☐ Resolution ☒ Not Applicable ☐ Information Only Comments: ☐ Council Direction ☐ Consent Agenda Staff Recommendation: Authorize the LORA Executive Director to amend the existing Construction Management and General Contractor Contract for site preparation and material procurement in the amount of $8,107,796. Recommended Language for Motion: Move to authorize the LORA Executive Director to amend the existing Construction Management and General Contractor Contract for site preparation and material procurement work in the amount of $8,107,796. Project / Issue Relates To: ☒Council Goals/Priorities ☒Adopted Master Plan(s) ☐Not Applicable ISSUE BEFORE THE BOARD Shall the Board authorize approximately $8.1m in early site work and material procurement in advance of the Guaranteed Maximum Price? The authorization would lock in construction costs for approximately 25% of the project cost, reduce wet-weather impacts, and keep the project on schedule. EXECUTIVE SUMMARY The design team has completed 75% construction drawings and the general contractor Howard S. Wright (HSW) is seeking authorizing to proceed with $8.1m in early work for the city hall 13.1 Page 2 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us project. The Construction Management and General Contractor (CM/GC) con tract that was approved in January 2017 allows an amendment for “early work,” which includes procurement of materials, release of bid proposals and critical components of the project such as demolition, excavation, shoring, and foundation. Authorization of the early work benefits the City by providing construction cost certainty for 25% of the project, locks in materials costs and allows weather sensitive work to be completed during the dry months. BACKGROUND On March 5, 2019, the LORA Board approved the design development phase drawings and directed the project team to proceed with the construction document phase. The total project cost was estimated at $43.1 million ($32.8 million hard costs and $10.3 million soft cost). The project continues to carry a total contingency of $5.7 million which is included in the total project cost (7.5% contractor contingency and an overall 10% owner contingency). The design team has completed 75% construction documents and anticipates completing 90% of this phase in early June. HSW will then prepare their final Guaranteed Maximum Price (GMP) for the Board’s authorization in mid-July. Final construction documents will be completed by August when building permits are submitted. DISCUSSION On January 3, 2017, the Board authorized a Construction Management and General Contractor (CM/GC) contract with HSW for the construction of the new city hall. As part of the contract, it authorized $50,000 for preconstruction services. The contract also included a provision to amend the contract to allow limited early work to proceed in advance of establishing the GMP. Permitted early work includes: procurement of materials and supplies; release of bid proposal packages for site development; and other advance work related to critical components of the project that will materially affect the critical path schedule of the project, such as demolition, excavation, shoring and foundation work. HSW is requesting authorization for a not-to-exceed amount of $8,107,796 for the early work. The following table outlines the early work, and the identified funding for payments. See Fiscal Impact discussion on the next page. Page 3 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us Howard S. Wright - Early Work Scope AMOUNT (Fund Allocation) DESCRIPTION LORA Fund City Sewer Fund Abatement, shoring, excavation, utilities, demolition, concrete, rebar, exterior glazing, elevator system $6,863,126 Public Sanitary Sewer Realignment $165,000 Project Contingency 5% $343,156 $8,250 Sub-Total $7,206,282 $173,250 General Conditions, Insurance, CM/GC Fee $711,166 $17,098 Early Work Sub-Total $7,917,448 $190,348 Early Work Grand Total $8,107,796 The benefit to initiating this early work is that it protects the City from uncertain escalating construction costs, minimizes weather impacts and keeps the project on schedule. Specifically, approving the early work will:  Provide certainty to 25% of the project cost, which in turn has allowed the contractor to reduce the construction contingency for this part of the project from 7.5% to 5% (a reduction of approximately $155,000)  Lock in the cost of materials, such as concrete, steel, exterior glazing and elevator s  Allow weather sensitive work such as excavation, shoring, foundation and waterproofing work to occur in advance of the wet weather. Although the Board is authorizing up to $8.1m in early work prior to the GMP, under the contract General Conditions for Public Improvements, the Board may terminate the contract in whole or in part whenever it is determined to be in the best interest of the public. The contractor is also protected in that they would be compensated for the work completed to date. FISCAL IMPACT The $8.1m includes $190,348 for the relocation of the sanitary sewer line along A Avenue and down Third Street which will be charged to the City sewer fund. The balance of the early work will come from the Redevelopment Agency’s tax increment funding. There are adequate resources in both funds to cover the cost of the early work. RECOMMENDATION Authorize the LORA Executive Director to execute an amendment to the existing Construction Management and General Contractor Contract for material procurement and site preparation in the amount of $8,107,796.