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APPROVE CONTRACT CHANGE ORDER NO. 2 WITH PSOMAS FOR THE THORNTON ROAD WIDENING PROJECT AND AMENDMENT NO. 1 WITH WSP, INC. FOR THE HAMMER LANE WIDENING PROJECT
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion authorizing the City Manager to:
1. Execute Contract Change Order No. 2 to the Professional Services Contract with Psomas, in the amount of $206,000, for construction management services during construction of the Thornton Road Widening, Project No. PW1428.
2. Execute Amendment No. 1 to the Professional Services Contract with WSP, Inc. for the Hammer Lane Widening Phase 3B, Project No. PW1427, in the amount of $994,993.56, to add construction management services to be performed on the Thornton Road Widening, Project No. PW1428.
3. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
The Thornton Road Widening project experienced significant delays due to unforeseen utility issues. Approval of the recommended motion is necessary to complete the project. The motion will increase the current contract construction management services to reflect additional costs already incurred due to the utility issues. The motion will also authorize a change in construction management firms to achieve economies of scale that will reduce the cost to oversee completion of the project. The additional costs will be funded using Measure K funds and there is no impact to the General Fund. The utility issues also resulted in increased construction costs, and a construction contract change order will be presented to Council at a future meeting once cost estimates are completed.
On August 23, 2016, by Motion No. 2016-08-23-1207, Council awarded a Professional Services Contract to Psomas, in the amount of $1,193,360, for construction management services for the Thornton Road Widening, Project No. PW1428. The project was included in the Fiscal Year (FY) 2014-19 Capital Improvement Plan (CIP).
On December 6, 2016, by Motion No. 2016-12-06-1204, Council awarded a Professional Services Contract to WSP, Inc. (formerly Parsons Brinckerhoff) in the amount of $846,641 for construction management services for the Hammer Lane Widening Phase 3B, Project No. PW1427. The project was included in the Fiscal Year (FY) 2014-19 Capital Improvement Plan (CIP).
The Thornton Road Widening project was originally scheduled to be completed by November 2017. However, unforeseen construction difficulties delayed completion of the project to November 2018. After construction began, excavation revealed shallow utilities that caused changes in construction plans. The Thornton Road project construction management consultant, Psomas, completed the original scope of services. Additional construction management services are required to complete the project.
The additional work required to complete the project involves a significant increase to the original quantity of work. Modifications to the construction management team skill set to include expertise with utility conflicts and claims management has also become necessary. To ensure the highest quality work for the City, another Request for Proposals to complete the project was sent to the four firms that originally proposed construction management services for the project. Psomas and WSP, Inc. submitted proposals for services. The other two firms declined to submit proposals. After evaluating the proposals, staff recommends that WSP, Inc. is the best qualified to provide the remaining construction management services for Thornton Road.
WSP, Inc. is currently the construction manager for the Hammer Lane Widening project approximately a half mile south of the Thornton Road project, and has highly capable staff available. Utilizing WSP, Inc. to complete Thornton Road will reduce construction management costs through economies of scale, reduce staff contract management, and provide the City with a team that can effectively oversee both projects. Economies of scale realized by the consolidation will result in savings of approximately 20 percent. An amendment to WSP, Inc.’s original contract in the amount of $994,993.56 is recommended to add construction management services for the Thornton Road project to the existing contract for the Hammer Lane project. It is recommended that Council approve a motion authorizing the City Manager to execute a contract amendment with WSP, Inc. for additional construction management services in the amount of $994,993.56 (Attachment C).
Psomas will remain on the project until March 30, 2018, and work with the City through the transition process. Contract Change Orders (CCO) No. 1 and No. 2, in a total amount not to exceed $386,000, are needed to compensate Psomas for services between December 2017, and March 30, 2018. CCO No. 1 in the amount of $180,000 was issued under existing authority. CCO No. 2 in the amount of $206,000 will exceed the original contract change order authority, and Council approval is required. It is recommended that Council authorize the City Manager to execute CCO No. 2 (Attachment B), in an amount not to exceed $206,000, which will close out Psomas construction management services for the Thornton Road Widening, Project No. PW1428.
DISCUSSION
Background
Thornton Road is an important arterial within the City of Stockton providing north-south access from Eight Mile Road to Hammer Lane. The City is the lead agency for delivering the Thornton Road Widening project (Attachment A). The project was included in the FY 2014-19 CIP.
On September 11, 2007, by Resolution No. 07-0383, Council authorized the execution of an Amendment to the Professional Services Master Contract with Stantec for final design of the Thornton Road Widening project. The project construction was originally anticipated in 2010. However, Measure K funds planned for the project were not available due to the recession, and the project was placed on hold.
With an improved economy in 2014, the San Joaquin Council of Governments (SJCOG) informed the City that the project could be funded using Measure K bond revenue. Council authorized executing a Measure K Renewal Financing Agreement between the City of Stockton and SJCOG to fund the Thornton Road Widening project on May 19, 2015, by Resolution No. 2015-05-19-1205. The resolution also approved an Amendment to the Professional Services Master Contract with Stantec, in the amount of $149,836, to update existing plans and specifications, environmental documents, permits, provide bidding support, and limited design support during construction of the project.
On July 26, 2016, by Resolution No. 2016-07-26-1212, Council awarded a Construction Contract for the Thornton Road Widening project to Goodfellow Top Grade Construction, LLC in the amount of $11,618,705. Construction began in October 2016. Completion of the project was originally anticipated to be November 2017.
On August 23, 2016, Council awarded a Professional Services Contract to Psomas, in the amount of $1,193,360, to provide construction management services for the Thornton Road Widening project. Construction management team staffing for a project of this size generally consists of an engineering manager, field/office engineer(s), inspectors, testing personnel, biological monitors, and administrative staff. Services provided include, but are not limited to, managing field issues, submittal reviews, inspections and testing, payment quantity verification, utility and permit coordination, biological monitoring, responding to requests for information, processing change orders and project records, and resolving all issues relative to construction. Construction management contracts are typically based on time and materials with the services provided until construction is completed and the project closed out.
The Thornton Road Widening project is designed to be constructed in three phases. Constructing the west side of Thornton Road being the first phase of work. The second phase is construction of the east side of Thornton Road with the final phase being the installation of medians.
Shallow utilities were uncovered while constructing phase one of the project, which significantly delayed the project. PG&E underground electric and gas facilities, AT&T fiber optic duct banks, a City water supply line, and other incidental utilities are located within the project’s work limits, and many were found to be shallow. The contractor performed additional exploratory utility excavations (utility potholing) to define the extent and nature of the shallow utilities. The results of the utility potholing confirmed that shallow utilities would conflict with the new roadway and some portions of drainage, traffic, and lighting facilities. The project design engineer, Stantec, redesigned the roadway section and portions of traffic signal, lighting, and storm systems to resolve utility obstructions on the project. This resulted in a significant delay to the project and extended the scheduled completion date.
Present Situation
The Thornton Road Widening project started in October 2016 and was scheduled to be completed by November 2017. This is based on the approved contract schedule for the project. Project schedules initially do not account for delays due to weather, material delivery impacts, additional work added, or unforeseen circumstances. To date, the cumulative total delays to the project have extended the project completion to November 2018. These delays to the project can be categorized in the following areas.
Project suspended (three months): The discovery of shallow utilities in phase one of the project required additional utility potholing and a redesign of portions of the project to resolve utility obstructions. This prevented the contractor from starting work on scheduled work for three months while potholing and the redesign was completed.
Weather delays (four months): Projects routinely experience delays due to inclement weather. On the average, two months of weather related delays per year can be expected on larger projects. The wet spring of 2017 exceeded normal expectations. Overall, the project is expected to incur four months of weather delays over a two-year construction season.
Utility delays (two months): Some utility obstructions could not be fixed through redesign efforts. Various utilities mobilized to relocate their facilities out of the path of the contractor’s work. The relocation process, along with customer notification notice timelines, caused delays to the contractor’s work schedule.
Utility protection added (three months): A new roadway section design and shallow utility precautionary measures were added to the project. As a precaution, the contractor had to install concrete protective caps over existing shallow utilities as part of building the roadway. In addition, restrictions on the weight and construction methods over shallow utilities were added. The precautionary measures required additional time to build the roadway and will delay the projects’ completion by three months.
Psomas is the construction management consultant for the project. Psomas completed its original scope of services. Due to the extension of the construction schedule, additional construction management services are required. In addition to this significant increase in the quantity of work, the project changed character due to design changes, utility conflicts, and ongoing negotiated changes with the contractor. The project now demands a construction management team with skills different than originally anticipated. Consequently, the City issued another Request for Proposals on January 31, 2018, to the four firms that originally proposed to provide construction management services on the project. The four firms were asked to submit a proposal for construction management services for the remainder of the project. Two of the four firms submitted proposals on February 8, 2018: Psomas (current construction management firm) and WSP, Inc. (construction management firm on the Hammer Lane widening project). The other two firms declined to submit proposals due to lack of proper staffing and their current busy project workload.
A selection committee evaluated the proposals and concluded that WSP, Inc. provides the staffing needed to successfully complete the Thornton Road Widening project. The project requires solid leadership from the Resident Engineer as well as expert knowledge in the analysis of schedule and resolution of claims. WSP, Inc.’s team is best suited to provide the necessary services. In addition, WSP, Inc. is currently the construction manager for the Hammer Lane Widening project approximately a half mile south of the Thornton Road project. Utilizing WSP, Inc. will enable the City to consolidate construction management services with one firm for both the Hammer Lane and Thornton Road Widening projects. This will reduce construction management costs through economies of scale, reduce staff contract management, and provide the City with a team that can effectively oversee both projects. Economies of scale realized by the consolidation will result in savings of approximately 20 percent to the project.
Staff recommends consolidating the construction management services for the Thornton Road and Hammer Lane Widening projects with WSP, Inc. (formerly Parsons Brinckerhoff, Inc).
Psomas will remain on the project until March 30, 2018, and work with the City on the transition to a new construction management firm for the Thornton Road project. CCO’s No. 1 and No. 2, in the total amount of $386,000, are needed to compensate Psomas for their services between December 2017, and March 30, 2018. CCO No. 1 in the amount of $180,000 was issued under existing authority. CCO No. 2 in the amount of $206,000 will bring the total construction management services contract with Psomas, including initial contract allocation of $1,193,360 and CCO No. 1 of $180,000, to $1,579,360. CCO No. 2 exceeds the original contract change order authority, and Council approval is required. Staff recommends Council authorize the City Manager to execute CCO No. 2, in the amount of $206,000, which will close out Psomas’ construction management services for the Thornton Road Widening, Project No. PW1428.
If the recommendation is approved, WSP, Inc. will continue construction management services for both the Thornton Road and Hammer Lane Widening projects until completion. The Hammer Lane project is anticipated to be complete by August 2018. The Thornton Road Widening project will be completed by November 2018. WSP, Inc’s. proposal adds the Thornton Road project to their existing contract, with an additional cost of $994,993.56, and adjusts staffing levels to address the needs of both projects. Their fee amount is based on the negotiated rates for the Hammer Lane project and is reasonable for the type of services required for both projects. An amendment to WSP, Inc.’s original contract is recommended to consolidate construction management services on both projects, revises their contract amount, and extends the contract term. Staff recommends Council approve a motion authorizing the City Manager to execute a contract amendment with WSP, Inc. for additional construction management services in the amount of $994,993.56.
Documentation and review of all utility and design related issues that have contributed to project delays is ongoing. A full accounting of the delays and associated cost impacts will not be known until the Thornton Road Widening project is completed. Staff of the Public Works Department and the City Attorney’s Office are presently assessing the course of action to recover any unnecessary utility related cost overruns.
Findings
Pursuant to Stockton Municipal Code (SMC) section 3.68.070, Council may approve findings which support an exception to the competitive bidding process. These findings include:
1. The City does not have the staffing available to perform the necessary construction management services for the remainder of the Thornton Road Widening project.
2. The Thornton Road Widening project has complicated utility relocation and construction changes. A construction management firm with qualifications and experience in managing a project of this nature is needed to complete the project and is in the public interest.
3. The City negotiated a contract with WSP, Inc. for the Hammer Lane Widening project following a solicitation of competitive proposals in accordance with SMC section 3.68.070.A.3. WSP, Inc. is a firm with at least a 10-year track record in managing complex road widening projects and bridge projects in the City. WSP, Inc. also has highly qualified engineering managers and scheduling personnel with experience in claims negotiations analysis.
4. Hammer Lane and Thornton Road Widening projects are within a half mile of each other. Consolidating construction management service for both projects with one firm (WSP, Inc.) will garner cost savings through economies of scale, reduce contract management for staff, and provide a highly qualified team to manage both projects.
FINANCIAL SUMMARY
CCO No. 2 for Psomas, in the amount of $206,000, will be funded by Measure K funds (080-3020-640) already allocated to the project. There are sufficient funds in the project account for this CCO. The Thornton Road Widening, Project No. PW1428, currently has an unencumbered balance of $2,882,000 which is sufficient to fund the proposed CCO No. 2 with Psomas in the amount of $206,000.
Amendment No. 1 to the Professional Services Contract with WSP, Inc., in the amount of $994,993.56, will also be funded by Measure K funds (080-3020-540) already allocated to the project.
There is no impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended action.
Attachment A - Vicinity Map
Attachment B - Contract Change Order No. 2 with Psomas
Attachment C - Amendment No. 1 to the Professional Services Contract with WSP, Inc.