RPVCCA_CC_SR_2014_05_06_J_KOA_Amendment_ContractCrTYOF RANCHO PALOS VERDES
MEMORANDUM
TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS
FROM: MICHAEL THRONE, DIRECTOR OF PUBLIC WORKS Ub
DATE: MAY 6, 2014
SUBJECT: AMEND THE CONTRACT WITH KOA CORPORATION
FOR CONSTRUCTION MANAGEMENT SERVICES -
SAN RAMON CANYON FLOOD REDUCTION
PROJECT
REVIEWED: CAROLYNN PETRU, ACTING CITY MANAGE~
Project Manager: Andy Winje, Associate Engineer
RECOMMENDATION
Approve an increase to the contract awarded to KOA Corporation in the amount of
$24,000 for potential changes in construction management scope and $86,000 for
contractor-reimbursements with a not-to-exceed total of $110,000, for Construction
Management services in relation to the San Ramon Canyon Flood Reduction Project.
BACKGROUND
City Council awarded KOA Corporation a $640,840 professional services contract on
March 5, 2013 to perform construction management (including inspection) for the San
Ramon Canyon Stormwater Flood Reduction Project. KOA employees function as the
day to day on-site managers and inspectors on behalf of the City. The contract
amendment is required to allow KOA to continue to serve as the City's on-site
representation until the project is complete and for new work that has been proposed
but not yet authorized.
DISCUSSION
There are several issues that contribute to the need for the contract amendment. These
reasons are detailed in the letter dated April 23, 2014 from KOA and included as an
attachment. A discussion of the reasons is outlined in the following paragraphs.
1. The San Ramon Canyon project is actually under budget, even though
complications encountered during construction have required additional time.
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KOA Professional Services Agreement Increase
May 6, 2014
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The schedule challenges were due primarily to difficulties with the tunneling
operation. Productions rates estimated by the contractor were simply not
attained. While this was occurring, the contractor was permitted to work
extended hours in order to make up time. Working extended hours required KOA
inspectors to remain on site, earning overtime. Per the construction contract, the
overtime costs are to be borne by the contractor. The $26,850 of additional costs
incurred for the overtime have been charged back against the contractor's
invoices and so there is no significant net increase in cost to the City, only an
increase of payments to KOA and a reciprocal reduction in payments to the
contractor. The City will be reimbursed $26,000 for this item.
2. The second issue is due to the project running beyond the number of days
allowed for construction. KOA will need to remain on site until the project is
finished. The $25,000 of additional costs to the City for their services beyond the
contract end date will similarly be borne by the contractor through chargebacks
against his future invoices. This will also result in no net cost to the City, and as
per the contract provisions, reimbursement is at a higher rate, and will total
$60,000.
The total amount to be reimbursed to the City by the contractor is $86,000. This
amount, which is passed through the KOA contract requires a contract
amendment.
3. An unanticipated increase in work that KOA has already performed related to the
value added change order process, which reduced the City's overall construction
contract obligation, resulted in an additional contract cost of $28,000.
4. There is a potential change in construction management scope that staff is
considering adding to the contract to take advantage of project savings and the
potential for grant reimbursement. These changes include:
a. Rehabilitation of a portion of PVDE. It is apparent that hauling fill material
for the canyon up PVDE damaged the roadway. This was not anticipated
at the time of bidding and no provision was made for its repair. Provision
was made for hauling via the roads in the PV Shores mobile home park
but it appears rehabilitation efforts there will require less effort than earlier
thought. KOA will require a net increase in time to manage construction
along PVDE, an arterial roadway, than would have been required in the
mobile home park because of the extra public traffic demands and the
more complex repair requirements. The additional construction cost will
be mitigated by the project savings already achieved. The additional KOA
cost to perform this work, if approved by the City, is $11,000.
b. Storm drain rehabilitation along the switchbacks. Extra time may also be
needed to manage rehabilitation of additional pipes along the switchbacks
that are not currently in the San Ramon project scope. Rehabilitation of
these pipes are programmed in the Water Quality Flood Protection
(WQFP) program but it is good practice to include them now, prior to
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KOA Professional Services Agreement Increase
May6, 2014
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rehabilitation of PVDE. Funding is available in the WQFP if the State
decides this work is not compatible with the grant. A construction
contingency of $1.5 million has already been authorized by City Council if
costs for these pipes exceed the remainder of project savings. The
additional KOA cost is $14,000 (or $9,000 plus $5,150 shown on
Attachment).
c. A small contingency amount of $5, 150 is also recommended.
d. The total cost of this work (4a. through 4c.) is $30, 150. Because of the
$86,000 reimbursement from the Contractor to the City, the net City cost is
$24,000.
The City's purchasing ordinance requires an amendment to the KOA agreement in the
amount not to exceed $110,000. KOA will continue to be paid only for work they
perform in accordance with the existing contract terms. Of the $110,000, $86,000 is
estimated to be recovered from chargebacks to the contractor. The remaining
estimated $24,000 for additional time on site is a 3. 7% increase to the original contract
value.
CONCLUSIONS
The San Ramon project is running about 3-months behind schedule, which will require
additional work to be performed by KOA as the City's on-site construction manager.
These costs will come at no net cost to the City but require KOA's contract limit to be
increased. An additional increase is also proposed to cover unanticipated work already
performed and for work which may be performed as described above. Therefore, staff
recommends an increase of $110,000 to the "not-to-exceed" limit of the KOA
professional services agreement awarded on March 5, 2013.
FISCAL IMPACT
The net cost to the City for services pertaining to this recommendation is estimated at
$24,000. Grant reimbursement may further reduce this obligation. The FY 2013-14
City Budget provides adequate funding in the Storm Water Quality Fund for this activity.
Attachments: KOA Letter April 23, 2014
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KOA CORPORATION
4 PLANNING & ENGINEERING
April 23, 2014
Department of Public Works
City of Rancho Palos Verdes
30940 Hawthorne Blvd.
Rancho Palos Verdes, CA 90275
Attn: Andy Winje, PE, Senior Engineer
1411 W. I 90th St., Suite 525
Gardena, CA 90248
t: 310.329.0102 f: 310.329.1021
www.koacorporation.com
RE: PROPOSAL TO INCREASE THE BUDGET FOR PROFESSIONAL
CONSTRUCTION MANAGEMENT SERVICES FOR THE SAN RAMON CANYON
STORM DRAINAGE SYSTEM PROJECT
Dear Mr. Winje:
KOA Corporation ("KOA") appreciates the opportunity to have been appointed the Construction
Management consulting firm for the construction of the San Ramon storm drainage project.
There have been a number of factors which have affected the amount of time required for KOA to
perform our services since the beginning of the project in in April 2013 detailed as follows:
• The contractor experienced ·difficulties during both of the tunneling operations and was unable
achieve the planned production rates. In order to minimize the impact to the overall project
schedule, he requested and was granted the ability to work extended hours and perform
weekend work. This required additional inspection from KOA, however the City has been
reimbursed for that cost from the contractor through a change order credit.
• Despite the contractor's best efforts he has fallen behind on his schedule and the project
completion date of April 16, 2014 has not been met and is now scheduled for completion by the
end of June 2014. The City will be reimbursed for the additional management and inspection
cost after April 16, 2014, through a change order credit.
• A considerable amount of additional professional services time was time was spent last summer
defending the two cost savings change orders, which saved the City over $420,000
• The savings to the project has provided the opportunity to expand the scope of work to include
additional storm drainage work and road reconstruction of Palos Verdes Drive South where it
abuts the project. This work will include the installation of an additional catch basin and storm
drain line above the upper switchback, which will discharge into the inlet structure; paving of
PVDE from PVDS to Ganado Drive and improvements to existing storm drain systems. This
work will also require inspection, which will be in addition to the supervision accounted for in
the points above.
The following is an estimate of the costs and projected costs for this additional scope.
Sincerely,
KOA Co~rati~l"_i A\~ Uo~QJY
Alan Braatvedt
V.P. of South Bay Operations
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1411 W. I 90th St., Suite 525
Gardena, CA 90248
t 310.329.0102 f: 310.329.1021
www .koacorporation.com
Projected Additional Professional Construction Management Services
Required for the San Ramon Storm Canyon Drainage Project
Cost Contractor
Estimate Reimbursement
Additional Inspection cost for extended hours of work $26,850 $26,000
Management and Inspection of Contract Work Beyond April 16, 2014 $25,000 $60,000
Defense of Cost Savings Change Order $28,000
CM and Inspection for added project scope for storm drain $9,000
CM and Inspection for added project scope for PVDE paving $11,000
CM and Inspection for added project scope for storm drainage structure modifications $5,000
CONTINGINCY $5,150
TOTAL PROJECTED COST $110,000 $86,000
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