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Home My WebLink AboutPR 16069: ALLCO, INC., CHANGE ORDER #3 MEMORANDUM CITY OF PORT ARTHUR UTILITY OPERATIONS DEPARTMENT TO: Stephen Fitzgibbons, City Manager FROM: Kelly Eldridge, Director of Utility Operations !� DATE: August 30, 2010 SUBJECT: Proposed Resolution No. 16069 RECOMMENDATION I recommend that the City Council approve Proposed Resolution No. 16069 authorizing the execution of Change Order No. 3 to the contract between the City and ALLCO, Inc., of Beaumont, Texas, at no additional cost for the Sanitary Sewer Rehabilitation by the Pipe Bursting and Sliplining Methods, Basins PA64C & PA66, Contract No. 6, City Project No. 404PB6. BACKGROUND This project is for the cleaning, television inspection, and rehabilitation of approximately 80,000 feet of sanitary sewer mains, plus every service connection served by these main lines. City contracts routinely utilize Davis -Bacon Wage Rates for various types of projects. The TWDB provided the wage decision for inclusion into our current projects. The TWDB is now requiring us to change from the decision provided with our bid documents, General Decision TX20080046 to General Decision TX20100102. This new decision will apply to all wages paid on the project from project start. I have attached a copy of an email from the TWDB `explaining' the need for the new decision. There will be similar change orders for the other projects. The 34 time extension has nothing to do with the wage decision, but is to cover inclement weather delays since the project initiation. BUDGET/FISCAL EFFECT None, as this is a $0 change order. STAFF/EMPLOYEE EFFECT None. SUMMARY I recommend that the City Council approve Proposed Resolution No. 16069 authorizing the execution of Change Order No. 3 to the contract between the City and ALLCO, Inc., of Beaumont, Texas, at no additional cost for the Sanitary Sewer Rehabilitation by the Pipe Bursting and Sliplining Methods, Basins PA64C & PA66, Contract No. 6, City Project No. 404PB6. TWDB EMAIL Original Message From: Jerry Laman [ mailto :Jerry.Laman @twdb.state.tx.us] Sent: Wednesday, July 28, 2010 10:33 AM To: jwilson @ageng.com Cc: James Bronikowski; John Steib; Michael Day Subject: Port Arthur ARRA -CWSRF G100003 - Davis Bacon issue Dear Mr. Wilson, During our telephone conversation yesterday you ask me to send an email or letter summarizing the guidance and explanations that we were discussing. I trust this email covers the key elements of our discussion. Let me know if you have additional questions. The primary issue is the use of the appropriate Davis Bacon Wage Rate schedule in all 5 of the contracts being funded through the ARRA program. As per our normal procedures, TWDB approved all 5 sets of contract documents as ready to bid. As it turns out TWDB did not notice that several of the contracts contained a Davis Bacon Wage Rate Schedule for "Highway" rather than the "Heavy Construction" schedule. All the contracts should have contained the "Heavy Construction" wage rate schedules. I can only say that the pace of work required by the ARRA time lines forced us to complete a review in a much shorter time frame than is normal for TWDB, and obviously we missed the fact that the submitted contract documentation contained Davis Bacon "Highway" wage rate schedule in several of the contracts. As I mentioned the ARRA legislation contained considerable oversite provisions. As a result, our files for the ARRA program are being audited by several Federal and State agencies. These audits have begun and will continue until everyone is satisfied that the State of Texas has complied with the ARRA legislation. From numerous discussions with auditors, it is clear to me that we need to document compliance with the ARRA legislation for every ARRA funded contract. Now that we know Port Arthur has several contracts with the incorrect Davis Bacon wage rate schedule, we strongly encourage. Port Arthur to take corrective action and make these contracts comply with the ARRA program requirements. I am not the best source of information on precisely the best way to remedy the situation. I do believe that inserting the correct Davis Bacon Wage Schedule by amending the contract through a change order will make the contract documentation compliant with the ARRA requirements. The consequence of the change order(s) may involve adjustments to the amount paid to certain workers. In implementing the pay adjustments, it is important to obtain clear documentation showing how the pay adjustments were implemented and that the worker(s) actually received the proper wage amounts for the work done. The existing system that the city has in place now to monitor and certify Davis Bacon compliance may provide sufficient documentation, but if an additional document (final pay certification from contractor) or step is needed, I encourage to go the extra mile. Having documentation on file that clearly shows compliance with ARRA requirements will save you, Port Arthur and us considerable amounts of time in satisfying future audit requests. I do not know the amount of the back pay that might be involved once the workers are re- classified under the "Heavy Construction" wage rate schedule. As I understand the status of your contracts, there is a good possibility some of them will be completed at less than the expected amount. We will be assist you in making available ARRA funds to make the back pay adjustments provided there are sufficient ARRA funds in the total project. This may involve change orders approvals and TWDB internal budget management issues. We will work with you to implement the revisions to the contract documents and to document the use of ARRA funds as required by the ARRA program. We briefly discussed the situation where some of the contracts may be completed at less than the contracted amount. Since the funding for the contracts contained both ARRA funds and local funds, there was question about how to move or apply ARRA funds between 5 contracts. Please proceed to document the final contract amount for each contract. The final contract amount must be the same in your files and our files. As per the ARRA requirements, TWDB reimburses the City when the City submits invoices through the outlay process. Continue to send invoices associated with each contract through the outlay process. When a final contract amount is adjusted to a lessor amount than originally in the contract, TWDB can adjust our internal budget tracking system to show that a contract is complete and then adjust our internal budget tracking system to show that the remaining ARRA funds are available for use on other contracts. You can apply the available the ARRA funds to any contract that is within the ARRA funding agreement. We will make the full ARRA grant amount available to you. If this results in Port Arthur using less local funds than originally anticipated, then that is good news. We do need to keep the accounting correct and transparent so that we can document with invoices and change orders where the ARRA funds were used. We will assist you in getting the documentation needed for the City to use all the available ARRA funding on your ARRA funded project. This email has not went through our normal internal review process. I used this email to save time for you and you said an email would be a satisfactory method to summarize our discussion. I believe I have given you correct guidance to you, but I will qualify this email by saying if I learn that I have mislead you or stated something incorrectly, I will get right back to you with the correct information as fast as I can. Let me know if you had different understanding after our conversation yesterday or if you need further clarification. Sincerely, Jerry Laman Team Lead - ARRA Program 08/30/10 RESOLUTION NO. A RESOLUTION AUTHORIZING THE EXECUTION OF CHANGE ORDER NO. 3 TO THE CONTRACT BETWEEN THE CITY OF PORT ARTHUR AND ALLCO, INC. AT NO ADDITIONAL COST FOR THE SANITARY SEWER REHABILITATION BY THE PIPE BURSTING AND SLIPLINING METHODS PROJECT, BASINS PA64C & PA66, CONTRACT NO. 6, ACCOUNT NO. 404 - 1625 - 532.83 -00, Project No. 404PB6. P.R. No. 16069 WHEREAS, the City is currently under an Agreed Order with the TCEQ to rehabilitate its sanitary sewer system; and, WHEREAS, there exists a need to reduce flows and eliminate sanitary sewer overflows in our collection and treatment systems; and, WHEREAS, on October 20, 2009, by Resolution No. 09 -489, the City Council awarded the Sanitary Sewer Rehabilitation by the Pipe Bursting and Sliplining Methods, Basins PA64C & PA66, Contract No. 6, City Project No. 404PB6 to ALLCO, Inc.; and, WHEREAS, the Texas Water Development Board has changed/updated the wage decision for this project and this change must be done by contract change order; and, WHEREAS, Arceneaux & Gates Consulting Engineers, Inc. recommends Change Order No. 3 at no additional cost, and increasing contract time by 34 calendar days due to inclement weather; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: THAT the City Council of the City of Port Arthur hereby authorizes the City Manager to execute Change Order No. 3 (attached as Exhibit "A ") to the contract between the City of Port Arthur and ALLCO, Inc. for the Sanitary Sewer Rehabilitation by the Pipe Bursting and Sliplining Methods, Basins PA64C & 66, Contract No. 6, City Project No. 404PB6 at no addition cost, and increasing contract time by 34 calendar days due to inclement weather, which simply changes to the P.R. No. 16069 08/30/10 Page 2 of 3 current General Decision TX20100102; and, THAT this Change Order No. 3 be sent to the TWDB for processing and approval; and, THAT, a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED THIS day of , 2010 at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: • AYES: Mayor Councilmembers: NOES: Deloris Prince Mayor ATTEST: Sherri Bellard Acting City Secretary 08/30/10 Page 3 of 3 APPROVED FOR ADMINISTRATION: Stephen Fitzgibbons City Manager / /4 - Ross Blackketter, P.E. Director of Public Works P.R. No. 16069 /Lyres Kelly Eldlidge I Director of Utility Operations APPROVED AS TO AVAILABILITY OF FUNDS: /Zati/Iteft614/y6 Deborah Echols Director of Finance Account No.: 404 - 1625 - 532.83 -00 Project No.: 404PB6 APPROVED AS TO FORM: CITY AT ORNEY EXHIBIT A (Change Order No. 3) ARCENEAUX GATES CONSULTING ENGINEERS, INC. CHANGE ORDER No. 3 DATE: August 30, 2010 JOB NO. CPA -490 -6 AGREEMENT DATE: November 13, 2009 NAME OF PROJECT: SANITARY SEWER REHABILITATION by PIPE BURSTING and SLIP LINING METHODS, BASINS PA64C & 66 OWNER: City of Port Arthur CONTRACTOR: ALLCO, Inc. The following changes are hereby made to the CONTRACT DOCUMENTS: 1. Add the following Items to the Contract Documents and Technical Specifications: Replace the Labor Classification and Minimum Wage Scale, General Decision TX20080046 dated 02/08/2008 with General Decision TX20100102. This new General Decision shall apply to all wages paid on the project from project start. [ $ 0.00 TOTAL $ 0.00 CHANGE ORDER NO. 3 August 30, 2010 ARCENEAUX Job No. CPA -490, Contract No. 6 GATES CONSULTING ENGINEERS, INC. CHANGE TO CONTRACT PRICE: ORIGINAL CONTRACT PRICE: $2,748,577.00 CURRENT CONTRACT PRICE adjusted by previous y p s CHANGE ORDER(S): $3,132,513.50 The CONTRACT PRICE due to this CHANGE ORDER will be fifiefeases14 flee- icased} by: $0.00 Dollars The new CONTRACT PRICE, including this CHANGE ORDER, will be $3,132,513.50 CHANGE TO CONTRACT TIME: ORIGINAL CONTRACT TIME: 550 Calendar Days CURRENT CONTRACT TIME adjusted by previous CHANGE ORDER: 550 Calendar Days CURRENT DATE OF COMPLETION: August 13, 2011 CONTRACT TIME due to this CHANGE ORDER will be increased by 34 Days The New DATE OF COMPLETION: September 16, 2011 No other Terms and Conditions of the Contract are changed as a result of this Change Order. Contractor's acceptance of Change Order relieves OWNER of any liability for additional costs incurred by Contractor in his performance of the work covered by the Change Order. RECOMMENDED BY ENGINEER: ACCEPTED BY: ARCENEAUX & GATES [CONTRACTOR, OFFICER OR OWNER] CONSULTING ENGINEERS, INC. ALLCO, Inc. ACCEPTED BY: CITY of PORT ARTHUR 2 of 2