AGENDA #4b
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Authorization for Manager to Approve Change Order for Carrboro Plaza Park/Ride Lot Electrical Contract
DATE: March 4, 2002
The following resolution would authorize the Town Manager to execute a change order with Piedmont Electric Membership Corporation for $23,164.38.
On May 5, 2000, the Town entered into a contract with Piedmont Electric Membership Corporation in the amount of $38,910.00 for the relocation of nine services and installation of lights for the Carrboro Plaza Park/Ride lot. A certificate of substantial completion was issued for the park/ride lot on October 30, 2000 and the lot opened for use on November 1, 2000.
On November 3, 2000, we received an invoice from Piedmont Electric for $76,993.95, which was $38,083.95 over the original contract amount.
The park/ride lot was built behind a row of businesses at Carrboro Plaza in an area which was crisscrossed by underground utility lines. As part of our pre-construction negotiations with those businesses, the Town had promised to avoid service disruptions during construction of the lot. It turned out that many utility lines had been installed closer to the surface than they should have been, and that there were several lines cut during construction. On several occasions Piedmont restored service when lines had been cut.
Work Completed
Piedmont Electric did not follow the process outlined in the contract that specifies that only a written change order obligates the owner to increase the contract amount.
A formal proposal for a change order must be received from the contractor before the work is done, or, in certain cases, as soon as practical after the work is completed. No such change order proposals were received from Piedmont Electric during the course of the project.
Therefore, Town staff were surprised to receive the final invoice from Piedmont Electric after the lot was occupied. The original invoice for the additional work was presented in a lump sum format and Piedmont Electric was asked more than once to itemize all additional costs and provide specific information on the affected areas of the park and ride lot. Town staff met with Piedmont Electric on several occasions to review their requests and evaluate their explanations for this change order. During these conversations Piedmont Electric agreed to reduce their proposed change order by $14,919.57. Full information in the format requested was received on February 8, 2002. The itemized work is listed below:
· Move an additional five (5) primary services necessary to maintain electrical services to existing businesses at the Carrboro Plaza Shopping Center;
· Lower a PVC pipe under a new culvert constructed for the park/ride lot and replace wiring;
· Move three transformer pads; and
· Inspect two underground primaries involving asphalt cutting and compaction between transformer pads.
Although there was no request for a change order during the construction phase of the project, we believe that the additional work performed by Piedmont Electric was necessary to properly install the electrical system at the Carrboro Plaza Park /Ride Lot and to do so with a minimum of service interruptions to the businesses operating at Carrboro Plaza. We also believe that the cost is reasonable for the work that was completed. Therefore, we believe that fairness and equity would require that the Town pay the negotiated amount of $23,164.38.
Sufficient funds remain in the original construction budget to allow for the proposed change order. No additional changes are anticipated to this contract and the project will be closed when these issues are resolved.
Council Policy on Change Orders
A 1982 Town Council policy authorized the Manager to prepare, approve, and enter into construction contracts and to execute change orders to construction contracts that do not cumulatively exceed the bid originally approved by the Council by more than 10% of the original contract amount, or $50,000, whichever is less, and provided that there is an appropriation sufficient for the contract amendment. The 10% limitation on the contract awarded to Piedmont Electric Membership Corporation is $3,891; therefore Council approval would be required to approve the proposed change order
That the Town Council authorize the Manager to execute a change order to the contract with Piedmont Electric Membership Corporation in the amount of $23,164.38.
A RESOLUTION AUTHORIZING THE TOWN MANAGER TO INCREASE THE CONTRACT AMOUNT WITH PIEDMONT ELECTRIC MEMBERSHIP CORPORATION (2002-03-04/R-5)
WHEREAS, the Town of Chapel Hill has entered into a contract with Piedmont Electric Membership Corporation as the electrical contractors of the Carrboro Plaza Park/Ride Lot for $38,910.00; and
WHEREAS, during the construction of the lot, unanticipated work occurred that was completed by Piedmont Electric Membership Corporation although no change order proposal was ever received from Piedmont Electric; and
WHEREAS, reimbursement of these unanticipated costs would cause the contract to exceed the original amount by more than 10%;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town Manager is authorized to make an additional payment to the Piedmont Electric Membership Corporation for its work on the Carrboro Plaza Park/Ride Lot in the amount of $23,164.38.
This the 4th day of March, 2002.