1 STAFF REPORT
DATE: December 13, 2022
TO: Justin Hess, City Manager
FROM: Dawn Roth Lindell, General Manager, Burbank Water and Power VIA: Richard Wilson, Assistant General Manager, Water Systems BY: Carlos Sanchez, Land Surveyor
SUBJECT: Approval of Change Order #1 to the Contract with Paveco Construction. Inc, for Citywide Pavement Repair and Restoration Relating to BWP Construction and Maintenance Projects (Bid Schedule No. 1480)
RE
COMMENDATION
Approve and authorize the General Manager of Burbank Water and Power (BWP), as the designee of the City Manager, to (a) execute change order #1 to the contract with Paveco Construction, Inc (Paveco), under bid schedule No.1480, to increase the contract amount from $1,000,000 to $3 ,000,000 for the third (current) contract year from May 11, 2022, through May 10, 2023, for citywide p avement repair and r estoration relating to BWP construction and m aintenance projects, and (b) execute future contract renewals of b id schedule No. 1480 for the fourth and fifth years, as applicable, which will include an amendment to the base contract amount of $3,000,000 for each year. The change order is needed to cover significant increases in paving costs that are discussed in detail below.
BACKG
ROUND
BWP uses an itemized pricing model, which is an industry standard, for yearly construction contracts and has proven to generate savings to the water and the electric fund on substructure installation and maintenance costs. Itemized pricing is an agreed- upon set price between BWP and the contractor based on the number and quantity of items constructed during each project. This agreed-upon unit pricing methodology creates a cost control for BWP since the price per unit of installation has already been established in the contract and is consistent for the contract year. Prices are adjusted based on consumer price index (CPI) and producer price index (PPI) at each contract renewal.
WATER AND
POWER
Richard Wilson (Dec 8, 2022 11:29 PST)
Richard Wilson
Carlos G. Sanchez (Dec 8, 2022 11:31 PST)
Carlos G. Sanchez
2 BWP’s contract with Paveco supports pavement restoration related to all our water capital improvement projects (i.e., planned transmission and distribution water main replacements, valve replacements, etc. ), new water services, unplanned water main repairs, facility maintenance, and when requested, provides the same for various underground electric and fiber optic construction projects on an as -needed basis throughout the year. The BWP Board approved this contract for $7 00,000 on March 4, 2019. The contract became effective on April 12, 2019 , for a period of one year. BWP exercised its renewal option for an additional year on April 12, 2022, for a contract amount of $1,000,000. The proposed change order of $ 3,000,000 would apply to the current contract year 2022-2023.
DISCUSSION
In the past , the $1,000,000 contract amount wou ld have been sufficient for the annual work performed by BWP in a contract year; however, BWP is experiencing and will continue to have, significant increases in paving costs mostly due to the following factors:
• Higher-than-expected unit price increases due to substantial adjustments in
CPI/PPI
• An increase in the number of current and future development projects resulting in an increase in the number of new water service installations/upgrades that require paving restoration
• Measure P has provided the means for the Public Works Department to significantly increase the number or roadways being rehabilitated as part of their annual paving program. This has resulted in more streets under moratorium due to their age and/or condition, which subsequently increases the amount of pavement required in cases like this where, in spite of diligent collaboration between Departments, utility work must be done that cuts into new or “good” pavement
• Recent changes to Public Works minimum standards for trench restoration within the city right-of-way following utility construction.
• The extra volume of work required to catch up with the backlog of capital improvement projects caused by the slow -down of work during the COVID -19 Pandemic
• H igher than expected paving quantities and thus costs associated with recent water main breaks
The best course of action to address the issues noted above is to increase the size of the contract with Paveco Construction. Without this increase, and based on the amount of forecasted work, we project a contract shortage of $2, 000,000 for the current contract year. Without this amendment, the current contract amount will be exceeded within the next sixty days and we will not be able to address the backlog of work.
Remaining contract balance (insufficient) $500,000
Current backlog $500,000
3 Additional money to cover future work $2,000,000
Total change order request $3,000,000
Other than the increase in volume, the scope of work proposed under the change order is of the same type as the original unit bid pricing. Since the unit bid prices were already competitively bid, and the scope of work is unchanged (i.e., no additional unit bid prices are needed), it is appropriate to use a change order to increase the current contract value.
Paveco Construction has been a good partner, whose quality work product has reduced BWP’s overhead during construction. The high level of quality from this contractor will help BWP complete projects already planned and budgeted, as well as future construction projects. Re-bidding the contract would expose BWP to higher prices and longer delays.
The paving costs for the current backlog of work associated with water construction/maintenance, BWP facility maintenance, and the Willow Street underground distribution project for the 2022-2023 contract term is estimated at $2,000,000.
FISCAL IMPACT
This change order will increase the contract amount by $2 ,000,000 to a revised total of $3,000,000 for the contract period of May 11, 2022, to May 10, 2023. The authorization for renewals for the fourth and fifth year, if executed by the BWP General Manager, would result in a total of $3,000,000 for the contract period of May 11, 2023 to May 10, 2024 and $3,000,000 for the contract period of May 11, 2024 to May 10, 2025. Funding for this work has already been approved by Council as part of the fiscal year 2022-2023 budget, as well as customer funded development projects.
CONCLUSION
This change order will allow BWP to continue issuing requests for pavement repair without interruption, thereby ensuring Burbank’s streets and sidewalks remain in a safe condition and maintaining the aesthetics of the City.
ATTACHMENT
Attachment 1 – Change and Extra Work Order #1