Item 4K - Final Item 4K
M E M O R A N D U M
(January 16, 2018)
To: Shana Yelverton, City Manager
From: Rob Cohen, Director of Public Works
Subject: Approve a change order with Haydon Building Corporation
(HBC) for the Champions Club construction project in an
amount of $1,714,400.
Action
Requested: Approve a change order with Haydon Building Corporation (HBC)
for the Champions Club construction project in an amount of
$1,714,400.
Background
Information: Approving this change order will revise the contract’s Guaranteed
Maximum Price (GMP) from $32,988,686 to $34,703,086. This is
a 5% increase.
Contract Sum was $32,988,686
Total amount of change order $ 1,714,400
Revised GMP $34,703,086
This change order will reimburse HBC for additional costs incurred
while constructing Champions Club. The majority of these costs
are attributed to two noteworthy issues that arose during the first
several months of the project. These events are found in Exhibit A
and identified with ‘green’ text.
The first issue involved the significant redesign of essential project
elements due to the need to meet fire code requirements. Over
1,300 additional design sheets were issued. These revisions
altered more than 2,000 work items that were required to be
incorporated into the contract documents. These work items were
added to the scope of work.
The second issue occurred shortly after the contractor started the
project and began drilling the piers. They encountered higher than
expected water levels at the site. This subsurface discovery
required revisions to the concrete mix design, placement method
and a redesign of all of the concrete piers.
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The discovery of the water also led to the decision to install an
underslab drainage system. This system was not originally part of
the project’s scope of work or within the GMP.
The changes since project inception until June 7, 2017 have been
categorized and are shown below. Each category is identified and
accompanied by an estimated cost and the contributory amount of
this cost to the total cost.
Design completion $1,694,594 (50 %) (Exhibit B)
Subsurface conditions $1,256,899 (37 %)
BRS clarifications $ 284,253 ( 8 %)
Owner changes $ 163,578 ( 5 %)
Total Cost Impact: $3,399,324 (100%)
These noteworthy items negatively impacted the project cost and
schedule. Most, if not all of the costs associated with the redesigns
have already been identified, quantified, negotiated and
categorized.
Financial
Considerations: The total change order amount is summarized below:
Row A is the sum of the contingency budget ($2,566,381 within
the GMP) less the total cost impact ($3,399,324) from project
inception to June 7, 2017. (The total cost impact is the sum of all
of the prospective changes to the original contract.) The result is a
contingency shortfall in an amount of $832,943.
Contingency
Budget:
$2,566,381
Total Cost
Impact:
$3,399,324
($832,943)
($832,943)
Credit to
Contingency:
$118,545
($714,398)
($714,398)
Change
Order:
$1,714,400
Contingency
$1,000,000
Row A
Row B
Row C
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Row B is a credit to the project contingency in an amount of
$118,545. This credit is added to the contingency shortfall, thus
reducing the shortfall to $714,398.
Row C is the contingency shortfall plus the use of approved funds
from this change order ($1,714,400). This action overcomes the
contingency shortfall and replenishes the project contingency to a
new balance of $1,000,000. This contingency is expected to be
adequate for the remainder of the project, barring any unforeseen
conditions.
Note that approval of the change order will increase the
contingency as the project goes vertical. It authorizes staff to
utilize funding that was approved in the FY 2018 CEDC Budget.
Prior to funding approval, Staff held discussions with the CEDC
and City Council. These discussions focused on the need to
identify several courses of action to improve the project’s cash
flow. Staff developed and discussed several cost mitigation
courses of action with the CEDC and Council last summer during
the FY18 budget development process. The chosen course of
action reallocated a number of items from the capital budget to the
operating budget. These items were FF&E expenditures for
purchases that do not have a capital-item useful life.
It is important to note that most of the work has already been
completed. The team has conducted numerous reviews and
negotiations over the past 13 months, finalizing the scope, cost
and allowable reimbursements. The team confirmed the scopes of
work and costs were reasonable, within industry standards and
were in accordance with the contractual terms and conditions.
Strategic Link: CEDCF1 Invest to provide and maintain the Marq as a high-
quality public asset in accordance with defined financial
performance and service guidelines (F2).
CEDCF2 Ensure expenditure of CEDC and Economic
Development Investment Funds in accordance with established
economic development goals, policies and master plan
recommendations (F2).
Citizen Input/
Board Review: N/A
Legal Review: N/A
Alternatives: The City Council may approve or deny this requested action.
Supporting
Documents: Attachment A: Time Line of Events
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Attachment B: Design Completion Costs
Staff
Recommendation: Approve the change order authorizing the use of pre-approved
funding to replenish the project contingency.
Staff Contact: Rob Cohen, Director of Public Works
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Exhibit A – Champions Club Time Line
Sept 1, 2015 The City Council amended the design services
agreement with Barker Rinker Seacat Architecture
(BRS) to complete design services for Champions
Club.
Sept 6, 2016 The City Council approved the contract for
Construction Manager at-Risk services with Haydon
Building Corp (HBC), and the Guaranteed
Maximum Price (GMP) Amendment in the amount of
$32,988,686 for the construction of The Marq
Southlake Phase 2.
Sept 29, 2016 Design documents provided by BRS and sent to
subcontractors were labeled as 100% Construction
Documents (CD), but were missing information.
Additionally, this drawing package failed to meet
code requirements.
Oct 2016 – Apr 2017 The CDs were developed with scopes of work,
estimates, negotiated and executed within a six
month period. Each of these documents added
information to and corrected information on the 100%
CD set issued for subcontractor bidding.
Jan 25, 2017 A subsurface issue were discovered.
Apr 2017 – Present The project team has worked for more than 13
months reviewing, negotiating and completing the
work that was changed with the revisions to the CDs.
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Exhibit B – Design Completion Costs
Fire Code Separation Issue #1 $419,511.40
Relocated existing location of 2 hour fire wall from the west side
of the gym to the east side. Included modifications to piers,
grade beams and masonry walls.
Fire Code Separation Issue #2 $33,862
Demolition of the Phase I exterior wall and construction of a new
fire rated drywall separation wall along with temporary bracing
and shoring of the temporary wall.
Under Slab Drainage $64,681.24
Costs for the design of the underslab drainage system by the
Plumbing Subcontractor.
Foundation & Structure Design $905,825.20
Final design completion of the pool, pool foundations, structural
steel and concrete foundations.
Interior Finishes & Millwork Detailing $81,007.89
Final completion of the interior signage, floor finishes and
millwork locations and elevations.
Request for Information/Submittal/Review $28,976.45
Answers provided to subcontractor and Haydon questions as
well as rejection of as equal material listed in the specification
and request to use only the basis of design.
HVAC, Plumbing & Electrical Design $78,365.23
Final completion of the design of the mechanical, plumbing and
electrical systems to catch up to the architectural changes.
Site Paving, Landscaping & Other Site Changes $59,336.09
Changes in the sidewalks, entrances from Shady Oaks,
landscaping modification as well as utility and drainage revisions.
Other Scope Changes $23,028.44
Changes to the ceilings, wall and floor finishes.
Sum of items:$1,694,593.94
Costs of the items in this Exhibit are included in the total cost impact of $3,399,324.00.