Wells No. 12/13 Pump Station and Hypochlorite Generation Facility (HDR s Claim Additional Design Fees)
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1 Wells No. 12/13 Pump Station and Hypochlorite Generation Facility (HDR s Claim Additional Design Fees) Presentation By: HDR Engineering, Pasco Office and Pacific Groundwater Group, Inc. March 5, 2012 Pete Weber, PE, HDR Project Manager Bruce Dudzik, PE, HDR Senior Project Engineer Roy Cross, PE, HDR Managing Principal Charles (Pony) Ellingson, LHg, Pacific Ground Water Group
2 HDR s Request of Sunnyside Approve New Amendment #13 to PGG/City Contract to Cover Out of Scope Engineering Services and Out of Scope Salary Inflation (Claims) Fee Increase of $66,470 (HDR s $60,428 Fee Claim + 10% Markup) based on letters to City dated October 10, 2011 and December 19, 2011, and Discussion with City Staff Current City staff has requested a Fee Proposal from HDR to complete Section 106 Consultation and Construction Management Services Well project that is pending award HDR requests resolution of claims first to bring contract up to date as soon as possible
3 Wells No. 12/13 Pump Station and Hypochlorite Generation Facility Construction of this project fulfills the 2005 Well #5 water right transfer for new water sources for the City of Sunnyside: Well #11 Well #12 Well #13 Total 500 gpm 350 gpm 650 gpm 1500 gpm
4 Wells No. 12/13 Pump Station and Hypochlorite Generation Facility The Hypochlorite Generation Facility will allow the City to discontinue the use of gaseous chlorine for disinfection of the drinking water. The facility includes generation, storage, and transportation of hypochlorite to Well sites using 1300 gallon trailer mounted tank purchased by City several years ago. Future conversions at Wells #6, #7, #8 and #9 will be required.
5 HDR s Commitment from Previous Public Works Staff and Others to Address Claims Last Four Years (late 2007 to 2011), out of scope services were verbally acknowledged by Sunnyside PW Director HDR understanding was that resolution would occur at end HDR started resolution process with letter dated Oct. 10 th, 2011 to Jim Bridges After bid opening on December 1 st, HDR requested a meeting with City Administrator (PW Director acknowledged he was leaving and did not participate) City Administrator requested additional support information HDR submitted letter dated Dec. 19 th, 2011 HDR has met with City Administrator and others at City two additional times since the letters were submitted City Administrator acknowledged that HDR would have to present our case to the City council
6 Justification for Fee Claim - Unplanned Delays & Unfunded Gap Services (Aug., 2007) new Well #11 output reduced to 500 gpm due to unforeseen sanding. Result: delay in delivery of final design services while other sources of supply are found (March, 2009) new Well #12 is finished and produces only 350 gpm out of desired 1000 gpm. Result: further delays in delivery of final design services while additional source is found (April, 2010) new Well #13 is bid for second Well source on the Monson property. Result: further delays in delivery of final design services (December, 2010) combination of Wells #11,#12 & #13 are determined to be adequate to meet 1500 gpm water right transfer Preliminary Design services requested by City PW Director to determine how to tie well supplies together (Spring, 2011) City PW Director requests addition of office space and relocating of on-site hypochlorination system from Well #11 to new proposed wellhouse at Wells #12 and #13. Result: further delays in delivering final design
7 December 19 th Letter Three items that provide justification for fee adjustments: 1. No salary increase adjustment allowance in contract final design delayed over four years 2. Preliminary Engineering request by City staff associated with change from single well (#12) to multiple wells at Monson Property. City wanted confirmation of basis of design before design was started and delivered 3. No task in HDR contract for evaluation of existing shop building for use as new Hypochlorite Generation Building
8 Item #1 from December 19 th Letter No Salary Adjustment Since original final design contract scope was expected to be completed within a short duration (6 months in 2007 Well #11 into service) there were no provisions for salary increases. Subsequent starts/stops and other documented issues delayed final scope delivery until summer/fall of 2011 Wells #12/#13 Four years of annual salary increases (2007 to 2011) and associated delay in completing scope (final design) resulted in $24,303 in additional salary inflation expense to HDR for final design work extended to 2011
9 Item #2 from December 19 th Letter Change from one to two source wells at Monson Amendment 11 to PGG/City Contract included additional engineering & design for adding well #13. However, none of the preliminary engineering required for City to review and concur in the new basis of design was considered or included in HDR s contract $34,448 in additional fees was expended by HDR in delivering the preliminary engineering services as requested by the City PW Director
10 Item #3 from December 19 th Letter Feasibility analysis of using existing shop building as new Hypochlorite Generation Building was never covered in HDR s contract Additional architectural, structural, process and mechanical evaluation of the existing building was required to make a determination $6,493 in additional fees associated were expended to completed the evaluation.
11 Summary of HDR s Claim for $60,428 City PW Director had committed to resolve HDR s emerging claims at the end as verbal directives were given to HDR October 10 th letter requests $60,428 in additional fees. December 19 th letter provides additional detailed documentation supports claim totaling $64,244 ($24,303 +$33,448 +$6,493) HDR concludes December 19 th letter by stating that additional fee request remains at the $60,428 amount same as in the October 10 th letter. HDR s claim request represents approximately 2/3 of our actual overage to date.
12 August 2008: New Well #11 Pump installed and put into 500 gpm. September 2008: The City, HDR and PGG meet and discuss the Well #10 and #11 Project status. Well #10 system shelved. November 2010: Well #11 is shut down for the second time due to sand production and instability in the aquifer. Summer 2011: City lets contract for repair of the Well #11. Work is completed and Well #11 is placed back in service. Wells #10/#11 Tasks Summer 2005: Drilling of Well #11 completed/ pump tests conducted. Fall 2005: HDR commences work to remove H 2 S and CH 4 from Well #10. April 2006: Contract Documents Issued for Construction of Well 700 gpm. August 2006: Well #11 put into operation. Late 2006: Well #10 design held up due to problems with Hazleton. Summer 2007: HDR restarts Well #10 after receiving assurances from Hazleton & City. August 2007: Well #11 shut down due to sanding. September 2007: Contract documents (90%) are completed for the Wells #10 & #11 Phase 2 Project. April 2010: Contract documents issued for Well #13 to be drilled near TW-3. September 2011: HDR submits contract documents to the City for construction of the Wells #12 and #13 Pump Station, new Hypochlorite Generation Building and work at Well #11. Wells #12/#13 Tasks 2006: Test wells TW- 1 and TW-2 installed at the Airport and School sites. May 2007: Preliminary evaluation of potential Well #12 sites. TM issued by PGG recommends additional test well at either the Monson Property or Central Park. Fall 2007: TW-3 installed on Monson property. Hypochlorite Generation Bldg. Tasks May 2008: PWTB approval obtained on transferring remaining loan to the Monson Property for development of additional water capacity. August 2008: Contract Documents issued for Well #12 to be drilled in northeast corner of Monson Property. March 2009: Tests are completed on Well #12 and indicate the sustainable well yield is 350 gpm. Another well is required. December 2010: Well #13 can meet the required 650 gpm flow rate. The City directs HDR to complete design of the Monson water source for two wells. December 2011: Bid opening on Wells #12 and #13 along with remaining work opened with Apollo apparent low bidder at $1.6 million Legend Tasks that were subject to salary increases not covered by implied contract timeline. Tasks that were not subject to salary increases. January 2007: Design commences for new on-site hypo system in the existing City Water Department/Public Works Shop Areas. August 2008: City requests modifications to Central Hypochlorite Generation Facility. October 2009: The City requests that HDR move the existing on-site Hypochlorite system located at Well #11 to the new Hypochlorite Generation Building. September 2010: City requests that HDR evaluate the feasibility of using the existing Shop Area Building for the Hypochlorite Generation Building. March 2011: City requests that the new Hypochlorite Generation Building use natural gas
13 October 10, 2011 Mr. Jim Bridges, P.E. Director of Public Works City of Sunnyside 818 E. Edison Avenue Sunnyside, WA Subject: Wells #12/#13 Pump Station and Hypochlorite Generation Facility Additional Fee Request Dear Jim: The purpose of this letter is to present the unanticipated and out of scope additional costs thatt HDR has incurred during our current Professional Services Contract with the City of Sunnyside as a subconsultant to Pacific Groundwater Group (PGG). As discussed when Roy Cross and I met with you in September, our contract under PGG started in 2005 and is just now coming to an end after completing the designs for Wells #10 (this design was not implemented), #11, #12 and #13, the subsequent repair work for Well #1, and the Hypochlorite Generation Building. The following list describes issues and out of scope services that have resulted in increased project costs since work started in 2005: 1. Several stops, delays, and restarts of the work on the Well #11 and Wells #12 and #13 projects resulted in team members being reassigned and reorganized from other projects (to which they were assigned when this work was stopped) and brought back up to speed on the project changes each time. Over the course of the project this has increased costs by $3, Since it was orignally thought that the project would have a relatively short duration, there were no provisions in the contract to account for annual salary increases over the last three years of work on the Wells #12/#13 design. Over the past three years, cumulative salary adjustments have increased the project cost by $11, Changing from a single source well at the Monson property to two wells to meet the 1,000-gpm flow rate; with the wells located approximately 1,300-feet apart, caused extensive redesign of the site layout, connections into the distribution system, and the associated waste discharge system. From the time of the original work on Well #11 to the completion of 90% design documents for Wells #12/#13, this change added $17,842 to the project costs. 4. Changing the power source for unit heaters and backup generator from electricity/diesel to natural gas for the Hypochlorite Generation Facility resulted in additional out of scope design and an increased cost of $5, Rework associated with removal and siting of existing hypochlorite equipment at the Well Site #11and work at the new Hypochlorite Generation Building resulted in a redesign cost of $3, Additional process, architectural, mechanical and structural services associated with evaluating existing building versus a new building for the Hypochlorite Generation Building at the existing City of Sunnyside Shop Facilities. An additional $7,652 was required for this evaluation.
14 Mr. Jim Bridges Page 2 7. The extended duration of the project, changes in Building Codes (IBC, NEC, and IFC) required additional and/or redesign of the Wells #12/#13 designs and the Hypochlorite Generation Building to meet the new code requirements. Over the three years of work on Wells #12/#13 and the Hypochlorite Generation Building the Code changes added $9,784 to the cost of the project. The following table summarizes these increases in cost by Task number: Task # Cost 1 $3,624 2 $11,984 3 $17,842 4 $5,678 5 $3,864 6 $7,652 7 $9,784 Total $60,428 Thank you for your review of these items and consideration of our request for the additional fees to cover the changes in HDR services provided to the City in the interest of successfully completing this important water supply project. With your approval of our request we would like to work with you and PGG to begin processing an amendment to our contract for these additional services in the amount of $60,428. The combined Opinion of Probable Construction Costs (OPCC) for all of the projects performed under this contract is approximately $2,205,000 (including the OPCC for the Well #10 treatment project which the City has decided not to construct). The $60,428 proposed addition to our existing $130,331 fee would result in a total fee of $190,759 which would only be 8.65 percent of the OPCC. The 8.65 percentage of construction cost is well within the 8 to 10 percent range typically used for engineering design fees. The 8.65 is also on the lower end of construction costs typically associated with the design of projects that include both rehabilitation and replacement of existing facilities as well as the design of new facilities. Please contact either Roy Cross (at ) or me (at ) to discuss this and any questions or comments that you may have. Sincerely, HDR ENGINEERING, INC. Bruce Dudzik, P.E. Project Manager cc: Charles (Pony) Ellingson, PGG Roy Cross, HDR Engineering
15 December 19, 2011 Mr. Jim Bridges, P.E. Director of Public Works City of Sunnyside 818 E. Edison Avenue Sunnyside, WA Subject: Documentation Submittal Wells #12/#13 Pump Station and Hypochlorite Generation Facility Additional Fee Request Dear Jim: This letter is in response to your of December 6 th in which you requested more detailedd accounting for the items enumerated in our letter of October 10 th requesting additional fees for the above referenced project. Our request represents the unanticipated and out of scope additional costs that HDR has incurred during our current Professional Services Contract with the City of Sunnyside as a subconsultant to Pacific Groundwater Group (PGG). Regarding documentation of some of the items in my letter of October 10 th, I am providing information based primarily on previous invoices showing labor hours. The total of the additional costs documented below and supported by the attachments exceeds our original request of $60,428. However, we are still only requesting reimbursement of the $60,428 as outlined in our October 10 th letter. The following list describes the issues and out of scope services, as supported by the attached documentation, that have resulted in increased fees since work started in 2008: 1. Since it was originally thought that the project would have a relatively short duration, there were no provisions in the contract to account for annual salary increases over the extended four years of work. Exhibit A, the Summary of Monthly Invoice Amounts for Major Labor Costs, shows the effects of labor cost escalation on four labor cost categories (Project Manager, Senior Engineer, Staff Engineer and CADD Technician). The increased costs for the hours billed for the period of January 2008 through to March of 2011 when HDR had reached its contract fee limit totals to $24, The following table summarizes the Exhibit A labor cost escalation fee impacts: Labor Category Inflation to March 2011 Project Manager $3, Senior Engineer 5, Staff Engineer CADD Technician 14, Total $24, Exhibit A and the above table include only labor cost increases associated with the above four labor categories and that additional labor increases could be justified. Copies of the monthly invoices for the period of January 2008 through March 2011 are included in Exhibit B as further documentation of the values used in Exhibit A. 2. Amendment 11 to the PGGG and City Contract included the additional engineering and design associated with adding Well #13 to the Project Scope of Work. However, HDR also performed several preliminary
16 Mr. Jim Bridges Page 2 engineering tasks to provide the City with sufficient information to proceed with a design basis for two wells on the Monson Property as supporting documentation for the amendment. These preliminary engineering tasks, performed during the period of September 2009 through April 2010 (when Amendment 11 was approved by the City), coincided with the work being performed under Item #5 as described in my October 10 th letter. These services were associated with removal and siting of existing hypochlorite equipment at the Well Site #11and work at the new Hypochlorite Generation Building. These two tasks were the only work that was being done by HDR at the time, and therefore, were not included in Amendment 11. The documentation for charges for this additional work is the sum of the invoices for this period which are included as Exhibit C. The following table summarizes the invoices issued during this period along with a total dollar amount for this work: Month & Year Invoice Amount September 2009 $ October 2009 $2, November 2009 $12, December 2009 $10, January 2010 $1, February 2010 $2, March 2010 $2, Total $33, Additional process, architectural, mechanical and structural services associated with evaluating upgrades to the existing building versus constructing a new building for the Hypochlorite Generation Building at the existing City of Sunnyside Shop Facilities was conducted by HDR staff during October The site visit and subsequent recommendation was conducted during the week ending October 9 th. Bruce Dudzik (Senior Engineer), Donn Hogan (Project Architect), and Brett Lilly (CADD Technician) were the three HDR staff members involved in the site visit. Since the existing pole building was deemed to be structurally inadequate, HDR made a recommendation to the City to proceed with the new building without preparation of a formal report which would have added to the cost of the project. Exhibit D is a markup of our November 2010 Invoice showing hours attributable to this previously unaccounted for and out of scope work. The following table summarizes the labor and computer charges associated with this additional work for the three HDR staff members: Staff Total Hours Rate/Hr including $3.70/hr computer charge Total Charge Bruce Dudzik 12.5 $ $2, Donn Hogan 11.0 $ $2, Brett Lilly 22.5 $ $2, Total 42.5 n/a $6, The following table summarizes the above fee increases by task numbers: Task # Cost 1 $24,303 2 $33,448 3 $6,493 Total $64,244 While the other items discussed in my letter of October 10 th did have costs associated with them, the above total is already above the requested $60,428 addressed in that letter: therefore I have not added detail documentation for those costs in this letter. We appreciate your further review of this documentation of the additional fees we have
17 Mr. Jim Bridges Page 3 incurred for this project. We are providing this justification to Mr. Gervasi and PGG with the understanding that it will result in the processing of an amendment to our contract for these additional services in the amount of $60,428. Please contact Roy Cross (at ), Pete Weber ( ) or me (at ) to discuss any questions or comments that you may have about this letter. Sincerely, HDR ENGINEERING, INC. Bruce Dudzik, P.E. Project Manager Attachments: Exhibit A: Summary of Monthly Invoice Amounts for Major Labor Costs Exhibit B: Copies of Individual Monthly Invoices for period of January 2008 through April 2011 Exhibit C: Copies of Individual Monthly Invoices for period of September 2009 through March 2010 Exhibit D: November 2010 Invoice Showing Hours for Evaluating Existing Building cc: Mark Gervasi, City Manager City of Sunnyside Charles (Pony) Ellingson, PGG Roy Cross, HDR Engineering Pete Weber, HDR Engineering
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