Title
Proposed Change Order No. 1
Contract No. 2003730
Water Transmission Main, Valve and Other Priority Repairs
CIP #170504 / BCE Score: N/A
Body
Agenda of: June 28, 2023
Item No.: 2023-199
Amount: Original Contract $15,000,000.00
Proposed Change Order No. 1 12,000,000.00
Total Revised Contract $27,000,000.00
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: May 26, 2023
RE: Proposed Change Order No. 1
Contract No. 2003730
Water Transmission Main, Valve and Other Priority Repairs
Vendor: LGC Global, Inc.
MOTION
Upon recommendation of Cheryl Porter, Chief Operating Officer - Water and Field Services, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), authorizes the Chief Executive Officer (CEO) to enter into Contract No. 2003730, Proposed Change Order No. 1, “Water Transmission Main, Valve and Other Priority Repairs” with LGC Global Inc., at an increased cost of $12,000,000.00 for a total cost not to exceed $27,000,000.00 with no increase in time for a total duration of five (5) years; and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The GLWA Water Transmission System consists of a network of approximately 800 miles of large (greater than 24-inch diameter) water mains that serve 3.8 million people across 112 communities that are represented by 88 member partners in eight counties of southeastern Michigan. There are approximately 10,000 air, blow-off, and isolation valves associated with these mains. The average pipe age is over 60 years old with some exceeding 150 years in age. This contract is used to respond to water main breaks, valve repairs, and other urgent projects as necessary to allow GLWA to provide water of unquestionable quality at the promised level of service to our member partners. Contract No. 2003730 is one of two concurrent emergency repair contracts, the other being Contract No. 1802745 “Water Transmission Main, Valve and Other Priority Repairs,” that GLWA intends to maintain on a staggered basis. This contract will also support valve repairs determined from the Valve Exercising Program and the GLWA/DWSD water main decommissioning efforts.
JUSTIFICATION
The contractor for this work has been performing above GLWA staff expectations. This additional funding is requested due to expenses associated with the 120-inch water main break and to support the reinforcement of identified distressed pipes along the 14-Mile Transmission main. The requested funding will allow for this contract to be fully funded for approximately three years remaining in its term. This is based on current cash flow projections. This will also allow for writing a new request for proposal and re-bidding of this work approximately one-year before the anticipated contract completion date. Therefore, GLWA staff recommends the additional budget to fund this contract to continue the services through the anticipated contract end date.
PROJECT MANAGEMENT STATUS
Original Contract Time 5 years (10/08/2021 - 10/07/2026)
Proposed Change Order No. 1 0 years
Total Contract Time 5 years (10/08/2021 - 10/07/2026)
PROJECT ESTIMATE
Original Contract Price $15,000,000.00
Proposed Change Order No. 1 12,000,000.00
New Contract Total $27,000,000.00
FINANCIAL PLAN IMPACT
Summary: The proposed contract with Lakeshore Global Corporation encompasses Capital Improvement Plan & Operations & Maintenance expenses. The value of the contract exceeds the current financial plan in total. Potential positive variances of other contractual services as well as the use of this service may vary by year. Sufficient funds will be provided in the Operations & Maintenance (O&M) and CIP financial plan for this contract.
Funding Source: Operations & Maintenance (O&M) Budget, CIP 170504
Cost Centers: Field Service Operations.........Centralized Services Cost Center (882431)
Expense Type(s): Contractual Operating Services-All Water (617901); Construction (616900)
CIP O&M Total
Original Contract Price $10,000,000.00 $5,000,000.00 $15,000,000.00
Proposed Change Order No. 1 8,400,000.00 3,600.000.00 12,000,000.00
New Contract Total 18,400,000.00 8,600,000.00 27,000,000.00
Financial Plan Forecast 11,000,000.00 7,261,100.00 18,261,100.00
Estimating Variance ($ 7,400,000.00) ($1,338,900.00) ($ 8,738,900.00)
The award of this change order provides an O&M variance of $1,388,900.00 ($8,600,000.00 proposed contract amount less $7,261,100.00 financial plan forecast) and a CIP negative estimating variance of $7,400,000.00. A budget amendment will be necessary to record the estimating variance and will be funded from Program No. 170500. The CIP financial plan (forecast) is from the FY 2024-2028 CIP Plan. Contractual services are dependent on several factors such as, delays in estimated start and end dates, environmental constraints, and other unforeseen circumstances that can cause the expenses to fluctuate from fiscal year to fiscal year.
COMMITTEE REVIEW
This item was presented to the Operations and Resources Committee at its meeting on June 14, 2023. The Operations and Resources Committee unanimously recommended that the GLWA Board adopt the resolution as presented.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.