V(I) Approval and Authorization of Change Order #1 with Master Site Development, Inc. on the Ocoee Crown Point PUD – Phase 1 Infrastructure Project in the Amount of $60,183 Agenda 04-20-2004
Item V I
Mayor e Center of Good Liv. Commissioners
S. Scott Vandergrift g Danny Howell, District 1
'FY
r - Scott Anderson, District 2
Acting City Manager ��� ::y Rusty Johnson, District 3
V. Eugene Williford i '� Nancy J. Parker, District 4
STAFF REPORT
TO: The Honorable Mayor and City Commissioners
FROM: David A. Wheeler, P.E. �-
Director of Public Works
DATE: April 12, 2004
RE: Approval of Change Order No. 1
With
Master Site Development, Inc.
For
Ocoee Crown Point PUD—Phase 1 Infrastructure Project
ISSUE
Should the Mayor and City Commission approve Change Order No.1 with Master Site
Development, Inc. on the Ocoee Crown Point PUD — Phase 1 Infrastructure Project in the
amount of$60,183.00 to purchase the reinforced concrete pipe from a supplier not located within
the State of Florida.
BACKGROUND/DISCUSSION
The construction of the phase 1 infrastructure for the Ocoee Crown Point project which will
serve the new high school has encountered a unique and unprecedented situation. The
contractor, Master Site Development, Inc., (MSD, Inc.) has been unable to purchase the
reinforced concrete pipe (RCP) for this project. Some of you may be aware of the current market
situation with the Chinese buying up almost all of the available steel and scrap metal on the open
market. This has caused an excessive price increases and unreliable delivery timeframes. These
unprecedented conditions are causing shortages among Florida fabricators and distributors and
enormous price swings. Accordingly, these fabricators are either not able or unwilling to supply
RCP to the Contractor for prices that (1) conform to the prices that existed at the time this project
was let out to bid, or (2) meet the unalterable construction deadlines set forth in the Contract
Documents. This is not just unique to the Florida market situation. However, some RCP
fabricators and distributors outside of the state have been able to purchase reinforcing steel in
advance of the market problems and have pipe available for an increased price
At the pre-construction meeting Master Site noticed the City about this issue and staff was
already somewhat aware of it, too. Since that time staff has become very aware of the issue and
the effect it has on this and other City projects and the industry as a whole. The steel situation is
not only affecting the price of RCP pipe, but also ductile iron and any construction commodity
made with metal.
The initial problem involved the large diameter (54" and 60") pipe because it is needed to go in
to place first for the stream and road crossings with all other utilities going on top of these large
pipes. And there is no way to install everything else first and then comeback and install the RCP
at a later date (and be able to afford that cost). Since then the problem has blossomed to include
all of the RCP pipe on the project from the 18" pipe up the big pipe. No manufacturer will
supply only a portion of the project, they want the whole job - and this is standard in the
industry.
Master Site is unable to purchase the RCP pipe in Florida within a timeframe to meet the first
milestone of the construction contract. That first and probably most important milestone is that
the water and sanitary sewer systems have to be installed and cleared for use by July 31st so that
the school board's contractor can meet its deadlines and have the school open in August 2005.
However, Master Site has been in contact with a supplier(Sherman Industries, Inc.) in Savannah,
Georgia, that can supply all the RCP pipe. Total length of pipe is around 5,00 linear feet in sizes
from 18 inch to 60 inch. But Master Site has to go to Georgia and get it. This supplier has all
the pipe in its yard and can have it ready to load when the trucks get there. Master Site
is quoting me a price of$60,183.00 to hire the trucks.
Alternatively, staff has contacted one of the local manufacturer/suppliers -just to get first hand
information. They first confirmed that the problem is the excessive increase in the cost for steel
to be used for reinforcing in the pipe and that regardless of price they are having a delivery
problem even if they wanted to buy the steel. Additionally, the local suppliers are holding their
stock for FDOT projects on which they have made "hard price" commitments. They are locked
into two year pricing and do not want to have to make pipe for FDOT projects that they will not
be able to recover the additional costs on because of their contractual requirements. This
company was contacted by our contractor and did not receive a commit to pricing and/or
delivery.
The firm did make staff an offer, that if the City bought the pipe, they would be willing to sell it
to the City for the school project. Staff could then deduct the cost from Master Site's contract.
But on first review of the pricing, the costs would be higher than having Master Site purchase the
pipe from the Georgia supplier. This is probably because they are projecting market conditions
in the near future and looking at replacing the existing stock planned for an
FDOT project. Additionally, they can only supply the big pipe and not all the pipe for the
project, so Master Site and staff would have only solve part of the problem.
If Master Site purchases the pipe from the Georgia supplier and is authorized to proceed
immediately, the pipe can be on the project site within days. The local market conditions offer
the City no relief Unfortunately, the City cannot afford to wait for market conditions to return to
normal. The suppliers do not see any changes in the current market trend in the near term. The
RCP suppliers are also losing money in this market issue because they are unable to sell any pipe
because they can not get any steel. Many state and local governments are negotiating equitable
upward adjustments to accommodate this most unprecedented market situation. Fortunately, we
have a good bid on this project, so the City can fit this adjustment into its budget for the project.
According to the City's contractual obligation with OCPS, the City is required to obtain OCPS
approval on all change orders prior to action. Because of the importance of this issue and by
notice of e-mail, Ocoee has asked for OCPS approval to proceed ASAP, with the documentation
to follow. This change order will be apportioned between Ocoee and OCPS according to agreed
upon percentages between both parties as provided in the Interlocal Agreement. The inclusion of
this change order will not exceed the contingency amount set aside by OCPS and therefore will
not exceed OCPS's project cost for their share of the infrastructure project. OCPS responded by
approving the expenditure of funds from OCPS's construction contingency.
This action will not change the City's rights or remedies under the Contract. It should be
emphasized that it is intended to allow an equitable adjustment in the contract price to
accommodate the unique and unprecedented upswing in the commodity price of steel and scrap
metal. These unprecedented conditions have caused shortages and enormous price swings that
no one in the construction industry could have predicted.
The attached is a copy of Change Order No. 1. The original construction contract amount is
$2,496,811.50. This change order increased the contract amount by $60,183.00, to a new
contract amount of 2,556,994.50. The overall contingency usage was 2.41% of the original
construction cost. This contract increase will be paid for out of the Ocoee Crown Point PUD
project fund, which is the funding source for the entire project.
RECOMMENDATION
Staff recommends that the City Commission approve Change Order No. 1 for the Ocoee Crown
Point PUD —Phase 1 Infrastructure Project with Master Site Development, Inc. in the amount of
$60,183.00 and authorize the Mayor and City Clerk to execute Change Order No. 1.
e Center of Good zit,
101111110f110,,., 111011
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45COR
j . :
CITY OF OCOEE
Engineering/Utilities
150 North Lakeshore Drive
Ocoee, Florida 34761-2258
CHANGE ORDER NO. #1
CITY OF OCOEE
Ocoee Crown Point PUD—Phase 1 Infrastructure
DATE: April 12,2004 CONTRACTOR: Master Site Development,Inc.
AGREEMENT DATE: March 2,2004
The following changes are hereby made to the CONTRACT DOCUMENTS.
Original CONTRACT PRICE $2,496,811.50
Current CONTRACT PRICE ADJUSTED by previous CHANGE ORDER $2,496,811.50
Net Increase Resulting from this CHANGE ORDER $60,183.00
The current CONTRACT PRICE including this CHANGE ORDER $2,556,994.50
ORIGINAL CONTRACT TIME:
420 Consecutive Calendar Days from Notice to Proceed Date: May 16,2005
Current CONTRACT TIME adjusted by previous CHANGE ORDERS Date: May 16,2005
Net Increase Resulting from this CHANGE ORDER Days: 0 Days
Current CONTRACT TIME Including this CHANGE ORDER Date: May 16,2005
00842-1
CHANGES ORDERED:
I. GENERAL
This change order is issued pursuant to the applicable provisions of the Contract Documents and is intended
to provide an equitable adjustment in the Contract Sum to accommodate an unprecedented market
condition.
II. REQUIRED CHANGES
Item A: To purchase all the reinforced concrete pipe("RCP")from an alternative supplier located outside
of the State of Florida.
III. JUSTIFICATION
Item A: This change order is intended to allow an equitable adjustment in the contract price to
accommodate the unprecedented upswing in the commodity price of steel and scrap metal. These unprecedented
conditions are causing shortages among Florida fabricators and distributors and enormous price swings.
Accordingly, these fabricators are either not able or unwilling to supply RCP to the Contractor for prices that (1)
conform to the prices that existed at the time this project was let out to bid, or(2)meet the unalterable construction
deadlines set forth in the Contract Documents.
IV. NARRATIVE OF NEGOTIATIONS
Item A: The equitable adjustment of the contract sum was negotiated based upon current market prices.
V. PAYMENT
Change Order Description Net Increase Unit Unit Price Net Increase
Item No. (Decrease)Quantity (Decrease)Price
Item A Purchase RCP from a non-Florida Supplier LS 60,183.00
•
Total Net Increase Change Order No. #1 $60,183.00
VI.APPROVAL AND CHANGE AUTHORIZATION
This proposed change to the Contract is to be approved by the Ocoee City Commission.
Acknowledgements:
The aforementioned change,and work affected thereby, is subject to all provisions of the original contract not
specifically changed by this Change Order;and,
It is expressly understood and agreed that the approval of the Change Order shall have no effect on the original
contract other than matters expressly provided herein.
00842-2
CONTRACTOR acknowledges,by its execution and acceptance of this Change Order,that the adjustments in
Contract Price and Time shown hereon constitute full and complete compensation and satisfaction for all costs and
modifications of performance time incurred by the CONTRACTOR as a result of this Change Order and/or relating
to or arising out of the reasons and justifications for this Change Order.. No other claim for increased costs of
performance or modifications of time will be granted by the OWNER for the Work covered by this Change Order.
Nothing contained in this action by the City shall be deemed to constitute a waiver or an estoppel to assert its rights
or remedies under the Contract Documents nor shall it be deemed to set a precedent for an equitable adjustment for
any other materials required by the Work. The CONTRACTOR hereby waives and releases any further claims for
cost or time against the OWNER arising from or relating to the matters or Work set forth or contemplated by this
Change Order and/or relating to or arising out of the reasons and justifications for this Change Order.
RECOMMENDED BY: ACCEPTED BY:
CITY OF OCOEE,FLORIDA MASTER SITE DEVELOPMENT,INC.
By: By:
Signature Signature
Date: Date:
Title: Title:
APPROVED BY:
CITY OF OCOEE,FLORIDA
By:
S. Scott Vandergrift,Mayor Date
Attest:
Jean Grafton,City Clerk
FOR USE AND RELIANCE ONLY BY THE APPROVED BY THE OCOEE CITY
CITY OF OCOEE,APPROVED AS TO FORM COMMISSION IN A MEETING HELD ON
AND LEGALITY THIS DAY OF ,2004 UNDER
,2004. AGENDA ITEM NO. .
FOLEY&LARDNER
By:
City Attorney
00842-3
center of Good
HAilivrv./s.s. CITY OF OCOEE REQUEST FOR PROPOSAL
�- f Public Works Department FOR PROPOSED CHANGE
0 'C) 150 North Lakeshore Drive
. �� (407) 905-3100 ext. 1505 (RFP)
\ Ocoee, Florida 34761-2258 (407) 656-7835 -fax NO. (1) ONE
PROJECT DATA:
NAME: Ocoee Crown Point PUD—Phase 1 Infrastructure Project PROJECT NO:
LOCATION: DATE: April&,2004
OTHER: REFERENCE:
TO(CONTRACTOR): Master Site Development, Inc.
Please provide the undersigned a proposal for the following change in the work within seven(7)calendar days after receipt of this request. The written
proposal must clearly delineate the scope of the proposed change in the work providing an itemized estimate of the time and all material and labor(by
trade),subcontract and overhead costs and fees. Any amount claimed for subcontracts must be similarly supported.
DESCRIPTION of change in work: To purchase all the reinforced concrete pipe('RCP")from an alternative supplier located outside of the State of
Florida. This change order is intended to allow an equitable adjustment in the contract price to accommodate the unprecedented upswing in the
commodity price of steel and scrap metal. These unprecedented conditions are causing shortages among Florida fabricators and distributors and
enormous price swings. Accordingly,these fabricators are either not able or unwilling to supply RCP to the Contractor for prices that(1)conform to the
prices that existed at the time this project was let out to bid,or(2) meet the unalterable construction deadlines set forth in the Contract Documents.
Change Order Type: d Deletion d Addition XX Revision d Other:(
Constraints of Change:Nothing contained in this action by the City shall be deemed to constitute a waiver or an estoppel to assert its rights or remedies
under the Contract Documents nor shall it be deemed to set a precedent for an equitable adjustment for any other materials required by the Work.
Initiated by: d Changes in Owner Requirements XX Unforeseen Conditions d Others:( )
Proposal must be received by:
ATTACHMENTS(Listing of attached documents that support description):
1. Contractor Request for Information No. 3 4.
2. Plan Revisions: 5.
3. 6.
d OWNER: David Wheeler—City of Ocoee d CONTRACTOR: Curt Noblitt—Master Site Development
d ENGINEER: Joe Kolb—VHB, Inc. d FIELD: Otis Patton—City of Ocoee
d CONSTRUCTION ADMINISTRATOR: d OTHER: Alex Busto-OCPS
d SUBCONSULTANT:
Date Received From Contractor: Date Returned to Contractor With Comments:
Date Returned to City:
00847-1
PRICING INFORMATION:
Method of Pricing:
A. d Established Contract Unit Price(s)
B. d Negotiated Unit Price(s)(including Overhead and Profit)
C. d Negotiated Lump Sum(including Overhead and Profit)
D. XX Actual Cost of Work plus Fixed Percent for Overhead and Profit
E. d A combination of A, B,C, D
DESCRIPTION OF WORK:
XX By General Contractor d By Subcontractor
ITEM OF WORK QUANTITY PRICE TOTAL
Purchase RCP from
Attach additional pages if necessary.
NET TOTAL COST OF THIS CHANGE PROPOSAL $
EXTENSION OF CONTRACT TIME:
As part of this Change Proposal the Contractor requests an extension of the contract time in the amount of No Days additional days.
Provide thorough documentation in support of the request for additional time: The schedule milestones should not be affected by this change orders
unless a letter from OCPS is provided to allow this date to slide by whatever new date is set.
A requirement of this Change Proposal will be to provide record drawing information for all of the affected items of work
RECOMMENDATION BY ENGINEER/CONSTRUCTION ADMINISTRATOR of the OWNER:
Comments: Due to uncontrollable conditions existing in the commodity markets for steel it is in the best interests of the City to allow this RPC to
be processed as CO#1 to allow an equitable adjustment in the contract price to accommodate these uncontrollable conditions.
Signature of Engineer/Construction Administrator: Date:
ACCEPTANCE BY ORANGE COUNTY PUBLIC SCHOOLS:
Comments:
Signature: Date:
I, ,of agree to the costs and terms of RPP
(Name) (Company) (No.)
this day of ,200
(day) (month) (year)
00847-2
Af
MASTER SITE DEVELOPMENT, INC.
1203 Florida Avenue * St. Cloud,Fl. 34769
407-891-0700(Office) * 407-891-0575(Fax)
March 30,2004
David Wheeler, P.E.
Public Works Director
City Of Ocoee
150 North Lakeshore Drive
Ocoee, Fl 34761
David,
The manufacture of the RCP pipe for Ocoee Crown Point PUD Infrastructure
Phase 1 is Sherman Industries, Inc. 2900 Louisville Road, Savannah, Georgia,
31415.The phone number is (912) 964-2313 and the fax number is (912) 966-5945. If
I can be of further assistance to you please do not hesitate to contact me at the office.
Sincerely,
Curt Noblitt
MSDI
Ocoee_Crown Point Change_Order_l Page 1 of 1
MASTER SITE DEVELOPMENT, INC.
1203 Florida Avenue* St.Cloud,Florida 34769 * (407)891-0700 * (407)891-0575—Fax
Request For Information
To: City of Ocoee Project: Ocoee Crown Point PUD
Attention: David Wheeler Date: 3-30-04
Phone: 407-905-3100 x9-1504 Fax: 407-656-
7835
Request No. 3
Comments:
SUBJECT: RCP Pipe
As you are aware through many daily conversations, the availability of this construction material
in Central Florida is still unavailable. We have thoroughly investigated and researched all
avenues to provide this project in a timely manner. The best verbal commitment that we have
received to date is that the job site would start receiving material 6-10 weeks from today's date.
This would adversely affect the completion date of this project a minimum of 2-3 months. We
have located a supplier out of state that has this material on hand to complete this project. If this
option is approved, material can begin to arrive on site within one week. The following is a
breakdown of costs.
1. Shipping FOB Savannah, GA. $60,183.00
Please advise.
Sincerely,
Curt Noblitt
Master Site Development, Inc.
file://C:\Documents%20and%20Settings\jwashington\My%20Documents\Ocoee Crown ... 4/13/2004