HomeMy WebLinkAboutRPT 2 COST OVERRUNS 02-19-85.AGENDA
DATE:
FEBRUARY 13, t985
RE~ORTS
NO. 2
2-19-85
Inter- Corn
TO:
FROM:
SUBJECT:
WILLIAM HUSTON, CITY MANAGER
DALE A. WICK, ASSISTANT CITY ENGINEER
MOULTON PARKWAY/IRVINE CENTER DRIVE FAU PROJECT M-M032(O04)
CONTRACT CHANGE ORDER COST OVERRUNS - INFORMATIONAL REPORT
RECOMMENDATION:
It is recommended that the City Council., at t~eir meeting of February 19, 1985,
receive and file this informational report.
BACKGROUND:
Subject project encompassed construction of 2.5 miles of 4 and 6 lane roadway with
two bridges and three major flood control structures. The work is now complete.
During the course of the project 33 contract change orders were written at a total
cost of $648,000.00. These contract change orders fall into three categories as
tabulated below:
TOTAL FAU LOCAL
COST SHARE SHARE
(1) Agency or CalTrans initiated ........
(2) Unknown factors encountered
during construction .................
{3) Necessary to correct plan errors
and ommissions ......................
$ 96,300.00
402,200.00
149,500.00
$ 83,029.86
346,776.84
128,898.90
$ 13,270.14
55,923.16
20,601.10
Two of the contract change orders which felt into the third category were
previously brought before the City Council for their approval, due to the
magnitude of funds involved. These two change orders alone accounted for
$120,000.00 of the amount in category three. At that time, it was indicated to
the City Council that staff would investigate the feasibility of seeking
reimbursement from the Design Consulting Engineer through his errors and
ommissions insurance. The Consulting Engineer has indicated that any
reimbursements through his insurance would have to be decided through litigation.
DISCUSSION:
This project is federally funded and administered thru CalTrans. The share ratio
is federal funds 86.22% and city funds 13.78%. Thus, actual cost to the city for
the change orders in category three is $20,600.00. 86.22% of any monies
recuperated would have to be refunded thru CalTrans to the Federal Government.
FEBRUARY 13, 1985
PAGE 2
Because of this fact, staff made a complete .analyzation report of all 33 contract
change orders. This report was forwarded to CalTrans for their review and
recommendations regarding the feasibility of attempting to recoup our losses,
since they would stand to gain the most. CalTrans response was "that we would
have little or nochance in court" of obtaining a judgment against the Design
Engineers insurance company. This opinion was based on their experience in
similar cases. Thus, CalTrans would not support or contribute toward any legal
expenses which we might incur and should the city lose its case, the $20,600.00 we
would stand to gain could easily be offset by legal expenses. The City Attorney
has reviewed this memo and concurs with both CalTrans and staff that cost to
recoup any of these amounts could surpass any potential settlement.
Consequently, it is staffs recommendation that no further action be taken on thi.s
matter.
Dale A. Wick
Assistant City Engineer
DAW:jr
CC:
City Clerk
City Attorney
Finance Director