DATE: July 17, 2018
SUBJECT:
Title
RESOLUTION AUTHORIZING CHANGE ORDER NO. 1 TO THE DEMOLITION AND SITE IMPROVEMENTS OF TRANSIT SHED 1 AT TENTH AVENUE MARINE TERMINAL - TIGER PROJECT TO RECOGNIZE VALUE ENGINEERING RESULTING IN A NET SAVINGS OF $967,284 TO CONTRACT NO. 2017-03R WITH $619,035 FOR THE DISTRICT AND $348,249 FOR DICK MILLER, INC.
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EXECUTIVE SUMMARY:
This action will adopt a resolution authorizing a change order to Contract No. 2017-03R - Demolition and Site Improvements of Transit Shed 1 at Tenth Avenue Marine Terminal (TIGER Phase I Project) resulting in cost savings of $$967,248 due to value engineering by the contractor and staff, and will reduce the contract amount from $12,345,678.90 to a total revised contract amount of $11,726,643.90. The cost savings will be split 64 percent to the District ($619,035) and 36 percent ($348,249) for Dick Miller Inc.
Change Order No. 1 (Attachment A) consists of three cost saving elements culminating from the value-engineered efforts resulting in a reduction to the contract amount (Attachment A). The elements are as follows:
1. Transit Shed 1 Pavement Revision: Reduction in new Portland concrete cement pavement (PCC) system and increase in asphalt concrete (AC) pavement system.
2. Re-use of Excavated Soil (Future Office): In lieu of excavating, disposing, and replacing soil from the future staff office site, existing soil will be processed and re-used onsite.
3. Re-use of Excavated Soil (BMP Units): In lieu of excavating, disposing, and replacing soil from the stormwater BMP unit’s area, existing soil will be processed and re-used onsite.
Table-1: Change Order No. 1 Cost Savings Distribution
Funds in the amount of $619,035 will remain within the overall Tiger Project budget and will be utilized in Phase II.
RECOMMENDATION:
Recommendation
Adopt a resolution authorizing Change Order No. 1 to the Demolition and Site Improvements of Transit Shed 1 at Tenth Avenue Marine Terminal - TIGER Project to recognize value engineering resulting in a net savings of $967,248 to Contract No. 2017-03R with the savings divvied, $619,035 for the District and $348,249 for Dick Miller, Inc.
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FISCAL YEAR IMPACT:
Funds needed for FY 2019 are included in the District’s approved Capital Improvement Program. Budget. Funds required for future fiscal years, if needed, will be budgeted for in the appropriate year subject to Board approval upon adoption of each fiscal year’s budget.
Contract 2017-03R Demolition and Site Improvements of Transit Shed 1 at Tenth Avenue Marine Terminal with Dick Miller, Inc. is currently in the amount of $12,345,678.90. Pending Board authorization of Change Order No. 1, cost savings of $619,035 are credited to the District which will reduce the contract amount from $12,345,678.90 to a total revised contract amount of $11,726,643.90.
DISCUSSION:
On October 10, 2017, the San Diego Unified Port District Board of Port Commissioners (Board) approved the plans and specifications and awarded contract No. 2017-03R TIGER Phase I Project to Dick Miller, Inc. in the amount of $12,345,678.90 in the FY 2014-2018 Capital Improvement Program.
On April 5th, 2018, the District’s construction team and Dick Miller Inc. negotiated a comprehensive change order for the TIGER Phase I Project that presents cost savings to the contract through value engineering methods. The contractor proposed 2 out of 3 of the cost savings elements, therefore District Staff recommends the sharing of savings with Dick Miller Inc. and split estimated savings as shown in Table-1. Pending Board authorization, the value engineering cumulative savings of $967,284 will be shared by both parties, in a ratio of sixty-four percent for the District and thirty-six percent for Dick Miller Inc., which in dollars is $619,035 to the District and $348,249 to Dick Miller Inc. The District’s shared savings totaling $619,035 will be used in the future phase of the overall TIGER Project accordingly.
Language in the District’s public works contract does not reference a procedure for splitting cost savings between owner and contractor for proposals initiated by the contractor. Other regional contract documents do identify the method of sharing these types of cost savings. The City of San Diego Standard Specifications for Public Works Construction Whitebook (Attachment-B) and California State Transportation Agency, Caltrans, Standard Specifications (Attachment-C) offer guidance on cost savings that the contract cost be adjusted by crediting the Owner with 50% of estimated net saving amount. Through discussions, the District and Dick Miller, Inc. have negotiated a split savings of 64% to the District and 36% to Dick Miller, Inc. for the comprehensive change order. For more detail on the cost savings elements and cost savings distribution between District and Dick Miller, Inc. please refer to Change Order No. 1 (Attachment A).
GENERAL COUNSEL’S COMMENTS:
The Office of the General Counsel has reviewed this changes order and approves as to form and legality.
ENVIRONMENTAL REVIEW:
The proposed Board actions would authorize a change order to the Demolition and Site Improvements of Transit Shed 1 Project (TIGER Project - Phase I) at the TAMT, which involves (1) Reducing the Portland concrete cement pavement system and increasing the asphalt concrete pavement (PC) system; (2) Reusing the excavated soil from the future staff office onsite in lieu of transporting and disposing the soil offsite; and (3) Reusing the excavated soil from the stormwater BMP area onsite in lieu of transporting and disposing the soil offsite. The potential environmental impacts of the Project were previously analyzed in the Final EIR for the Tenth Avenue Marine Terminal Redevelopment Plan and Demolition and Initial Rail Component Project (TAMT Final EIR) (SCH No. 2015-031046), which was certified by the District on December 13, 2016, Resolution No. 2016-199. District staff has reviewed the proposed actions and has found them consistent with the Project analyzed in the TAMT Final EIR. The proposed Board actions are not a separate “project” for CEQA purposes but are subsequent discretionary approvals related to a previously approved project. (CEQA Guidelines § 15378(c); Van de Kamps Coalition v. Board of Trustees of Los Angeles Comm. College Dist. (2012) 206 Cal.App.4th 1036.) Accordingly, the proposed Board actions are merely a step in furtherance of the original Project for which environmental review was performed and no further environmental review is required.
In addition, the proposed Board actions comply with Section 87 of the Port Act, which allows for the construction, reconstruction, repair, maintenance, and operation of wharves, docks, piers, slips, quays, and all other works, buildings, facilities, utilities, structures, and appliances incidental, necessary, or convenient, for the promotion and accommodation of commerce and navigation. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed Board actions are consistent with the Public Trust Doctrine.
Finally, on December 13, 2016, the District authorized issuance of a non-Appealable CDP (CDP-2016-09) to allow for the demolition of Transit Sheds 1 and 2, completion of the initial rail improvements and completion of other site improvements, Resolution No. 2016-201. District staff has reviewed the Board actions and has found them consistent with the CDP. No additional action under the District’s CDP Regulations is required.
EQUAL OPPORTUNITY PROGRAM:
A 12% SBE goal was established for this contract. Dick Miller, Inc., is a certified SBE and identified SBE’s as part of their team exceeding the 12% goal.
PREPARED BY:
Rudy Zelaya
Assistant Engineer, Engineering-Construction
Attachment(s):
Attachment A: Changer Order No. 1 - Demolition and Site Improvements of Transit Shed 1 at Tenth Avenue Marine Terminal
Attachment B: City of San Diego Standard Specifications
Attachment C: Caltrans Standard Specifications