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HomeMy WebLinkAboutagenda.council.worksession.20111206 r THE CITY OF ASPEN MEMORANDUM TO: Mayor and City Council FROM: Chris Everson, Affordable Housing Project Manager THRU: Barry Crook, Assistant City Manager E G DATE OF MEMO: December 2, 2011 MEETING DATE: December 6, 2011 RE: Burlingame Phase 11 Presales and Infrastructure Construction Contracting REQUEST OF COUNCIL: Direction requested on Burlingame Phase 1I PREVIOUS COUNCIL ACTION: At the September 27, 2011 City Council work session, Council directed staff to produce 60 mortgage - prequalified applicants which may allow Council to consider starting construction of infrastructure in 2012. BACKGROUND: On March 22, 2011, staff proposed a multi -part plan for presales, which is in progress. On September 27, 2011, the status of the presales effort was reported by staff to Council as 206 total applicants with 68 of those APCHA qualified. DISCUSSION: Presales Status: Currently, the presales tally is as follows: ✓ 231 total applicants ✓ 81 of 231 are APCHA - qualified ✓ 28 of 231 are APCHA - qualified with mortgage preoualification (8 additional applicants are finalizing their paperwork and are expected soon) Additionally, the 505 City Employee Housing Fund has contributed funds toward 4 to 6 units, and Aspen Valley Hospital is in the process of demonstrating commitment to the purchase of 3 or 4 units. Thus employer purchases account for 7 to 10 units at this time as well. A breakdown of the presales results to date is as follows: Current Housing Type AmongAPCHA- qualified: ✓ 55 of 81 currently rent housing (68 %) ✓ 18 of 81 own deed restricted housing (22 %) ✓ 8 of 81 currently 'other" (10 %, 7 own free market, 1 unknown) Current Housing Location Among APCHA - qualified: ✓ 71 of 81 Up- valley (88 %, Aspen, Snowmass, Woody Creek) ✓ 10 of 81 Down - valley (12 %, Basalt, Carbondale, Glenwood) Page 1 of 5 THE CITY OF ASPEN Unit Size Need Among APCHA - qualified: ✓ 30% 1Bedroom ✓ 36% 2 Bedroom ✓ 35% 3 Bedroom ✓ These are within 7% of current plans Current Housing Category Among APCHA - qualified: ✓ 2.8 average category compared to 3.6 currently planned average category ✓ This could be a risk of increased subsidies to the project if Council decides to lower the average category of the project. Given the current presales progress achieved in only a limited amount of time, staff is confident that the goal of 60 mortgage- prequalified applicants can be achieved by the end of the first quarter of 2012 and that a commitment by the City to continue moving forward with construction of infrastructure in 2012 will induce more qualified applicants to sign up. Staff thus recommends that Council allow staff to continue to pursue 60 presales applicant mortgage prequalifications so that Council may provide a final "go or no -go" decision before "final GMP" infrastructure contracts are signed and infrastructure construction begin. "Final GMP" Infrastructure Construction Contracting: Since early 2010, Integrated Project Delivery (IPD) has provided a framework for collaboration among the City's Burlingame Phase II design team and has yielded highly effective results to date. One key element of IPD is that the process leverages contributions of knowledge and expertise from all of the IPD team members early in the design process. The design portion of the Burlingame Phase 11 IPD effort is due for completion in the first quarter of 2012. Based on the current status, the results appear to be exactly what the City has hoped for: a design based on input from the community with additional informed input from the IPD team to create a highly - efficient, cost - effective, sustainable, high - performing design with a flexible phasing plan, a guaranteed maximum price (GMP) proposal for construction as well as a 3D construction model in hand for effective clash detection to streamline the construction process. By the time the IPD design effort is complete, Haselden Construction will have created over 10 iterations of the detailed project construction estimate, with 4 of those estimates guaranteed to the City and all of them 100% transparent — with detailed line item costing and subcontractor bids included for the City and its consultants to readily review. Haselden Construction has collaboratively created the Burlingame Phase II Construction Management Plan, which has exceeded the highest standards that the City has seen. Haselden has conceived an on -site, modular approach to the construction that will allow the City to achieve factory -built quality Page 2 of 5 1 THE CITY OF ASPEN with local labor resources, and Haselden will be in possession of a 3D construction model for the project. Staff recommends that Council provide direction to draft the Burlingame Phase IIA "final GMP" infrastructure construction contract with Haselden Construction and continue with the IPD contract approach, based on the following rationale: 1) Haselden Construction has completed a significant quantity of work for Aspen Valley Hospital since their selection for the City's Burlingame Phase II IPD design effort. Dave Ressler, AVH CEO, highly recommends Haselden Construction based on Haselden's "over the top" accommodation of AVH's needs and "overwhelmingly positive" results with the neighbors in managing the construction currently in progress at AVH where Haselden is both on budget and on schedule at this time. 2) Haselden Construction was chosen as the Burlingame Phase II IPD preconstruction contractor based on their strong capabilities, qualifications, experience, references, financial strength, construction fee and safety performance as compared to peers in their industry. The only element that was not a factor in the prior selection of Haselden Construction was the price to construct the project, which at that time was unknown. 3) The City's owner's agent, Rider Levett Bucknall, and an additional independent third party, Basalt -based Summit Consulting, have reviewed the current GMP submitted by Haselden for the Burlingame Phase IIA infrastructure package — which is still based on the 100% Detail Design documents package. Those reviews are attached and describe recommendations for the City in agreeing on a "final GMP" with Haselden based on the forthcoming Construction Documents in progress by the IPD team. In the event that Haselden Construction can agree to modifications in the "final GMP" which address the recommendations in the attached reviews to the satisfaction of the IPD team, then those reviews suggest that Haselden will be providing value consistent with the market to the City for the Phase IIA infrastructure construction. This conditional approach to completing the "final GMP" and Phase 11A infrastructure construction contract with Haselden will maintain the City's leverage through contract execution. 4) Given the complexity of the current plan to phase the delivery of the overall project and the need to closely manage the construction impacts to the existing neighborhood at Burlingame Phase I, it is critical that a single, knowledgeable, highly - capable, highly- experienced General Contractor be utilized to oversee the entire project to mitigate risks related to scope integration, warranty, coordinated construction management, insurance and bonding. 5) Per the AIA IPD process, the City has made a sizeable investment in Haselden Construction by including them in the preconstruction design effort, thus Haselden Construction is holding Page 3 of 5 THE CITY OF ASPEN a large amount of information capital related to this project which would be lost if the City were to change contractors at this stage of the development. 6) Haselden's current GMP reflects competitive subcontractor pricing from the 100% Detailed Design documents. The IPD team expects that with the increased detail of the final Construction Documents, subcontractor pricing will remain stable or continue to trend downward, keeping the final GMP within the current budget. The subcontractor community will provide best and final bids after the Construction Documents are issued in early 2012. In addition to the recommendations cited in the attached reviews, this will contribute to the generation of the "final GMP" pricing for the 2012 infrastructure contract. 7) If Council chooses instead to go out to bid, the IPD team sees limited benefit. Given a re -bid to the market would likely be served by the same pool of qualified, large, second -tier subcontractors, the only other major variable a General Contractor can change is the fee. An additional risk to the City would be if GC bids propose to exclusively use the lowest subcontractor bids (rather than the most responsible bid of best value to the City), in which case subsequent change orders could offset any perceived savings or could cause the need for the City to later have to fix unacceptable, substandard work — or both. At the time of the IPD contractor selection Haselden had the most competitive General Conditions and contractor fee percentage among other finalists, as is still the case in their current GMP. 8) Due to the significant amount of collaboration and information traded between OZ Architecture and Haselden Construction during the design process, OZ would need to re- educate a new contractor which would cause an increase in architect fees. 9) At the conclusion of the IPD design effort, Haselden will have a completed 3D model of the project that will be used for physical conflict resolution and construction process streamlining much like they are doing at Aspen Valley Hospital. No other contractor could possibly have this high level of information about the project. In choosing another contractor, the City would be forfeiting this significant supply of information capital. FINANCIALBUDGET IMPACTS: At this time, staff is only requesting confirmation to prepare a "final GMP" contract for the 2012 infrastructure construction. While further year -on- year estimates for the completion of the project cannot be guaranteed due to the potential for significant economic changes, the current long range estimate for Burlingame Phase II is below: Page 4 of 5 EXHIBIT A RLB Rider Levett Bucknall 1621 Eighteenth Street Suite 255 Denver, Colorado 80202 T: +1 720 904 1480 F: +1 720 904 1481 December 1, 2011 Mr Chris Everson email: chris.everson @ci.aspen.co.us Affordable Housing Project Manager City of Aspen 130 South Galena St Aspen, CO 81611 BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE - HASELDEN GMP REVIEW Dear Chris, The purpose of this report is to review for reasonableness the Haselden initial GMP for the 2012 Civils and Infrastructure work (dated September 21, 2011). The documents used for the review include the following: • BRPII - Phase 2a 100% DD design issued by Alpine Engineering Group (dated 10/20/10) • BRPII — Oz Architecture 100% DD Design for the full project (dated 9/2/10) • Note - there is not a specific breakout set at this stage for the 2012 Phase 2a Civil work This GMP package was compiled by Haselden to respond to a "capped expenditure" driven scenario requested by the IPD project team. The Phase 2a Civils plans include Buildings 1 thru 7 being constructed, which is not the case for the 2012 Civils work, therefore Haselden compiled this GMP based on the intent of the Phase 2a Civils Designs with some assumptions regarding how building pads and layback are dealt with. The 2012 Civils and Infrastructure GMP generally includes the full site excavation and grading, road base to the new Paepcke Road and parking lots 1 thru 7, one lift of asphalt from Mining Stock to the new cul -de -sac and utilities terminating at the cul -de -sac. These are detailed in the attached Haselden summary. Design changes since this September 21 GMP will have an affect on the overall GMP total, and this report does not address the impact of these potential design changes, but we feel as though the Haselden estimating contingency and escalation allowances ($243,000 total), as well as the Owners contingency should be sufficient to cover these scope changes. Design changes include the drainage revisions, permeable pavers, move to installing the long loop of utilities from the cul -de -sac to Harmony Pond, drainage and waterproofing at the carport back walls as well as the irrigation /pumps at Pond 2. We have structured this report to address the buildup of the direct work, the Haselden Construction Markups and then the GMP process. Page 1 of 7 r THE CITY OF ASPEN Burlingame Phase II Total Project Expenditures and Revenues — Long Range Estimate Year(s) Expenditures Revenues Includes 1997 -2011 $12,495,685 $2,300,000 Shared cost allocations, land, mitigation, fees, design, soft costs / 505 City employee fund advance sales revenues 2012 $9,360,000 $0 Permitting, Tap Fees, Infrastructure and Access Construction for Phase IIA. Underground electrical & utilities. 2013 $16,770,000 $4,100,000 Construction and sales, buildings 1 & 3 2014 $5,490,000 $6,020,000 Construction and sales, buildings 2, 4 & 5 (units for 505 fund) 2015 $12,470,000 $11,930,000 Construction and sales, buildings 6 & 7 (units for 505 fund) 2016 $0 $0 Interim Condition 2017 $0 $0 Interim Condition 2018 $0 $0 Interim Condition 2019 $5,970,000 Permitting, Fees, Infrastructure and Access Construction for Phase 11B 2020 $14,960,000 $12,600,000 Construction and sales, buildings 8, 9, 10 & 11 2021 $18,800,000 $17,500,000 Construction and sales, buildings 12, 13 & 14 Total $96,310,000 $54,390,000 Subsidy $41,920,000 $260,000 * Subsidy per unit for 161 multifamily units only. Six RO total per unit single family residences to be sold at cost with no subsidy. Includes all costs and revenues directly attributable to the Burlingame Phase I1 affordable housing development with the exception of solar p/v or hot water preheat systems which may be added by Council. Costs included for baseline landscape handover condition of on -site parks, but costs for final completion of on -site parks (to be completed by the City Parks Department) is not included. Projected revenues are based on categories currently described in land use approval ordinance 22 series of 2011, which may be modified by City Council. 10% contingency applied to all future costs. RECOMMENDED ACTION: 1) Continue to pursue 60 presales applicant mortgage prequalifications 2) Prepare "final GMP" contract for Phase IIA infrastructure with Haselden Construction as General Contractor 3) In early 2012, Council to provide a final "go or no -go" decision before contracts are signed and infrastructure construction can begin CITY MANAGER COMMENTS: ATTACHMENTS: Exhibit A: Rider Levett Bucknall review of current Haselden GMP Exhibit B: Summit Consulting review of current Haselden GMP Page 5 of 5 EXHIBIT A December 1, 2011 RLB Rider Levett Bucknall Chris Everson, Affordable Housing Project Manager BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE — HASELDEN GMP REVIEW SECTION 1 - DIRECT WORK COSTS 01A PROJECT LOGISTICS One of the larger packages of work, we query if $150,000 of temporary access roads will be necessary, given the civil work will be generally cutting at the south side of the project and transporting this for fill to the north of the project site. A temporary road is detailed in the CMP, so while this cost is reasonable if the road is required, utilizing the formed long loop of Paepcke Drive and working backwards, out of the site regarding the road and utility install may offer some savings. We think this item should be discussed more in the IPD team meetings. A dedicated traffic control flagman has been included in the CMP, and the GNP includes 1200 hours for 171 hours per month. This flagman should be provided at the listed laborer rate of $39.97 for a deduction of around $10,000. 01D SNOW REMOVAL For May to November work, snow removal of $38,491 should not be required. Given the earthwork subcontractor will have a number of machines, as well as skid - steers on site, we recommend that snow removal be treated as a construction allowance in the 2012 GMP and paid from this allowance to avoid potential double up of snow removal work and work included under subcontractors. Dunrite included snow removal for their scope of work and GCI offered an additional $200 /hr for a loader and $85 /hr for a skid steer - which for a four hour snow cleanup to the road would cost $1,140 /day. We suggest a May to November allowance of ten snow cleanups at $10,000 would be reasonable. A skid steer is also included in 01G Erosion Control and can perform this activity adequately. 01E SITE SURVEYING AND LAYOUT This package appears reasonable, but must be a bid package to Registered Surveyors to set the site boundary and appropriate datums etc for the earthwork and utility contractors to work from. 01G EROSION CONTROL Given the focus of water quality in Aspen and the large open cut created by this package, erosion control gets some focus, with over 35,000 SY of erosion control blanketing and a full perimeter silt fence to the site. We suggest the erosion control blanket quantity is reviewed, due to the fact that with the 4,552 SY of erosion control at the diversion ditch, 61 % of the site is set to receive erosion control blankets. Given the topography of the site, the $15,000 dewatering allowance may not be required but is an appropriate inclusion given in- ground unknowns. 02A DEMOLITION Demo appears reasonable and we believe the larger cost item for Asphalt Patch back for utilities should be included in the bid package for the bulk asphalt work to the new road. This should achieve some pricing economies. 02B EARTHWORK Obviously the major line item of this package, the earthwork package is driven by quantities supplied by Alpine Engineering Group. At the final GMP we will require that subcontractors hold a lump sum rate and evaluate their own quantities rather than provide unit rates. The quantities utilized and rates appear reasonable and consistent with the bids received. For the final GMP we request that the subs be required to complete a detailed line item bid form with separate line items mobilization, direct work, general conditions, overhead and profit. This way the cost of the work can be evaluated more easily. In the initial unit pricing exercise mobilization appears to have been a placeholder for normal subcontractor overhead and profit, driving a noticeably high cost in some instances. Haul off site is an Page 2 of 7 EXHIBIT A December 1, 2011 R LB Rider Levett Bucknall Chris Everson, Affordable Housing Project Manager BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE — HASELDEN GMP REVIEW allowance of around $48,000 and further discussion should be have if Parks or other City Departments can utilize this fill which can simply be stockpiled on site, thus removing around $48,000 from the GMP. 02C BOULDER WALLS Data from Alpine indicates there will be sufficient boulder material on site to install the mile of boulder walls. Given the large equipment involved and requirement to bed these on a %" base, with compacted backfill and filter fabric, the rate and cost appears reasonable. 02D ASPHALT PAVING /PAVEMENT MARKERS The bulk of this package is the 4,488sf of asphalt to the new road up to the cul -de -sac. The rate includes for both lifts of the 4" depth asphalt, although the intention at this stage is to install the second lift after the first buildings are constructed. This needs to be discussed to address the greater risk of damage, to the final finished road, or curbs and gutters. 02G SITE CONCRETE The rates and quantities of this package are reasonable. 02H UTILITY — WATER The rates and quantities of this package appear reasonable, however we note that the re -use line length will reduce significantly given the BRPII project will now pick up the 10" Re -use water -line less than 100' from the boundary, so this re -use cost should drop by over $40,000. 02J UTILITY — STORM SEWER For the basis of this design, the Storm Sewer rates and quantities appear reasonable. The one item we query when we interrogated the subcontractor bids is the cost for the drywells. These ranged from $7,230 to $22,316 each. Given the drainage design has changed to include more drywells, the final GMP bid clarifications should detail what the drywell rate must include (i.e. excavation, placement, filter fabric, manhole cover, washed aggregate etc). 02K UTILITY —DRY UTILITIES The dry utilities overall appears reasonable but more intensive recent work on the undergrounding of the Holy Cross electric line has revealed that the material will be purchased from Holy Cross and can be placed on site by the BRPII subcontractors. The unit rates for the Holy Cross Ductbank and Vault Placement may need to be increased to reflect this supply arrangement. 02L LANDSCAPING /IRRIGATION This quantity and unit rate appears reasonable for the drainage Swale. 02M — FENCES GATES The CMP calls out a 6' high fence with screen which we assume is chainlink with wind /dust mesh. The unit rate for fence installation appears reasonable, but the maintenance is at the high end of the range. Given the project phasing, this fence could be replaced in its entirety given the maintenance rates. Some clarity is required regarding where the cost for moving or removing the perimeter fence is held as the project rolls out building pods. 15A — MECHANICAL SYSTEMS • The quantity and unit rate appears reasonable for the sumps. Page 3 of 7 EXHIBIT A December 1, 2011 R LB Rider Levett Bucknall Chris Everson, Affordable Housing Project Manager BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE — HASELDEN GMP REVIEW 16A — ELECTRICAL SYSTEMS The bulk of this cost is $50,000 for conduit and vaults /tees relating to the site lighting. It appears that this is a plug number, but is a reasonable allowance for the extent of site lighting conduit required across the project. CARPORTS /PARKING One observation for this package is that there is the potential that the quantity of backfill for strip footings and walls is included in both the site bulk excavation and the carports. The Alpine volume for excavation and embankment totals 90,695 CY held in 02B Excavation, so there should be a deduction of this volume to account for the sloped backfill adjacent to the parking retaining walls. The order of this is a $42,000 deduction for Parking 1 thru 7. However, this deduction may be offset by the enhanced waterproofing behind the concrete carport walls. The concrete volumes used appear reasonable and the unit rates for concrete strip footings, pad footings and walls are very competitive. SECTION 2 - MARKUPS During the competitive contractor selection in early 2010, Haselden had the most competitive Overhead and Profit and fee, as detailed in the slide below presented to CoA Council in March 2010: City o f Bur l ingame Phase II IPD Team Selection 7 "` _ AB, A 'aspen ,A3rch 2010 Fa, 1= Contractor at Risk RFP Evaluations :• Comparison of Overhead & Profit and General Conditions Costs ' Overhead & General EXAMPLE OF COST based FIRM NAME TOTAL Profit Conditions on $100 million project Haselden Construction 2.10% 3.76% 5.86% $5,860,000 CFC / John Olson Builder 3.35% 4.17% 7.52% $7,520,000 Shaw Builders 3.50% 5.90% 9.40% $9,400,000 1 :• These costs apply ONLY to the construction phase. not design phase Contractor's construction phase fees are much larger than preconstruction fees Committee was cautious about selecting a contractor with low design phase costs and high construction phase costs Since the original RFP, the project has been broken into smaller multiple phases and the increase of Haselden's Overhead and Profit to 3% is reasonable, reflecting the changed schedule of the project. Page 4 of 7 EXHIBIT A December 1, 2011 RLB1 Rider Levett Bucknall Chris Everson, Affordable Housing Project Manager BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE — HASELDEN GMP REVIEW General Conditions which were initially fixed for a 30 month, 167 unit project are now extended over a number of years, and we feel as though the rates that may have been appropriate for lump sum GCs based on a single phase project should be reviewed prior to establishing the 2012 GMP. Two examples of this are: • Annual escalation of 4% to material and labor rates appears high. We suggest the 2011 rates be fixed, or the escalation rate is lowered even if only in the short term until 2015. • Company vehicle rates appear high at $2,864 /month. For a generous $500 /month lease, $4,000 /year maintenance allowance ($333 /month) and two $80 tanks of gas /week comes to around $1,500 /month. This requires review. Our detailed review of General Conditions established that for the original 167 unit single phase GMP, GCs were 6.3% of the direct costs. For the 2012 Civils, the GCs are 10.6% of the direct costs. The Direct Cost for the 2012 work is 9% of the 167 unit GMP, but the duration is 23% (i.e 7 months /30 months). Proportionally, the 2012 GCs are 16% of the full project GCs. So, given the schedule is 23% of the full project, with less overlapping work reflected by direct costs of 9% of the full project, 16% appears within the range of what could be extrapolated from the base bid. The bulk of the GCs are driven by supervision and is 60% of the total. The level of supervision implies 2.75 FTEs for the civils work, which appears reasonable. We believe the GCs should be a point of negotiation with Haselden, particularly in establishing agreed project labor unit costs, appropriate vehicle costs, and interrogating a number of smaller line items such as RFTA Bus Passes $6,400 (as well as vehicles), and the unit costs for cell phones ($122 /mo), Telephones ($270 /mo), water coolers ($487.65/mo) and radios ($98 /mo). Overall, GCs are not unjustifiable, but some are at the high end of the range. SECTION 3 — THE GMP PROCESS We have two items to point out with the Haselden 2012 Civils GMP, and these require discussion and agreement between CoA and Haselden (the boxed excerpts are from the Haselden GMP clarifications): al Self Performed Work Owner and Contractor agree to clarify the provisions of the Agreement by adding the following term; a. The Contractor shall provide a bid on any portion of the Work that the Contractor intends to perform, and shall solicit up to three additional bids from subcontractors. If the Contractor is chosen to perform the work, then such work shall be performed for the Contractor's bid amount on the basis of a Stipulated Lump Sum, and shall not be subject to the cost documentation requirements of the Agreement. Self performed work requires more definition and for the 2012 Civils, we believe a/ Haselden must clarify the packages they intend to bid on, prior to issuance of the bid documents. b/ Haselden must notify other bidders of the packages they will be bidding on so as to ensure open and competitive bidding where they will be both bidder, and bid reviewer /recommender. c/ That bids for Haselden self Page 5 of 7 EXHIBIT A December 1, 2011 R LB I Rider Levett Bucknall Chris Everson, Affordable Housing Project Manager BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE — HASELDEN GMP REVIEW performed work close 24 hours in advance of other outside subcontractors. d/ We query why they are proposing that their self performed work not be under an open book scenario subject to the review and audit inherent in the overall GMP? b/ Contingency Use b. The estimated cost of the work shall include Contractor's contingency, a sum established by the Contractor for the Contractor's exclusive use to cover costs which are properly reimbursable as cost of the work, but not the basis for a change order. This includes but is not limited to costs attributable to errors and omissions by the Contractor; costs to correct defective, nonconforming or damaged work; costs related to items necessary only to the extent consistent with the Contract Documents and reasonably inferable from them as being necessary to produce the indicated results; overtime and acceleration costs to meet contract schedule; and costs, including legal fees, for contractual disputes. Contractor shall provide a reconciliation to Owner, as required, to document the utilization of the contingency. The Contractor's contingency shall not be utilized for Owner scope changes, unknown conditions, Architect errors and omission or other costs which are the basis for a change order. Contractor's contingency must not include for legal fees. Furthermore, we would argue that subcontract bids must include for items that would be "reasonable inferable and necessary to produce the indicated results" and that defective work must be rectified by the subcontractor, rather than being an additional cost to the owner. We also recommend that expenditure against this Contingency must be formally applied for in a manner similar to a Change Order, rather that the Contingency being a contractors reserve for which the City may have no control. We agree that this Contingency should not be used for scope, or omission driven Change Orders. SUMMARY Key items from the detail above are: 1. The Flagman rate should be adjusted downward to reflect the listed Laborer rate. Instructions to trade bidders should be clear that traffic control is being held separately. 2. Snow removal. It is summer construction, so snow removal could be treated as an allowance to call upon, or the excavation and utility subcontractors should be requested to include this in their lump sum bids. 3. Drywell costs need to be all inclusive and broken out for review in the final GMP. 4. Maintenance of the site fence is at the high end of the range, particularly given the total that will result from the phased schedule. 5. The high voltage electrical undergrounding rates may require adjustment to reflect material supply from Holy Cross and an install only by the subcontractor. 6. Electrical site conduit appears to be an allowance but is reasonable. 7. Carport backfill volumes appear that they should be deducted from the overall excavation fill volume. 8. Given the IPD contractor selection, 3% should be confirmed with Haselden as the Overhead and Profit for the entire project duration, including subsequent vertical work. Page 6 of 7 EXHIBIT A December 1, 2011 RLB Rider Levett Bucknall Chris Everson, Affordable Housing Project Manager BURLINGAME RANCH PHASE II 2012 CIVILS INFRASTRUCTURE — HASELDEN GMP REVIEW 9. Review and negotiate annual escalation applied to labor and material rates and revise /negotiate some of the listed labor and material rates in the General Conditions. 10. Review 2 new GMP clauses added to the September 21, 2011 GMP for management of Self Performed work and management of the Construction Contingency Some smaller direct cost items in the initial 2012 GMP could be adjusted downward but the higher cost items overall appear reasonable, competitive and reflective of the project scope and phasing. We note that minor revision, review and negotiation is a common part of finalizing a construction contract and do not see that any of these items above are out of the ordinary. The final GMP will also be based on a more developed 95% Construction Document set of drawings issued to the subcontractor marker. CONCLUSION Overall, the Haselden GMP appears to be well compiled, reasonable and sufficient to complete the 2012 Civils and Utility work. This GMP is predominantly based on repackaging of competitively bid subcontract packages to reflect new phasing. Some design changes currently underway will adjust the GMP but we see that the 2012 overall project budget is sufficient to incorporate these. We feel as though given the changes in the project phasing from the initial RFP, the City should negotiate with Haselden a number of the rates and values for General Conditions for the re- phased project delivery. Response to some minor contractual items relating to how the GMP and Contingency is administered will also streamline management of the construction phase. If Haselden can agree to these adjustments in their final GMP then we see that for the construction phase, the City of Aspen will have strong contractual standing and attain good value, consistent with the market. We trust this is of assistance. Please contact us for any queries relating to this report. As always, we are happy to meet with to discuss our observations. Sincerely, Rob Tar Associate, BE. PSP Rider Levett Bucknall Ltd Page 7 of 7 EXHIBIT B S UMMIT CONSULTING December 1st, 2011 Mr. Chris Everson Affordable Housing Project Manager City of Aspen 130 South Galena Street Aspen, CO 81611 cc: Rob Taylor, PSP Re: Peer Review of the Burlingame Phase II - 2012 Construction Pricing Dear Chris, Below you will find our bid evaluation for the Burlingame Ranch Phase II Project. This evaluation is based on the 100% DD's GMP 2012 Civil Infrastructure ONLY document dated September 21st, 2011 that was created by Haselden Construction. Overall we have divided this report into four different sections: 1) Haselden Unit Price Evaluation 2) Haselden Scope of Work Evaluation 3) Haselden General Conditions Evaluation 4) Project Design Comments It is important to note that Summit Consulting has not performed any quantity checks, but is commenting on unit pricing and larger scope items that appear to be missing, deficient or inflated unit pricing. Haselden Unit Price Evaluation Subcontractor Unit Prices - Haselden appears to have appropriately adjusted their 2012 GMP and DRAFT Budgets summary, dated September 21st, 2011, to reflect the feedback received in the 2010 pricing exercise. There are multiple examples (63 line items) where Haselden has adjusted the Unit prices between their Bid Recap (11 "x17" document) and their GMP. Most of the time they adjusted their unit prices up to more closely align with the feedback that they received from the subcontractor bids. The unit pricing contained in the subcontractor bids generally conforms to our historical data for the Roaring Fork Valley. GMP Process - Christian Ekstrom states that Haselden will bid out the 100% Implementation Documents to the subcontractor community for all scopes of work in his letter to Chris Everson dated 9/21/11. While Haselden performs this component of their pre- construction contract, we would recommend that they receive bids using a uniform bid form. Not having the subcontractor bids in the same format as the master bid form made it difficult to 'roll up' the bids into the Haselden master bid form. Therefore, we would recommend that when the next round of bidding occurs, that it occur using the same bid form that Haselden is using on their master form (or a modified version from Haselden). This will make it easy to compare bids and make it easy to know that you will be selecting the correct bidder. Since the Haselden GMP does not consistently follow any specific subcontractors unit prices, it should be confirmed that the unit prices that Haselden shows on the GMP estimate will be honored by whichever subcontractor wins the job. Haselden Unit Price Adjustments - Here are two specific examples of where Haselden adjusted their unit prices to reflect subcontractor feedback: 02B Earthwork - Clear & Grub Site - Recap unit price was $0.48 / SY and their GMP adjusted unit price is $0.75 / SY. Summit Consulting's historical data shows $0.50 / SY for clear & grub, however on three subcontractor bids the price was above both Haselden's & Summit Consulting's historical unit pricing. Specifically; Subcontractor A was Summit Consulting, Inc. 210 Lakeside Ct Basalt, CO 81621 970 - 418 -0233 mkeeling ©cosummitconstruction.com EXHIBIT B AIL $0.95 / SY, Subcontractor B was at $0.94 / SY & Subcontractor C was at $0.63 / SY. Based upon these bids the Haselden number of $0.75 appears to be reasonable. 02C Boulder Walls - Boulder Retaining Walls - Recap unit price was $103 / LF and their GMP adjusted unit price is $43.62 / LF. Our historical data shows $57 / LF for on -site boulder retaining walls. The four adjusted subcontractor numbers that were received were Subcontractor A at $29.29, Subcontractor B at $40.27, Subcontractor C at $44.69 & Subcontractor D at $45.89. Based upon these bids, the Haselden number of $43.62 appears to be reasonable. These are just two examples of the work that Haselden did to produce the GMP as it stands today. As stated above, there are 61 other line items where similar logic occurred. Maintain Construction Fencing - We would recommend that this line item be tracked by man hours, not a monthly unit price. Most likely a laborer whose cost is covered under the 01A Project Logistics will be performing this work as a normal task. In order to protect from being double charged this line item should be tracked by man hours. Earthwork Mobilization -We believe that the line item Earthwork Subcontractor Mobilization is high. This line item is mostly a fee pocket and actual mobilization costs are far less than the $90,000 proposed for 2012. We would recommend that this line item be decreased to a maximum of $25,000 for 2012 and $15,000 for 2013 with the current scope of work. There are two advantages to getting the subcontractors to all have a lower & similar mobilization cost. The first advantage is that the Owner will spend less money up front for the work that will occur. The second advantage is that it will be easier to compare the subcontractor bids as the mobilization is usually the line item that contains the largest differences between subcontractor bids. We recommend that Haselden should challenge / negotiate with the subcontractors prior to entering into a final GMP to act in the best interests of the Owner. • Haselden Scope of Work Evaluation Quantity Take -offs - The overall Haselden site estimate has trended downward from the recap sheet and subcontractor estimates that were provided to Summit Consulting for review. This is primarily attributable to a decrease in scope as directed by the City of Aspen staff and RLB. Because of this, there are multiple examples (98 line items) where Haselden has adjusted the quantities between the Bid Recap and the GMP. Since the scope of work is evolving (as in all construction projects) we recommend that the Owner incorporates language into the final GMP to ensure that all discrepancies related to quantities shall be the Contractor's responsibility, therefore limiting the Owner's risk exposure. Construction Coordination with work at Forge Road - At the end of Forge Road (near the North entry to the project) there is an existing bus pull off and a trash facility. Haselden's scope of work does not appear to go into the detail necessary to complete the utility work in this area without shutting down the bus route & closing access to the trash enclosure. Greater detail needs to be provided on how Haselden will perform this work (and the utility work at the south entry to the project) with as little impact to the public as possible. At a minimum we would recommend that a temporary location for the trash enclosure be created, a temporary bus stop be located & that an agreed upon method of keeping the bus route active be developed. Additionally, Haselden should confirm that the subcontractors include the work necessary to tie in all utilities shown on sheet C3.01. Specifically there is a storm sewer line that goes directly under an existing boulder wall which will need to be removed and replaced along with the sidewalk, curb & gutter, etc. in their next bid pack. Existing Utility Coordination - There are multiple existing electrical & gas crossings shown on the drawings. Haselden should confirm that they are including all work necessary to adjust these utilities in their next bid pack and the Owner should carry money to pay the utility companies to re -pull / modify their existing systems. Sanitary Sewer - It is our understanding that the Sanitary Sewer will be installed directly by the Aspen Sanitation • District. It should be noted that the COA is taking on extra liability by doing this. Specifically the COA will need to put extra time into managing the scheduling / coordination of the ASD & Haselden's contractors for this scope of work. The schedule needs to be agreed upon in writing prior to final GMP to avoid any Page 2 of 6 EXHIBIT B A IL issues in the field. If anything goes wrong with the schedule on this item, Haselden will potentially have grounds to claim a delay caused by the Owner. Second, if there are any soil settlement issues that occur in the vicinity of the sanitary sewer line then there will be doubt on which contractor did not properly compact the soil. Finally, if a sewer manhole rim elevation is off by even the smallest amount this will be a point of contention if other activities need to be adjusted because of an ASD manhole. In order to reduce the liability on both the COA's & the ASD's sides we would recommend that the two groups work together to discuss different options to overcome these issues and at the very least the ASD provide a list of approved contractors that the COA / Haselden can use to perform the work. Storm Water Management Plan - We would recommend that the Colorado Department of Public Health & Environment Storm Water Management Permit be managed by Haselden. This reduces the risk of the COA & will create a higher level of accountability by Haselden. Inspections required for this permit can still be held by the COA to oversee the process but the permit should be held by Haselden. At a future date, this permit can easily be transferred to another party if the COA deems it necessary. Haselden General Conditions Evaluation OCIP - It has been brought to our attention that an OCIP is going to be provided by the City of Aspen. If this is the case then refunds should be provided from all subcontractors and from Haselden. This savings will need to be captured prior to executing the final GMP. This credit will be minimal but every dollar counts. Warranty - On infrastructure projects, similar to Burlingame Phase II, that are phased over many years it is common to purchase a multi year warranty from the contractor. We would recommend that at a minimum a two year warranty should be priced to ensure that settlement and other workmanship deficiencies have the time to show themselves. We would also recommend that the warranty start with final completion of the job, not at substantial completion. Especially since the Phase IIA side of the project is the fill side of the project, this may be cheap insurance, especially if it is purchased while bidding is still occurring. If a warranty is deemed to be too difficult to manage then we would recommend that the contractors purchase a Warranty Bond to protect the Owner. We believe that an Extended Warranty is the better option of the two. Even though there may be different subcontractors or Owner's occupying the property during the warranty period, this does not give the original contractor an excuse to not follow through on their warranty obligations. As long as the end of the job is properly documented there should be no major issues enforcing this. Allowances - We would recommend that most allowances be removed prior to the final GMP. These numbers can always be moved into an Owner's Contingency line item that the contractor never sees or it can be better defined and changed to an actual line item. If the Contractor and Owner cannot agree that a line item should change from an allowance then that allowance item should be better defined. To be more specific on our recommendations we will go through each allowance item one by one: 1) Dewatering of Site - We have not had the opportunity to review the soils report to verify if this allowance is appropriate. However, we would recommend that dewatering tools (i.e. pumps, hoses, temporary piping, etc.) be added to the agreed upon unit prices in the final GMP. 2) Rock Excavation - There are multiple line items in the GMP that cover excavation (Rough grade cut and fill, Process fill, Double handling of material on site, excavation / backfill for concrete retaining walls, etc.). In order to avoid being double charged for work, further definition of the Rock Excavation allowance needs to occur. We would recommend that blasting & a pre- determined boulder size be the ONLY items included in an allowance like this. Unit prices should be agreed upon for this prior to entering into a final GMP. Another potential solution to help reduce this cost for the COA is to have the COA remove the large boulders that currently exist at the job site. 3) Frozen ground excavation - What does this allowance consist of? How will they accurately charge for this? Because of these difficulties we would recommend that this allowance be moved to an Owner's Contingency line item to limit the owners risk. 4) Haul off excess material - We would recommend that this item be carried in an Owner's Contingency. The size and scope of this item is completely dependent on the quantity and type of materials remaining at the end of the project. We are also aware that other COA departments may haul this for their use at their own facilities Page 3 of 6 EXHIBIT B /EL MM IT CONSULTIN at their own cost. Since so much is up in the air on this item, it should be a number controlled directly by the Owner. 5) Utility locates / potholing - We would recommend that utility locates be a base bid item, not an allowance through either the General Contractor or the subcontractors. But if you are confident that you know the approximate locations of the utilities then an allowance is an appropriate way to track this line item. Again, we would recommend that an pre- negotiated unit price per pothole as an appropriate way to track this line item. Prices that we have paid in the past are $200 / pothole but price depends on the depth of the utilities. 6) Difference in insurance coverage - pending OCIP coverage - This is an acceptable way to track this line item for the time being, but should be either added as a hard cost or removed prior to final GMP. 7) Cost escalation - This should simply be removed prior to final GMP for the 2012 project. Its only appropriate to carry for 2013 estimates at this point in time. This also applies to the Design / Estimating / Bidding Contingency line item. Alternates - We understand the purpose of these two items to be placeholders for additional / undetermined scope additions. These are appropriate at this point in time but both need to be fully incorporated as line items prior to final GMP. Contractor's Contingency - The proposed Haselden definition of Contractor's Contingency states that Legal fees related to contractual disputes be included in the Contractor's Contingency. We would highly recommend that this be removed from the definition / clarification. This is something that is typically defined in the contract and typically states that the legal fees for the prevailing party are paid for after a legal judgment. If these terms are kept then they will have their legal fees paid out of the Contractor's Contingency prior to any judgment. Schedule - The schedule needs to be updated prior to entering into final GMP. The schedule for 2012 currently contains 4 activities in 2012: 1) Overlot grading and retaining walls - 4/30 to 8/28 2) Deep utilities & laterals - 6/25 to 9/26 3) Road base for loop road - 8/30 to 10/03 4) Road paving first lift loop road - 10/04 to 11/28 In addition to the lack of detail it should be noted that in some years it is difficult to get asphalt from Elam's Woody Creek batch plant after 10 /01 due to winter conditions. Due to the fact that scope has been reduced and that it is best practice to attempt to avoid winter conditions at the end of a job, we would recommend that the schedule be shortened to end on 10/15/12. BIM Clash Detection - We have been told that BIM clash detection is being used by Haselden during the pre - construction phase. Before the design team gets too far down the road we would recommend that Haselden perform a full BIM clash detection report and distribute to the design team. Discoveries from this report will potentially change the design in multiple areas. If this report has been produced then either the design team has not incorporated the comments or Haselden should run the report again. Equipment Rates - The project cost for laptops ($500 / month), copier ($639 / month), digital camera ($121 / month), fax ($137 / month), radios $93 / month, etc. are high. It would be possible to buy one of each of these items every month for the duration of the job with the rates that are proposed. In addition to these rates being high the other equipment rates are also high. Fence Maintenance - We would recommend that this item be tracked on an hourly basis vs. a monthly basis. Snow Removal - Items associated with snow removal should be tracked at a daily rate, not a monthly rate. This will allow the Owner to better track these line items. In addition to this tracking method, if the COA & Haselden agree to a shortened schedule it will also reduce the COA's risk of working in winter conditions and finally we would recommend that the COA provide a snow dump site at the Burlingame Project. This will greatly reduce the hauling line item. Advertising / Ground Breaking - We would recommend that this item be removed. The COA probably wants to control all advertising associated with this project that way there is a consistent message. Page 4 of 6 EXHIBIT B SU CONSULTING Progress Photos - We would recommend that this item be removed as it appears the COA will be getting double charged for the Project Engineer's time to take photos. CAD As- builts - We would like to point out that Haselden has an appropriate number for this line item and it is extremely important that the design team has a detailed specification of exactly what is required for this item so that the Owner can push for quality as- builts. Employee Subsistence - This item could be lowered if the COA is able to provide housing. RFTA Passes - Who are these passes for? It calls for 8 passes but only three employees. Also, depending on where these employees are located will dictate how much a yearly bus pass costs. Field Office Expenses - Many of these line items appear high and we would recommend further negotiations. Specifically $700 / month in postage, $487 / month for water & cups & the electrical hookup at $6,000 needs to be reduced prior to final GMP. Company vehicle - It appears that the Project Manager, the Superintendent & the Project Engineer are all getting trucks for the duration of the job. Typically, only the Superintendent is given a company truck as they will need it to pick up and deliver work supplies. In addition to having too many vehicles provided, the unit cost for this item should be negotiated and clarification is also necessary that states that employees that get a company vehicle do not also get a RFTA pass in the budget. We would recommend that this is negotiated prior to final GMP. Method of General Conditions - Will Haselden's General Conditions be signed up as a lump sum or on a time & materials basis with a not to exceed amount? This needs to be determined by the owner prior to entering into negotiations for final GMP. Proiect Design Comments The following are some pre- construction design comments that we have noticed. Our objective while reviewing the design documents was to point out areas that the design team should look at in greater detail. Hopefully these comments will add value to the project for the Owner: 1) 2012 Scope of Work - It is difficult to determine what the 2012 scope of work is from the drawings. In order to avoid future cost escalations / arguments with the contractor we would recommend that a 2012 Scope of Work Drawing be created, this will potentially also require that a narrative be created to better define the work that will occur in 2012. We understand the COA staff are currently leading the creation of this critical document. 2) We would recommend that sleeving for unforeseen future requirements be added in strategic locations as determined by the design team. This is something that will save the project time & money in the future as long as the location, quantity and size of the sleeves are accurately documented. 3) Curb & Gutters / Concrete Pans - The plans show curb & gutter & concrete pans to be installed with the 2012 scope of work. The design team should evaluate the installation of these improvements with this phase of work as the improvements will certainly get damaged because they will be 3" above the 2012 finished asphalt level. We do not recommend that the final asphalt lift be installed but that the concrete improvements be held off. If this recommendation is followed additional storm water BMP's will need to be put in place (netting, seed, inlet protection, etc.) and adjustments will need to be made to utility rim elevations to accommodate this temporary situation. 4) Concrete flatwork - We recommend that concrete flatwork adjacent / around future buildings be held off as it will get damaged during the construction of the buildings. We believe that there should either be two phases for the installation of the concrete flatwork or that it is all held back to be installed with the corresponding building packages. 5) Boulder Retaining Walls - There are boulder retaining walls adjacent to the buildings that will also need to be put into the buildings phase of the project as it will be impossible to build what is on the drawings. Again, we recommend that a 2012 scope of work drawing be created or a scope narrative describing what is being installed. Page 5 of 6 EXHIBIT B SUMMIT CONSULTING 6) Handrail - There is handrail that should be moved to a different stage of the project as it will get damaged or settle during construction. We would recommend that a note for temporary fall protection be added to the drawings for the contractor to produce and that the final handrail be moved to the buildings phase of the project. 7) Utilities under walls - There are many locations on the drawings where deep and shallow utilities go under boulder walls. This should be avoided wherever possible and where it is not possible to avoid going under a boulder wall that either a sleeve should be added, higher quality materials should be used, or both. 8) Phase IIB Utilities - We recommend that all utilities under & around the Holy Cross Electric line be installed with this phase of the project. This will be a safer way to construct the project and it will also save money in the long run. In addition to the utilities around the Holy Cross Electric line it will be more cost effective to install all utilities that go under the roadway surface or are close enough to effect the roadway surface that is being installed with this phase. 9) Irrigation mains - We recommend that all irrigation mains be installed with this phase of the project. We also recommend that a few of the laterals be installed to assist the project with the temporary irrigation that will be required to satisfy the Storm Water Management Plan. 10) If the 8" DIP redundant fire loop remains in the plans (through Park 2), we recommend that the water service for the adjacent Building D comes from this line vs. the current plan. It will have a shorter run of approximately 60'. 11) Utilities near North Entry Gate - We would recommend that the storm sewer line that connects to an existing storm sewer manhole be reviewed. If constructed in its current state an existing boulder wall & a large stretch of sidewalk will need to be removed and replaced. Conclusion We have performed the review of the Haselden GMP documents and believe that Haselden has generally provided good value to the City of Aspen. We believe that with further design development, more detailed subcontractor feedback, improved allowance definitions & with the proper oversight that the project will be set up to succeed in 2012. Appendix - Documents Provided For Evaluation 1) 100 /o Detailed Design Guaranteed Maximum Price 2012 Civil Infrastructure ONLY dated September 21st, 2011. 2) Drawings titled Burlingame Ranch Phase II -A dated 10/20/10. 3) Miscellaneous subcontractor bids. Documents Not Provided For Evaluation 1) Electrical Subcontractor Bids 2) Soils Report 3) Specifications dated 9/2/10 Thank you for this opportunity. We would be delighted to assist you with any future requests. Mak Keeling Owner Summit Consulting, Inc. Page 6 of 6