Subject: Fifth Amendment to the Design-Build Services Contract between the City and Houston Waterworks Team, a joint venture between CH2M Hill Engineers, Inc. and CDM Contractors Inc. for the Northeast Water Purification Plant (NEWPP) Expansion Project, Early Work Package 4 Construction (EWP4).
Recommendation: Adopt an ordinance approving the Fifth Amendment to Ordinance No. 2015-1260, dated December 9, 2015, for the Design-Build Services Contract between the City and Houston Waterworks Team, a joint venture between CH2M Hill Engineers, Inc. and CDM Contractors, Inc. for the Northeast Water Purification Plant (NEWPP) Expansion Project and appropriate funds.
Project Notice/Justification: This project is required to meet regulatory mandates of the Texas Commission on Environmental Quality and the Harris-Galveston Subsidence District Groundwater Reduction Plan.
Under the second supplements, approved on February 18, 2015, under Ordinances No. 2015-137, 2015-138, 2015-139, and 2015-140, between the City and Authorities, the City will be responsible for approximately 16% of the NEWPP expansion, and the Authorities will be responsible for the remainder. It is intended that the NEWPP expansion be completed in two phases. The first phase of 80 million gallons of water per day will be substantially complete no later than August 31, 2021 and the second phase of 240 million gallons of water per day to be substantially complete no later than June 30, 2024 for a total of 320 million gallons of water per day. This project was described and briefed to the Transportation, Technology, and Infrastructure (TTI) Committee on December 11, 2017.
Description/Scope: The planning and design phase determined that some of the construction work would be completed as Early Work Packages to meet project milestones. EWP4 consists of the installation of the two 108-inch diameter raw water pipelines within the raw water corridor, tunneling under West Lake Houston Parkway, and drainage improvements for the site.
Location: This project is located at 12121 North Sam Houston Parkway East, in Humble, Key Map Grids 376 Z & 377 W.
Project History and Scope: City Council approved the Design-Build Services Contract between the City and Houston Waterworks Team (HWT) on December 9, 2015 under Ordinance No. 2015-1260 appropriating $3,288,000.00 to the expansion project.
Amendment No. 1 to the Design-Build Agreement was approved on November 16, 2016 under Ordinance No. 2016-875 appropriating additional funds in the amount of $14,950,000.00 to the expansion project.
Amendment No. 2 to the Design-Build Agreement was approved on March 29, 2017 under Ordinance No. 2017-231 appropriating additional funds in the amount of $3,000,000.00 to the expansion project.
Amendment No. 3 to the Design-Build Agreement was approved on May 24, 2017 under Ordinance No. 2017-378 appropriating additional funds in the amount of $66,300,000.00 to the expansion project.
Amendment No. 4 to the Design-Build Agreement was approved on December 19, 2017 under the Ordinance No. 2017-1017 appropriating additional funds in the amount of $37,339,594.00 to the expansion project.
Amendment No. 5 to the Design-Build Agreement was initiated in July 2017 when the HWT requested interested construction companies to complete a prequalification package for Early Work Package 4 (EWP4). HWT reviewed those qualifications and sent a Request for Proposal to four major subcontractors including Barnard Construction Company, Oscar Renda Contracting Inc., Primoris Services Corporation, and Thalle Construction Company. Competitive Sealed Proposal method was used to procure the contractor for EWP4. HWT evaluated each proposal independently. Each contractor was then interviewed by HWT with the City and an Authority representative as observers. Following the interviews, HWT and the City convened for a final evaluation and scoring of the proposals on a consensus basis. Barnard was chosen as the major subcontractor to perform the work for EWP4.
Project Cost: The total project cost of $57,957,252.00 includes the direct construction cost of $32,264,924.00 for EWP4, the indirect construction cost of $25,213,536.00, and a management reserve of $478,792.00. The major items for indirect construction costs include the insurance cost of $9,500,000.00 for the entire project through the year 2024, the cost of $1,167,219.00 for the performance and payment bonds, and the cost of $9,120,000.00 for the construction allowances for items currently under design.
The direct construction cost of EWP4 includes the oversizing of the raw water pipelines for the City of Houston's total available water rights of 560 million gallons of water per day. Oversize cost of $10,802,457.00 will be paid 100% by the City of Houston in accordance with Section 3.14 of the Second Supplement to the Water Supply Contracts between the City of Houston and each of the participating Water Authorities. The remaining cost of the project for non-oversizing will be divided by the City and the Authorities at 16% and 84%, respectively.
The City of Houston's total contribution for the oversize and non-oversize is $18,347,224.20; (oversize cost of $10,802,457.00 plus non-oversize cost of $7,544,767.20). The Water Authorities will contribute $39,610,027.80, (non-oversize).
Pay or Play Program: The proposed contract requires compliance with the City’s ‘Pay or Play’ ordinance regarding health benefits for employees of City contractors. In this case, the consultant provides health benefits to eligible employees in compliance with City policy.
M/WBE Information:
a). M/WBE-Construction: The Capacity Study performed for EWP4 showed a 15% capacity for M/WBE participation for direct construction costs. Currently, the proposed amount of participation from the Design-Builder (Houston Waterworks Team) is 13.32%.
b.) Included in the indirect costs is the construction allowance of $9,120,000.00 for items that are in the design phase such as the chemical piping, electrical ductbank, and road repairs for damages to West Lake Houston caused by this project. When the design is complete, the Project Director will authorize the use of these funds for construction. However, although the final amount for construction is not yet determined, it is anticipated that the 15% M/WBE goal will be met during the construction of the Allowance items.
c.) EWP4 indirect costs also include the cost of $9,500,000.00 for insurance of the entire project through the year 2024, and the cost of $1,167,219.00 for the performance and payment bonds for EWP4. Currently, the City of Houston does not have any certified M/WBE firms to manage insurance and performance bonds of this magnitude.
Houston Waterworks Team has proposed the following plan for M/WBE participation for the EWP4 Construction.
|
Firm
|
Scope of Work
|
Amount
|
% of Direct Construction Cost
|
|
Z Logistics Solutions
|
Aggregate Supply and Hauling
|
$1,200,000.00
|
3.72%
|
|
M & D Foundation Industries, Inc.
|
Pile Drilling and Installation
|
$900,000.00
|
2.79%
|
|
M/WBE Firm (TBD)
|
Fuel and Cement Supply
|
$650,000.00
|
2.01%
|
|
Fencemaster of Houston
|
Temporary Construction Fencing
|
$525,000.00
|
1.63%
|
|
All Steel Welding
|
Pipe Welding
|
$450,000.00
|
1.39%
|
|
J. Simmons Group, Inc.
|
Clearing and Grubbing
|
$225,000.00
|
0.70%
|
|
AGS Consultants, LLC
|
Surveying
|
$200,000.00
|
0.62%
|
|
Republic Traffic Safety, Inc.
|
Traffic Control
|
$150,000.00
|
0.46%
|
|
|
Total M/WBE Participation
|
$4,300,000.00
|
13.32%
|
d.) Early Work Package 1 (EWP1) was approved on December 19, 2017 under Ordinance No. 2017-1017 with an MWBE goal of 80.45% of the direct construction costs. Construction has recently commenced and M/WBE data is not available yet.
e.) M/WBE-Design: The status of the design for this project is 30% complete. The original contract amount previously appropriated to design this project totals $85,134,000.00. The consultant has been paid $23,835,693.60(28%) to date. Of this amount, $7,829,584.77(32.85%) has been paid to M/WBE sub-consultants to date. The design goal for this project is 24%. Currently, this project is exceeding the design goal.
Estimated Fiscal Operating Impact: No significant Fiscal Operating impact is anticipated because of this project.
_______________________________________
Carol Ellinger Haddock, P.E.
Director
Houston Public Works
WBS No. S-000065-0008-4 (Non-oversize), S-00065-0010-4 (Oversize)