by Rick Stryker
Last issue, we looked at the beginning steps of a wastewater treatment
plant refurbishment project at a summer camp in northeastern Pennsylvania.
This issue, we'll look at the prices proposed by contractors, management
of the construction period, some issues that came up during construction,
and lessons learned. In the information noted as "TIP," you
will find particularly useful project details.
Refresher
As a recap, recall that the project at hand is to replace the sand in
a filter that measures 60-feet wide by 240-feet long and about 2-feet
deep. The existing sand is to be removed, some drains beneath the sand
have to be replaced and covered with a special range of stone sizes, and
new sand material is to be installed over the whole bed, but to a depth
of 2½ feet. The extra 6 inches will allow for settlement and losses
over time as the bed surface is raked and rejuvenated.
TIP It is said that a picture speaks
a thousand words. A drawing which shows dimensions of both existing
and proposed conditions will go a long way toward preventing confusion
during the bid and in the course of construction. The more thought and
detail which can be included in the drawing, the more smoothly the entire
project is likely to go.
"Bid documents" were prepared (quotation form, general information
and the drawings) to allow the owner to compare several contractors' quotes,
apples to apples, specifically defining the project scope and responsibilities
of the owner, contractor, and the engineer. In this case, "bid"
is a bit of a misnomer, since in the industry it implies that the work
will be awarded to the "lowest responsible and responsive bidder."
However, since this project was funded entirely by the owner, the camp
was free to select whatever contractor it chose. The format of the documents
was otherwise identical to our standard bid package. That form was presented
last issue.
Finding Contractors
Over the years, the camp had used several construction outfits with
varying degrees of success. We didn't bother to contact the ones with
which the camp had trouble in the past. At the same time, one firm in
particular had become their "go to" outfit, and we made certain
to invite them to participate. Altogether, four companies indicated that
they were interested in the work.
TIP Each company was sent a packet
with a cover letter that encouraged them to review the project before
they attended a mandatory pre-bid meeting on site.
Preparing for Quotes
The mandatory pre-bid meeting was held at the wastewater treatment plant
for several reasons. The bid documents certify that the bidder had visited
the site and had an opportunity to examine it for conditions that could
impact their bid. With all of the prospective bidders together with the
owner, questions could be answered for the benefit of all the bidders.
This prevents later claims that one bidder was aware of, or was told something
that the others didn't see or hear. An attendance list was circulated
that further documented who participated from which company. Attendees
referred to the drawings as we discussed the scope of the project, the
"successful bidder's" responsibilities, and the expected construction
timetable. Everyone was invited to take pictures for reference while preparing
their quotes.
TIP None of the contractors took
pictures, however we did, documenting the conditions of the site on
the day of the meeting. These would prove to be very helpful later.
In the week or ten days between the meeting and the opening of the quotes,
we answered several questions, prepared written responses, and faxed them
to all of the potential contractors. On the day of the opening, two sealed
quotes had been delivered to our office and two contractors (including
the camp's regular outfit) chose not to quote the work at all. The high
quote was about $129,000 and the low quote was about $120,000. It is important
to remember that these quotes were mostly for labor and equipment only.
TIP The Owner had made arrangements
to purchase the sand directly from the supplier (to avoid material markup),
so $57,600 (estimated sand cost) had to be added to the quotes to calculate
the apparent project cost. Given the relative closeness of the bids,
we were satisfied that both firms had prepared their bids similarly
and that the difference in the quotes was probably the profit for each.
Our firm had worked with both, and we knew that each was staffed, equipped,
and qualified to perform the work in a safe and timely manner. Based
solely on price, the low quote seemed to be the obvious choice. However,
the firm with the higher quote offered to complete the work in a shorter
time than the other. The owner was willing to consider paying a little
more for the peace of mind of having this complete before winter set
in. In the end, the owner offered the lower bidder a $7,500 bonus if
the work was complete before January 1, and the contractor agreed.
The Agreement
The formal contract documents were comprised of several pieces. First,
the bid documents were included by reference. That is, they acknowledged
the contractor's offer to complete the work laid out in the bid documents
in accordance with the provisions described and the prices offered by
the contractor. Next, they included "boilerplate" legal documents,
which divided responsibilities between the owner (mostly paying promptly);
the engineer (mostly project facilitation, checking of payment requests,
and technical issues); and the contractor (including project safety, construction
methods, requirements for insurance and liability among other things),
as well as describing how disputes and other common situations would be
resolved. Finally, they finished with signature blocks and certifications
that assured everyone involved that the individuals executing the agreements
were authorized to commit their organizations to the terms of the agreement.
With a signed contract and copies of the contractor's insurance documents
in hand, we were almost ready to begin.
Department of Transportation
In the last article from the March/April issue, we alluded to the fact
that the DOT had reservations about the heavy volume of truck traffic
that their dirt/gravel road would see. They were concerned that the roadway
would be damaged and that the taxpayer would have to pick up the repair
bill. There is a 25-ton, seasonal weight limit on this particular road.
We met on site with DOT representatives and the contractor, and after
walking the route into camp and a lengthy discussion, it was agreed that
no extra insurance (or project "bond") would be required only
if it was thoroughly understood that:
- The Contractor would only use the route we walked; and
- The steep, winding, and narrow road did not receive regular attention
in the winter (i.e., salting or sanding. Sound familiar . . . ?). If
conditions were unfavorable for deliveries or construction, the contractor
was not to work.
If the contractor violated either of these conditions, then PennDOT
would reverse its decision and require that the contractor post a road
bond to ensure that they would make any repairs necessary.
Construction at Last!
Some five months after we began, all the pieces were in place to start
construction. The owner had negotiated payment arrangements with the sand
supplier, and the contractor had contracted with several trucking firms
to move the sand 230 miles from the supplier to the site. In less than
a week, the old sand had been removed from the sand bed, stockpiled on
the owner's property, and the clogged drains had been uncovered and replaced
with new pipe. It snowed several times during construction, and the contractor
covered his work with sheets of plastic, facilitating the snow removal
the next day. The following week, large dump trucks began arriving with
the new sand.
TIP The caretaker signed for each
load that was delivered, keeping a copy of the delivery ticket listing
the weight of that particular load. As we neared the end of the project,
we were called in to assess if and how much more material would be required
to complete the project. When we were notified that the contractor had
finished, we returned to the site to identify items that were required
to be cleaned up, repaired, or otherwise finished before the owner would
consider final payment.
Finishing the Project
The punchlist included several items that were not specifically listed
in the project documents, but that were covered under the "boilerplate"
provisions of the construction agreement. These included things like removing
trash from the site; cleaning up an area where the contractor had burned
refuse (without permission of the owner); finish grading, seeding and
mulching of the area around the sand filter; and repairing embankments
the contractor had created when removing the old sand. Although the contractor
agreed to everything else, he chafed about the embankment repair, contending
that it had been like that when they started. He was invited to produce
photographs to document the claim, which had been taken in the period
between the pre-bid meeting and when construction started. He was unable
to do so, and therefore was not eligible for payment for the repair he
was required to make.
In the course of trucking material in, the contractor had violated the
agreement with PennDOT and had used an alternate route in bad weather,
causing damage to the ditch, not to mention several of the trucking company's
trucks.
TIP Despite finishing before the
January 1 deadline, we declined to make final payment until the Contractor
produced a release letter from PennDOT that relieved the camp from liability
for roadway repairs. PennDOT issued that letter after the contractor
repaired the road.
The last sticking point concerned the number of trucks that had been
received at the project. As mentioned before, the camp caretaker signed
for each and every truckload of material as it arrived on site. At issue
was whether a certain truckload of material ever arrived on one particularly
treacherous day. Although both the material supplier and the trucking
company had load tickets that documented that the material left the supplier's
yard, there was no signed receipt for that truckload. Because of the careful
paper trail he kept, the owner was in a position to refuse payment for
the trucking and deduct the value of the missing sand from the contractor's
invoice.
Once the contractor was paid, we were able to prepare a report for the
owner and the Department of Environmental Protection (DEP) that documented
the repairs and asserted that the most likely source for the systems permit
violations had been repaired. We made it a point to tell DEP that the
project had come at a surprisingly high cost, due mostly because of the
unavailability of sand filter material. In phone conversations with the
regulators (while trying to find a sand source), they told us that they
were completely unaware that there was a shortage of compliant material.
When included in the report, this short paragraph enabled the regulators
to bring this issue to the attention of others in the department, and
has since been the source of significant discussion about acceptable filter
media.
What Made the Project a Success?
From our perspective, probably the most useful is that the owner did
not waste the most irreplaceable asset: time. More than any other factor,
time is the one that gets projects off on the wrong foot most often. There
is often an inclination to put large projects off until spring, and certainly
a reluctance to dive into an expensive one with winter imminent. However,
we began looking at the project in August, when camp was in session and
months before DEP sent the Notice of Violation. In retrospect, there was
hardly a day to spare.
Along with starting early, we worked with the owner to tackle multiple
tasks simultaneously.
TIP In this case, the operations
manager kept the camp's board up to date on critical issues and began
early to consider how to pay the bill. At the same time, we were tackling
the technical, construction, and administrative aspects of the project
so that we were able to get an agreement reviewed and executed in very
short order. Through frequent, sometimes daily, e-mails, we kept each
other appraised on our progress. Now, at the end of the project, we
both have an extensive correspondence file that documents each and every
step along the way.
Another very worthwhile lesson was one of diligent project management
and record keeping beginning with unit prices in the quotation forms,
all the way to committing on-site staff to tracking the deliveries. Without
these, it would have been difficult to assess the final value of the finished
project and pay the contractor what he was due, and no more.
The next important aspect was the camp's foresight to accumulate and
then to tap into "rainy day" funds, along with their clear understanding
of what that "rainy day" looked like. Our client and its board
immediately recognized the potential for the spread of mosquito-borne
illnesses from the failed sewage system not to mention the health of the
stream that received the under-treated waste.
The last point is perhaps the most difficult for many camps to embrace.
The idea that municipal and state regulators could, and perhaps should,
be invited to participate in the project may seem counterintuitive. However,
in our practice we have found that more often than not, their involvement
at the beginning of the project makes for a team with a communal interest
in making the project successful.
Originally published in the 2004 May/June issue
of Camping Magazine. |
