Request
Review and approve a Guaranteed Maximum Price (GMP) for the Construction of a new Police Station with Riley Construction
Background
After several years of study and public meetings, the Board accepted a Police Station feasibility Study prepared by consultants in September 2015. The Feasibly Study evaluated the existing building deficiencies and developed a “best fit” Police Station option on the existing Municipal Campus.
Numerous existing building deficiencies have been identified, not only in the 2015 study, but also in a prior study from 2010. As a result of these studies and the Capital Improvement Programming (CIP) that had gone before it, the Board approved the issuance of a $35 million bond to be funded through expiring existing bonds and resulting in no increased tax payer debt.
In February 2016, the Village Board retained the services of Legat Architects, McClaren, Wilson & Lawrie Inc. and other consultants as part of their team to prepare construction drawings for the new Police Station.
In May 2016, the Village Board retained the services of Riley Construction to be the Construction Manager. The Police Station Committee has met on a bi-weekly or more frequent basis as necessary to partner in the design and development of the site, floor plans and construction documents for the new Police Station. During this time period, the Village also conducted an extensive search for potential temporary lease locations. A temporary lease was approved by the Board for the 1500 W. Shure Drive location. Interior buildout of that property was complete, and in mid-May the Police Department relocated to that location.
Budget/Early Bid Packages
The construction budget for the new Police Station is $27,985,000.
Over the past few months, Riley Construction has bid various early bid packages in order to expedite the project. The bid packages that have been approved to date by the Village Board are as follows:
Bid Package #1 Police Annex and 4th floor Village Hall renovation $201,354.00
Bid Package #2 Demolition and site utility work $866,415.00
Bid Package #3 Precast and structural steel $1,837,878.00
Bid Package #3C Excavation, concrete, underground plumbing $2,797,836.00
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$5,703,483.00
Summary of GMP
Riley Construction has bid and estimated the remaining major components of the Police Station project, excluding items that would be funded from non-construction accounts, such as furniture, fixture and equipment, AV, security and IT telecommunications, temporary location, other, etc. Riley Construction along with Legat Architects and the Village’s Design team have spent the last several weeks evaluating the GMP and creating an extensive value engineering list to be considered. Riley Construction’s GMP including the early bid packages already approved, is summarized as follows:
Riley GMP $ 27,942,917
Budget $ 27,985,000
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(Under) ($ 42,083)
The Riley GMP includes a design and pricing contingency of $382,743 to allow for adjustments in the budget for final design and bidding. The GMP also includes a construction contingency of $1,275,809 and excludes 19 items that are being identified as alternates for consideration, now as an addition to the GMP, at final bidding, or throughout the project, subject to need and availability of contingency funds
Contingencies
There are two types of contingencies that are typical in a construction project which are described as follows:
Construction Contingency
The construction contingency included within the GMP is an allowable use by the construction manager to cover those costs considered reimbursable as part of the costs of work but not included in a change order.
Owner’s Contingency and Change Orders
The Village has budgeted in a separate account, owner contingency funds. Owner contingency funds can be utilized if so approved by the Village for changes in scope of the project after the construction commences. Due to the unpredictable nature of construction, there will be change orders necessary throughout the project, which is the reason why the Village has a separate budget account for owner’s contingency. During construction of the Village Hall and Municipal Campus, the Village Board authorized the spending of owner’s contingency for construction related changes and to incrementally increase the Guaranteed Maximum Price accordingly. The Board authorized Staff to approve individual expenditures above the $10,000 limit at the time to $25,000, subject to Finance Director and Village Manager approval of individual expenditures above that limit. Due to the nature of construction and the fact that decisions need to be made promptly, it is recommended that the Village Board authorize a similar approach for the new Police Station. In this instance, it is recommended that the Village Board authorize Staff to approve change orders up to $40,000 with the approval of the Village Manager and Finance Director.
Value Engineering
Throughout the process at various stages of the project, preliminary budget estimates have been prepared and value engineering has taken place. Value engineering in its simplest form is, review of the most cost effective and prudent approaches to constructing the project, and utilizing different materials and construction methods to maximize benefit, in the most cost effective manner. In particular, over the past month, Riley Construction, Legat Architects, and the Village’s Design Committee have held lengthy meetings to identify areas to reduce costs through value engineering. The following is a summary of the value engineering exercises.
A total of 72 value engineering items were evaluated. The value of items included and accepted as part of the value engineering exercise, reduced the overall construction budget by $1,812,950. A number of items that were accepted through the value engineering process, have been evaluated as possible alternates for inclusion in the project.
Bid Alternates
A total of 19 project components of the Police Station have been bid as alternates to allow the Village flexibility in decision making when awarding bids. Some alternates could be accepted now by the Village Board as an increase to the GMP as described previously, or will be considered by the Design Team throughout the construction process, as the project construction continues and it becomes clearer that the construction contingency included within the GMP, and owner’s contingency is available to be released for these alternate elements.
Environmentally Sustainable Grants
A number of environmentally sustainable and earth friendly components have been evaluated to be incorporated into the project in accordance with the Board’s goals. An incentive application is being worked on in conjunction with utility company ComEd. Based upon environmentally friendly building components, it is currently estimated that the Village could receive a reimbursement of $25,981 from ComEd at the conclusion of the project. In addition, a grant application is being prepared and will be filed this week with MWRD to seek a grant for installation of permeable pavers on top of the storm water detention vault and the main access driveway between the Village Hall and new Police Station.
Recommendation
It is recommended that the Village Board approve increasing the previously approved early bid awards of $5,703,483 as follows:
1. Authorize the Village Manager to enter into a Guaranteed Maximum Price (GMP) of $27,942,917 to Riley Construction for the construction of a new Police Station.
2. It is further recommended that alternate #5 for $29,376 be added to the GMP for a total GMP of $27,972,293.
3. It is further recommended that the Village Board authorizes spending the owner’s contingency for construction related changes on the new Police Station and incrementally increase the Guaranteed Maximum Price (GMP) accordingly up to that same amount within the following limits and authorizing individual expenditures over the $20,000 limit but no more than $40,000 without Board approval subject to Finance Director and Village Manager approval. Individual expenditures from the owner’s contingency above $40,000, will require Board approval.