HomeMy WebLinkAbout06-225 Resolution No. 06-225
RESOLUTION
AUTHORIZING EXECUTION OF A SIXTH AMENDMENT AGREEMENT
WITH GILBANE BUILDING COMPANY FOR
CONSTRUCTION MANAGEMENT SERVICES FOR THE CENTRE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
Olufemi Folarin,City Manager,and Dolonna Mecum,City Clerk,be and are hereby authorized and
directed to execute a Sixth Amendment Agreement on behalf of the City of Elgin with Gilbane
Building Company for construction management services for The Centre,a copy of which is attached
hereto and made a part hereof by reference.
s/ Ed Schock
Ed Schock, Mayor
Presented: September 27, 2006
Adopted: September 27, 2006
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Dolonna Mecum
Dolonna Mecum, City Clerk
SIXTH AMENDMENT AGREEMENT
THIS SIXTH AMENDMENT AGREEMENT is made and entered into this
7 tlf day of S E P71 , 2006 , by and between the CITY OF
ELGIN, an Illinois municipal corporation (hereinafter referred to
as the "City" ) and GILBANE BUILDING COMPANY, a Rhode Island
corporation (hereinafter referred to as "Construction Manager" ) .
WHEREAS, the City and Construction Manager have previously
entered into an Agreement dated June 14, 2000, relating to the
Construction Manager providing certain professional services for
the City' s proposed new recreation center (hereinafter referred to
as the "Agreement" ) ; and
WHEREAS, the Agreement provides that it is the expectation of
the parties that the Recreation Center Project (hereinafter
referred to as the "Project" ) will be constructed in phases; and
WHEREAS, the Agreement further provides that upon receipt of
all subcontract and supplier bids for the Project or Phase thereof,
the Construction Manager shall propose a Guaranteed Maximum Price
which sum shall be sum of the estimated cost of work for the
Project or Phase thereof and which shall also include the
Construction Manager's contingency, the Construction Manager' s fee
and the owner' s allowance, if any; and
WHEREAS, the Agreement further provides that upon acceptance
by the City the Guaranteed Maximum Price proposal for the Project
or a Phase thereof and its basis shall be set forth in amendments
to the Agreement; and
WHEREAS, the City and the Construction Manager have previously
entered into a First Amendment Agreement dated July 11, 2001,
providing for a guaranteed maximum price for the Parking Garage
Phase of the Project in the amount of $6 , 217 , 945; and
WHEREAS, the City and the Construction Manager have previously
entered into a Second Amendment Agreement dated July 25, 2001,
providing for a guaranteed maximum price for the Underground and
Structural Work Phase of the Project in the amount of $6, 087, 650;
and
WHEREAS, the City and the Construction Manager have previously
entered into a Third Amendment Agreement dated February 28, 2002 ,
providing for a guaranteed maximum price for the MEP, Building
Enclosure, and Interior Finishes Phase of the Project in the amount
of $19 , 953 , 459 ; and
WHEREAS, the City requested the Construction Manager to
perform construction phase services for the Symphony Way and Grove
Avenue streetscape improvements work; and
WHEREAS, the City and the Construction Manager have previously
entered into a Fourth Amendment Agreement dated August 8 , 2002 ,
providing for a guaranteed maximum price for the pool
construction/climbing wall and Symphony Way and Grove Avenue
streetscape improvements work in the amount of $3 , 712 , 487 ; and
WHEREAS, the City and the Construction Manager have previously
entered into a Fifth Amendment dated March 14, 2005, providing for
trade contractor change orders, additional reimbursable costs, and
testing services costs and further agreement between the City and
Construction Manager regarding contract contingency and savings in
the amount of $568, 051; and
WHEREAS, the subcontracts with PBMC and Johnson Blacktop
remain open and have resulted in litigation which has required the
Construction Manager to obtain outside legal services to defend and
resolve such litigation; and
WHEREAS, the costs of the legal services for such outside
litigation has exceeded the Construction Manager ' s available
contingency amount of $504, 591; and
WHEREAS, Section 6 . 1 . 6 . 5 of the Agreement provides in part
that legal costs, other than those arising from disputes solely
between the Owner and the Construction Manager, reasonably incurred
by the Construction Manager in the performance of the Work and with
the Owner ' s written permission, which permission shall not be
unreasonably withheld, are eligible Costs of Work; and
WHEREAS, the Construction Manager has completed the Project
and the City and the Construction Manager desire to enter into this
Sixth Amendment Agreement to provide for an adjustment in the
Construction Manager's contract contingency amount up to a total of
$985 , 863 , as needed to resolve the aforementioned remaining open
subcontractor contracts, and in accordance with the contingency
provisions included in paragraph 1 (D) of the Fourth Amendment
Agreement; and
WHEREAS, the Fourth Amendment Agreement of Agreement reduced
the Construction Manager's contingency from $985, 863 (calculated at
three percent (3%) pursuant to Section 2 . 2 .2 of Agreement) to
$504 , 591 , which is $481, 272 less than the contingency amount
provided for in Agreement of $985, 863 . The Construction Manager
agreed to do this in cooperation with the City to keep the
Guaranteed Maximum Price within the City's project budget. At the
time of the Fourth Amendment Agreement, the parties hereto agreed
that in the event of the incurring of additional costs
contractually and properly reimbursable as a Cost of Work in excess
of the reduced contingency amount of $504, 591, provided by the
Fourth Amendment Agreement, then the Construction Manager may
properly charge such additional costs against the $985, 863 provided
by Agreement and that the City would provide for this payment to
the Construction Manager by Change Order.
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•
NOW, THEREFORE, for and in consideration of the mutual
undertakings as contained herein, and the mutual undertakings as
contained in the Agreement between the City and the Construction
Manager of June 14, 2000, as amended by the First Amendment
Agreement between the City and the Construction Manager dated
July 11, 2001, as amended by the Second Amendment Agreement between
the City and Construction Manager dated July 25, 2001, as amended
by the Third Amendment Agreement between the City and Construction
Manager dated February 28, 2002, as amended by the Fourth Amendment
Agreement between the City and Construction Manager dated August 8,
2002 , and as amended by the Fifth Amendment Agreement between the
City and Construction Manager dated March 14, 2005, and other good
and valuable consideration, the receipt and sufficiency of which is
hereby mutually acknowledged, the parties hereto hereby agree as
follows :
1 . That the Agreement between the City and Construction
Manager dated June 14, 2000, as amended by the First Amendment
Agreement between the City and the Construction Manager dated
July 11 , 2001 ; and as amended by the Second Amendment Agreement
between the City and Construction Manager dated July 25, 2001; as
amended by the Third Amendment Agreement dated February 28 , 2002 ;
as amended by the Fourth Amendment Agreement dated August 8, 2002 ;
and as amended by the Fifth Amendment Agreement dated March 14,
2005, is hereby further amended as follows :
Pursuant to the Fourth Amendment Agreement, the Construction
Manager ' s available contingency is hereby adjusted upward from
$504, 591 to $985, 863 to provide additional available funds to
compensate the Construction Manager for legal costs incurred by the
Construction Manager in connection with the PBMC and Johnson
Blacktop litigation.
2 . The reasons for the changes as outlined by the Sixth
Amendment Agreement are germane to the original contract as signed;
the events necessitating the changes outlined by this Sixth
Amendment Agreement were unforeseeable at the time of execution of
the original agreement; and this Sixth Amendment Agreement is in
the best interests of the City and is authorized by law.
3 . That except as amended herein the terms and provisions of
the Agreement between the City and the Construction Manager of
June 14, 2000, as amended by the First Amendment Agreement dated
July 11, 2001, and further amended by the Second Amendment
Agreement dated July 25, 2001, and further amended by the Third
Amendment Agreement dated February 28, 2002, and further amended by
the Fourth Amendment Agreement dated August 8, 2002 , and further
amended by the Fifth Amendment Agreement dated March 14, 2005,
shall remain in full force and effect.
4 . That in the event of any conflict between the provisions
of this Sixth Amendment Agreement and the Agreement of June 14,
2000, as amended by the First Amendment Agreement dated July 11 ,
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2001, and further amended by the Second Amendment Agreement dated
July 25, 2001, and the Third Amendment Agreement dated February 28,
2002 , and further amended by the Fourth Amendment Agreement dated
August 8 , 2002 , and the Fifth Amendment Agreement dated March 14,
2005 , the terms of this Sixth Amendment Agreement shall control .
IN WITNESS WHEREOF the parties have entered into and executed
this Sixth Amendment Agreement on the date and year first written
above.
CITY OF ELGIN GILBANE BUILDING COMPANY
By I _ By feeem____
City M. ager /
Attest : Attest :
City Clerk
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September 8, 2006 L Li 000
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PI tl I I1 l
TO: Mayor and Members of the City Council N i vi
.: . •� .�
FROM: Olufemi Folarin, City Manager FINANCIALLY S ENTE CITYGOVERNMENT
EFFICDavid L. Lawry, General Services Group Director AND OLaLITYINFRASTRUCTURE
SUBJECT: Amendment #6 to the Gilbane Construction Management Agreement for the
Centre Construction Project
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider approval of Amendment #6 to the Gilbane contract for Construction
Management Services related to The Centre and to the Symphony/Grove Streetscape Project.
RECOMMENDATION
It is recommended that the City Council approve Amendment #6 for a total amount of$481,272
and direct staff to execute the required documents.
BACKGROUND
The City Council approved a contract with Gilbane Building Company of Chicago (Gilbane) to
provide the construction management services associated with The Centre development.
Amendment # 1 was approved on July 11, 2001, Amendment # 2 was approved on July 25,
2001,Amendment#3 was approved on February 28, 2002,Amendment#4 was approved on July
10, 2002 and Amendment #5 was approved on February 23, 2005. These amendments
established the Guaranteed Maximum Price (GMP) for the sum of all bids and the construction
services current to the date of the amendment. The GMP is determined by adding all low
responsive bids related to construction, Gilbane's on-site construction service costs, the
construction manager's contingency, and the owner's contingency. Once the GMP is established,
Gilbane is responsible for all project costs, regardless of final costs, unless the City or other
circumstances change the scope of the project.
Amendment#5 was presented to City Council on February 23, 2005 and was considered the final
amendment. It was reported at that time about ongoing legal disputes with some of the
subcontractors. Since February 23, 2005, Gilbane's attorneys and City attorneys have been
attempting to resolve the matter. Gilbane is eligible to recover their legal fees up to the value of
the Guaranteed Maximum Price(GMP) for the project.
The action in February 2005 increased the GMP to $36,539,592.00. The balance remaining in
the budget is $64,407.00. On July 20, 2002, Amendment #4 was approved by City Council.
This amendment reduced the value of Gilbane's contingency by $481,272 with the assumption
that most of the work was awarded and the $481,272 could be used to complete improvements
which would have otherwise not fit into the budget at that time. Amendment #4 did however,
guarantee Gilbane the full value of their contingency should situations warrant. The subject
amendment re-establishes the full value of Gilbane's contingency to be used to cover legal fees
GSU-Amendment#6 for Gilbane for The Centre Constr. Proj.
September 8, 2006
Page 2
and any resulting settlement with the subcontractors. To date, legal fees charged by Gilbane
total $107,958.40.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None
FINANCIAL IMPACT
The cost associated with Amendment#6 with Gilbane Construction is $481,272. The budget for
The Centre and Parking Structure, project number 509560, is $41,138,640. To date $41,075,325
has been spent/encumbered leaving$60,315 available to fund this amendment. Of the remaining
$420,957 required funds, $348,500 is available from various General Obligation Bond Funds
(Fund 396-$6,500; Fund 380-$164,000; Fund 382-$46,000 and Fund 384-$132,000) and greater
than anticipated riverboat proceeds ($72,457).
LEGAL IMPACT
Section 6.1.6.5 of the city's construction management agreement with Gilbane provides in part
that legal costs such as those being incurred in the PBMC and the Johnson Blacktop litigation are
eligible costs of work to be reimbursed by the city to Gilbane. Such reimbursement is limited to
amounts within the guaranteed maximum price for the project. The legal department will be
providing the city council a separate memorandum on the status of the PBMC and Johnson
Blacktop litigation.
ALTERNATIVES
1. Approve Amendment#6 as outlined above.
2. Do not approve Amendment#6. The City is however contractually obligated to cover the
cost as outlined above.
Respectfully submitted for Council consideration.
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Attachments