|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.|
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.
"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.
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.
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.
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.
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:
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.
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.
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