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School Board Approves $77,794 Change Order

The $77,794.87 payment covers work performed that "exceeded the scope of work of their contract."

The Board of Education for the Thursday approved a $77,794.87 change order with McCarthy/Kwame for work "performed that exceeded the scope of work of their contract."

The vote was 5-1, with Sen. Maria Chappelle-Nadal voting against the measure. Board Director Tom Peters was not at the meeting. 

According to School Board Agenda item 13-22:

This cost issue is the result of information brought forward by McCarthy/Kwame regarding staff costs associated with the and projects. This information was presented to the Board of Education during two presentations at Board of Education work sessions. McCarthy/Kwame presented information regarding changes to the construction process that required addtional staff that extended beyond what was originally proposed. Consideration was given to staffing requirements that included the addition of a summer intern during two summers of construction, additional staff time on the site due to a schedule extension at Barbara C. Jordan Elementary School, and additional staff hours related to LEED certification documentation. The cost for this adjusted staffing expenses was $77,794.87.

Karl Scheidt, Executive Director of Operations for the District, presented the item and told the board the $77,794.87 number was a compromised figure, down from an original proposal by McCarthy/Kwame of near $180,000.

There were some weather delays on the project, he said, and an engineer and secretary were on-site for three months longer than originally planned to to other delays. The intern also wasn't planned on for two summers.

Chappelle-Nadal raised questions about the change order, saying that "compromising on something that was not outlined in the contract" was of grave concern to her. She asked that a full breakdown of the change order be provided to board members.

"This is taxpayers' dollars we are talking about here," she said. "We have to be very careful in the future of any contract that is presented to us as a board. Any contractor now knows he/she can come back and ask for more money." 

Board President Stacy Clay said that many of the hours in the change order were due to the LEED certification documentation. He added that the Board of Education decided to seek the LEED certification after contracting for the projects had begun. 

"This was put forward by the board," Clay said. "There was a conversation about the implications but the board decided to go forward. Our attorney did due diligence—there was no way to foresee that the board would seek LEED certification."

Clay also noted that in his time on the board this was the first time an issue like this had come up.

"The board has to bear some responsibility for creating this," he said. 

Board Director John Clark asked if the board was "hedging its bets" against possible litigation and if the change order would be the final word on this project. 

Board Director Rick Salamon said he agreed with Chappelle-Nadal's reading of the situation and was also concerned with the district paying for items not outlined in contracts. But Salamon voted with the majority to approve the change order.

"I'm voting yes because of the potential legal implications," he said. "I'm supporting the legal opinion we just received."

The funds will come from contingency funds in the Pershing construction budget, according to the action item. 

Lois August 20, 2012 at 10:10 PM
Board Members Chappelle-Nadal’s and Salamon’s comments that ‘"compromising on something that was not outlined in the contract” was of grave concern’ shows inexperience with contract administration. A Change Order is a normal part of a large, complex construction project such as a new school. It simply means that something occurred during the project that was not anticipated at the outset. Good contracts allow fair compensation for unanticipated changes that are not errors. Perhaps the client wishes to add square footage to the project, there were unexpected weather delays or possibly the price of fuel or raw materials escalated significantly. All of these are legitimate and honest changes to a project. It appears that Karl Scheidt did a great job of negotiating down the cost of the change order. Well managed projects always have a contingency (as this one did), to accommodate unforeseen conditions. Also, there is an inference that using the Leadership in Energy and Environmental Design (LEED) certification process added cost. As a result of using LEED, University City has two new well-designed, durable and energy efficient schools that will reduce maintenance and energy costs for years to come and be well lit, clean and healthy learning environments for students, teachers and staff. The cost of LEED documentation will quickly be paid back in energy savings, but many people only focus on the first cost of a project, not the lifelong benefits.

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