On April 26, 2021, the Board of Commissioners approved an agreement with American Constructors, Inc. (American) to serve as the construction manager for the Fire Station 5 project. Under this method of construction, the construction manager is selected during the design phase and serves as the third member of the project team, along with the owner and architect, to successfully complete a complex construction project. The construction manager’s role is divided into two phases – Pre-Construction services and Construction services.
The Pre-Construction services performed by the Construction Manager include the following:
- Work alongside the architect to assess project constructability and identify construction efficiencies and value engineering options to maintain the project budget;
- Prepare preliminary project budget estimates based on schematic design and update the budget throughout the final design and value engineering process;
- Develop construction phasing plans;
- Prepare subcontractor scopes of work and bid packages; and
- Competitively bid all subcontractor work packages.
Once the various subcontractor packages have been bid, the construction manager will present a guaranteed maximum price (GMP) for construction of the project. Once the GMP is accepted by the City, the construction manager then initiates the Construction phase of the project and oversees all aspects of construction to final completion.
Since April, American Constructors has been performing its services under the Pre-Construction phase of the contract. Sealed bids for 45 different subcontractor packages were received by American on August 11. Several of the subcontractor packages received either no bid or only one bid. As a result, American is recommending that these subcontractor packages be rebid. The rebid of these packages is now scheduled for August 27.
This agenda item proposes establishment of a Phase 1 GMP based on the majority of bids received on August 11 along with General Conditions costs, temporary construction site costs, etc. Establishing this Phase 1 GMP now will allow American to get subcontractors under contract and begin initial site work. Following the rebid of the remaining subcontractor packages on August 27, a final GMP amendment will be presented to the Commission at the September 13, 2021 meeting.
Based on American's review of the bids recommended for acceptance they have a proposed a Phase 1 GMP of $6,174,633. The GMP includes the subcontractor bid amounts, 12 months of General Conditions (overhead) costs, temporary construction site costs (fencing, parking area maintenance, temporary utilities, etc.), bonds, and the American Constructors fee. This total includes a $100,000 contingency allowance. A breakdown of these costs is included in the attached AIA Exhibit A.
With this Phase 1 GMP and the projected amounts for the subcontractor packages set to be rebid, the total construction cost is currently projected at $6,950,000. The updated overall project budget is as follows:
| Design |
$402,500 |
| Materials Testing |
$32,000 |
| Construction |
$6,950,000 |
| Apparatus |
$845,000 |
| Furniture and Technology |
$150,000 |
| TOTAL |
$8,379,500 |
Funding currently available or programmed in the future for this project totals $7,575,000, leaving a project budget deficit of a little more than $800,000.
Construction costs for this project have continued to escalate despite design changes and an overall reduction in the size of the building from initial plans. These cost increases are a reflection of the construction market we live in today here in Middle Tennessee. It is doubtful that postponing the project would lead to lower costs later, and the fire response time challenges in this growing area of town are only going to increase if the project is delayed. Design changes to the exterior of the building are another option to reduce costs somewhat, but the City has committed to the surrounding neighborhoods that the facility will fit into the character of the area given its high visibility along an arterial road.
At this time, staff would propose that the funding source to make up the project deficit be a General Fund undesignated fund balance transfer of $805,000 to be completed as part of a FY 2022 year-end budget amendment. Note that this amount would be in addition to an already planned transfer of $2,000,000 from projected FY 2022 excess revenues. The overall funding budget for the project is attached for your review.
If you have any questions, please contact the City Manager. |