PURPOSE

Staff is requesting City Council approval of 1) a Professional Services Agreement with Turner Construction Company to develop the Guaranteed Maximum Price for the Robert R. Ovrom Park Project, Phase I and the South San Fernando Boulevard Streetscape Project; and 2) a Cooperation Agreement with the Redevelopment Agency for the South San Fernando Boulevard Streetscape Project. 

Staff is also requesting Redevelopment Agency Board approval of 1) a Cooperation Agreement with the City of Burbank for the South San Fernando Boulevard Streetscape Project; and 2) an appropriation of Redevelopment Agency Funds for the Agency�s portion of the Professional Services Agreement with Turner Construction Company. 

BACKGROUND

In separate actions, the City Council approved a Guaranteed Maximum Price (GMP) delivery strategy in lieu of the Design Bid Build delivery process for the Robert R. Ovrom Park Project, Phase I and the South San Fernando Streetscape Project.[1] 

Staff initiated a pre-qualification procedure in July 2003 to identify general contractors with the requisite qualifications to submit a proposal for consideration in constructing these capital projects.  This delivery strategy was deemed in the City�s best interest and is consistent with the objectives of competitive bidding, including advertising for Statements of Qualifications (SOQ) from prospective providers of GMP services.[2]  These measures were implemented to enhance project delivery strategies and improve the City�s protection against potential cost overruns, schedule delays, and quality concerns for its capital projects.

The SOQ and selection process for GMP service providers culminated with the Selection Committee (Committee) convening March 25, 2004 to hear oral presentations from three qualified firms.  The Committee was comprised of the following representatives:

Dr. Ali Kiafar � BUSD Chief of Facilities and Superintendent

Eric Hansen � Acting Parks, Recreation & Community Services Director

Bruce Feng  - Deputy City Manager/Public Works & Capital Projects

Sue Georgino  - Community Development Director

Bob Van Hazelen � Assistant Public Works Director/Fleet & Building

Larry Wolfe � WLC Architects � Principal (Ovrom Park Design Architect)

Phillip Clifford  - Capital Projects Manager

Discussions were held immediately after completion of all presentations and the Committee unanimously agreed in ranking the firms as noted below.  The GMP Services cost was part of each candidate�s proposal and therefore known in advance.  The Committee directed staff to initiate contract negotiations with Turner Construction Company (Turner).

Turner was selected based on overall best value and fit with the City and District needs, not lowest price.   Its proposed staff was most qualified having the commensurate expertise in completing projects of this type and complexity.  Its hourly rates, fixed fee for the GMP, weekly staff costs, expected construction durations, and costs for insurance and bonding were either the lowest or compared favorably with Pepper Construction.   Turner�s understanding of, and commitment to, the Project�s success was clearly portrayed to the Committee.

1st       Turner Construction Company

2nd      Pepper Construction Company

3rd      KPRS Construction Services, Inc.

The proposals submitted for GMP Services reflected a cost range from a low value of $38,624 for Pepper Construction, to the highest value of $99,000 for KPRS Construction.   Based on four project delivery scenarios identified in the Request for Proposal (RFP), the cost for Turner�s GMP Services ranged from $48,000 to $83,300.   Turner clearly understood that four potential construction scenarios would require four pricing options commensurate with the level of service required to complete the GMP.   Since the Park and Streetscape projects could be completed in a variety of ways - keeping them separate, overlapping their respective start and completion dates, or completing the Streetscape project within the start and completion dates for the Park Project, several service levels, and therefore, cost levels, were possible.

Pepper and KPRS tendered the lowest and highest price of $38,624 and $99,000 respectively, for the GMP Services.   This cost information suggests that Pepper and KPRS both misunderstood there was more than one possible construction scenario that could be selected by the Project Team or their willingness to provide the GMP Services irrespective of the final level of services or delivery scenario.

ANALYSIS

Project Execution - Staff met with Project Stakeholders and the Development Oversight Committee and was directed to separately commence construction for each Project with a consensus that this approach was in the City�s long term and best interest. 

To prepare for construction commencement of the Streetscape Project by September 2004, the GMP Services Provider needs to be retained as quickly as possible to properly develop the GMP for City Council and Redevelopment Agency approval.   Consequently, the decision to first issue a Professional Services Agreement (PSA) followed by a project specific construction agreement after a GMP was completed for each Project was based on time constraints and efficiency.  The PSA, provided herein as Attachment A, enables staff time to develop the project specific construction agreement that will be executed after the GMP has been approved by City Council and the Agency.  The original Request for Proposal, excluding its Exhibit C attachments, is provided herein as Attachment B.

Completion of the GMP Services and a subsequent and separate construction contract for the Ovrom Park and Streetscape Projects is summarized below.  

• Only one PSA encompassing GMP Services for both the Ovrom Park and Streetscape Projects will be executed based on City Council�s approval.   GMP Services for each Project will commence on/or about the same time.

• The GMP for the Streetscape Project will be developed first with an anticipated submittal to the City Council and Agency for approval in August 2004.  Staff will also request City Council and Agency approval of the construction documents and the construction contract at that time. 

• Based on City Council approval of GMP for the Streetscape Project, a separate construction contract will be executed with construction expected to commence in September 2004.

• As previously noted, the GMP Services for the Park Project will commence on or about the same time as the Streetscape Project.  However, since the Park Project is currently completing its Design Development Phase, the GMP is expected to be completed in February 2005.

• Based on City Council approval of the GMP for the Park Project, a separate construction contract will be executed with construction expected to commence in March 2005.

Company Profile � Turner Construction Company�s Special Projects Division (Turner) was established in 1964 to serve the unique needs of its clients for construction projects with values between $1.0M and $15.0M.  These projects include new ground-up construction, renovations, historic structure restorations, seismic renovation, and interior improvements.  Turner excels in meeting challenging schedules and provides its clients all the benefits of being part of the nation�s leading builder � purchasing power, depth of staff, and financial strength.

Turner previously provided pre-construction services for the new Buena Vista Branch Library and is currently providing similar quality services for the Development & Community Services Building Project.

Professional Services Agreement � Attachment A represents the City�s PSA with Turner and has been crafted to enhance the City�s control over the GMP Services Provider by imposing a higher accountability level on its service delivery and overall performance.   The City also reserves the right to pursue another general contractor in the event Turner does not meet the expectation and performance levels.  Although the possibility of this scenario developing is remote, the down side is that the project will slip day for day until a replacement general contractor has been secured and a new GMP developed.   Therefore, it is incumbent upon staff and Turner, in conjunction with the design team, to develop a design program commensurate with currently established budgets.

Attachment A also details Turner�s scope of services for the Ovrom Park and Streetscape Projects.  In general, Turner will provide the following services.

�        Provide Document Constructability and Bidability Reviews

�        Develop a Comprehensive and Fully Supported GMP

�        Develop Construction Milestone Schedules

�        Establish a Subcontractor Pre-Qualifications and Resource Program

�        Attend Requisite Coordination Review Meetings

�        Provide Other Required GMP Services Based on Project Needs.

Cooperation Agreement between the City and Redevelopment Agency � The proposed Cooperation Agreement between the City and Redevelopment Agency serves three purposes.  Primarily, it documents the relationship between the City and Agency and allows the City and the City�s Construction Manager (Turner) to manage an Agency project that is funded by Redevelopment Tax Allocation Bonds for the South San Fernando Redevelopment Project Area.  It also protects the City from any liability that could possibly occur due to the City�s Construction Manager utilizing construction documents that were created as a result of an Agency contract with David Evans and Associates. 

The second purpose served is that the proposed Cooperation Agreement allows appropriation of the Agency funds necessary to fund the Agency�s portion of the proposed Professional Services Agreement for Turner Construction to act as Construction Manager for both the Robert Ovrom Park and South San Fernando Boulevard Streetscape Projects, and allows transfer of these funds to the City�s Capital Projects Budget (Fund 370). 

Thirdly, the proposed Cooperation Agreement allows for future transfer of Agency funds to the City�s Capital Projects Budget to pay the cost of the streetscape improvements.  Agency staff will return to the Agency Board to request approval of a resolution appropriating funds to be used for the streetscape improvements at the same time it seeks approval of a construction contract for the streetscape improvements.  To accomplish these three goals, staff recommends that the City Council and the Redevelopment Agency Board each adopt a resolution approving the proposed Cooperation Agreement.  

FISCAL IMPACT

Cost for GMP Services - The cost for GMP Services was based on the City�s recent decision to segregate and separately complete the Park and Streetscape Projects.  Turner�s cost to provide GMP services for this scenario is $48,010 and excludes reimbursable expenses.  However, the maximum cost exposure for GMP Services for both Projects, excluding any reimbursable expense allowance, is $81,619 and is based on the timing in completing the Park Project GMP and commencing construction.   This is explained below.

In brief, a concerted GMP Services effort for the Streetscape Project will commence after City Council�s approval of the subject PSA to facilitate the projected September 2004 construction commencement.  This initial concerted effort will also include GMP Services to reconcile the Design Development Budget for the Park Project.  

Sometime during the Streetscape Project�s construction period, and when the Park Project construction documents are approximately 75% to 90% complete, a focused GMP development effort for the Park Project will begin.  This effort will be performed by the same on-site Turner staff working on the Streetscape Project.  It is only in this manner that the GMP Services can be effectively completed without incurring any additional Turner staff costs, and therefore, additional costs to the City. 

In the event the Park Project is delayed in such a manner that Turner�s GMP Services cannot be completed while its on-site staff is working on the Streetscape Project, the City�s cost exposure may increase by no more than $33,609 to a total cost of $81,619, for all GMP Services, excluding reimbursable expenses.  Staff maintains this possibility is remote but plausible and is a function of the remaining design and approval efforts required for the Park Project�s construction document phase.

To ensure each project equitably shares its relevant cost for GMP Services, staff offers the following points.

1. If GMP Services are provided for the Streetscape Project without any involvement or existence of the Park Project, those costs would be $48,010.

2. If GMP Services are provided for the Park Project without any involvement or existence of the Streetscape Project, those costs would be $33,609. 

3. If the GMP Services for the Park Project are performed by Turner�s on-site staff during construction efforts on the Streetscape Project, there is no additional cost to the City.   The cost is $48,010, plus any reimbursable expenses.

4. Under the scenario identified in Point 3 above, the $48,010 cost for GMP Services on the Streetscape Project will be reduced by $33,609 (for a net cost of $14,401 to the Streetscape Project) and the $33,609 cost transferred to the Park Project�s total cost.  

5. If the GMP Services for the Park Project are not performed by Turner�s on-site staff during construction efforts on the Streetscape Project, there will be an additional cost of $33,609 to the City.   Under this scenario, the total combined cost for GMP Services for both projects is $81,619, excluding reimbursable expenses.

Please note that the manner in which Turner�s GMP Services are being provided represents a substantial benefit and value to the City.  Turner is requiring its on-site staff, which is the same staff providing construction management for both the Street and Park Projects, to provide these GMP Services.  The value Turner obtains is the cost and schedule knowledge base it acquires in preparing for constructing the Park Project

Funding Provisions - A Not-to-Exceed Fee of $53,000 was negotiated for Turner�s GMP Services and includes $4,990 for reimbursable expenses.  Staff is requesting $53,000 in Redevelopment Agency funds to cover the cost of the Turner PSA for the Streetscape Project.  Sufficient funds are available in the Ovrom Park Project (370.CP01A.70002. 0000.13504) for its share of the PSA cost in the event the Park Project is delayed to such an extent that Turner�s on-site staff cannot complete the GMP Services during the construction completion of the Streetscape Project.

There is no fiscal impact to the City if the Council approves the PSA for GMP Services.  Although no specific line item cost was initially set aside for GMP Services within either Project�s original budget, the cost for these services is an inherent component of the Construction Manager�s overhead expense in developing a construction bid or a GMP.  Each Project�s construction budget has accounted for this cost as part of the Construction Manager�s overhead expense.

The City created a separate Fund 370 (General City Capital Projects) project to accept and use Redevelopment Agency funds for the Streetscape project as allowed by the Cooperation Agreement.  Since appropriation of Redevelopment funds involves the transfer of money between funds (from Fund 304 to 370), the money must move out of Fund 304 �Un-appropriated Balance� (304.ND000.30004.0000.00000) to Fund 304 �Transfer to Fund 370� (304.ND000.85101.0370) before being placed in Fund 370 �Contributions from Fund 370� (370.ND000.59500.0304).  Once the $53,000 is in Fund 370, it will be appropriated to the City�s Fund 370 South San Fernando Streetscape Project (370.CP01A.70005.0000. 13154). 

RECOMMENDATION

Staff recommends that the City Council adopt the proposed resolutions approving 1) a Professional Services Agreement with Turner Construction Company to develop the Guaranteed Maximum Price for the Robert R. Ovrom Park Project, Phase 1 and the South San Fernando Boulevard Streetscape Project; and 2) a Cooperation Agreement with the Redevelopment Agency for the South San Fernando Boulevard Streetscape Project. 

Staff also recommends that the Redevelopment Agency adopt the proposed resolutions approving 1) a Cooperation Agreement with the City of Burbank for the South San Fernando Boulevard Streetscape Project; and 2) an appropriation of Redevelopment Agency Funds for the Agency�s portion of the Professional Services Agreement with Turner Construction Company. 

Cc:          PAF 3.2

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