Directions:

You are the Construction Manager on $$25,000,000$ Hospital Addition. You will be asked to prepare a combined change order complete with the following documents:

The attachment that you will need are listed below:

Bluebookrates.pdf

Change Order $2013(2)(2).$doc

Water Main repair.xls

A letter to the Owner which will be the instructor of the Course describing the change order in accordance with the Lecture notes. Your letter should include the reason for the change order, the scope of the change order and if the change order is value added or the result of unforeseen conditions.

The Form of the Change Order

Time and Material Spreadsheet

Part $1$

The Owner of the Project has requested that additional sidewalks, storm drainage, traffic striping, paving and landscaping be performed to an older parking lot that is in need of some improvements. The Owner has directed the Construction Manager to perform the work as Change Oder to the Original Contract. The General Contractor $($GC$)$ has to subcontract the paving, traffic striping and landscaping to other subcontractors. As the Construction Manger you prepared the scope of work for this additional work. The CM and GC negotiated the following raw unit prices including labor, materials and equipment $($profit and overhead have not been applied, but the Contractor is eligible for profit and overhead as specified on page $3)$ to perform the work.

Description

Performed By

Quantity

Unit

Unit Price

$15$ Reinforced Pipe

General Contractor

$410$

Liner Foot

$$85$

Storm Inlets

General Contractor

$6$

Each

$$2,750$

Concrete Sidewalks

General Contractor

$225$

Square Yards

$$60$

Paving

Subcontractor

$17,000$

Square Feet

$$8\mathrm{.}50$

Traffic Stripping

Subcontractor

$1$

Lump Sum

$$5,000$

Landscaping

Subcontractor

$1$

Lump Sum

$$25,000$

Calculate the total cost of the change order based upon the negotiated unit prices and apply the overhead and profit factors described later in this document.

Part $2$

While the Contractor was excavating to install the storm drainage related to the parking lot paving, they encountered soil that has a gasoline odor and appears to have an oily sheen. At this point work is stopped and the Contractor has to send his crew home due to safety concerns. After reviewing some records and consulting with the Owner it is discovered that an abandoned gasoline storage tank is buried beneath the older parking lot. Current State regulations require that the underground fuel storage tank has to be removed and disposed of$.$ Furthermore, all of the contaminated soil has to be excavated and disposed at a licensed disposal facility. All of the excavated material has to be replaced with Dense Graded Aggregate at a material cost of $$25$ per cubic yard including delivery. This work has to be performed immediately on a time and material basis $($T&M$).$

The scope of work of the T&M work will include the following:

The Contractor has to be compensated for the delay in the work, because he had to pay his crew for two days while the research into the cause of the contaminated soil was determined.

The crew consisted of the following:

Two Class B Equipment Operators

One Labourer Foreman

Three Labourers

The Contractor hired an environmental consultant to perform soil sampling. A total of $25$ samples were taken at cost of $$400$ per sample.

The Contractor also has to purchase $30$ rolls of plastic sheeting at $$10$ per roll to cover the stockpiled soil. He also has to purchase $125$ hay bales for soil erosion at $$5\mathrm{.}00$ per bale and $300$ linear feet of silt fence at $$2\mathrm{.}00$ per foot.

The area of contaminated soil measures $40-$feet by $50-$feet by $15-$feet deep. The disposal facility charges a tipping fee of $$125$ per ton to dispose of the contaminated soil. A cubic yard of soil is $1\mathrm{.}5$ tons per cubic yard. Additionally, the Contractor has to rent dump trucks at a monthly rental cost of $$15,000$ and operating cost of $$12$ per hour to transport the soil to the disposal facility. Each truck holds $25$ tons and can make to two trips per day. The Contractor hires two trucks per day and the trucks drivers are paid a wage of $$35\mathrm{.}25$ per hour with fringe benefits of $$17\mathrm{.}10$ per hour.

The Contractor hired a subcontractor to remove the underground storage tank at a lump sum of $$15,000.$

The General Contractor used the following crew to excavate the contaminated soil and place the clean fill.

Three Class B Equipment Operators

One Labourer Foreman

Four Labourers

The Labourers and Foreman worked for a total of $80$ hours $(400$ Total man hours$)$ this was agreed upon by the CM and the Contractor$$s Superintendent. The Equipment Operators man$-$hours will be based upon the hours that the heavy equipment was operated.

The following company owned heavy equipment was utilized:

Kobelco SK$295$LC Track Mounted Excavator $80$Hrs

Deere $724$K Front End Loader $80$Hrs

Roller Compactor $56$Hrs $($Monthly Rental $$12,000$ and Operating Cost $$12\mathrm{.}50$ per hour$)$

You will need to calculate the volume of contaminated soil, clean fill, cost of subcontractors, equipment rental, tipping fees $($considered a subcontractor$),$ materials and labor associated with this change order.

By Contract the Contractor is permitted to charge $10\%$ overhead and $15\%$ profit on all Materials and Labor of his own forces. $10\%$ profit on all equipment and all subcontractors, no overhead can be applied.

You can use the labour rates listed in the spreadsheet presented in Lecture $5$ with a labour burden of $1\mathrm{.}32,$ the equipment rates can be found in the attached copies of the Blue Book unless described herein. Operating costs can be charged and use the $176$ factor to determine the hourly rental rates.

This additional work is to be applied to an original $$20,000,000$ contract that has already had two change orders in the amount of $$605,500.$ It is important in your summary to advise the Owner if this additional change order will approach the $20\%$ threshold.

Also, the Contract has a $360$ day duration and the Contractor has requested a $90-$day extension to the Contract for this additional work, be sure to document this request in the change order documents.

It is best to calculate the cost of each part of the change order separately and combine the totals into one change order.

Learning Outcomes:

Outcome $4-$ Prepare a contract modification $($change order$).$