BURLINGAME—The project to upgrade the city’s electric utility distribution system has been a topic of discussion during numerous Burlingame City Council meetings since 2011. The lowest total of bids for each of three project components was $715,000 more than the $1,041,000 estimated project cost.
In response to high bids, the city requested scope of work changes for each of the components. The project manager, Morrow Engineering, Inc., charged the city an additional $55,440 for three change orders. On Oct. 24, 2011, the city executed a $125,000 project management contract with Morrow.
The change orders affected project scope and schedule. At its Oct. 21 meeting, the council requested a representative of Morrow to be present at its Nov. 4 meeting to discuss project performance. Project Engineer, Janice Wilson, P.E., P. Eng., appeared before the council during its Nov. 18 meeting.
“I’m a little frustrated with all the (change order) charges from beginning to where we’re at right now, especially charges that were not necessarily the city’s doing,” said Burlingame Mayor Mike Dorr to Wilson. “This whole thing … was $600,000 off from the beginning. You should know what the contractors are charging. It should be closer than $600,000. Right now, we have all our electric (fund) reserves setting in your engineering firm.”
When representatives of the city and Morrow began discussion in 2011 to define scope of the project, Burlingame requested retention of existing 2,400V system capacity, while physical capacity and line clearances would be built to code requirements for upgrade to 12,470V. This approach would enable the city to upgrade the voltage in the future, when the electrical crew was trained to work around high-energy lines.
Morrow prepared the contract to implement the project. The contract specified 12,470V service. The city signed the contract on Oct. 24, 2011. Later, Change Order 1 was written to accommodate the Burlingame request, providing for retention of the existing 2,400V capacity.
A provision of the Standards of Performance in the city’s contract with Morrow says, “Owner (Burlingame) shall not be responsible for discovering discrepancies in the technical accuracy of Engineer’s services. Engineer shall correct deficiencies in technical accuracy without additional compensation, unless such corrective action is directly attributable to deficiencies in Owner furnished information.”
“If you guys made an error, and undershot $600,000, why aren’t you paying for what you did wrong, to start with?” council member Michelle Mullinix asked. “We had to rebid to start with, because you guys
undershot everything. We’re having to pay you again, because you basically messed up.”
Wilson’s response was technical, citing an industry guide for development of price estimates. She also said bids by one or two vendors did not constitute competition. She added that delayed bidding did not take into account price increases for materials. She said demand for products and services had increased from two years ago, so prospective bidders were not “hungry,” which gave them an opportunity to quote higher bid prices.
“We just got Change (Order) 3,” Dorr said. “That was on a safety item. I can’t see how something like that was overlooked.”
Morrow issued Change Order 3, related to transformer specifications and placement. The city requested bids for the transformer, as specified in Change Order 3. After the city accepted a bid and executed a contract to purchase the transformer, Morrow advised that an enclosure was needed. The vendor requested, and the city paid, an additional $1,725 over the contract price. The Nov. 11 Morrow invoice listed the Change Order 3 at $24,000.
“This particular item is an enclosure on a transformer, that when the cables come up (from underground conduit) and land on the transformer, they’re going to be exposed,” Wilson said. “It got omitted, overlooked, when we put the transformer out to bid. My opinion was that the transformer manufacturer should provide that.”
Later in the Nov. 18 meeting discussion, Wilson acknowledged that Morrow would reimburse the city $1,725 for added cost of the transformer enclosure.