TRANSMITTAL LETTER FOR BOARD MEETING OF JANUARY 21, 2021
COMMITTEE ON PROCUREMENT
Mr. Brian A. Perkovich, Executive Director
Title
Authority to increase Contract 73-161-EH McCook Reservoir Excavation Agreement, to Vulcan Construction Materials, L.P. in an amount of $2,200,000.00, from an amount of $101,200,234.25, to an amount not to exceed $103,400,234.25, Account 401-50000-645620, Purchase Order 5000176
Body
Dear Sir:
On October 1, 2003, the District executed an Agreement with Vulcan Construction Materials, L.P. (Vulcan) to mine a portion of the Lawndale Avenue Solids Management Area (LASMA) for the McCook Reservoir, Contract 73-161-EH. This agreement was amended several times over the years. On July 9, 2015, the Board of Commissioners authorized the execution of an amended McCook Reservoir Excavation Agreement that incorporated eight (8) previous amendments, clarified language in the original estimate, and expanded the mining area of Stage 2 so that the final reservoir capacity would be increased from 7 billion gallons to 10 billion gallons, increasing the amount of material to be excavated by over 40 percent and requiring more time to complete the mining. The contract is now scheduled to expire after completion of mining in 2028.
The terms of the agreement provide for reimbursement of “Hard Costs” associated with the mining operation over a period of approximately 20 years. The agreement recognized that additional hard cost items would be identified over time and provided for their reimbursement. The agreement also recognized that the costs included were initial estimates and that reimbursement would be based on costs actually incurred. The purchase order had a value of $94,717,289.25 after the amended agreement was approved and was increased to $97,695,421.25 at the December 7, 2017 Board Meeting. On the November 7, 2019 Board Meeting, the Board of Commissioners approved and adjusted twelve budgetary items in the agreement to account for the subject work and was increased to $101,200,234.25. As of December 7, 2020, the attached list of change orders has been approved.
An increase in the value of Item 8.3.G: Additional Administration, in an amount of $2,200,000.00 from an amount not to exceed $4,085,000.00 to an amount not to exceed $6,285,000.00 is requested at this time. The increase is required to allow for Vulcan to maintain a project manager and part-time account dedicated to this project throughout the duration of this project. The initially approved costs substantially underestimated the amount of Vulcan administration costs for said work through 2028. The initial estimate also did not include costs for the Expanded Stage 2 area. Per the agreement, Vulcan requires additional staff to administer responsibilities solely arising out of Vulcan’s obligations including but not limited to project management, accounting and reporting. The Districts responsibilities per the agreement are to reimburse Vulcan for such additional staff.
This change order is in compliance with the Illinois Criminal Code since the change is due to circumstances not reasonably foreseeable at the time the contract was signed and is in the best interest of the District.
It is hereby recommended that the Board of Commissioners authorize the Director of Procurement and Materials Management to execute a change order to increase Contract 73-161-EH in an amount of $2,200,000.00 (2.17% of the current contract value), from an amount of $101,200,234.25, to an amount not to exceed $103,400,234.25.
Funds are available in Account 401-50000-645620.
Requested, Catherine A. O’Connor, Director of Engineering, KMF
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for January 21, 2021
Attachment