City most likely to use different bid process

City most likely to use different bid process

(March 21, 2014) One of the hallmarks of personal effectiveness – according to most every motivational speaker and reality TV judge – is knowing your own limitations.

In that case, the Town of Ocean City will likely be more effective this spring in bowing out of the responsibility of selecting contractors for the upcoming Ocean City Beach Patrol Headquarters project, and instead going through a construction management firm.

“It’s actually a totally different way to build the project itself,” said City Engineer Terry McGean, who told the city’s Recreation and Parks Commission last week that he would recommend the new approach for the OCBP project.

The long-awaited and sorely-needed deal on construction of a new beach patrol building is expected to be sealed next week, when City Council takes a final vote on a land-swap and financing deal with the Ocean City Development Corporation. OCDC currently owns the land on Talbot Street where the new building will sit, and will be paying 35 percent of the project’s cost.

Instead of simply designing the building and then contracting the construction out to the lowest bidder, McGean said, the city could instead hire a construction management firm based on its qualifications and projected overhead costs. That firm, not the city, would then be responsible for bidding out the construction work and completing the project

“They would work with you from the beginning, with both myself and the architects, and once you’re far enough along they would actually bid the project out to the sub-contractors,” McGean said. “Based on the prices they get back from the subs, and their own provisions…they would bring all those numbers back and we would negotiate a final price with them.”

Despite the extra steps involved, using a construction management firm means the city is not the one responsible for the selection and coordination of other contractors.

“The management firm would be what we call the ‘at-risk’ party,” McGean said.

“It actually does two important things,” he explained. “One, it brings qualifications into the contract side of it, so it’s not just the city making the decision based on a low bid from a general contractor. Two, it brings the person who is responsible for the actual building in during the design phase.”

The management firm, in assisting with the final designs for the OCBP building, would be aware of any design changes that would adversely affect the cost or quality of construction.

“I try to do that, but having the person who actually builds it laying eyes on it and doing the cost estimates during design is a big help,” McGean said.

This process – or the lack thereof – has proven to be a major issue for the city over the past year with the Caroline Street restroom and stage facility.

The project, which began construction in the fall of 2012, was expected to be completed before the 2013 summer season. Instead, a myriad of delays saw the facility open the week after Christmas, seven months behind schedule.

Conversely, the city has seen relative success with construction at the convention center. Because the state has paid the majority of capital costs for those renovations, the Maryland Stadium Authority is in charge of construction, and used the construction manager method for the project.

“It’s a combination of the experience we’ve had at Caroline Street, which hasn’t been as good, and the experience the Stadium Authority has had at the convention center, which has been very good,” McGean said about the new methodology. “Plus, we know this is going to be a very tight budget.”

The city has borrowed $2 million for the OCBP facility. The current layout of the building shows 9,477 square feet, a roughly 3,000 square foot reduction from what was originally planned. However, in the first design revision, an increase in estimated costs ate up the 15 percent contingency the city had built into the price before construction even begins.

“I’m not anticipating anything out of the ordinary, but it’s still got a way to go before it’s actually built,” McGean said.

Although weather was initially blamed for the Caroline Street delay, it became evident that the complexity of the architecture – particularly the concrete molding – was far beyond the scope of Black Diamond Builders, the general contractor hired by the city after bidding the project at $938,750, well below the $1 million estimate.

Despite levying hundreds of thousands of dollars in late fees to Black Diamond, and bringing on other subcontractors, the city is still dealing with frozen pipes, roof leaks, and questionable concrete quality at the facility.

McGean said that none of the design issues with the restroom project should be an issue for the OCBP building – but a construction management firm would be able to advise the city if certain design elements were to increase cost or difficulty of construction.

“[The OCBP building] doesn’t appear to be particularly difficult, but I didn’t think Caroline Street appeared to be either,” McGean said. “Which is why it’s good to have someone on board to say that.”

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