Board of Aldermen 8-11-2020 Page 10
Attorney Bolton
As with any contract, it can be amended over time. Construction contracts are complex and certainly
renovations are even more complex than new construction. And we’ve got a contractor, actually we have
several trade contractors agreeing to do certain work for certain prices. Those all get added up, our
construction manager adds their fee, a certain amount of continency for odds and ends and that becomes
the guaranteed maximum price under the contract as it exists. It is not unlikely that in the course of doing
the work that the contractor has agreed to do something is discovered that requires additional work that the
contractor has not yet agreed to do. But once we discover that, we may decide that is better to address it
now than later or we may essentially have little to no choice if not addressing that additional work would be
a violation of building code. If that happens and we are requiring a contractor to do extra work, extra work
begets extra pay. So we may well be in a position to negotiate how much to pay for that extra work. So if
we agree to modify the contract, to amend the contract, we may, in fact, be paying more. Sometimes, |
would say less often, the reverse can be true. Something you think needed to be corrected when you enter
into the contract, once you start removing walls and floors and ceiling tiles, you find out that something that
you thought needed to be corrected and the contractor has agreed for a price to correct that, you find out —
Woah, we don’t need to have that done, it’s in better shape that we thought it was, in which case the
change order can come along that reduces the guaranteed maximum price. So it’s possible to amend a
contract in either direction; to remove work or to add work and that can be expected if you are adding work
it costs more, if you are removing work you can expect it to cost less.
President Wilshire
Are you all set Alderman Lu?
Alderwoman Lu
Yes thank you. Just a comment that it is surprising to learn that before the work begins a contractor wants
to reduce the guaranteed maximum, that’s all. But thank you for your concise explanation Attorney Bolton.
Attorney Bolton
Yeah | can answer that too. At the time that we enter into a contract with a construction manager, the
construction manager, the design professional are estimated what areas of the work might cost. The
guaranteed maximum price generally is set after bids have come in from all the trade contracts. So you get
a bid from your electrical contractor and a bid from your mechanical contractor, a bid for the framing and
roofing and a bid for the electrical wiring. And as | say you add all that up. One of the jobs of the
construction manager is to assist us in that process of bidding out the segment of the work to the various
trade contractors. So in the construction management form, this is very typical. The contract is based on
an estimate to begin with and then the guaranteed maximum price is set after the construction manager
has already performed some of its duties.
President Wilshire
Ok so the motion before us to accept, place on file and approve the guaranteed maximum price by Martini
Northern by roll call. Any further discussion? Alderman Jette.
Alderman Jette
Yeah | just want to say | mean | don’t take any great pleasure in being a road block on these things; | take
my job seriously. | mean | appreciate Alderman Tencza’s pointing out that there was a Memo written on
July 27" on this. And it included 21 pages | think of amounts of details. | didn’t, maybe it is my fault, |
didn’t expect that we would be voting on this tonight, | thought it would be referred to a Committee. | mean
our rules, you know Section 5-19 of the Nashua Revised Ordinances says that every Ordinance Order or
