Finance Committee - 7/5/2018 Page 3
From: Dan Kooken, Purchasing Manager
Re: 2018 Paving Program — Change Order #1 (Value: $50,000)
MOTION BY ALDERWOMAN KELLY TO ACCEPT, PLACE ON FILE AND APPROVE THE CHANGE
ORDER TO THE CONTRACT WITH NEWPORT CONSTRUCTION IN THE AMOUNT OF $50,000. SOURCE
OF FUNDING IS DEPARTMENT 160 ADMINISTRATION/ENGINEERING; BOND
Mayor Donchess
Mr. Dookran, why don’t you explain what the change order would be?
Mr. Dookran
Yes thank you Mayor. This one has to do with the paving program and the change order is for increased
flagger rates, the money that will pay for flagging and traffic control. What happened is that when we put out
the bid, we used the cost that we had last year and that was essentially $22.00 an hour to have a flagger on-
site. As the contractor and others tried to get flaggers this year, the only companies that are giving or providing
flaggers are at a much higher, essentially around $28.50 an hour. So that is a significant increase. When we
went to the Board of Public Works it was asked if they are putting the bid at $22.00 why aren’t they sticking to
it, why can’t they just do the job for $22.00 an hour. Actually it is not a bid item it is an allowance we put in the
contract. We put so many dollars, | think we put $50,000.00 or so into the contract and so they draw from that.
So regardless of the cost they just draw down from that $50,000.00, so this change order is to add to that
allowance and therefore the contractor is not hooked to the $22.00 an hour.
Alderman Laws
Thank you for the explanation | was actually concerned when | saw this earlier because it very obviously looks
like they took $50,000.00, divided it by $28.50 dollars an hour and came up with this 170054.39 hours. | did
the math out and $28.50 is 30% more than $22.00 and then it follows time and a half, double time, same thing,
30%. So 30% of $100,000.000 which was our original allotment would have been $30,000.00 so there is
$20,000.00 more in it and | was a little concerned because | feel like we have an obligation to explain that. But
if they are drawing down from it, does that mean if they don’t spend that $50,000.00 the citizens get it back, it
goes back into our budget?
Mr. Dookran
Yes we can keep it. | didn’t say exactly why we experienced the high rates. It is because of the economy. |
guess it is tough to find qualified flaggers so they are demanding their price, | think that is what is happening
Alderman Laws
But yes it does go back into our ...
Mr. Dookran
It does go back.
Alderman Laws
Who is responsible for reporting those hours? Is it the company?
Mr. Dookran
Yes the company invoices us but we also have people in the field, inspectors, who are there to measure the
amount of work being provided by the flagging company.
