Delay Costs for Design Build January 17, 2019 Basis of the - - PowerPoint PPT Presentation

Core Systems Contractor’s RFCC 00014 Delay Costs for Design Build January 17, 2019

• As a result of delays to the Interim Opening from East Kapolei to Aloha

Stadium (Segment 1), Core Systems Contractor AHJV (the “Contractor”) made its original Request for Contract Change (RFCC) to the Design-Build (DB) portion of its Contract.

• The Contractor subsequently amended the RFCC to include the delays to

the DB work to the projected Full Opening (East Kapolei to Ala Moana).

• Interim Opening is presently scheduled for December 2020, which is

1560 (4.3 years) days after the originally scheduled date.

• Full Opening is presently scheduled for January 2025, which is 2119 days

(5.8 years) after the originally scheduled date.

Basis of the Contractor’s Claim

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• The delays caused the Contractor to perform many tasks much later

than originally scheduled, escalating their costs to perform those DB tasks.

• The delays prolonged many of the Contractor’s Project-Wide and

General Requirements scope of work for the DB phase, which increased the Contractor’s costs.

• In addition to full opening (East Kapolei to Ala Moana) the scope of

work includes additional work necessary for a second Interim Opening (East Kapolei to Middle Street).

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Basis of the Contractor’s Claim (cont.)

HART and Contractor’s Differences

HART

• Total delay should be reduced

by the calculated amount of the Contractor’s “concurrent delay.”

• HART’s estimate prolonged

and escalated the Contractor’s original Price Items from its bid (Best and Final Offer 2).

CONTRACTOR

• There is no “concurrent

delay” as all “delay” was simply the utilization of project float.

• Delay-related costs should be

calculated independently of its original bid.

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• The Contractor’s first verbal notification indicated that the

claim amount would exceed $400M.

• The Contractor’s first formally submitted claim amount was

$275M.

• The final settlement is agreed at $160M to be spread over the

project period. This equates to $147.7M (net present value).

HART Final Settlement

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The Milestones

• 20% - MSF Completely Operational
• 10% - Completion of the Functional Section
• 20% - Interim Opening No. 1
• 20% - Airport Segment Readiness
• 10% - Installation of Train Controls in last four stations
• 20% - Full Opening

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• Original Price (w/o O&M)

$573,782,793.00

• Previous Change Orders

$42,639,889.00

• Current Contract Price

$616,422,682.00

• This Change Order

$160,000,000.00

• New Contract Price

$776,422,682.00

CONFIDENTIAL & DELIBERATIVE 7

THE DESIGN BUILD CONTRACT

Significant Agreement Terms

• Includes the DB portion of the O&M Mobilization costs for all

three Openings.

• HART will accept a retainage bond in lieu of the Contractor’s

retainage.

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A LESSON LEARNED (Avoiding Future Delays)

• Fixed Facilities’ and Core Systems’ schedules should be

contractually linked.

• The involvement of a P3 Developer accomplishes this result.

CONFIDENTIAL & DELIBERATIVE 9