| 9. |
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Approve Change Order No. 2 ($49,419.06) on East Frankfort Water System Improvements Project Phase I Work Order 7348B:
On April 7, 1998, the Plant Board awarded the referenced project to Environmental Construction Corporation in the amount of $1,495,800. The scope of the project involved the construction of 28,000 feet of 24” ductile iron water transmission main, beginning at the water plant en-route to the Sullivan Concrete Tank and ending on
U.S.
60. Also included in the project was the construction of the
East Frankfort
Water Pumping Station.
The final pay estimate for this project was approved in January 2000. When the pump station and transmission main came online, operational problems began to develop on
Deerwood Road
due to surge pressures. In February 2000, an elbow in the transmission main blew off, causing a shut down of the new system. Modifications to the pump station were evaluated. A surge control valve, discharge piping restraints, and enhanced motor controls were installed in the pump station. On December 6, 2000, HMB Engineers declared the pump station ready for operation.
In January 2001, Environmental Construction submitted the following 5 items for payment by change order:
| 1. Surge Control Valve - |
|
$ 38,456.69 |
| 2. Repair Leak in Pump Station - |
|
$ 27,296.06 |
| 3. Add end restraints in Pump Station - |
|
$ 20,085.20 |
| 4. Provide additional motor controls - |
|
$ 3,914.40 |
| 5. Repair transmission main (@ 24” elbow) - |
|
$ 18,105.95 |
| TOTAL |
|
$107,857.30 |
Subsequent to negotiation between the Engineers and Environmental, HMB Engineers drafted change order #2 and recommended payment in the amount of $49,419.06 for items 1, 3, & 4 (attachment B). HMB and the Plant Board agreed that items #2 & 5 were warranty work and were not subject to reimbursement. By letter dated July 26, 2001, Environmental accepted Change Order #2 for $49,419.06 but not as final payment. Environmental contended they were due payment for repairing the leaks in the pump station and in the transmission main, and further that the damage was a result of poor design (attachment C).
The Plant Board, HMB Engineers, and Environmental Construction maintained their respective positions and Change Order #2 was never executed.
On March 26, 2003, the law office of J. Patrick Sullivan, PSC (representing Environmental) wrote a letter to the Plant Board requesting payment plus interest on all five (5) items. No further communication was received from the attorney. On July 15, 2003, Environmental Construction delivered an invoice for Change Order #2, in the amount of $106,784.31.
Approximately 2 weeks ago, Jim Wharton, Secretary/Treasurer of Environmental Construction, called and said he wanted to close out the project and agreed to the final Change Order in the amount of $49,419.06. He further stated that Environmental had been sold to Smith Contracting in
Lawrenceburg
,
Kentucky
.
Staff recommends executing Change Order #2, and the associated final pay estimate #15.
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