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1f Policies on Change Order/Agr CTrYOF 7Z00 M~ket Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952.227.1100 Fax: 952.227.1110 Building Inspections Phone: 952.227.1180 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax:. 952.227.1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Reaeation Center 2310 Coulter Boulevard Phone: 952.227.1400 Fax:. 952.227.1404 Planning & Natural Resource= Plqone: 952.227.1130 Fax:. 952.227.1110 Public Wo~ 1591 Park Road Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site v^,~;,.ci.chanhassen.mn.us TO: FROM: DATE: Mayor and City Council SUB J: Todd Gerhardt, City Manager March 4, 2003 ~,],.~.. Consider Approval of Change Order and Supplemental Agreements Policy Attached you will find the proposed Change Orders and Supplemental Agreements Policy. Thc purpose of this policy is to define thc practices for City staff to process change orders that arc different from those included in the original plans and specifications. These changed conditions may result in the need to make field decisions in an expeditious manner to avoid delays and additional costs. In defining the conditions of approval, staff used the same criteria used in our purchasing policy. RECOMMENDATION Staff recommends approval of thc attached Change Order and Supplemental Agreement Policy. Gfiadmin~~v.! of Change Ordm' ! The City of Chanhassen, A growing community',ti,h clean laL, s. qua:;ty schools, a charming downtown., thriving businesses, winding trails, and beautiful parks, k gmat place to live. work. and play. CITY OF CHANHASSEN POLICY PROCF..~SING CONSTRUCTION CHANGE ORDERS AND SUPPLEMENTAL A GREEME~S I. PURPOSE AND NEED FOR POLICY The City utilizes contracted construction services on many projects each year. These projects are considered and processed by the City Council according to City policies. As a part of this process, the Council defines and authorizes the work scope for the project. In the interest of securing the least cost for these services, and in compliance with the Uniform Municipal Contracting Law, the City implements a competitive bid process. The Council reviews and approves proposals submitted by private contractors as a part of this process. The propos~ are based on plans and specifications reflecting conditions to the extent they can be reasonably known at the point of bidding. From time to time during the course of implementing the contracted work, conditions present them~lves that axe different from those known at the point of bidding, necessitating changes in the work plan reflected in the approved plans and specifications, but within the project scope approved by the Council. These changed conditions may result in the need to make field decisions in an expeditious manner to avoid unnecessary delays and additional costs. An example of this occurrence would be a street project that encounters poor soils that were not detected by the exploratory drilling process used during the preparation of plans and specifications. From time to time there are also occasi~ when it is in the City's best interest to modify the project work scope. H. POLICY lo All procurement practices at the City shall be targeted to securing the purchased product or service at the least cost to taxpayers and/or ratepayers. City facilities shall be consm~ted with the goal to provide facilities of appropriate quality and longevity. 3. City projects shall be constructed only within Council authorized scopes. Work scope is established by the City Council. For approved contracts, authorized changes in work scope will be documented by "Supplemental Agreements." In accordance with the approved contract documents, the Contract Administrator shall issue clarifications and directions for modifying the work, within the work scope as defined by the Council. Any such action will be documented by "Change Orders". e City contracts relating to projects proceeding under MS 429 will not be expanded by more than 25%. City of Chanhassen Policy Processing Construction Change Orders and Supplemental Agreements Page 2 Ill. PROCEDURE 1. The staff shall process all projects in accordance with City Policies. . The staff shall endeavor to identify all reasonable discemable aspects of existing conditions in the preparation of plans and specifications for projects. If non-discemable conditions are encountered during the consmmtion phase of work that is within the scope authorized by the City Council, the Contract Administrator shall address these unknown conditions in an expeditious manner and make the appropriate changes to the detailed plans and specifications and implement the modified construction. . These changed conditions and the action taken should be documented in a "Change Order" and incorporated in the project records. J If the changed conditions result in additional costs to the City, these costs should be identified and justified in the Change Order. 6. Change Orders must be approved as follows: $0 to $5,000 Contract Administrator $5,000 to $15,000 City Manager $15,001to $75,000 City Council Over $75,000 Change orders resulting in costs over $75,000 will be considered a work scope change and be pmc~ed as Supplemental Agreements by the City Council. . In order to expedite the work and avoid or minimi?~ delays in work which may affect contract sum or contract time, work scope changes shall be docmnented in approved Supplemental Agreements. Supplemental Agreements shall be approved as follows: $0 to $15,000 City Manager Over $15,000 City Council IV. RESPONSIBILITY The Contract Administrator shall oversee the implementation of projects. The Director shall identify and p~s any and ail required Change Orders or Supplemental Agreements and present them to the City Manager and/or City Council as appropriate. The Contract Administrator shall also be responsible for preparing the required documentation for project files. City of Chanhassen Policy Processing Construction Change Orders and Supplemental Agreements Page 3 V. AUTHORITY Administrative implementation of policy. Submitted by: Date: Reviewed by: Date: