Exh A
Elcon Corporation's Comments to the Port Commission on 5/3/11 Re. Rental Car Project Exhibit A PortCommlsslon Rgow _,./Meetlng01M Introduction: I'd like to briefly explain a few matters regarding this project as follows: I. Schedule Delays April 5, 2011 Commission meeting minutes, page 2: "This is a 42 day time loss from what was reported on the last update is due to a slip in the commissioning start date, driven by setbacks in power and electrical " systems completion. a. Elcon schedule analysis shows 233 day delay (given the September 22, 2011 power on date per latest Turner schedule update) power on date was originally February 1, 2011 b. Late access to work areas. Elcon held out an average of 86 days over 17 different areas c. Elcon directed by Turner to accelerate (man-up) from 35 to 80 thus currently Elcon labor makes up nearly 1/3 of total project work force (250 total) S'DQ.. The construction schedule is now nearly vertical Elcon has not been paid for ANY acceleration COST. Elcon is in no way responsible for condition leading to schedule acceleration. ll. Design Changes December 2010 Port of Seattle Monthly RCF Progress Report, page 18: "RCF/CSB Electrical work including design changes affecting the transformers, cable pulling, buss ducting, electrical panels, lighting and trim. Further design delays may drive the permanent power and the start of commissioning to the RCF/CSB out. " A few key points to consider here: 1) 100% P08 electrical construction drawings issued by POS 3/28/08 2) 136 P08 electrical design changes after 100% design (over 350 Elcon pricing iterations thereof) 3) Project could not be built electrically as it was designed (Walker) 4) There have been 11 Design Related L&| correction notices issued indicating NEC code violations 5) Electrical Design Changes affected nearly every aspect of Elcon's electrical scope of work from infrastructure to light fixture types and all else... 6) 15 NEW ELECTRICAL DESIGN CHANGES in past 10 days alone 7) 307 Elcon RFl's drove design changes 8) Design change documents incomplete (no drawings nor by-in-large electrical design issued) 9) Port has treated Elcon as a design/build subcontractor. This project is a Design/Bid/Build NOT a Design/Build Change Orders April 5, 2011 Commission meeting, contract status summary, Power point page 3: "Non suspension Contract Changes total $8,765,318.00. " a. Elcon currently has $2,748,766.00 in executed (non suspension) C/O's b. Elcon issued 31% of total of all project changes (% of entire project changes) c. Elcon endin chan es 603 811.00 not eta roved d. Elcon disputed underpaid changes $2,104,375.00 *To Elcon's knowledge POS did not conduct independent estimates for change orders, as was the #1 recommendation in the 2007 Performance Audit. The excerpt below was taken from the performance audit. * " p. 17, Table I: Recommendation #1: Immediately implement and strengthen control procedures to assure that Engineer' change order estimates are (a) prepared without knowledge of the contractors' proposed amounts, and (b) change order estimates and cost analyses are fully and completely documented. Where cost orprice analysis is used to evaluate change order proposals, POS should require full and complete documentation of these reviews, including fully documented supervisory reviews and approvals. " e. POS issued lump sum unilateral change orders to Elcon at a fraction of the true cost of the work. Why? f. Elcon forced to fund POS directed change order work. Why? 9. PCS issued changes/design have aged over 1 year, in some cases, (DCN's 14, 14.1, 38, & 39) and the designs are still not complete. h. Cumulative impact of changes have adversely affected base contract labor productivity and base contract work IV. Financial Impact to Elcon as of 3I31I11 a. Elcon job cost through 3/31/11 $20,439,052.00 b. Elcon approved billings through 3/31/11 $14,771,560.00 c. Elcon financial impact through 3/31/11 ($5,667,492.00) V. Closing Comments. It is important for each of you to understand that Elcon is continually being vilified by the Port of Seattle on this project. Elcon has suffered significant financial damages at the hand of the Port staff. All of this has resulted from: 1. A poorly managed project schedule, 2. Incomplete electrical design, 3. Woefully underfunded change orders, 4. Cost impacts associated with schedule acceleration, 5. And the cumulative impact of the Port directed changes to Elcon's base contract work which have caused major labor inefciencies and losses. We are very concerned. You should be too. Thank you for your time. 0 Architectural Stairs and Rails North architectural stair installation is complete. South architectural stair installation is in progress. Architectural handrail installation commenced around the north escalator core openings. 0 Architectural Metal Panels - Installation of architectural metal panels on level 6 (penthouse mechanical and clerestory) is complete. Metal panel installation is in progress on electrical shafts and Level 5 support buildings. 0 Temporary Erosion & Sediment Control TESC items are being maintained. The site is in good condition and ready for the ongoing winter/early spring weather. Contractor Schedu e - RCF Substantial Completion date is November 15, 2011. Current progress schedule update shows a negative seventy one day oat in the project schedule, with the critical path running through the QTA power-up and commissioning and training. This is a 42 day time loss from what was reported on the last update due to a slip in commissioning start date, driven by setbacks in power and electrical systems completion. The Port continues to review the progress schedule for sequencing and logic ties to validate the schedule status, and is working diligently with Turner staffto improve on the status of activities and overall completion date. In addition, staff has authorized selective overtime for critical path activities. Cost Status Summary See Cost Status Summary Table in PowerPoint Supplement page 3 for current cost information and page 4 for the trending of Construction Contingency costs over time. 0 Subcontractor Bids closed 0 Risk Reserve 96 approvals have been issued, and 13 in review. 0 2% MACC (Maximum Allowable Construction Costs) Contingency 104 Change Orders executed and 24 in review. - Negotiated Support Services 42 approvals issued. - Conforming Design Development Allowance closed 0 Anticipated Scope Allowance closed 0 Non-Suspension Related Contract Changes 481 Change Orders executed, and 132 in review. Port staff is currently trending approximately $8,000,000 in potential claims from the GCCM and a major Subcontractor. 0 Suspension Related Contract Changes 58 Change Orders have been written. One last claim relates to the unsupported cost previously rejected by the Port from one subcontractor. Off-Site Roadway Improvements - Construction Contract Construction Status Summa 0 Construction progress is 37% complete. 0 Construction costs continue to exceed the originally budgeted amount by approximately $320,000 due primarily to unsuitable soils and unknown conditions at WSDOT property. The Commission approved transfer from unallocated program contingency to address the unsuitable WSDOT soils appears to allow sufcient contingency funds for completing the construction project. 0 9 to 16 construction workers on site daily. 0 Overall project completion date remains the same Page 2 of 6 Port- of Seattle' Customer Service Building The awaited metal panels for the CSB clear story and penthouses have arrived and installation is underway. The Interior build-out in both the lobby and lease spaces is progressing as planned with wall 'aming nearing completion, lobby ceiling framing commencing and MEP rough in continuing throughout. A potential delay for rerouting the vesda smoke detection piping may delay completion of the ceiling drywall. ORI Progress continued in December in several areas as follows: I Curb on west side of S 160'h supporting the SCL vault relocation completed 12/9/10. Vault and sidewalk work scheduled to complete 2/1/11. The SRS 18 ramp continued with MS-09 work completing 12/15/10 with ne grade and the 1" li ofHMA. The moment slab and barrier work is ongoing and expected to complete 2/7/11. The Qwest work on SR 99 Bridge (milestone 3) continued with trafc set up and conduit hanger installation completing 12/16/10. The remaining conduit related work is scheduled to complete 1/11/11 at which time Qwest will start their 180 day period to relocate communication wiring under milestone 10. SR 99 Retrot work commenced with drilling and doweling work on Piers 2 and 3. This is early opportunity work with large oat. BMF Bus Maintenance Facility. No progress I The NTP and Mobilization for this project is being delayed while the contractor works to prepare and submit the required Preconstruction Submittals. Scheduling Risk RCF-- There is four known potential risks to schedule as follows: QTA delays affecting the start of Commissioning. he extent of the impact is unknown at this time until the design work and the material orders completed. The impact to the correction notice in the QTA's is still being determined and was not antici . ated. Car Wash Equipment the car wash equipment has been delayed due to two changes. The rst is for an installation change switching a couple bays from car washing to light maintenance use. The second delay is the trench drain from an upper car wash bay extends too far into a lower QTA car wash bay. The height clearance is below minimum and requires redesigning of the upper bay drainage. These two changes could push the completion of the car wash equipment past their commissioning start dates. e crew ties from QTA 3 would indicate an equivalent delay in QTA 4. Weather delays. The ORI contractor has successfully completed the 2010 work and is on track to completing the remaining work ahead of schedule. Weather could delay some work but shouldn't affect any remaining Milestones. 18 9 a 8st SN 8 3931;; 2348.: 81:}; 83.3% 55.8; maa; nop 69:5 uo m5 mmmdeww Gaming 3.3.38a "$.23; a on "53:53: 35:5" Swine 25.9%.; mkvcecnw 23%: 2553.3 333% a Eahwcum 3.3.5,; khazm 0, 3v6mc~m 380 _a:o_a=uc< 552% maxLN" 53m "$58.2" Sag 85%; 8.3% .50 - Ring "22:80 @839: mam.~v.:nw $38.2" 833.2%. E:":a=c "gabEU 252.2 auhmvamm "mummqma 4.35 25.5.; gigging 838.5 .8 8am E35. "55255 330 .5 SEEw 8320 89:26 .525 5:93:50 "58:5. bagso :3 .8" .a 35m 5525250 hummosh 0:0 32:50 3.225 3.3.50 "cabSD 5.52 32:5 5 anOD he 389 Each Eszam 8.53. muacm 35:35.0 ma cmuohumEOU 552.250 5:02:50 "33:85:: 552.3250 5:02.250 wean"E: meg.2: Ez 555.56 aim ..f. to 25 "Hr.OZ TABLE I RECONIMENDATIONS FOR PCS AND CORRESPONDING FINDINGS Recommendations Immediately implement and strengthen control procedures to assure that Engineers' change order estimates are (a) prepared without knowledge of the contractors' proposed amounts, and (b) change order estimates and cost analyses are fully and completely documented. Where cost or price analysis is used to evaluate change order proposals, POS should require full and documentation of these complete ~_- 7. Uncle m e a reVIew 0 all major recent and ongoing projects to identify cases where engineers' estimates and contractors' proposed amounts are consistently the same and, in such cases, undertake a further evaluation of the underlying causes; followed b remedial actions as a uI'O riate. Revise its SOP Manual to include specic guidelines for proper and accurate change order documentation. POS should provide training to its consultant staff/construction ers to imrove the manner in which POS is documentin_ uro'ect change orders. . Develop Standard Operating Procedures (SOPs) that align with industry practices. lC Current POS SOPs do not provide adequate information regarding change order otiations. POS management should take immediate steps to assure that POS rigorously enforces all contractual schedule requirements. Then, when requests for time extensions are made, they can and should be properly evaluated. POS should also provide more oversight of the Change Order process to ensure that estimates are properly created and used. Immediately cease its informal method ofresolving change order differences, and that POS improve its change order documentation requirements to include that details of change order negotiations must be based on discussions of scope/means and methods/ uricin; differences. Improve its management information systems to provide more accurate and up-to- date information regarding project and contract expenditures. POS should develop a better means for tracking actual project expenditures against initial estimates to .revent unforeseen cost overruns. Develop and include in all contracts a "cost limitation" clause that advises contractors that they should not accept work authorizations or perform any work that would result in exceedin 1 the maximum amount of the contract. 10. Controls should be implemented to prevent specic companies from being added to randoml -enerated PCS bid lists b ro'ect mana ement n ersonnel. ll. Evaluate all of its PCS contracts during the past three years to determine other instances where the practice of lapping contractor invoices occurred and take a ro riate corrective actions. 12. Conduct a more detailed investigation of this contract SWV-311608 to determine how and why the preferred electrical contractor was added to the bid list, contact the other bidders on the list to determine if they were aware of the procurement, and initiate follow u actions as a ro riate. 13. Take immediate steps to review and enforce its policies and procedures for awarding 2A PSA contracts and establish controls to ensure that competition requirements are not 2B circumvented. 2-D COlIOIIE) Company 1"all" 17 IONSUITAk'l Turner's Turner's START DATE FINISH DATE Schedule: Schedule: per Restart per Restart Activity Name Actual or Actual or Days Late Schedule of Schedule of Current Start Current Finish 8/4/09 8/4/10 Date "19/2011 Remove Reshores at Area A A to ES 12-Feb-10 -5365 Remove Reshores at Area A E5 to L 2-Mar-10 5-Mar10 5375 Remove Reshores at Area B A to E5 26Mar-10 31-Mar-10 6385 Remove Reshores at Area B 15.5 to L 20- -r-10 23- -r-10 26-Jul-10 A Remove Reshores at Area C A to ES 14-Ma -10 19-Ma >10 Remove Reshores at Area C ES to L 2-Jun10 7-Jun-10 13-Au-10 A Remove Reshores At Area D 8-Se- 10 13-89-10. 13-Nov-10 A Remove Reshores At Area E 1-Oct-10 7-Oct-10 11-Dec-10 A Remove Reshores At Area F 21-Oct-10 27-Oct-10 07-Jan"11 A _ Avera- e "iii:II- I A-Inten'or CMU Walls L1 mm 17-Mar-10 25-Jun-10 A A-Inierior CMU Walls 12 18-Mar-10 26-Mar-10 08-Jul-10 A 29-Mar-10 6~ -r-10 AVe - e llii ' Glnterior CMU Walls L1 28-Ma ~10 09-Se- 10 A CInierior CMU Walls L2 9-Jun10 22-Se- 10 A Clnterior CMU Walls L3 10-Jun10 18-Jun-10 04-Oct-10 A Clnterior CMU Walls L4 21-Jun10 29Jun~10 Avera . e Permanent Power -On Milestone DATE REDESIGN Start date 3/17/09 Redesin - CB17/DCN14 Selective Coordination Stud 8/17/2009 Redesin - CB48IDCN33 Feeders & Transformers & Panels "28/2010 10/25/2010 4/20/2010 -_ _ I. I "III-IITm")-AWAITING MATERIAL DELIVER Stan Date 10/6/09 . 1. NOT RELEASED T0 " ELEASED 4/12/11 ' I. 1016/2009 __._______' NOT RESOLV OTHER ISSUES Not a com- Redesi n - Elevator Pit U htin I Redesin - Escalator Truss Heaters Redesin - Escalator Disconnect - AHUs Insufcient Clearance Redesi-n - Fuel Controls Tenninaiion Schedule Redesin - Undersized Groundin- Paddles at 7 Transformers Redesi-n - Fire Alarm Control Panel and Batte Closets Main Electrical Rooms 1017 a 1018) Late Release 5/26/2010 9/15/2010 8'0 WM 230 1110/2011 4111/2011_ L&| Correction - Undersized Ground \Mres 4/12/2011 2/1/2011 CONSOLIDATED RENTAL CAR FACILITY GRAPHIC TO SUMMARIZE DELAYS AND CHANGES TO ELECTRICAL WORK MAY 3, 2011
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