$1.3 mil Tacked onto Northend Drainage Project- Original bid $7.8 million; change orders swell cost

OCEAN CITY – Change orders are nothing new for an infrastructure project. 

Items are often tacked on as work progresses as situations arise.

But the northend drainage project has seen multiple change orders and increased costs – to the tune of about $1.3 million – over the last two years, prompting Fairness In Taxes (FIT), a local taxpayer advocacy group, to question the expenses.  

On Dec. 28, 2017, council awarded a contract for drainage improvements to L. Feriozzi Concrete Company, of Atlantic City for $7.8 million for a flood mitigation project for the northend. 

Three stormwater pumping stations and a network of storm pipes are hoped to improve drainage from First to Eighth streets, from West Avenue to the bay. The project uses a $5 million Federal Emergency Management Agency (FEMA) grant as part of the funding. 

Work began in March 2018 and was expected to conclude in April 2019. 

Since the project started, council has authorized 33 change orders to the contract totaling $1.3 million, increasing the total cost for the northend drainage improvements to $9.1 million. 

Change orders have increased the total amount of the contract 16.8 percent, according to the city. 

 “It’s not unusual for a project of that scope to have a lot of change orders,” city Information Officer Doug Bergen told the Sentinel.

These change orders are for different items like concrete, installing check valves, resizing manholes, purchasing pipes, or landscaping. 

A list of each change order and its associated cost is as follows: 

– Change order 1 on June 14, 2018 for $55,458;

– Change order 2 on July 12, 2018 for $36,701;

– Modification to change order 2 and change orders 3 and 4 on July 26, 2018: $41,224;

– Change order 5 on Aug. 23, 2018 for subtracting $90,454;

– Change orders 6 and 7 on Sept. 13, 2018 for $33,084;

– Change orders 8 and 9 on Sept. 27, 2018 for $1,632;

– Change orders 10, 11, and 12 on Oct. 23, 2018 for $48,238;

– Change orders 13 and 14 on Nov. 8, 2018 for $63,446;

– Change order 15 on Nov. 29, 2018 for $86,466;

– Change order 16 on Dec. 13, 2018 for $3,017;

– Change orders 17, 18 and 19 on Dec. 27, 2018 for $184,976;

– Change order 20 on Jan. 10, 2019 for $111,649;

– Change order 21 on Jan. 10, 2019 for $8,935;

– Change orders 22, 23, 24, and 25 on Feb. 28, 2019 for $446,168;

  Change order 26 on March 14, 2019 for $5,000;

– Modification to change order 22 on March 28, 2019 for $87,494;

– Change orders 28 and 29 on April 11, 2019 for $121,623;

– Change orders 30 and 31 on April 25, 2019 for $62,260;

– Change orders 32 and 33 on May 9 for $24,877.

At council’s April 25 meeting, City Business Administrator George Savastano said the city does “everything we can to follow the rules and regulations” regarding change orders, including having city purchasing agent Joe Clark review them. 

 “One of the things this contractor does is bring change orders forward in a timely fashion, and one of the things the city has done on this project, and it’s not unusual a project of this magnitude, for that it’s appropriate for conditions or circumstances that weren’t foreseen at the time the specifications were written and the contract awarded to make changes to things that weren’t foreseen,” Savastano said.

Savastano noted that change order 30 was for installing sod and irrigation at the Bayside Center following the installation of one of the pumping stations. 

“The original scope of the project required restoration of only the disturbed area,” Savastano said. “We were going to put the pipe and pump stations on that area. That job was designed over a year and a half ago. Only within the past six months well after the job was awarded and under construction, the administration believed that a better plan other than just restoring that lawn to the way it was would be to elevate the lawn, build it up so that it would drain better, put sod and irrigation in. The most logical course of action in that circumstance was to do that as a change order as opposed to restore it and come back with another contract.” 

Change order 31 involves installing stairs and railings for the pump stations, items that Savastano said were not included in the original scope of work. 

 “These items were required by Atlantic City Electric after the contractor completed the required electrical installation that was included in the original scope. The original scope included electric overhead service down to a meter and a disconnect panel, it did not include stairs and rails. After Atlantic City Electric looked at it they said they wanted stairs and rails as part of the job,” Savastano said.

Savastano said the northend drainage project includes concrete, curbing and sidewalk work that resolves “problems or improves services with property owners.”

“We made changes going forward using our best judgment and it’s completely consistent with public contract law,” Savastano said. “I would argue that this serves a benefit to the community. Thirty-one change orders, the number sounds like a lot but in and of itself the singular change orders are minor modifications.”

But FIT President David Hayes said the problem is the city is using one contractor delegating work outside of their purview instead of the city hiring individual contractors.

“Their basic vendor is concrete. For all these other things like landscaping at the Bayside Center, they just make a change order. They shouldn’t be doing it like that because that’s not something that’s covered under the original scope of the contract,” Hayes said. “A $30,000 contract for landscaping is a pretty concise contract.”

Hayes said the project’s scope is “out of control” with these additional change orders. 

“It’s almost like a cost-plus contract where they pay the contractor a basic fee and everything else you just throw it on top of there,” Hayes said. 

Hayes said change orders aren’t bad in and of themselves, and often help to control the project’s contents and allow the city to document city spending. Hayes said the way the city is handling the northend drainage project through one contractor is resulting in multiple change orders.

“They’re cutting back on the engineering staff in-house,” Hayes said. “You’re just lumping it in with a lot of other work…. Project management-wise, it’s not a good practice. Engineering-wise, it’s not a good practice.” 

Hayes said the number of change orders is raising questions on the project’s status and scope. 

“Part of the problem is how do you tell performance-wise how are you progressing and when are you going to be done and how many change orders does it take to finish it?” Hayes said. “They’re (the city) doing it to make things easier on them, but it doesn’t look good.” 

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