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May 4, 2015

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School Board raises concerns about costly, unchecked change orders on construction, renovations

As the Clark County School District prepares for a potential capital improvement overhaul, its School Board is looking more closely at the mounting cost of change orders to school construction and maintenance projects.

School Board members said Wednesday there was a widespread public perception that contractors are “gaming the system” by bidding low on building projects to receive the contract, and then getting more money by putting in change orders, which alter the terms, breadth and cost of the project.

“I think there is a perception out there that it hasn’t been on the up and up,” School Board President Linda Young said during a work session Wednesday. “We’re airing our concerns in public. These (change orders) need to come to the forefront.”

Change orders usually occur when unforeseen site conditions are discovered, when design deficiencies are found, a government agency levies a requirement or the School District changes the scope of the project under construction.

Examples include finding a cavern underneath the construction site of East Career and Technical Academy, having to install additional ramps to comply with the American with Disabilities Act and having to change out piping because the design called for the wrong size.

Oftentimes, these change orders cost more money than originally estimated.

That’s a problem for the cash-strapped district, which saw an increase in the number of change orders for new construction projects over the past decade. (There has been a decrease in the number of change orders for renovations, however.)

While designers have been billed in the past to offset the cost of excessive or unwarranted change orders, School Board members are now discussing stepping up standards. They are also contemplating fundamentally changing how the district accepts bids and awards contracts.

This comes in advance of a November ballot initiative that calls for a six-year capital levy to fund high-priority school rehabilitations, which if approved would raise property taxes about $74 annually on a house valued at $100,000.

Currently, the district follows the Design-Bid-Build model. Officials first hire an architect who designs the school project. Building out the design then goes out for contract bids. The construction company awarded the contract would then execute the design.

This model poses several concerns, district officials and School Board members said.

Construction estimates are made public during the bidding process for transparency, which is to the contractors’ benefit when casting bids, Weiler said.

Furthermore, budgets include a line item for “change order forecasts,” which on a recent $12.4 million project ran upwards of $600,000, or nearly 5 percent of the total cost.

“That’s basically telling the company you have built-in wriggle room,” said School Board member Deanna Wright, who called change order requests for shoddy work or inattention “just unacceptable.”

Moreover, to meet construction schedules contractors often plow through with project changes before the School Board approves formal change order requests.

School Board members found the potential for contractors bidding low and putting in larger change orders without great oversight troubling. Some called the practice near “corruption” while others called it an abuse of the process.

The School District is looking at using change order rates as one basis for hiring and firing contractors. It is also looking at bringing together project managers, contractors and architects early in the process to decrease the number of change orders due to design deficiencies.

Officials are also considering not approving School District-requested change orders, and even stopping work on any projects until all change orders are approved before work recommences.

School Board member Chris Garvey said she was concerned about ensuring timely construction however.

“We have children in these buildings,” she said. “We need to make sure we’re not putting them in dangerous situations and losing instructional time.”

The School District even may change its contracting model from Design-Bid-Build to a more streamlined model. That could mean hiring a single design-builder instead of two companies to design and build the project, or hiring them together early in the process.

The School Board is expected to take this issue up again later this month.

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  1. After theY ffinish on the contract end, how about they look into the laziness of those employed in the maintenance area. The majority of guys I've seen working for maintenance spend more time hanging out parked in the shade or in the teachers lounge than actually doing what they're supposed to do.

  2. I don't understand why these projects were not designed properly in the first place. The Americans With Disabilities Act has been around since 1990. The design professionals and city plan checkers should be sued.

  3. The design/bid/build model of building is obsolete and becoming more so every day. Design/build helps in some ways, but if your prime contractor is a Contractor the result can be somewhat warehousish, and if the prime contractor is a designer your budget can be in trouble.

    No building will ever be totally detailed, and no contractor will not try to make changes based on his past experiences and biases. Sometimes those changes are for the better, and sometime they have unintended consequences. Shrewd contractors can, and have, taken advantage of that to submit change orders - and speaking from experience, it's pretty hard to tell when an estimate comes in 5-10% high.

    A better way to work is to create a virtual design and construction model using Building Information Modeling software. This software creates a 3D virtual building that can be studied not only for program compliance, but also for code compliance and constructability. The point is - make decisions about the building while it's a virtual building, then go execute with as few changes as possible.

    For Building Information Modeling (BIM) to work, it's best to have the contractor and designers working together. Creating a single contract that has several prime signatories to it is called Integrated Project Delivery (IPD), and to use this approach you have to change your focus on interviewing teams, not pricing buildings. The team then, is responsisble to delivering the building on budget and on schedule. However, using BIM allows the Integrated team to better detect clashes between building elements, and more quickly develop estimates and schedules.

    BIM also has the advantage of making life much easier for the Facilities Manager during the life of the building.

    This is all pretty cutting edge stuff, but not uncommon in the architectural, engineering, and contracting industries. It doesn't work well with the old design/bid/build paradigm and there are legal complications that the State Boards for Architects and for Contractors need to address. But is is a way to improve the whole design and construct process - and if it can be done on hospitals it certainly can be done on school buildings.

  4. Since so many of the schools are of the same or very similar design, why is a separate design needed? Just another excuse to soak taxpayers for endless bond issues and bond rollovers. The taxpayers need to say NO more money. We're not getting acceptable results in K-12 and we've over-funded K-12, especially CSR, for decades.

  5. Please let be known that when I spoke at the Board meeting for about an hour all of this came up by me, Rose Moore and in great detail and by line item. NOW they are making it look like it was the Trustees that thought this up on their own. I would like to see them give credit where credit is due. Just to let the readers know that the agenda for Tuesday, November 8, 2012 had approximately $1,112,485,38 in change orders that should have been charged back to the Architect, Plan Checker and Inspector. Please note that common practice in the Construction Code is only 5% above contract amount where as one Change Order was 225%. If you look back over the Change Orders for the last 10 years you could possibly find an approximate EXTRA amount in Change Orders in the Billions. I asked then, due to my extensive experience in Construction, why the public is paying for all these extra's and all the errors and omissions of others. The system is broken in the Construction well as Food Services and other major departments. It is time to privatize Food Services and have Construction taken over by the State once and for all. I would like to see the employees of Food Services take this over and form their own company. This way very few people, if any, would loose their jobs. Sincerely, Rose Moore