To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Roy Gallea, P.E., Engineering Manager
Josh Hansen, P.E., Project Manager Supervisor
Title
Resolution Approving Change Order 6 with HEI Civil for Castle Rock Reservoir No. 1 & 2 Construction [Sedalia, Colorado]
Town Council Agenda Date: April 1, 2025
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water is seeking Town Council approval of a Resolution (Attachment A) approving Change Order 6 (CO6) with HEI Civil (HEI) for the Castle Rock Reservoir 1 & 2 (CRR1&2) Project. CO6 will increase the contract price by $304,012.57 and extend the contract time by 232 days. The CO6 cost increase is primarily related to revisions to CRR1 plans that were made after the project was contracted. The CO6 contract time extension is primarily related to unanticipated bedrock conditions encountered during CRR2 excavation, property acquisition and permitting delays, weather days, and other project scope revisions and additions.
The original Council Authorization for the project was $27,814,666.99 ($26,490,159.04 contract + 5% contingency). CO6 requests authorization of an additional $275,659.56 (approximately 1% of original contract) in funds for the project bringing the total authorization to $28,090,326.55. The additional contract days of 232 will put project completion in April 2026.
History of Past Town Council, Boards & Commissions, or Other Discussions
On April 4, 2023 Town Council voted unanimously to recommend award of a construction services agreement in the amount of $26,490,159.04 to HEI Civil along with $1,324,507.95 (5%) in staff-managed contingency to complete the CRR1&2 Project.
Discussion
As part of Castle Rock Water’s long-term water supply plan, the Town of Castle Rock purchased a surface water diversion, pumping, and raw water storage facilities located along Plum Creek near the Town of Sedalia. The diversion point is downstream from the confluence of East and West Plum Creek, which allows the Town to maximize the use of its water rights, including reusable supplies and native supplies owned in East and West Plum Creek. Existing facilities included a diversion structure, two pump stations, and a raw water storage reservoir, Castle Rock Reservoir No. 1 (CRR1) with an original capacity of 240 Acre-Feet (AF). The diversion structure provides for the controlled diversion of water from Plum Creek to the Plum Creek Pump Station, which delivers water to CRR1, the Ravenna Pump Station, and the Plum Creek Water Purification Facility.
As discussed in the Water Resources Strategic Master Plan, CRW planned and designed a new reservoir, Castle Rock Reservoir No. 2 (CRR2) with an estimated capacity of 790 AF immediately east of CRR1 along with expansion of the storage capacity of CRR1 to 550 AF. Both CRR1 and CRR2 will help CRW accommodate daily high demands during summer months in the coming years and as an additional storage vessel for those times when Castle Rock’s junior surface water rights are in priority, or when free river conditions exist. These reservoirs will also be a location where water captured in Chatfield Reservoir can be pumped back and subsequently pumped to Castle Rock for treatment, or to Rueter-Hess Reservoir for storage on the east side of Castle Rock’s system.
HEI was selected to provide construction services for CRR1&2 through a competitive Request for Qualifications and Invitation to Bid process. On April 4, 2023, Town Council awarded HEI a construction services contract for the project in the amount of $26,490,159.04 along with authorization of $1,324,507.95 (5%) in staff-managed contingency.
The original construction bids received were as follows:
|
Engineer’s Estimate |
$ 28,321,413 |
|
HEI Civil |
$ 26,490,159 |
|
Monks Construction/JHL Constructors |
$ 33,993,974 |
|
Kelly Trucking |
$ 35,393,419 |
|
Ames Construction |
$ 39,148,200 |
|
Moltz Constructors |
$ 39,994,438 |
The bid spread was approximately 28% ($7,503,815) between HEI and the next highest bid from Monks/JHL. This spread was significantly higher than 10% industry standard. High construction bid spread percentage can be indicative of scope gaps within contract documents as well as differences in contractor pricing of unknowns and potential risks for a project.
Construction of the first phase of CRR2 began in August 2023 and was completed by the end of 2024. Castle Rock Water has already stored over 350 AF of water in the first phase of CRR2 for the 2025 irrigation season. Some of the above-mentioned scope gaps and unforeseen risks came to light during CRR2 construction.
Five change orders have been issued from the original 5% project contingency for a total of $1,296,154.95. These change orders were issued primarily to address the following issues:
• Construction fencing and staging changes needed to address property rights limitations
• Design revisions made to CRR2 plans after contracting including significant reservoir piping changes and the addition of an access ramp to the reservoir floor
• Significant earthwork plan and County permitting revisions needed due to unforeseen bedrock and dam foundation conditions encountered during the excavation of CRR2
The last of these items resulted in the Town’s decision to purchase the 145-acre property in its entirety. The land acquisition provided full property rights including a critical location to balance earthwork for the project but the purchase process added a significant delay to the overall project schedule.
Staff has negotiated and tracked additional contract time HEI has requested with the above-mentioned change orders. The time requested for these changes along with weather delays encountered during the project comprise the additional 232-day contract time extension requested with CO6.
The contract addition of $304,012.57 requested for CO6 is primarily for design changes made to CRR1 that occurred after contracting. These included revisions to some of the CRR1 concrete structures, piping, and scope addition of an aggregate surfaced access ramp to the floor of the reservoir. With the $28,353.01 remaining of the original 5% contingency, staff is requesting an additional authorization of $275,659.56 (approximately 1% contract addition) for the project. This will bring the total Council authorization for the project to $28,090,326.55. This remains below the original engineer’s estimate for the project.
The original contract time for the project was 730 calendar days. With the additional 232-day contract time extension, the final completion date of the project will be extended to April 26, 2026. This date is for final completion including site cleanup and reclamation work scheduled for spring.
With the first phase of CRR2 now complete, CRR1 has been drained and HEI is excavating the expansion of the reservoir. CRW Staff is actively filling the 372 AF of newly available storage in CRR2 in preparation for the 2025 peak irrigation season.
The current construction schedule anticipates substantial completion of CRR1 and the final phase of CRR2 by January 2026. This will allow CRW the ability to begin filling the expanded 1,340 AF available in the new reservoirs in preparation of the 2026 peak irrigation season.
Budget Impact
CO6 is a contract addition of $304,012.57 and the revised total contract amount would be $28,090,326.55. With the $28,353.01 remaining of the original 5% contingency, staff is requesting an additional authorization of $275,659.56. A project change order and contingency summary is shown below:
|
Change Order |
Description |
Contract Adjustment |
|
Previously Approved |
|
01 |
Revisions to staging areas, site fencing, 36-inch joint restraints, CRR2 Design Changes |
$ 273,392.39 |
|
02 |
Mitigation of soft subgrade conditions, 16-inch waterline depression |
$ 91,955.38 |
|
03 |
Added pipeline connection scope, added pipeline cathodic protection, revisions to concrete structures, and unforeseen rock excavation/earthwork |
$ 903,929.34 |
|
04 |
Flowfill, perimeter drain, and underdrain quantity reconciliation (contract deduct) |
$ (46,326.59) |
|
05 |
CRR2 boat ramp surfacing and dam instrumentation changes |
$ 73,204.42 |
|
Under Consideration |
|
06 |
CRR1 Design Changes including boat ramp addition |
$ 304,012.57 |
|
|
Total Change Orders: |
$ 1,600,167.51 |
|
|
Less Original 5% Contingency (PO 2657): |
($1,324,507.95) |
|
|
|
|
|
|
Additional Requested Council Authorization: |
$ 275,659.56 |
Funding for the additional authorization will come from the following account:
|
Project |
Account Number |
This Authorization |
|
Capital Improvement Prgrm/ Reservoir Upgrades |
211-4375-443.79-15 |
$ 275,659.56 |
A budget transfer will be completed for the authorization.
Staff Recommendation
Staff recommends the approval of Change Order No. 6 increasing the contract amount by $304,012.57 and increasing the contract time by 232 days.
Proposed Motion
“I move to recommend to Town Council approval of the Resolution as presented”
Attachments
Attachment A: Resolution (Not Attached)
Exhibit 1: Change Order No. 6 (Not Attached)
Attachment B: Original Contract (Not Attached)
Attachment C: Notice to Proceed (Not Attached)