Delay Costs for Design Build January 17, 2019 Basis of the - PowerPoint PPT Presentation

Core Systems Contractor’s RFCC 00014 Delay Costs for Design Build January 17, 2019

Basis of the Contractor’s Claim  As a result of delays to the Interim Opening from East Kapolei to Aloha Stadium (Segment 1), Core Systems Contractor AHJV (the “Contractor”) made its original Request for Contract Change (RFCC) to the Design-Build (DB) portion of its Contract.  The Contractor subsequently amended the RFCC to include the delays to the DB work to the projected Full Opening (East Kapolei to Ala Moana).  Interim Opening is presently scheduled for December 2020, which is 1560 (4.3 years) days after the originally scheduled date.  Full Opening is presently scheduled for January 2025, which is 2119 days (5.8 years) after the originally scheduled date. 2

Basis of the Contractor’s Claim (cont.)  The delays caused the Contractor to perform many tasks much later than originally scheduled, escalating their costs to perform those DB tasks.  The delays prolonged many of the Contractor’s Project -Wide and General Requirements scope of work for the DB phase, which increased the Contractor’s costs.  In addition to full opening (East Kapolei to Ala Moana) the scope of work includes additional work necessary for a second Interim Opening (East Kapolei to Middle Street). 3

HART and Contractor’s Differences HART CONTRACTOR  Total delay should be reduced  There is no “concurrent by the calculated amount of delay” as all “delay” was the Contractor ’s “concurrent simply the utilization of delay.” project float.  HART’s estimate prolonged  Delay-related costs should be and escalated the calculated independently of Contractor ’s original Price its original bid. Items from its bid (Best and Final Offer 2). 4

HART Final Settlement  The Contractor’s first verbal notification indicated that the claim amount would exceed $400M.  The Contractor ’s first formally submitted claim amount was $275M.  The final settlement is agreed at $160M to be spread over the project period. This equates to $147.7M (net present value). 5

The Milestones  20% - MSF Completely Operational  10% - Completion of the Functional Section  20% - Interim Opening No. 1  20% - Airport Segment Readiness  10% - Installation of Train Controls in last four stations  20% - Full Opening 6

THE DESIGN BUILD CONTRACT  Original Price (w/o O&M) $573,782,793.00  Previous Change Orders $42,639,889.00  Current Contract Price $616,422,682.00  This Change Order $160,000,000.00  New Contract Price $776,422,682.00 CONFIDENTIAL & DELIBERATIVE 7

Significant Agreement Terms  Includes the DB portion of the O&M Mobilization costs for all three Openings.  HART will accept a retainage bond in lieu of the Contractor ’s retainage. 8

A LESSON LEARNED (Avoiding Future Delays)  Fixed Facilities’ and Core Systems’ schedules should be contractually linked.  The involvement of a P3 Developer accomplishes this result. CONFIDENTIAL & DELIBERATIVE 9