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Owner/agent considered for remainder of Prop P work

As the McCarthy Construction Co.'s relationship with the Mehlville School District nears completion, administrators have realized they will need more help than they thought to manage the duration of Proposition P construction.

Mehlville School District voters in November 2000 approved Proposition P, a nearly $68.4 million bond issue funded by a 49-cent tax-rate increase. However, the Board of Education last September adopted a revised budget for the Proposition P districtwide building program totaling more than $86.7 million.

McCarthy has worked as the construction manager for Proposition P since the inception of the program, but is scheduled to complete its involvement Oct. 31 — before construction is completed.

Once McCarthy's involvement ends in October, Ricker told board members Feb. 24, Operations/Maintenance Director Rick Platz would assume responsibilities as Proposition P construction manager. Supervisory responsibilities had been shifted in the district, Ricker told the Call during a February interview, so that Platz would be able to focus all of his attention on remaining Proposition P projects — work at Forder, Hagemann and Rogers elementary schools and the construction of a new early childhood center.

Ricker said Randy Charles, assistant superintendent for finance and the district's chief financial officer, had discussed the new responsibilities with Platz to determine if he believed he had enough manpower, time and expertise to take on the projects.

And administrators were confident that he did, Ricker said.

But Ricker told board members June 29 that he believed the district should seek requests for qualifications for an owner/agent to provide construction management services once McCarthy's contract ends in October.

"As Randy (Charles) and I worked with ... Dickinson Hussman (the district's architectural firm for Proposition P) on finalization of the projects that McCarthy was construction management for, it became evident that we believed that we needed a little more expertise in the finalization of some of our existing projects," Ricker said. "We also knew that we wanted to do that in a fashion that best represented the board's needs, our community's needs and the district's needs. We suggested to each other, and through a little guidance from DHA, to look at the concept of owner/agent and looking at a request for proposals in relationship to that.

"Randy and I feel that this would be a good step to have someone who would actually is our employee, if you will, to look out for our interests as we finalize these projects ...," he added.

Board Vice President Matt Chellis questioned the need for retaining an owner/agent.

"In your opinion, will the selection of an owner/agent improve the quality of the products, reduce the expenditures for the projects or both?" Chellis asked.

Charles answered, "I think it has the potential for all of the above. One of the biggest issues I have is with quality control. I am not an expert in the field of construction. Rick Platz is very knowledgeable. Again his expertise is more in the field of maintenance, the maintenance of educational facilities. When you get into the construction field ... it has a vocabulary all its own. It has a culture all its own. And, quite frankly, when you're dealing with the powers within the construction industry, you need a sense of credibility when you sit across the table and start to hammer out some of the difficult issues."

Based on discussions with representatives of McCarthy and Dickinson Hussman, Charles said he believed that the quality of work would increase for a lower price with the presence of an owner/agent.

"They've been real honest with us, during our contract amendment discussions, that they felt like the construction management contract we had with them was probably not the best approach for us for the small amount of projects we had remaining," Charles said of McCarthy representatives. "Something like the owner/agent approach would be much more appropriate."

Employing McCarthy for the duration of the implementation of Proposition P would cost the district $1 million, while Charles noted that owner/agent would cost the district an estimated $250,000. The $250,000 would involve one or two people from a firm working closely with Platz and himself to finish the remaining Proposition P projects — the early childhood center and Forder, Hagemann and Rogers elementary schools.

The board's June 29 vote would not authorize the expenditure of the $250,000, Charles added, but permit the district to seek RFQs. The board unanimously supported the administration's recommendation to seek RFQs from at least three firms for an owner/agent.

Still, board member Tom Correnti wanted to know why the estimated difference in cost between McCarthy and another consultant was so different.

"I think it's admirable that they thought with the amount of projects left over, they thought this was the way to go, but it still amazes me that they would have charged us $1 million and yet they really think it's a good idea we go to someone else for $250,000," Correnti said. "Why the difference? Why the great difference in that amount?"

Personnel, overhead and reimbursable expenses would be much greater with McCarthy under its contract with the district, Charles answered, that would make keeping McCarthy much more expensive for the district.

All those expenses really aren't necessary, he said, with the increased involvement of Platz and himself in project management and one to two consultants vs. paying a team of five or six McCarthy employees.

"It would be sort of like buying a bulldozer when all you need is a shovel to plant a tree," board member Rita Diekemper explained. "You know, sometimes you need a bulldozer, but sometimes you just need a shovel. That's how I'm looking at it.''

Also June 29, board members unanimously accepted a finalized contract amendment between the district and McCarthy.

As reported in March by the Call, board members had directed administrators to amend McCarthy's contract so that it would cap the total amount of money the Proposition P construction manager would be paid at roughly $7.2 million.

On Nov. 13, 2000, the board approved the selection of McCarthy as construction manager for Proposition P and directed administrators to "negotiate and develop a contract with McCarthy Construction." But the original contract with McCarthy never was approved by the board. Instead, the undated contract was signed by former Superintendent John Cary.

The original contract totaled $2.835 million in construction management fees and projected the cost of general conditions at $3.321 million. The amended contract, which now has been drafted and approved by the board, increased and capped McCarthy's construction management fees at $2,969,040. Numbers presented to board members in February indicated that the fees would have been capped at $2,969,683.

It also capped reimbursable expenses to $3,527,559. As of February, McCarthy had billed the district $2,861,965 in general conditions, which led the district to establish a fixed rate of $73,955 a month for the duration of McCarthy's involvement as construction manager, which was nine months.

The district and McCarthy, according to Ricker, had agreed to terminate their relationship Oct. 31. For some time, Ricker told the Call in February, McCarthy was scheduled to work until the end of November.

With one month less of McCarthy's involvement, the district received credits that would have paid personnel for an extra month.

Fixed printing and pre-construction service costs also were established, with printing to cost the district no more than $206,040 and pre-construction services to cost the district no more than $505,014.

To make up for inaccurate estimates, which led to higher-than-anticipated bids for renovation work at Blades, Beasley and Point elementary schools, McCarthy agreed to discount the district $65,000 in pre-construction services, according to Kevin Kuntz of McCarthy.

Also, through contract negotiations, the district is receiving a $12,429 credit to account for items that never should have been billed to the district, Kuntz told board members in February.

"We called out items that shouldn't have been billed," he said, noting those items were "oversights."

The fixed fees and caps on reimbursable, according to district and McCarthy estimates, will save the district $2,533,590.

Responding to a concern posed by Diekemper, Kuntz assured board members June 29 that McCarthy would be available during subcontractor close-outs in October and would be willing to assist in the close-outs if they extended into November.

"And what would our recourse be if there was some issue in September of October?" Diekemper asked.

The original contract includes a provision that states McCarthy would charge the district $15,000 for every extra month in that situation, Charles and Kuntz answered.

Site work at Bernard Middle School would be the only leftover work after the Oct. 31 contract termination, Charles said.

"In my time on the board and certainly as a community member, I appreciate the work that they've done (McCarthy) and want to make sure that everyone understands that," board member Bill Schornheuser said. "I certainly have done that and again there's only one issue of a set of estimates that I thought McCarthy didn't pull its weight on, but I think overall you did an outstanding job.''

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