Archive for Thursday, February 14, 2008

Change orders said to be part of construction

February 14, 2008

De Soto USD 232's newest schools, Horizon Elementary and Mill Creek Middle, cost more than originally planned, but a district official said not as much as it might appear.

Mill Creek cost about $20 million including all change orders and Horizon cost about $14.3 million.

However, the final cost of Horizon is somewhat deceiving, said facilities director Denis Johnson.

The elementary school was bid at about $13.56 million, but the district incurred a large change order because of roadwork near Horizon Elementary School.

The city of Shawnee in 2006 agreed not to require the district to pay excise taxes on the school and instead pay for road improvements to 71st Street and Chouteau Road. Originally, the city had asked for the district to pay for both.

After subtracting the cost of the $678,616 road project from the total change orders, Johnson figured that the school's actual change orders were about $85,321.

Mill Creek originally was bid at about $19.68 million and with about $326,000 in change orders, cost about $20 million.

Johnson said those numbers are actually close, as all building projects come with unexpected costs and change orders.

"You try to think of everything you can during design, but the buildings are so huge and complex and have so many components and so many different disciplines that contribute to them and their work has to overlap that it is impossible not to have a project without change orders," Johnson said.

Most change orders are due to site conditions, Johnson said. At Horizon, for example, rock was found underground before construction began, he said.

"We knew there was rock there," Johnson said. "You never know how much before you start removing the soil. When we bid a project we get a cubic price for rock removal and so when we get into the project and we do find rock we have a price built in, but then there is a change order for that because it is above and beyond what their original contract is. We get pricing in advance so they just can't come in and say 'oh we found rock, now we are going to charge you this much to get it out.'"

Regulations by government entities also bring about change orders, Johnson said. That includes meeting city regulations and fire codes. Others can be attributed to a request from the owner to make modifications in the project, like upgrading to a higher grade of tile, he said.

Regardless of the reason, each change order is talked through and it is up to the district's construction manager, a hired professional service, to make sure the district is getting a fair price when change orders are made, Johnson said.

"Let's say a mason comes in with a change order," Johnson said. "The construction manager and the owner's rep will look at that and decide whether the pricing is fair, if the request for the change is fair, if there is merit to it and then they will work along with me as the owner's rep and look through the change orders and we'll decide if the request is relevant, if the costs are in line."

Johnson said there is a tremendous amount of time spent on change orders before they are brought to the school board for approval.

"Some of these change orders the discussion, before it ever goes on to the board, goes on for months and months," he said.

Change orders aren't the only financial adjustments Horizon and Mill Creek have undergone.

When voters approved a $76.75 million bond referendum in 2002, it included three elementary schools and a middle school.

The elementary schools were proposed to cost $12.25 million, $13.6 million and $13 million. The middle school, Mill Creek, was proposed to cost $15.9 million.

However, escalations in construction cost due to steel prices in China and hurricanes in 2003 led the school board to revise those projects in 2004. Building capacities for two of the elementary schools were increased from 550 to 600 students and were proposed to cost $12.17 million and $13.75 million. Those buildings would become Prairie Ridge and Horizon elementary schools, respectively. The board decided not to go with the third elementary school.

The middle school capacity also was increased from 500 to 750 and was proposed to cost $24.6 million.


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