MEMORANDUM

TO:  Board of Trustees

CC:  Brad Underwood and Mike Bandelin

June 14, 2023

Re: Effluent Pipeline  – CMAR Contract with Granite Construction –  Construction Manager Fee Percentage

It is with dismay, that the Staff of IVGID, the Board of  Trustees and the attorney Josh Nelson  cannot  review and insure that important items in a contract are clearly stated and appropriate.

The  contract for the Effluent Pipeline  phase 1 to install 5,500 LF  is for a maximum price of $9.4 million. It should clearly indicate the Construction Manager’s  Fee Percentage (7.3) .  Within the Bid Schedule the amount of Contractor Overhead and Profit is $1.15 million which equates to 14% of the Cost of Work and displayed in an exhibit to the contract.  No Percentage is provided and the description does not indicate that it is the Construction Manager’s Fee.

A  closer review of the Article 7  section 7.3.1 to 7.3.4 no percentage is indicated; in addition,  the percentage, which is not provided, would include

1) Salaries for incidental employees except for employees in general conditions.

2) General and administrative  expenses for the Construction Manager’s  principal and branch offices

3) The construction  Manager’s capital expenses, including  interest on any of the Construction Manager’s capital that is employed

4) The Construction Manager’s  profit.

As a result certain items are included, and no percentage is provided.    THIS  SECTON OF THE CONTRACT  SHOULD BE A FLAT PERCENTAGE  WHICH WOULD INCLUDE THE FOUR ITEMS ABOVE.

A review of the Federal Transit Authority  indicates that a CMAR Fee is 2.5% to 4%.  The April, 2021 CMAR contract with Core Construction for the Burnt Cedar Pool indicates a CMAR FEE of 3.95% was in the contract.