Initial Studies To Be Basis For Who Pays For Overruns At Miamis New Performing Arts Center
Written by Shannon Pettypiece on January 22, 2004
By Shannon Pettypiece
Blame for delays at the Performing Arts Center of Greater Miami will be assessed based on the builders’ 3-year-old studies that were their gauge for OK’ing construction costs and schedules, county officials said.
When they won the contract in 2001, the builders were employed as "agents" of the county for six months and paid $2 million to determine if proposed costs and schedule for construction were reasonable, Assistant County Manger Bill Johnson said.
"The county paid $2 million to the contractor for six months to look at plans and tell [us] if it could be constructed," he told county commissioners last week. "This [blame for delays] all rests on what happened and what did not happen during that six-month period…. Everything else falls from that."
During that pre-construction phase, Mr. Johnson said, the builders were "working on our behalf" and filed 490 requests for clarification to the plans. But, he said, after the six-month study, they approved the project at a cost of $255 million and with an October 2004 completion date.
The county claims that after the builders signed off on the plans they submitted 5,000 more clarification requests and construction of the foundation and skeleton of the two buildings took 600 days longer and started 173 days later than projected.
"What I want to know is what happened during those six months of pre-construction," Mr. Johnson said. "Sixty days after that period I [was] getting hundreds and hundreds of requests for information."
Now in mediation with the builders and architects, the county maintains that project delays and cost overruns originated during these six months.
The two-building center, spanning Biscayne Boulevard between 13th and 14th streets, is being built by Performing Arts Center Builders, a joint venture between Odebrecht Construction, The Haskell Co. and EllisDon Construction.
Luiz Rocha, president and CEO of Odebrecht, said this month that once the subcontractors were hired after pre-construction and started their drawings they found they needed much more clarification than was assumed during the six-month design review. He also said the county-hired architects, Cesar Pelli and Associates, made several changes to the plans after the pre-construction phase.
While the builders were able to make up some lost time, they are at least one year behind. A revised construction schedule accounting for delays, which county officials say is essential for momentum to pick up on the project, is to be finished Jan. 30.
"This project cannot move forward unless there is an agreed-upon schedule by everyone," Mr. Johnson said. "It sounds simple, but that is the fundamental issue."
So far, delays have resulted in $57 million in claims for extra construction costs and $3.3 million more in fees to the architects’ contract to compensate for extra manpower needed because designs were clarified after the project was approved.
"Because of the volume of requests for information," the county’s project manager, Gail Thompson, said, "We added an additional design team."
The county is expected to increase money for the architect’s contract again in the next month since there is an extra year of work, Ms. Thompson said.
"We still need additional services from [architectural firm] Cesar Pelli and Associates resulting from the fact that there is over a year in delays," she said.
Mr. Johnson said the county will try to cut architectural costs by limiting overtime and reducing travel expenses.
"It’s just astronomical the amount of money we have spent on reimbursements," Mr. Johnson said.
When the county commission approved the center in 1995 the cost of construction was set at $112 million, with a $5.6 million contingency fund. Through the bidding process, numerous contractors said they could not build the center for that amount and the budget began to climb.
During the last round of bidding in November 2000 the county received two bids – one for $279 million and another for $311 million. An agreement was reached with the contractors in September 2001 and the county increased the budget to $254.65 million, with a $7 million contingency fund from the contractors and an $18 million contingency from the county.
Those emergency reserve funds have been put to use over the past three years as cost overruns mounted.
Of the county’s $18 million in project reserves, only $3.5 million is left for future changes, according to a report last week to the county commission.
The county put $6 million aside in discretionary funds to pay for changes since it approved the final contract, of which $3.1 million has been spent on 47 changes.
An additional $4.5 million has gone toward $2.9 million in costs caused by design problems pinpointed by the builders and additions to the project approved by commissioners, such as a $248,000 donor wall and $1.13 million for lifts.
In December the county also dispersed $4 million to unpaid subcontractors with the proviso that it would get the money back if it wasn’t found responsible for the cost overruns.
Last Thursday, Ms. Thompson told the Performing Arts Center Trust, which will oversee the center once it opens, that one-third of the disputed costs have been resolved and the remainder will be settled over the next four to five months.
The county, builders and architects are to sit down with their professional mediator again Friday, and Ms. Thompson said she expects eight or nine items related to construction costs to be presented to county commissioners at their February meeting.
When approved in 2001, the center was planned to open this fall. A late-2005 opening is now predicted.