Recommend approval to award Contract Modification No. 2 for construction manager at risk services for the Savannah arena with AECOM/Hunt to authorize the early release of bid packages in an amount not to exceed $22,045,582.

On September 18, 2018, City Council approved a contract with AECOM/Hunt Inc. to serve as construction manager at risk (CMAR) for the new arena, responsible for construction of this $165 million public asset. As CMAR, AECOM/Hunt was brought in during the design phase of the project to work with the architect, project manager, and operator to design, value engineer, and price the arena construction. A major milestone of the CMAR is to propose for the City a guaranteed maximum price (GMP) -- the contractually obligated maximum construction price for the arena, which is developed following completion of the final construction documents.

On September 12, 2019, City Council approved Modification No. 1 to the City's contract with AECOM/Hunt to authorize procurement of certain early-release packages to allow arena work to be performed prior to competition of final construction documents and prior to adoption of the GMP. This first early-release modification was anticipated at the onset of the project, and facilitated an expedited construction schedule by allowing work to begin on site work, underground utilities, foundations, elevators, and steel packages in an amount not to exceed $23,530,000.

Since this approval, AECOM/Hunt has overseen the construction of arena site grading, the commencement of water and sewer line installation, the awarding of structural steel, the completion of elevator pits, and the installation of 729 drilled displacement piles, which are sunk 80 feet into the ground to provide a solid undergirding for the arena's foundation. The project is on schedule, with an anticipated facility opening in February 2022.

Final arena construction documents were completed by the architect in March 2020, and the project schedule anticipated AECOM/Hunt to submit a proposed guaranteed maximum price to the City in May 2020. In order to develop an accurate GMP, AECOM/Hunt engaged numerous subcontractors to develop price estimates for each of the packages contained in the final construction documents.

The timing of this pricing process has coincided with the height of COVID-19 pandemic and subsequent shelter-in-place orders issued by various authorities across the country. This has created significant disruptions in the supply chain, uncertainty with material costs, and the temporary closure of many businesses. Because of these issues, AECOM/Hunt has experienced significant challenges in developing accurate price estimates, particularly for long-lead items. In order to submit a GMP, AECOM/Hunt would be required to include sizable contingencies in its pricing to address these uncertainties, which may artificially increase the arena construction budget.

In recent weeks, AECOM/Hunt has begun to see the subcontractor market stabilize, and prices come down. The construction manager anticipates being able to submit an accurate GMP to the City in July, which would be placed on City Council Agenda in late July or August. Funding authorized through the first early-release package approved in September 2019 will be fully allocated prior to this anticipated approval.

This second modification authorizes a second early-release package in an amount not to exceed $22,045,582 to allow critical arena construction activity to continue until that GMP is approved by City Council this summer. This will minimize schedule impacts and project delay costs. The scope of work included in Contract Modification 2 includes partial procurement of:

• Concrete Superstructure (Precast) and Concrete on Metal Deck (COMD)
• Structural Steel Erection
• Mechanical/Electrical/Plumbing/Low Voltage Coordination
• Underground Mechanical/Electrical/Plumbing/Low Voltage Installation
• Ice Floor
• Sports Lighting long lead time material procurement
• Food Service long lead time material procurement

This early-release package includes only partial contract values, and allows AECOM/Hunt to execute subcontracts at a reduced contract value to perform partial scope-of-work services and material procurements.

The construction manager will invoice the City for the cost of these early release packages. All payments made by the City to the construction manager for the early packages will then become a component of the GMP when it is established. Approval will not impact the total $165 million project budget, which is funded primarily through voter-approved Special Purpose Local Option Sales Tax.

Approval