Thursday, August 30, 2018
Arena Construction Manager contract delayed after $3.9 million error causes controversy
A key City Council vote to award the "Construction Manager At Risk" contract for the Savannah Arena was delayed two weeks due to chaos caused by a so-called "scrivener's error."
The error, totaling a nearly $4 million upward adjustment in the winning contract, provoked a formal protest and appeal by a losing bidder, as well as unrest on Council itself.
The winning bid was from national giant AECOM Hunt, whose resume includes Mercedes Benz Stadium in Atlanta. The error on their bid caused the potential award to jump from $7,316,016 to $11,166,016.
"The reason for the discrepancy is a misreading of the fee proposal document submitted by AECOM Hunt," City staff explained.
City Manager Rob Hernandez apologized to Council, saying, "We just didn't catch it... that should not have happened."
Nonetheless, Hernandez recommended moving forward with the award to AECOM Hunt, which remained the low bidder even after the "scrivener's error."
Walter Murphy of competing bidder JE Dunn, the only local firm of the three bidders, forcefully spoke against the vote:
"You just added $3.5 million" to the Arena construction contract, he told Council.
"How you did that I don't know... who is looking out for the taxpayers?"
Murphy intimated that there was fraudulent activity in the bid process.
"Today you were misled" by AECOM Hunt, Murphy said to Council. "Is there a separate ground rule for out of town firms?"
This contract is just the tip of the iceberg for the winning Construction Manager, who will spend much more money than that to hire various subcontractors to work on the Arena.
Estimates for the total cost of the Arena construction range from $120 to well over $140 million.
Alderman Bill Durrence said, "I'm very nervous. I've never spent $140 million before."
Durrence said that with such a "huge disparity in numbers, it seems like that should have been a red flag."
The "scrivener's error" boiled down to different ways of filling out the bid paperwork, a City staffer explained.
"The City requested that the proposers express construction manager fees, including overhead and profit, as a percentage of all subcontracted and all self-performed costs. All three proposers provided the percentage of construction manager fees as requested, but the City did not originally recognize that AECOM Hunt did not add that dollar amount to its bottom-line price on the fee proposal document."
Despite the threat of a potential lawsuit, Hernandez maintained that the process was done according to City protocol and policy, and the error in no way minimized AECOM Hunt's status as the highest-scoring bidder on the City's award matrix.
In other City Council business, plans moved ahead to sell the historic Gamble Building on Factor's Walk to the Foram Development Group, which is also behind the controversial Starland Village project.
Foram plans high-end condos on the site, with rooftop gardens.
Aldermen Tony Thomas and Van Johnson both objected to the sale, saying the City will have to lease expensive space in the Savannah Morning News building for the City staff that will have to leave the Gamble Building.
"The City is giving up its imprint on the historic waterfront," Thomas said.
"It boggles my mind that we are selling buildings to pay rent on others," said Johnson.
In another development, an alcohol license transfer brought what to some observers seemed like a mean-spirited, xenophobic reaction to an immigrant entrepreneur on the City's westside.
The license for Jyoti B. Patel narrowly passed after neighborhood opposition based on perceived high crime in the area around the convenience store at West 60th and Montgomery Streets.
In opposing the license for Patel, Alderman Tony Thomas repeatedly lambasted what he said were Patel's frequent trips to India.
Patel's attorney responded that she recently went to India to visit her son, but resides in Chatham County.
Thomas went on to berate Patel, through her attorney, for having limited mastery of English.
City Attorney Brooks Stillwell had to remind Council that there was no legal way they could require Patel to be on-site constantly as the alcohol license holder, as was suggested by several Council members opposed to the store — and apparently also opposed to her traveling to her home country.
The error, totaling a nearly $4 million upward adjustment in the winning contract, provoked a formal protest and appeal by a losing bidder, as well as unrest on Council itself.
The winning bid was from national giant AECOM Hunt, whose resume includes Mercedes Benz Stadium in Atlanta. The error on their bid caused the potential award to jump from $7,316,016 to $11,166,016.
"The reason for the discrepancy is a misreading of the fee proposal document submitted by AECOM Hunt," City staff explained.
City Manager Rob Hernandez apologized to Council, saying, "We just didn't catch it... that should not have happened."
Nonetheless, Hernandez recommended moving forward with the award to AECOM Hunt, which remained the low bidder even after the "scrivener's error."
Walter Murphy of competing bidder JE Dunn, the only local firm of the three bidders, forcefully spoke against the vote:
"You just added $3.5 million" to the Arena construction contract, he told Council.
"How you did that I don't know... who is looking out for the taxpayers?"
Murphy intimated that there was fraudulent activity in the bid process.
"Today you were misled" by AECOM Hunt, Murphy said to Council. "Is there a separate ground rule for out of town firms?"
This contract is just the tip of the iceberg for the winning Construction Manager, who will spend much more money than that to hire various subcontractors to work on the Arena.
Estimates for the total cost of the Arena construction range from $120 to well over $140 million.
Alderman Bill Durrence said, "I'm very nervous. I've never spent $140 million before."
Durrence said that with such a "huge disparity in numbers, it seems like that should have been a red flag."
The "scrivener's error" boiled down to different ways of filling out the bid paperwork, a City staffer explained.
"The City requested that the proposers express construction manager fees, including overhead and profit, as a percentage of all subcontracted and all self-performed costs. All three proposers provided the percentage of construction manager fees as requested, but the City did not originally recognize that AECOM Hunt did not add that dollar amount to its bottom-line price on the fee proposal document."
Despite the threat of a potential lawsuit, Hernandez maintained that the process was done according to City protocol and policy, and the error in no way minimized AECOM Hunt's status as the highest-scoring bidder on the City's award matrix.
In other City Council business, plans moved ahead to sell the historic Gamble Building on Factor's Walk to the Foram Development Group, which is also behind the controversial Starland Village project.
Foram plans high-end condos on the site, with rooftop gardens.
Aldermen Tony Thomas and Van Johnson both objected to the sale, saying the City will have to lease expensive space in the Savannah Morning News building for the City staff that will have to leave the Gamble Building.
"The City is giving up its imprint on the historic waterfront," Thomas said.
"It boggles my mind that we are selling buildings to pay rent on others," said Johnson.
In another development, an alcohol license transfer brought what to some observers seemed like a mean-spirited, xenophobic reaction to an immigrant entrepreneur on the City's westside.
The license for Jyoti B. Patel narrowly passed after neighborhood opposition based on perceived high crime in the area around the convenience store at West 60th and Montgomery Streets.
In opposing the license for Patel, Alderman Tony Thomas repeatedly lambasted what he said were Patel's frequent trips to India.
Patel's attorney responded that she recently went to India to visit her son, but resides in Chatham County.
Thomas went on to berate Patel, through her attorney, for having limited mastery of English.
City Attorney Brooks Stillwell had to remind Council that there was no legal way they could require Patel to be on-site constantly as the alcohol license holder, as was suggested by several Council members opposed to the store — and apparently also opposed to her traveling to her home country.
Tags: Westside Arena , Savannah Arena , Rob Hernandez , Bill Durrence , Eddie DeLoach , Van Johnson , Tony Thomas , Savannah Arena
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