Change Order Procedure to Public Contracts
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MEMORANDUM
August4,2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Change Orders to Public Improvement Contracts
A change order for a public improvement contract is technically an amendment to the
contract, which would require City Council approval. Corporation Counsel Barry Lindahl
is recommending that the City Council adopt a formal written policy for change orders.
City Engineer Gus Psihoyos is recommending that change orders be approved by the
City Manager, as is current practice. He further recommends that when change orders
exceed 10% of the amount budgeted for the project, or $100,000, whichever is greater,
that a report be submitted to the City Council.
For any material change in the contract, however, City Council approval of the change
order would be required.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Gus Psihoyos, City Engineer
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MEMORANDUM
August 5,2005
FROM:
Michael C. Van Milligen, City Maf'lFJ
Gus Psihoyos, City Engineer ~ ,/
TO:
SUBJECT: Change Orders to Public Improvement Contracts
INTRODUCTION
The City of Dubuque does not have a formal written policy regarding approval of
change orders for public improvement contracts. The attached resolution
delegates the authority to approve change orders to the City Manager.
DISCUSSION
A change order for a public improvement contract is technically an amendment to
the contract, which would require City Council approval. Corporation Counsel
Barry Lindahl is recommending that the City Council adopt a formal written
change order policy.
The proposed policy provides that change orders will be monitored by the City
Manager or his designee on a project. When change orders exceed 10% of the
budgeted amount as approved by City Council, or $100,000, whichever amount
is greater, the City Manager must provide an informational memorandum to the
City Council concerning the details of the change order or change orders. The
explanation of the change order will include the status of the project and all
change orders. The policy also include unit price bid items when they exceed the
above limits
This process will not require the contractor to discontinue work until the
informational memorandum has been presented to the City Council.
When a material change in the project occurs or the type of work changes
substantially from what was originally approved by the City Council, approval of
the change order by the City Council rather than by the City Manager.
The policy also requires that when the project is completed, all quantities and
costs must be presented by the City Manager for final City Council acceptance.
The final payment schedule will show how the final quantities changed from the
original engineer's quantities.
ACTION TO BE TAKEN
The attached resolution authorizing the City Manager to approve change orders
to public improvement contracts and providing the procedure for such change
orders should be submitted to the City Council for consideration.
Preparer: Barry A. Lindahl. ESQ. Address: Suite 330 Harbor View Place 300 Main Street
DubuQue.IA 52001 Telephone: (563l583-4113
RESOLUTION NO. 389-05
AUTHORIZING THE CITY MANAGER TO APPROVE CHANGE ORDERS TO PUBLIC
IMPROVEMENT CONTRACTS AND PROVIDING A PROCEDURE FOR SUCH
CHANGE ORDERS
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
1. After award of a public improvement contract by the City Council, the
City Manager or the City Manager's designee may approve change orders subject
to the following procedure. All change orders shall be monitored by the City
Manager to note the point in time when the change orders equal 1 0 percent of the
budgeted amount approved by the City Council for the project or whenever the
total for all change orders exceeds $100,000, whichever amount is greater. Once
change orders totaling such amount have been issued, for any subsequent
change order the City Manager shall provide an informational memorandum to
the City Council containing an explanation of the change order and the status of
the project and change orders issued to date at the next City Council meeting.
The City Council may modify the $10,000 limit in the resolution approving a public
improvement contract. Work on the project shall be allowed to continue during
the time the City Manager is preparing the informational memorandum.
2. The foregoing procedure shall apply to unit priced contracts when it
becomes apparent that there will be a change in the number of units that will have
the effect of increasing the contract by the amounts specified above.
3. Notwithstanding the foregoing provisions, a change order shall be
submitted to the City Council for approval when it involves a material change in
the quantity or type of work to be done under the contract.
4. Once a project has been completed, the total quantities and costs shall
be presented by the City Manager to the City Council for acceptance and
payment. Such quantities shall include the quantities from change orders as well
as the final, as-built measured quantities.
Passed, approved and adopted this 15th day of
August
, 2005.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk
F:\USERS\tsteckleU.indahl\ResoIutions\AuthorizingCityManagerApproveChangeOrders...Q19.doc