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Regular meeting of the Board of School Directors - Sept. 28, 2015


STATE COLLEGE AREA SCHOOL DISTRICT MEDIA RELEASE


Sept. 28, 2015


CONTACT:

Chris Rosenblum

SCASD Director of Communications

jcr19@scasd.org

814-272-8699



SCASD Board of Directors Reviews

Second State High Project Cost Estimate


   On Monday, Sept. 28, the State College Area School District Board of Directors received and reviewed Massaro Construction Management Services’ 90 percent cost estimate for the State High Project.

   Crabtree Rohrbaugh and Associates, the project’s architectural firm, had presented its separate 90 percent estimate to the Board on Aug. 31. CRA and MCMS calculated their cost estimates independently.

   MCMS estimated the final total estimate will be $140,332,300 (including soft costs of $18,772,675), compared to CRA’s $129,441,575 (including the same soft costs).

   Projected net costs to SCASD — the 90 percent estimates minus two secured Leadership in Energy & Environmental Design (LEED) grants of a little less than $4 million — are $136,396,307 from MCMS and $125,506,182 from CRA.

   District of Physical Plant Ed Poprik and design team members Jeff Straub and Jon Bedia from CRA and Dan Kiefer and Tim Jones from MCMS explained the estimates to the board.

   Poprik started by noting that the design team had promised the Board that it would advise it about the suitability of the final project documents before any approval vote for bidding. He said that neither he nor MCMS were prepared to do so Monday, but hope to have an assessment by the end of the week and to be able to recommend at an Oct. 5 special meeting that the Board approve the documents for bidding.

   “Because of the size of this project … it is critical for the next three years of construction that we have a nearly flawless set of documents,” he said.

   Poprik said gaps existed between the CRA and MCMS estimates at the 30 percent and 60 percent stages, but then, the firms had time to compare notes, reconcile the estimates and narrow the differences. Because of the urgency of bidding the project before winter, they didn’t have the same time with the latest estimates.

   In fact, Poprik said, he partly accepted not having any reconciliation and a potential further delay because the project is so close to bidding, when the real cost — as opposed to the informed guesses of estimates — will be revealed.

   “The only way to know the true number of this project is to bid it,” he said.

   Basically, design team members said, the difference between the estimates was due to several factors:


  • Part of the discrepancy can be attributed to differing opinions from independent parties.


  • The two firms have different approaches to estimates.


CRA’s practice is to generate an estimate that predicts the total value of the low bids, using data from their previous project bids. MCMS estimates predict a mid-point of all bids, drawing from the project documents and assessing them as a bidder would — getting a market quote for a type of compressor, for example; then multiplying it by the number of units needed and then factoring in labor costs. Dan Kiefer told Board members that the MCMS “cut” about 10 to 20 percent from vendor quotes, understanding that vendors would give conservative figures as cushions. The estimate, he said, drew from more than 215 pages of raw data. “We like to generate as much detail as possible in order to give our teammates as much static information as possible,” he said.


  • Kiefer explained the MCMS 90 percent estimate increased about $17 million from the 60 percent estimate mainly because of it factored in 49,000 square feet added to the South Building floor plan at the 60 percent stage — primarily within the performing arts and physical education areas. Straub said CRA calculated the increase was 10,000 to 15,000 square feet smaller — translating into $2 million to $3 million less in its estimate.


  • Over the past 10 years of previous MCMS estimates (about $480 million worth of work), the low bid total value of its projects has averaged 12 percent below the estimated mid-point of bids. If this holds true for the State High Project, the MCMS estimated total construction cost would be $121,559,625 — 12 percent less than the MCMS mid-point construction estimate of $134,390,000. By contrast, the CRA total construction cost estimate comes in at $108,759,200.


  • CRA has reduced its estimating contingency to 1 percent based on its comprehensive knowledge of the architectural drawings. MCMS is still carrying a 4 percent contingency for the project’s architectural and site and mechanical, electrical and plumbing portions. The difference equates to about $1 million. Construction contingency remains 3 percent and isn’t expected to change.


 

   Poprik said the current market conditions bode well for the eventual low bid to hold true to historical trends and come in 12 percent lower than the MCMS estimate.
   “We have been surveying the market and we believe there are a lot of contractors who will be aggressive with bidding this project,” he said, adding it appears there aren’t a lot of large projects out to bid that would compete for contractors.
   Board member Dorothea Stahl said she was concerned that contractors would see the MCMS estimate, the high end of the range, and bid accordingly, expecting the district to pay. But Poprik said it wasn’t likely because preparing a bid is expensive, and contractors need to get the low bid and the job to justify bidding costs.
   Board member Jim Pawelczyk said the two firms did “a great job” in coming up with “bookend estimates,” but the question remained whether the district could pay for a project in the MCMS estimate’s neighborhood.
   “If we are acting conservatively as a Board, we should be prepared to cover that entire range, no matter where it will be,” he said.
   Board President Amber Concepcion, however, framed the disparate estimates as a useful decision-making tool for the Board.
   “Clearly, we have two estimates that help us understand the range of what we need to cover,” she said.
   Other points stressed by the district administration in its memo to the Board for the meeting included:

  • Cost estimates for alternates were not included in either company’s estimate.


  • An estimated $7,666,746 of state PlanCon reimbursements may be provided to the district based upon the current PlanCon process. By nature of the referendum exception process, the reimbursement resulting from the referendum debt must be dedicated to funding the project budget. The remaining PlanCon reimbursement may aid in reducing project costs, as well as tax levies in future years.


  • The administration’s capital financing plan, most recently reviewed at the Sept. 16 board meeting, shows a capacity of $135,000,000 in project funding.


  • The 90 percent estimates are tools in preparing for bidding the project.


  • Coming from independent parties, the estimates are expected to contain inherent differences.


  • As the source of the architectural documents, CRA is expected to have a clearer understanding and deeper knowledge for the cost estimate. The MCMS estimate prepared at the 90 percent stage included greater uncertainty about the project and supporting documents.


  • During the last month while reviewing the 90 percent documents, MCMS has provided CRA with questions and comments which will lead to refined documents for bidding purposes.


  • The 90 percent documents from which the estimates were generated were not suitable for bidding purposes. An updated set of project documents was created on Sept. 25. MCMS will offer a final recommendation about the bid of the project at the Oct. 5 Board meeting.


  • At the Oct. 5 meeting, the Board is expected to vote on approving the release of the bidding documents. In preparation, the district administration will continue to work with CRA and MCMS to prepare for the release of bid documents.


Other discussions

   Tim Jones of MCMS provided an update of construction phasing starting in January 2016. Work originally had been scheduled to start this fall. The project now is expected to be completed in the summer of 2019.
   Board President Amber Concepcion asked about what happens if contractors “slide” from the schedule. Jones said he and others at MCMS “will monitor the schedule carefully for slides.” If they sense some developing, they will put contractors on notice to create a “recovery schedule” or face penalties.
   Jeff Straub of CRA also discussed minor changes to the South Building floor plans — a reorganization of the gym locker rooms and the addition of an exterior concrete maintenance storage shed. He also discussed the size and location of student lockers along the main, curving hallway bordering the four classroom towers.

Action items


   Among action items, the Board approved a contract with Affinity Connection for development fundraising services and a resolution outlining the Board’s stance on Memorial Field and downtown campus development planning.