Centennial Way Detailed Response 11 16 11 by 9bN92am



The media inquiry received about this project states, in part, that “The project was
originally put out to bid with the intentions that it would cost less than $5M but today the
price tag is over $7M.” That statement is incorrect and this report provides background
information on the project in response to the statement.

The message fails to recognize that this project uses a non-traditional method called
“Design-Build.” Due to the tight timeframe to deliver the project, the decision was made
to use the Design-Build (DB) approach. Using DB one team is selected to do both the
design and construction activities. The project is then expedited by overlapping the two
major activities. For example, construction can begin on simpler, more straightforward
elements while design of more complicated elements is completed. The traditional
Design-Bid-Build approach would have required us to design the entire project 100%,
then put it out to bid, and then construct it in a very linear process which would have
extended past the Centennial celebration date.

This project was not “bid” as was suggested by the message. A “best value” approach
which considers both qualifications and price was used to select the Design-Build team
which is led by Achen-Gardner Construction. At the time of selection, the project had
not been designed so the price competition was based on a listing of minimal required
features like sidewalk improvements, pavement, accessible ramps, landscaping, and
street lights. Achen Gardner provided a price proposal of $5M for those known
elements which was used for their initial contract approved by Council on September
15, 2010.

As soon as they were under contract, the DB team immediately finalized the design of
these simpler features and began construction activities. One early construction item
was the planting of trees which didn’t require extensive design and needed to be done
at the right time of the year. At the same time, the team also began a series of
stakeholder meetings to gather input on the more complicated, signature elements of
the project such as the 15 county displays and the 22 tribal monuments. After receiving
that input, they then began the detailed design process for these additional features.
Once the design was completed to the satisfaction of all stakeholders, a price was
negotiated for construction of the remaining project features.

What was described in the message you received as a “change order” was actually the
contract amendment to add $1.3M to Achen Gardner’s contract to provide these
additional elements. The amendment was approved by Council on June 22, 2011,
some 9 months after approval of the initial contract amount and after all of the project
features were fully designed. This was a planned incremental increase in the work and
not a mistake as was suggested. We had no idea what these features would look like at
the time of the original contract. To try to price those features at that time would have
been inefficient and irresponsible. By waiting until those elements were fully designed,
we can ensure that the final project meets stakeholders’ expectations and represents
the best return on the public’s investment in the project.
The message also suggests that there have been cost overruns on the project. That is
not true. The project budget was set at $7.2M to cover all project costs, with
approximately $6.8M from the Federal government and $409,000 from City funds. The
$6.3M design and construction contract with Achen-Gardner is still within the total
federal aid authorized budget. This project will also create 70 new high-paying jobs in
the metropolitan Phoenix area where construction unemployment far exceeds the
national average. See the attached report for more details on the funding for this

The project will provide upgrades to the street, the sidewalk, and other infrastructure
components, as well as elements to commemorate the State’s Centennial on February
14, 2012. The approach that the City has taken in executing this project attempts to
maximize the value of all of the elements provided while still meeting the firmly fixed
deadline for completion of the project.

The Centennial Way project (Washington Street from 7th Ave to 19th Ave) has received a
total federal aid authorization of $7,184,635. This type of federal aid requires a 5.7% local
agency match that equals a $409,424.20 contribution in City of Phoenix funds from
Arizona Highway User Revenues (gas taxes). The result is a leveraging of $6,775,210.80
(94.3%) in federal aid transportation enhancement funds that has been specifically
assigned to the Centennial Way project and can not be used for other projects or uses
such as General Fund expenditures.

A breakdown of the total authorization budget amount is as follows:

  $390,000 for project development, prelim engineering, and environmental clearances
$4,999,999 for the initial Design-Build contract (based upon less than 30% design plans)
$1,302,280 for a contract amendment to add project elements from stakeholder meetings
  $492,356 for City project administration and construction inspection expenses
$7,184,635 Total project authorization budget

To date, this budget remains intact with no “cost overruns” having occurred. The listed
contract amendment for $1,302,280 was an anticipated addition to the base project
amount to include elements from the extensive stakeholder involvement process that was
unidentified at the time of the base contract award. The amendment was executed
approximately 8 months after the base contract award to allow time for the overall design
to progress and to include stakeholder requested elements including additional curb &
gutter replacement, pavement mill & overlay, enhanced crosswalks, LED pedestrian &
street lighting, shade structure and wayfinding display upgrades, enhanced sidewalk
treatments, tribal monuments, and upgraded audible pedestrian signals for crossing
Washington Street.

Additionally, there has been some confusion regarding the merits of this project and the
City’s involvement in this State of Arizona initiated project. The enhancement elements
intended to create an improved approach to the State Capitol may not be appreciated by
all; however, the benefits of the associated civil infrastructure improvements should not be
discounted. Outside of the enhancement elements, the project will replace and widen
degraded sidewalk, eliminate accessible barriers for persons with disabilities at all
crosswalks, address minor drainage issues at intersections, renovate adjacent bus stops,
provide new street lighting along the corridor, and install a new pavement surface and
roadway striping within the project limits. These infrastructure items total over $2 million
(excluding design and administrative costs that can exceed 40%) of direct investment into
the Washington Street corridor that the City would have had to construct eventually.
Finally, the quality of the infrastructure improvements will establish a corridor that will not
require major maintenance for more than 10 years.

In conclusion, the total federal aid budget of $7,184,635 that was authorized for this project
remains in tact with the construction phase proceeding on schedule. Due to the design-
build delivery method that was used for this project, the construction will be completed in
time for the State of Arizona’s centennial with no cost overruns or delay claims.

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