School board approves $398,000 contingency allocation after subcontractor omitted canopies from bid

The school board approved a contingency change request to cover approximately $398,000 in additional work after subcontractor bids failed to include a set of walkway canopies that were part of the contract documents.

During discussion, a construction representative identified as James explained why the change was proposed. “We have contingency built into the GMP. So contingency is used for a wide array of things. It can be used for scope gaps, acceleration when it's necessary, those types of things,” he said. James described the omitted canopies as “first cost” items that must be installed for the school, saying the subcontractor missed those items in its bid submittal and only disclosed the omission during the submittal review process.

James said the project team negotiated with the subcontractor and asked the firm to reduce overhead and profit because the omission was its error; the team also compared the subcontractor’s revised price to an internal estimate and to other market quotes. “We told them that they needed to cut their overhead and profit due to their mistake, which they did,” James said. He added that continuing with the same subcontractor — rather than forcing the contractor to walk away and rebid the work — avoids schedule and cost risk and benefits project continuity.

Board members pressed for additional detail about bid procedures, contractual recourse and alternatives. Board member discussion referenced the project’s Guaranteed Maximum Price and contingency level; the construction manager said contingency remains healthy after value engineering and credits returned to the project.

A motion to accept the recommendation and move forward passed unanimously after a brief exchange of questions and clarifications. Board members asked staff to follow up with contract documentation and with the board attorney if further legal action or negotiation becomes appropriate.