Kenai council approves $2.1 million change order for airport engineering and administration

The Kenai City Council on Oct. 1 approved a $2,100,000 change order to a previously awarded engineering contract for a federally funded airport improvement project, adding construction-administration services, City Manager Kevin Eubank said.

The change order was removed from the consent agenda for discussion because "we're asking for a $2,100,000 change order, which is a rather large change order that will bring you it's actually bigger than the original contract amount, and I think that warranted some discussion and explanation," Eubank said. The council approved the amendment by unanimous consent with no objections recorded.

The change order funds construction-administration work from the design firm that prepared the plans, HDL (the city’s design engineer). Construction administration includes quality-assurance testing of materials, documenting quantities, reviewing pay requests and ensuring contractor compliance with plan specifications and federal program guidelines, Public Works Director Frey told the council during the discussion.

Eubank said the work is funded under the Airport Improvement Program, a federal program with procurement rules that require a qualifications-based selection process for engineering and architectural services. "That selection must be based upon experience and qualifications," Eubank said; price may not be considered in the initial selection stage and is negotiated after a firm is chosen.

Vice Mayor Nackstedt placed the engineering and administration cost in the project context, saying the total engineering and administration allocation was about $3,000,000 and that construction costs for the project are "around $21,000,000," which he said makes the fee percentage fall within typical industry ranges of about 12–15 percent for projects of this scope.

Council member Askin moved the purchase-order amendment; the motion was approved by unanimous consent after discussion and questions about scope and procurement. No roll-call tally was taken and no dissent was recorded.

The city manager said staff had discussed the increase with the contractor and recommended awarding the additional services to HDL because the firm performed the design and the proposed construction-administration team has FAA project experience. Council members and staff said the work is necessary to comply with federal requirements and to provide on-site oversight during construction.

The council did not set a separate implementation timeline for the change order during the meeting; final construction schedules and pay estimates will be handled during project administration and as part of the federal grant reporting processes.

Ending: The council’s approval authorizes city staff to execute the change order; staff said they will continue to coordinate with the FAA and the contractor as construction proceeds.