Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Procurement And Change Orders topic
No spam. Unsubscribe anytime.
Assembly debates removing 10% contingency in borough procurement code and seeks rewrite
Summary
Assemblymember Ryan Sherritt asked the Kodiak Island Borough Assembly on Jan. 9 to remove a 10 percent contingency clause from borough procurement code to reduce scope creep; staff and new project management staff urged a broader rewrite of procurement and contracting rules.
Assemblymember Ryan Sherritt brought the Kodiak Island Borough’s procurement code under scrutiny at the Jan. 9 work session, asking the assembly to consider removing language that automatically allows a 10 percent project contingency from awarded contracts.
Sherritt said removal of the 10 percent contingency language would tighten the borough’s procurement process and limit scope creep. “I believe that if we remove the 10% contingency that’s written into code, this will help tighten our procurement process,” he said, urging clearer contract definitions and improved cost estimating.
Staff and engineers responded that the subject is more complex than a single sentence in code. Engineering and facilities director Dave Conrad explained that change orders and “changes of conditions” can legitimately increase a contract’s cost after award — for example, when demolition reveals unforeseen conditions — and that project management practice and the choice of procurement mechanism (ITB vs. RFP vs. RFQ) affect how those risks are managed.
New project manager Cody Allen described contingency as a risk-management tool tied to estimate accuracy. “The way that I see that contingency is not only a cost line item, but it’s directly proportional to your risk exposure on the project and the accuracy or inaccuracy of your estimate,” he said. Cody walked the assembly through industry-standard estimating levels and noted that more-destructive testing and higher-level estimates typically reduce the need for large contingencies but cost more up front.
Several assembly members urged a comprehensive rewrite of procurement code rather than a piecemeal fix. Members raised historical examples — including prior large school projects — where change orders became substantial. Multiple members supported studying a procurement officer or a dedicated project-management capacity to improve estimating, contracting templates and oversight.
Next steps: The assembly directed staff to provide the historic ordinances, examples of how code has changed over time, and to consider forming a subcommittee or working group to propose a broader rewrite of procurement and contract change-order language. No ordinance was adopted at the Jan. 9 session.
Context: The contested provision appears in Kodiak Island Borough Code 3.30.100 and was last revised in 2019 (with earlier revisions in 2013). Managers and the borough attorney advised the assembly that existing language has internal inconsistencies and can be read to require different approval steps for aggregated change orders; staff asked for direction on whether to pursue a targeted amendment or a wholesale code update.
The discussion also touched on operational matters: the current manager’s change-order authorization threshold ($50,000) and existing approval steps including the Architectural Review Board. Several assembly members said hiring or designating a procurement officer worth the budgetary cost if it reduces overall project overruns.
No vote was taken; staff and the assembly said they will return with proposed language and options for a subcommittee to consider.
