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Committee presses SFPUC on steep headworks cost increases as $10M contract amendment is advanced
Summary
The Budget & Finance Committee recommended a $10 million amendment to the SFPUC construction-management agreement for the Southeast Plant new headworks facility and pressed the utility on cost escalation after BLA said the project budget rose from $244 million to $490 million; the committee requested SFPUC reporting during the PUC budget review.
The Budget & Finance Committee on March 3 recommended a $10 million increase to an existing construction-management services agreement with HDR Engineering to support the San Francisco Public Utilities Commission’s (SFPUC) new headworks facility at the Southeast Treatment Plant.
Alan Johansen, the SFPUC construction bureau manager, said the amendment increases the contract’s not-to-exceed amount to $27 million and extends the term by one year to June 2024. Johansen said the increase reflects added scope (including adjacent work and electrical and foundation improvements), changes to design development and the need to repackage some bid work after limited contractor responses in earlier procurements.
The Budget Analyst reported the project’s estimated construction cost had risen from roughly $244 million to $490 million and recommended amending the proposed resolution to request that the PUC general manager report to the Board during the SFPUC budget review (anticipated in May 2022) on actual and projected construction costs, the impact on the sewer system improvement program and procedures to contain cost increases.
Supervisor Gordon Marr and other members asked for an explanation of the cost escalation. Johansen cited a single responsive bid on an early package, repackaging by the CMGC contractor, added deep-excavation scope around a pump station that later was reframed as a seismic refurbishment of an existing lift station, and added adjacent work that made sense to include in the overall contract.
Public commenters raised concerns about rising program costs and contracting out; one speaker who served on PUC advisory panels supported the project but suggested the city consider using Public Works staff for construction management when feasible.
The committee approved the amendment and voted to send the item as amended to the full Board with a positive recommendation (3–0). BLA’s requested report to the Board will accompany the item when SFPUC’s budget is reviewed.
