Get AI Briefings, Transcripts & Alerts on Local & National Government Meetings — Forever.
Omaha council narrowly approves changes to $411M Papillion Creek expansion after contentious debate over bidding and fees
Loading...
Summary
After hours of debate over whether staff followed the CMAR agreement and whether open‑book self‑performance and contractor fees were handled appropriately, the council approved amendments permitting open‑book self‑performance and related fee terms by a 4–3 vote; the attorney general said no statutory violation was found but expressed policy concerns.
The Omaha City Council on April 21 voted 4–3 to approve a package of amendments tied to the Papillion Creek Water Resource Recovery Facility Secondary Expansion project, a multiyear construction effort with a guaranteed maximum price (GMP) cited in the meeting at roughly $411 million.
The central dispute at the hearing centered on procurement: whether Public Works and the city’s project team followed the competitive‑bid expectations laid out by the council in a 2024 CMAR (construction manager at risk) agreement, or whether the city improperly began an open‑book, self‑performance process without prior council approval. Council member Harding argued that the process “was not followed” and warned the council risked violating public trust by retroactively changing terms that had been publicly vetted. “We agreed to terms and conditions for this process,” Harding said, “and that process was not followed,” adding he would not vote to support the changes.
City attorneys and public‑works staff responded that state statute (13‑29‑12) allows CMAR contracts to be conditioned on later refinements in scope and price and that the city had relied on consultant review (HDR, Jacobs) and the contractor (McCarthy) to develop an open‑book approach intended to control cost and risk. Deputy city attorney Ryan Wiesen summarized the Attorney General’s written response: the AG’s office “could find no violations of state statute” but reiterated policy concerns about the lack of competitive bidding and left the decision whether to ratify the departure to council judgment.
Representatives of McCarthy Building Company and HDR defended open‑book self‑performance as a risk‑management technique for complex projects. Jaren Murphy of McCarthy described the preconstruction market outreach—790 solicitations and some 186 bid packages returned—and said the open‑book, third‑party audited approach provides transparency and cost control for large, high‑risk scopes. HDR’s Ron Sova explained how CMAR fee structures work in practice: an expected subcontractor markup (which can range up to ~15% depending on risk) combined with a CMAR management fee (7.5% in this contract), creating layered markups when a CMAR self‑performs work.
Council debate also focused on the size of the self‑perform work and the total markup math. Speakers cited figures used during the hearing: a self‑perform labor figure of roughly $57 million and broader self‑perform totals that variously appeared as $163.3 million or $187 million depending on which line items were included; council members flagged a roughly $2.25 million discrepancy in the fee math on a $27.9 million subpackage as an example of why the calculations required careful review. Council members Festersen and Goodwin urged caution but supported the amendment once additional oversight language and clarified reporting lines were included; members Melton and Roe voted against the amendment citing process and transparency concerns.
The council separately approved a $2.8 million builder’s risk insurance premium for the same project by a unanimous 7–0 vote.
What happens next: With council approval, the contract amendments and the open‑book protocols will proceed under city and third‑party audit oversight; opponents signaled they intend to monitor billing and compliance closely. The debate left open questions about how the city will document any future self‑performance packages to improve perceived fairness and ensure the math behind markups and fees is fully auditable.
