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New water plant delayed amid contractor and materials problems; city holds retainage and warns of schedule change order
Summary
City staff said the new water treatment plant is behind schedule and the contractor is requesting a schedule adjustment; issues cited include undisclosed existing valve conditions, lead‑time delays for switchgear, a discovery of non‑stainless fasteners causing corrosion, and subcontractor turnover; the city retains 5% and liquidated damages remain in the contract.
City utilities staff told council on June 24 that the new water treatment plant is behind schedule and the contractor has proposed extending substantial and final completion dates.
Alex, utilities director, said the contractor has submitted a proposed schedule change that would move substantial completion to Dec. 31, 2025 and final completion to April 9, 2026. Staff cited multiple causes: previously unknown existing valve conditions that complicated isolation work; code‑driven additions of fire suppression in some loading docks; supply‑chain delays for long‑lead electrical equipment; and a quality issue in which stainless‑appearing washers and fasteners were found to corrode when exposed to water. That discovery prompted removal and replacement work the contractor is performing at its expense, staff said.
Alex also reported subcontractor performance problems, including an HVAC mechanical subcontractor that left the project and slow ramp‑up of electrical and instrumentation work. He said the contractor has since added an on‑site scheduler and senior management resources to expedite completion and that the city has been pressing for progress while protecting contractual remedies.
Council and staff discussed contractual tools: the city holds a 5% retainage and required performance bonds; liquidated damages are $5,000 per day for substantial completion and $3,500 per day for final completion. Alex said the city will not accept additional change orders for ordinary contractor delays and that any extensions will be evaluated only for delays the city caused. Staff also noted the TCEQ certification process typically takes up to 120 days after startup, though staff will seek expedited review if possible.
Council expressed frustration at repeated schedule slips and asked staff to ensure the city's leverage (retainage, bonds, liquidated damages) remains available while staff works to bring the project to completion.
