Change orders for projects sometimes take time to be approved 

By Bob Balgemann

Reporter

First of two parts 

Occasionally, city officials receive change orders for different kinds of public projects, to deal with unforeseen problems that occur while work is being done. Most are taken care in a short period of time, without difficulty. 

But every once in a while, as was the case with the Appleton Forcemain Extension Project, a lot of discussion is required to work out the details. 

The city recently was asked to approve a $143,000 change order to reimburse the contractor, SegaAg of Cissna Park, for drilling through about 700 feet of bedrock encountered during the final portion of the pipe installation project under the Kishwaukee River. Going through the rock took 96 additional hours of labor, plus equipment use. 

The change order represented a 47.7-percent increase in the $300,000 contract awarded to SegaAg. 

Alderman Ric Brereton brought part of the problem to the table at the start of the Oct. 11 committee meeting, pointing out the change order was being requested for work that already had been done. “This is like the mural thing – we keep doing this backwards,” he said.  

He was referring to city council recently approving a special use permit for a mural after it had been painted on the side of a downtown building. 

Public Works Director Brent Anderson missed the Oct. 11 meeting, but he did attend the Oct. 18 session of city council. He explained the progression of events experienced by the contractor. 

The most recent contract was signed Sept. 7, 2021. “We are at the point where the boring has been completed,” he said. “The boring took more time than expected because they (contractor) hit rock material. They notified the city in writing of the change in conditions, per the IDOT (Illinois Department of Transportation) requirements.

“The change order was initiated. Typically, they (change orders) proceed ahead of time but not always. It depends on the change and the process that’s going through to get that done.

“Benefits to the city to have the change order done at this time is that it’s a known, fixed cost. We know exactly what was done for the extra work. Had we done this ahead of time, there would have been some unknowns involved. Have we done (change orders) after the fact? Yes, we have. Sometimes it just works out that way.” 

Two options 

He concluded by saying the city had two options and what could happen, depending on which option it chose. 

“Apparently the change order will give us a contract that’s ready for approval on Nov. 7, at a known cost ($143,000). Having this completed and online will be a benefit to us. If the change order is denied, that could lead to the contractor possibly exploring his options to recover his additional costs. Any legal action that may come would delay completion of the contract. If we go through that (court) process and the city is successful, they (city) will still need to have the project completed.” 

(Concerning completion of the project Danny Anderson, superintendent of the city’s water, street and sewer departments, said on Oct. 11, “The pipe from the sewer plant to the VFW [Post 1461] is ready to be tied in to the prospective tie-in positions.”)

After Brent Anderson’s recap of the project Alderman Dan Snow observed, “It sounds like your suggestion is to proceed with the payment.” 

“That would be my recommendation, yes,” Anderson replied. 

Before the vote, Alderman Marsha Freeman said there was “justifiable concern” on the part of city council that the project was done first and then the contractor expected to be paid later. 

“We didn’t know they had run into any kind of problem,” she said. “They hit a rock one day and decided to proceed the next day. It would have been nice had they given us a heads up, that we likely would be having another expense.” 

She added, “It’s not a good habit for continuing to get into, and do work and then come back and say, ‘Ok, we did it so pay us.’ It’s a concern.” 

“You have to look at these as a case-by-case basis,” the director answered. Had the contractor come to the city about the problem and be told not to continue working, “we would have had to rebid the project and they (new contractor) would have had to go through the rock, just the way this played out. They (SegaAg) really didn’t have any other choice.” 

Then he added, “And hindsight is always 20/20.” 

Notice given 

City Attorney Mike Drella offered this perspective:

“The contractor did make us aware rather quickly that they had hit rock,” he said. With a situation like that, had the contractor waited to proceed drilling, its costs would have increased and likely the city’s, too, he said. In that case, the city would have had to pay for delay time, too. 

“Ideally,” he added, “yes, this should be done at the front end. It just didn’t work out this time.” 

But Freeman said, “My fear is that in the future, this encourages contractors to low-bid projects.” 

Anderson didn’t agree, saying, “Again, I believe this is a very unique project. I don’t share that same concern going forward.” 

Mayor Morris wrapped up the discussion by reminding that project had not been completed. 

“There are two ends that have yet to be made,” he said. “Was there a specific date for those (connections) to be made?” 

“They (contractor) have 60 days from the ‘notice to proceed,’ which was Sept. 7,” Anderson replied. “So, they have until Nov. 7 (Sunday) to finish. I’m confident they will be able to finish in that timeframe.” 

The Committee of the Whole, in a unanimous voice vote Oct. 11, recommended approval of the change order and corresponding payment of $143,000 to SegaAg. Council then voted 9-1 on Oct. 18 to provide final approval, with Brereton dissenting.