R-XII works to build schools, rebuild communication

After two years of debate on issues ranging from program management to contractor prequalification to bid documents, communication between Springfield Contractors Association and the Springfield R-XII School District ground to a halt in early 2005 with hard feelings on both sides.

Norm Ridder inherited this tense situation when he became superintendent July 1, 2005. The problem was not of his making. But it is his hope that the solution will be.

Ridder’s solution is Continuous Quality Improvement, which calls for communication and transparency at all levels.

“Our philosophy is to keep everything as open as possible,” Ridder said. “The thing that I want to do is what Jack Stack is good at, and that is just to open up everything. It should not appear that anything is covered up at any time.”

While local contractors like what Ridder has to say about a new, more open approach, they also say they’ll believe it when they see it.

“They’re looking at some new ideas and they’re asking for some input, so that’s a positive sign,” said Jim Carson, president of Carson-Mitchell Inc. and vice president of the SCA board.

While the district seems willing, “I want to reserve judgment until I find out the result of the consults – whether they took the advice or just ignored it,” Carson said.

For his part, Scott Wendt, R-XII’s new director of capital construction, says he is utilizing local contractors’ input, and the district is getting the benefit.

Wendt is point man on the $96.5 million in construction projects funded by the 18-cent increase in the district’s debt service levy that voters approved in April.

Most recently deputy director of facilities, Wendt has worked with R-XII facilities, operations and major repair construction for the last 3 K years, as well as serving on the R-XII Construction and Design Task Force.

With the new bond projects, Wendt said, the district is also taking a new approach toward project management. Wendt is assembling a team of project managers who will work as district employees for the term of the bond projects.

“That’s a move in the right direction,” said Rick Quint, SCA board member and Walton Construction’s senior vice president and managing director.

With input and involvement from the construction community, Wendt already has hired two project managers – mechanical engineer Gary Brobst and architect Ed Tims – both of whom are known to the construction community.

Quint said Tims recently contacted him for help in gathering school construction cost information. Quint, whose company is currently at work on three school projects, was happy to share the data.

“The more information they get like that, the better decisions they can make regarding how they spend this money,” he said.

And they’re going to need all the help they can get.

“Cost of construction right now is going through the roof,” Quint added. “They’ve got some tough rows to hoe, but at least Scott Wendt, I think, is trying to make a good effort at it.”

Communication and conflict

Communication problems came to a head following the hiring of LeNir Ltd. as program manager for the Wilson’s Creek and Parkview construction projects in June 2003.

LeNir, an Arizona-chartered real estate and development company, initially consulted with the district Jan. 20–April 30, 2003, on architect selection and program management, a form of project delivery not previously used by R-XII.

LeNir subsequently applied and was selected for 55 percent of the program management work. (See related story on page 25.)

LeNir was named program manager for the new Wilson’s Creek School and the Parkview addition/renovation project, while local firm DeWitt and Associates was named program manager for the district’s various air-conditioning projects.

Program management and prequalifying of contractors were new concepts for Springfield, and LeNir President Doug Fowler said it was only natural that the change would cause some resistance. But he also said that he addressed members of SCA’s school liaison committee at the beginning of the process and invited members to provide input on the prequalification process, but only one member did so.

SCA members said that while they were told input was welcome, they were also told they would not be able to review the documents being considered, which they found unacceptable.

In addition to introducing program management and prequalification, part of LeNir’s task was to prepare contracts and conduct public bids, but the contract that LeNir developed for Wilson’s Creek was widely criticized. SCA repeatedly provided input on the contract, spelling out members’ objections and concerns. Some of SCA’s suggestions were followed – and the contract amended by change order three times before the bid deadline – but other suggestions were not. SCA stated that as a result, the contract language would likely have a dampening effect on bidding.

That warning seemed prophetic when only one of R-XII’s six prequalified contractors, Flintco Inc., submitted a bid for the job.

Dick Smith, owner of prequalified firm R.E. Smith Construction Co. in Joplin, said he didn’t like the fact that the school was using program management, and “The type of contract they came up with and the requirements they were putting on the contractors were a risk factor that we weren’t interested in going through with.”

Fowler said there was another reason only one bid was received: Building Construction Enterprises, a prequalified company from Kansas City, wanted to bid but did not receive the bid documents in time.

BCE later was the successful bidder on the Parkview High School renovation.

Contractor liability, GMPs

One of the biggest issues with the Wilson’s Creek contract was language that placed greater liability on contractors.

Jim Carson of Carson-Mitchell said, “There’s a trend across the construction industry, not just in this area but around the country, to shift more and more responsibility and liability onto the contractor, but some of those things the contractors are not suited or able to take on or insure.”

In the Wilson’s Creek contract, that included items such as guaranteeing the roof for a period exceeding the manufacturer’s warranty and bearing the cost of volatile steel prices.

But Fowler, as owner’s representative, said shifting liability is appropriate.

“Our client is in the education business, they’re not in the construction business. Contractors get paid very well, and part of what they get paid for is to take that risk,” he said. “I can’t expose the owner to steel price fluctuations. I can’t expose them to the cost of lumber going up or the cost of concrete going up.”

Another issue that raised contractors’ eyebrows was the use of a guaranteed maximum price contract, also known as a GMP or cost-plus contract, for Wilson’s Creek.

“When you go do cost-plus work for an owner, usually it’s because the owner needs something done in a hurry,” Walton’s Quint said.

Under GMP, the contractor is paid the cost of construction plus a stated percentage of profit, all not to exceed the guaranteed maximum, and at the end of the job, the contractor’s books are audited.

But Quint, whose company is active in more than 30 states, said GMP is unheard of in public projects.

The stumbling block, he said, is the audit requirement.

“In the public arena, because you have and I have the right to get all those documents, it can go in the newspaper,” Quint said. Contractors don’t want their competitors knowing what they pay their staff or the details of their overhead. “Why would you expose yourself to that?”

Moving forward

To address some of the difficulties encountered in past construction projects, on Jan. 12 the R-XII Design and Construction Task Force, co-chaired by Todd Parnell and Jean Twitty, provided a list of recommendations to Superintendent Ridder.

The recommendations address bid policy for emergency situations; standardized contracts; prequalification of contractors; board oversight of projects; communication, particularly regular meetings between R-XII and SCA; written procedures on cost, fee and general conditions; definition of audit procedures in contracts; and selection processes, including development of an internal construction management team or department.

“While these changes may seem simple,” members stated, “the task force believes their implementation will open the door to re-establishing trust and cooperation between well-intentioned parties.”

SPS’ Wendt is establishing a construction management team and meeting and talking with SCA and individual contractors.

“I know there’s been some tension in the past, but as far as what I’ve been doing in working with them, bouncing ideas off, getting feedback, it’s been real helpful,” Wendt said. “I think that it’s going to work out well.”

R-XII has issued a request for qualifications for engineers on the first of the district’s 15 standalone air-conditioning projects and has selected the architects for its 10 renovation/addition projects.

Wendt said the Weaver and Weller elementary projects are farthest along, adding that construction should begin in the fall and be completed in time for the 2007–2008 school year.

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