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Page 2 ( Agenda Item For 03-15-2011 BCC Meeting Sector 3 Beach Restoration — Change Order #4 March 8, 2011 The proposed Change Order #4 increases the unit cost of all sand required to complete Phase 2 of the project from $15.66 to $16.74 per cubic yard, and consequently increases the total contract price from $10,319,234 to $10,622,714. This is based on a total volume of 281,000 cubic yards remaining to complete Phase 2. ANALYSIS AND ALTERNATIVES Staff evaluated Change order #4 and determined that Ranger is correct in their assertion that fuel prices have increased since the project began. If a fuel -related change order were to be granted however, staff does not agree that the baseline for calculating a fuel increase is the contact bid date of August 3, 2009. Staff feels that the baseline date should be March 23, 2010. Since Ranger agreed at the 03-23-2010 Board meeting to freeze the unit cost of sand at $15.66 per cubic yard, any fuel -related price increases (if granted by the County) should be calculated from 03-23-2010 forward. Another important issue to consider is that during the discussion leading up to the approval of Change Orders #1 and #2 on 03-23-2010, staff calculated that the County was owed a credit because Ranger was going to save over $500,000 in transportation costs. The savings were due to 90% of the material coming from the Ranch Road Lake mine instead of equal shares coming from the Ranch Road. Lake, Fischer 86th and Nick Stewart mines. The Ranch Road Lake mine is only nine (9) miles from the beach compared to the more -distant Fischer 86th and Nick Stewart mines, which are 17 miles and 23 miles, respectively, from the beach. Ranger balked at the $500,000 figure, saying that the credit due to the County was closer to $111,000. Later on 03-23-2010, when Change Orders #1 and #2 were approved by the Board, zero credit was given to the County. This was despite the fact that Ranger acknowledged a substantial reduction in transportation expenses incurred throughout the project. Staff offers the following three alternatives ... Alternative 1• Approve 100% of Ranger's proposed Change Order.#4, corresponding to the increase in fuel cost from August, 2009 to the present. This would increase the total contract price by $303,480, from $10,319,234 to $10,622,714. Approving 100% of Change Order #4 increases the unit cost of all sand required to complete Phase 2 of the project by $1.08 per cubic yard, from $15.66 to $16.74 per cubic yard. F:\Public Works\CRM\My Documents\Coastal\Beach Sector 3 Change Order #4 BCC 03-15-2011.docx 117