9.3. SR 01-21-1997 - Laserfiche WebLink

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expense that Borson included in its bid package. Also, with the construction management approach, Greystone pays and charges the city as a "reimbursable" for the general and special conditions much like Borson had included in its overall bid package. Finally, the city pays Greystone 3.8 percent of the project ($35,570 based on the estimate) for management services. This compares to the 7 percent estimated mark up that Borson had on its subcontractors as a profit margin. Additionally, for this 3.8 percent, the city receives some services through pre-bid assistance to the architect on designing the project. Overall, under this approach the construction manger supervises the subcontractors that the city hires versus a general construction firm supervising and making a profit off of these subcontractors. Based on the recommendation from Gary Tushie, which I support, the construction management approach saves the city money and we get a better overall project. Before considering the architectural fees or a project contingency budget, the liquor store project is estimated to cost the city about $1,044,100. We hope that this estimate is high. This estimate is through using the construction management approach and it is believed that if we simply went out for bids and used a general contractor for the project that the total project would be about 3 percent higher. The biggest furniture, fixture, and equipment item for this project is the cooler and when we add everything together, we are probably looking at a project that is in the $1.4-1.45 million range. The Council should note that this total project cost estimate is higher than what we originally envisioned. Recommendation It is recommended that the City Council hire Greystone Construction Company as the construction management firm for the Northbound construction project as outlined in the attached material. kkelkriverksys\shrdoc\council\cnstrmgr.doc