The School Building Committee breathed a collective sigh of relief at its July 18 meeting when it learned that Shawmut, the project’s construction manager at risk, had proposed a guaranteed maximum price of $42,995,738 to construct the new Hildreth Elementary School. That amount is about $3,000 less than the construction budget specified in the Project Funding Agreement between the town and the Massachusetts School Building Authority. The committee voted unanimously to accept Shawmut’s guaranteed maximum price (GMP), allowing the town to borrow the money for the project so it can move forward to the main phase of construction, slated to begin in late September.
The GMP represents the maximum price the town will pay Shawmut for the scope of work defined in the final construction drawings. It does not include costs for change orders or overruns on the cost of items contracted as allowances, such as winter conditions.
A subgroup of the building committee, along with project manager Tom Murphy of NV5, started the GMP negotiation process three weeks ago, when the project was about a half million dollars over budget. Three of the five bid alternates and six value engineering items were cut from the project, which represented a savings of about $260,000. Another $140,000 was saved when Shawmut reduced its allowances for winter conditions and utility consumption, which Murphy told the Press were too high based on his experience with similar projects. Shawmut also agreed to lower its contingency from 3% of construction costs to 2.25%, saving the town an additional $221,000.
The total savings brought the budget below where it needed to be, and that allowed the committee to include an allowance for future sitework. Committee chair SusanMary Redinger told the Press, given the issues with arsenic and boulders encountered while preparing the site for the new building, the allowance may be needed in the second phase of the project, which includes demolition of the old school and installation of driveways, parking spaces, and the playground and soccer field.
The GMP agreement also includes a 75-day “buyout” period for Shawmut to review the scope of work with each nontrade bidder to make sure the bids will cover everything before signing contracts with those bidders. If any costs are increased, they will be covered by Shawmut’s contingency. Murphy told the committee that Shawmut still has concerns about the nontrade bids given the robust market for construction. But at the end of the buyout period, if costs have remained on track, Shawmut will lower its contingency even further to 2%.
The schedule in the GMP shows the building ready for occupancy May 10, 2021. The committee had hoped to schedule the move from the existing school to the new building during April vacation week in 2021, but the delay caused by the unexpected number of large boulders that needed to be removed from the building site has pushed that date back. If Shawmut recommends areas where the schedule could be accelerated, the town will consider using funds from its construction contingency to get the project back on schedule.
Committee member Alice von Loesecke told the Press the project will be bonded in August. She said she expects an interest rate cut at the end of July, which would lower payments on the 25-year debt for taxpayers. The town is currently using funds from a $5.5 million one-year bond anticipation note, borrowed last August, to pay project invoices. The note will be paid off this August when the project is bonded.