On April 13, 2018, the Department of Finance (DOF) approved OB Resolution No. 57-18, approving a contract with J&G Industries, Inc., for demolition and related services for Project No. S-1232 Brookhurst Triangle Demolition Project, Phase II, and authorizing certain actions in connection.

During the demolition process, unanticipated changes in conditions to the site resulted in change order requests being submitted by the Contractor for approval.

Change Order #1 – July 15, 2019 Change in site conditions: During slab and footing removals an underground transite asbestos pipe was discovered that required proper removal and remediation by a qualified company. Work immediately stopped in the area and a 3rd party contractor was contacted for a Survey and Preparation of a Procedure 5 Plan, as required by the South Coast Management District.  Additional cost incurred $17,561.25. (Attachment 4).

Change Order #2 – August 12, 2019 Change in site conditions: Removal of additional concrete and block building wall found 3 feet below grade surface.  The total area is approximately 70ft x 200ft = 14,000 sq. ft.  Additional cost incurred $44,413.00. (Attachment 5).    

The total cost for the change orders is $61,974.25.  The original approved contract amount for J&G Industries, Inc., was for $330,100.00 with a 10% contingency of $33,010.00. The Successor Agency is now requesting an amendment to J&G Industries, Inc.’s, approved contract budget for the difference between the previously approved contingency amount and the total change order amount, which is $28,964.25.

Additionally, the Contractor requested an extension to the term of the contract as a result of the additional scope of work resulting from the unanticipated changes in conditions to the site discovered during the demolition process.  The contract was to expire on September 8, 2019.  The contractor has requested a 1-month extension to his contract for a new expiration date of October 8, 2019.   

None until approved by the DOF.  If the DOF approves an Amendment to the budget for the contract with J&G Industries, Inc., for Project No. S-1232 – Brookhurst Triangle Demolition Project – Phase II, as submitted, the Successor Agency will increase the contract amount by $28,964.25.  This will result in an increase to ROPS Line Item No. 22 – Brookhurst Triangle DDA, previously authorized RPTTF distribution amount for the period of January 1, 2020 to June 30, 2020, to pay the Successor Agency’s enforceable obligations.

It is recommended that the Successor Agency:

• Adopt the attached Resolution approving the Amendment to the agreement with J&G Industries, Inc., for Project No. S-1232 – Brookhurst Triangle Demolition Project – Phase II, subject to submittal to and review by the Oversight Board and then by the State Department of Finance. Further, the Community and Economic Development Director and her designees, in consultation with legal counsel, shall be authorized to make augmentations, modifications, additions or revisions as may be necessary or directed by Department of Finance.

By:  Monica L. Covarrubias, Project Manager