Add-ons to contracts cost county millions

The Hamilton County Commission on Wednesday approved a payment of nearly $500,000 to cover additional construction costs of the recently opened East Ridge Elementary School, part of nearly $2 million in contract overruns in less than a year.

Since December 2009, commissioners have approved nine construction contract increases totaling $1.8 million, county records show.

The extra $467,698 commissioners paid EMJ Corp. on Wednesday for East Ridge Elementary went to cover costs of "bad soil" found during the project, commissioners said.

Gary Waters, Hamilton County Schools assistant superintendent for auxiliary services, said that, with the additional money, the total price for East Ridge Elementary is $15.3 million.

Waters said the county didn't foresee the increase, though Commission Chairman Fred Skillern said increases for construction are common.

"If we're building, we're approving them," Skillern said. "Generally speaking in the school system contracts, you can anticipate 6 or 7 percent increase of the original bid price, especially when you're building on reclaimed property, especially when you go out on a field [where] there's nothing been there before. The odds are the ground hasn't been disturbed."

The contract increases came about because of unanticipated building conditions, records show. In a typical example, in December 2009 the county gave $356,160 more to Steve Williams Construction for infrastructure improvements for Gestamp, a Volkswagen supplier. The extra payment brought the total cost to $1.2 million.

Records show that the extra money was needed to take care of problems with the site that cropped up after construction started.

"The request for change order is due to unforeseen undercut and replacement of unsuitable material on site," the Gestamp project engineer wrote.

In all cases, Skillern said, the engineers and architects bring the requested change orders to commissioners for approval. He said trying to engineer a project to anticipate site conditions would be more expensive than approving change orders after a project has started.

Hamilton County Mayor Claude Ramsey said the county is unable to estimate how much site conditions will drive up the cost of a project.

Commissioner Jim Coppinger, the commission's Finance Committee chairman, said the county does set aside extra money to cover potential change orders on some projects.

"It's not that any of us like it," Coppinger said. "It's just something that has to be dealt with."

In other business Wednesday, commissioners approved an agreement with the Hamilton County Railroad Authority for $6.6 million worth of railroad improvements at the new Volkswagen auto assembly plant at Enterprise South industrial park.

County Administrator of Finance Louis Wright said $2.2 million would come from the $20 million set aside by the county for incentives to entice Volkswagen to build in Chattanooga. He said $2.2 million would come from CSX railroad and $2.2 million from the state.


Construction contract increases approved by Hamilton County Commission

Date: Dec. 2, 2009

Increase: $356,160

New contract price: $1.2 million

Contractor: Steve Williams Construction

Project: Gestamp infrastructure improvements


Date: April 7, 2010

Increase: $150,000

New contract price: $1.3 million

Contractor: Kay & Kay Contracting

Project: Bridge replacement over Bonny Oaks Drive


Date: June 2, 2010

Increase: $118,135

New contract price: $1.19 million

Contractor: Bradanna Inc.

Project: Sheriff annex expansion


Date: June 16, 2010

Increase: $74,566

New contract price: $22.28 million

Contractor: Sain Construction Company

Project: New Hixson Middle School


Date: June 16, 2010

Increase: $265,366

New contract price: $42.25 million

Contractor: Rentenbach Constructors Inc.

Project: New East Hamilton School


Date: July 21, 2010

Increase: $196,500

New contract price: $2.95 million

Contractor: East Tennessee Grading

Project: Enterprise South Industrial Park railroad support yard


Date: Aug. 4, 2010

Increase: $60,028

New contract price: $1.43 million

Contractor: Kay & Kay contracting

Project: Bridge replacement over Bonny Oaks Drive


Date: Sept. 1, 2010

Increase: $144,967

New contract price: $2.75 million

Contractor: Construction Consultants

Project: Courthouse renovations


Date: Oct. 20,2010

Increase: $467,698

New contract price: $15.3 million

Contractor: EMJ Corp.

Project: New East Ridge Elementary School


Total increases: $1.8 million

Source: Hamilton County government

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