A. Management Of Major Construction Projects: Department directors in departments which manage major construction projects shall manage such projects in order to keep the project within budget. In order to do so, the department director, in conjunction with the finance division, shall:
1. Secure approval of each major construction project and any subsequent modifications, including changes in the project scope, from the chief administrative officer.
2. Secure a project cost accounting number from the finance division (for capital improvement project) or from the department director (for other than CIP projects) for the project prior to submitting the project charter for approval and code all revenues and expenditures associated with the project to that project cost accounting number.
3. Ensure that in establishing project budgets and prior to awarding construction contracts, a construction contingency of ten percent (10%) to fifteen percent (15%) of the anticipated costs of construction is set aside.
4. Not utilize more than one-third (1/3) of the total amount of the construction contingency for change orders without the approval of the chief administrative officer. This approval shall be secured:
a. For any change order that results in expending more than one- third (1/3) of the total project construction contingency, and
b. Prior to giving a notice to proceed for the work outlined in the change order.
5. Not approve any change order in excess of twenty thousand dollars ($20,000.00) without the approval of the chief administrative officer prior to giving a notice to proceed for the work outlined in the change order.
B. Architect Or Engineer Estimates: Department directors in departments which manage major construction projects shall require as a part of any and all architect or engineering contracts an architect's or engineer's estimates of total construction costs prior to bidding projects.
1. The architect's or engineer's estimate shall be provided to the finance manager and the purchasing coordinator prior to soliciting bids for major construction projects.
2. Prior to soliciting bids for major construction projects, the finance manager shall certify to the chief administrative officer that funds for the amount of the architect's or engineer's estimate, plus ten percent (10%) of that amount, are available within the project's construction budget for the project.
3. All city bid specifications for architectural or engineering services shall include a provision that if the architect's or engineer's estimate is not within ten percent (10%) of the average of the bids of responsible bidders, the city will deduct seventy five percent (75%) from the cost within the architect's or engineer's contract for preparing the estimate which was in error.
4. If the city determines that errors or omissions occurred in the architectural or engineering processes, the city will pursue claims against the architect or engineer's errors and omissions insurance policy to recover costs when it is in the city's best interest to do so.
C. Change Orders Due To Contractor Or Design Error: It is the policy of the city that a change order that is due to a foreseeable error on the part of the contractor or the designer of the project should be the financial responsibility of the negligent party. The city will take reasonable action after consultation with the city attorney to recover the cost of such change orders through a contractor's or designer's applicable insurance policies. (Eff. 3-14-2007)