Item - 2019.GL3.3

The General Government and Licensing Committee:

1.  Deferred consideration of the item to the General Government and Licensing Committee meeting on April 23, 2019, with a request that the Interim General Manager, Facilities Management, and the Chief Purchasing Officer provide the following information:

a.  The process used to determine project costs and the scope of work for heritage buildings, such as Toronto City Hall, including the involvement of Heritage Preservation Services, Corporate Security, and other relevant staff; and

b.  How project costs are accrued and accounted for and why project costs are unanticipated.

The purpose of this report is to request authority to amend Purchase Order Number 6044338 issued following award of Tender Number 300-2016 to Phoenix Restoration for building envelope improvements on the first, second, and third floors of City Hall, including the Council Chamber. The total Purchase Order Amendment being requested is for an additional amount of $2,020,993, net of all applicable taxes and charges ($2,056,562 net of HST recoveries).

The original project scope of work incorporated stakeholder requirements and site conditions identified through consultation and due diligence conducted prior to contract award, including a review of building drawings and investigative openings to confirm construction details and ascertain site conditions. The requested amendment addresses work that was added to the current project to realize efficiencies and avoid costs or disruptions associated with re-tendering and remobilizing construction in the future, as well as changes to the original scope of work necessary to meet heritage or code requirements that were identified as the heritage review process progressed. These added items and project modifications provide important benefits to the City, including enhanced security for City Hall occupants and preservation of the heritage nature of the building.

The requested amendment is also required to address costs to remediate concealed site conditions attributable to the age of the building and the original construction methods and materials, including additional asbestos, salt corrosion, and curtain wall characteristics not identified during the due diligence process. If not completed as part of the current project, this remedial work would have been required prior to completing curtain wall improvements at a later date. This work also supports ongoing efforts to manage asbestos and other designated substances to ensure the safety of building occupants.

To address scope changes and the remediation of concealed site conditions, the project has been extended to October 2019. Therefore, the contract value must be increased to accommodate increases in the cost of labour, materials, and project administration.

Once completed, this project is expected to reduce maintenance requirements in the future, improve the air sealing of the building and increase its energy efficiency, and more effectively dampen noise from Nathan Phillips Square and adjacent areas.