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BACKGROUND The project is currently under construction and will modify the 1-580 interchange at Foothill Road to improve the interchange operation and safety. The project will modify the interchange by replacing the direct eastbound to southbound and eastbound to northbound off ramp "loop" connections with a "T" style intersection at Foothill Road just south of the 1-580 interchange. This intersection will be signalized and will significantly improve interchange safety by removing two problematic weaving locations caused by the existing off ramp connections. The eastbound off ramp will terminate at Foothill Road and include eastbound left and right turn lanes. The project will also relieve the weaving concerns at the intersection of Foothill Road and Canyon Way. On August 20, 2013, City Council approved a Professional Services Agreement with Carlson Management, Inc in the amount of $666,377.62 to provide construction management services for the subject project and for the I-680/Bernal Avenue Interchange Improvement project, CIP No. 005068. The construction management, inspection, and quality assurance testing service contract fee for the I-580/Foothill Road Interchange project is $411,582.85 and for the I-680/Bemal Interchange Improvement project it is $254,794.77. Carlson Management, Inc. was selected to provide specialty services for the City since both projects are similar in scope and within Caltrans' right of way. DISCUSSION Since the beginning of construction, Carlson Management, Inc. has incurred additional construction management, inspection, and quality assurance testing costs resulting in requests for additional compensation. Attached is a letter from Carlson Management, Inc. (Attachment 2) which provides the current project budget status and requests an increase to the current Professional Services Agreement compensation. Carlson Management is requesting a not-to-exceed limit increase of $87,000 from the currently approved $666,377.62 (to $753,377.62). Reasons for these costs increase are summarized as follows: 1) The I-580/Foothill Road project has experienced an extended construction duration (additional 32 working days) due to site conditions not as expected, inclement weather, and schedule changes. To date, the contract has been extended 19 working days due to inclement weather. The contractor did work on non-critical operations the majority of these days, therefore services from Carlson Management, Inc. were required. The other 13 day extension to working days was due to change orders and work taking longer than the contractor originally scheduled. The contractor has worked additional Saturday shifts and shifts in excess of eight hours to try to maintain the schedule. 2) The I-580/Foothill project was originally anticipated to begin in August of 2013, however it was delayed until October 15, 2013, because additional time was required for awarding the contract. The delay of construction impacted the cost as hourly rates increased in at the beginning of 2014 per the contract's fee schedule. Page 2 of 4