Category: Aurelius Principle

Video: Augusta Commission Committee Discusses Heery/Dukes Contract

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Tuesday, June 11, 2013
Augusta, GA
From CityStink.net Reports

Contributions were made to this article by Al M. Gray, President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns. Cost Recovery Works is no longer in business, as of December 31, 2020.

An Augusta Commission committee gave no recommendation to proceed with the multi-million dollar contract with Heery International yesterday, deadlocking at 2 to 1. Marion Williams and Wayne Guilfoyle voted not to proceed with extending the contract as-is. Grady Smith and Corey Johnson voted in favor of extending the contract as-is. CityStink.net was there yesterday and got exclusive video of the meeting including where Cost Recovery Specialist Al Gray challenged Heery officials. You can watch that video below.

You can also see our most current investigative piece concerning the Heery saga:

Peas Lost to TSPLOST (video)

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Originally posted on CityStink
Monday, July 30, 2012
Augusta, GA
By Al Gray

The author, Al M. Gray, was President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns. Cost Recovery Works is no longer in business, as of December 31, 2020.

In his latest anti-TSPLOST video, Al Gray, explains how our buying power will be pea’d away if TSPLOST passes. Watch his video below.

Special Report: No RW Allen GuaranTEE?

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Originally posted on CityStink
July 25, 2012
Augusta, GA
By Bradley E. Owens

Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article. Cost Recovery Works is no longer in business, as of December 31, 2020.

Augusta Today member Dean Klopotic submitted a Georgia Open Records Request seeking the RW Allen, LLC (RWA) billings for the TEE Center related contracts they are performing. The Law Department of the city of Augusta issued a response which included RWA invoice number 24 representing costs through March 31, 2012. Our investigating team has since obtained RWA invoice number 26 from other sources in city government and turned the documents over to cost recovery accounting specialist Al Gray for analysis and review.

RWA boasts of having an “Open Books Policy” but their TEE Center project manager Jim Cely declined to allow us to visit their offices to view supporting documents to the billings obtained through the Georgia Open Records Request. RWA CEO Rick W. Allen, currently a candidate for Georgia’s 12th Congressional District, had previously pledged to allow Mr. Gray access to the billing detail records. Despite being assured they would cooperate, we were not allowed to see the documents, and instead, Cely gave instructions to direct inquiries to Augusta Administrator Fred Russell… the same Fred Russell who has displayed a pattern of withholding VITAL information from Augusta Commissioners on the TEE Center and its companion parking deck across the street.

The TEE Center Contract with RW Allen, LLC is a Construction Manager at Risk guaranteed maximum price (GMP) contract. Under a fast track, a cost plus contract with a GMP, the Construction Manager sets its fee, general conditions (overhead) expenses, and other costs necessary to construct a total facility.  These contracts are or can be comprised of multiple subcontracts and work with the CM (RWA in this case), self-performing portions as if they had been subcontracted. In other words, they can hire themselves to do certain parts of the job as the Construction Manager.

Once the drawings and design work is 75% complete the GMP was officially set at a price of $29,700,000 and accepted by the Augusta Commission. There have been two change orders (“change orders” are contract modifications which usually are increases in the cost of the fixed price cap due to unforeseen “changes” that affect the construction itself) executed which bring the total price to $30,113,215.  So as you can see, the agreed upon price of the TEE Center construction was $29,700,000.00 but due to the two “change orders” the final projected price tag (there could be more change orders before it is completed, so I say “projected”) is now a cool $30,113,215.

Since the more detailed supporting documents for RWA’s invoices (which are pretty vague) are not likely to be in the possession of the Augusta government and therefore open records accessible and the honcho over at RWA, 12th District candidate R.W. Allen, has already broken his pledge to allow us access to the documents (a politician breaking a pledge to the tax payer? SAY IT ISN’T SO!); here are the questions we would pose to Mr. Russell and to Program Manager Heery International to find out the details of these invoices for us, the lowly tax payer footing the entire bill of $30mil and change.

Has There Been Double Billing of General Conditions Costs?

Let’s be clear here, these are complicated contracts, but the billing is not if you are willing to bear with me and see the questions we are asking.

Article 7.4.1 sets out the components of the contract price and these are repeated in Exhibit A in the contract. to be paid by Augusta, so a cost has to fall into one of those two categories and be authorized by the terms of the contract to be billed. To cover the contractor’s overhead costs, called “General Conditions” in construction language, RWA put in a General Conditions Guaranteed Maximum cost of $1,082,670 in the contract and in Exhibit G.

The capped GC cost is described this way on page 56: Items that are included within the General Conditions Costs for which the Construction Manager is entitled to no additional compensation include without limitation:.. viii. “That portion of insurance GL and Auto Builders Risk and P&P bond premiums that can be directly attributed to this Contract for Construction”… ix. Fees and assessments for the building permit and for other permits, licenses, and inspections for which the Construction Manager is required by the Contract for Construction to pay.

Looking at the latest payment application available, on line 2 of the Form G703 appearing on page 2, we find an amount listed for General Conditions costs of $1,082,475, which is only $195 less than the stated limit in the contract. Augusta is making progress payments, which total $697,917 (less 5% retained by Augusta) through this invoice, based upon component invoicing and RWA labor charges. In addition to the GC costs, we found $167,585 charged on page 2, line 19 of the G703 schedule for P&P Bonds.

Based upon the contract having capped GC costs to INCLUDE the P&P bonds, separate invoicing in this manner appears to be a duplicate charge, especially since the contract also says this: “The overhead and profit component for any change includes the cost of bonds and insurance”, which seems to preclude the additional billing of P&P bonds separately in this manner. The P&P bonds for the subcontractors are in their OWN costs.

Besides the P&P bond issue, there is the same issue with the $48,961 of permit costs on line 18 of the payment request.

These two issues relating to costs billed separately that appear to be already covered by capped General Conditions total $216,546. It is recommended that these costs be reallocated against the capped GC costs of $1,082,670, or line 2 on the G703 billing schedule of values.

Extension of General Conditions without Required Change Order?

 

Accompanying payment request number 24 was a document entitled, “Augusta TEE Center Contingency Log”, which includes a $16,393 item labeled, “extended builders risk cost due to delays.” There was an invoice supplied showing the builder’s risk policy was being extended to October, 2012. The contract says this, “All adjustments in compensation or extensions of time shall be by change order (page 38).”

No change order was found to extend the duration of the project, so shouldn’t this charge be covered by the capped General Conditions that includes builder’s risk insurance?

A much more important and broader issue is whether RWA intends to collect extended general conditions for the approximately 6 months greater time until completion of the project, to include the more costly GC costs, like supervision. The project duration in the contract was set at 24 months, yet the project is on the 26th monthly billing.

Does the charging of builder’s risk premiums for project delays mean that there will be a costly claim for extended General Conditions at the end of the project? Will extension costs be continued to be charged against the contract contingency, instead of being authorized by change order, as the contract apparently requires?

Lack of Pricing Details Limits Change Order Price Analysis?

 

Augusta Today and City Stink contributor Lori Davis submitted a Georgia Open Records Request on another matter concerning the TEE Center kitchen equipment that was added to the RWA contract as Change Order 1, to increase the Contract Price to a total of $29,276,987. Included in the information provided  was the pricing from the subcontractor, itemized by equipment price, but unsupported by cost versus overhead and profit analysis of the pricing.

The contract says this in Article 15: “If and to the extent the change involves work of one or more subcontractors, the overhead and profit component for subcontractors shall be fifteen percent, and the overhead and profit component for the Construction Manager shall be seven percent 7 of the amount allocable for subcontracted work.”

Unless there is additional analysis not presented with the City’s response to the GORA request, how can RWA tell whether the 15% limitation on overhead and profit has been met with respect to Change Order 1? Is sufficient cost information being obtained on other project changes to meet the contract limitations on combined overhead and profit?

Construction Equipment Rentals in Steel Costs?

Within the supporting backup for Payment Application 24 for the steel cost category was an invoice to RWA for construction equipment rental. The contract has this inclusion within the definition of General Conditions costs: “xviii. Rental charges for temporary facilities and for machinery equipment and tools not customarily owned by construction workers.”

Since the equipment rentals seem to be within General Conditions (Overhead), wouldn’t such costs be covered by the allowed 15% overhead and profit markup allowed on work self-performed by the Contractor?

Summary

  1. Aren’t $216,546 of bond and permit costs separately billed also within the capped General Conditions expense in this contract?

  2. Did the billing of $16,393 for extending insurance coverage to October 2012 presage a claim for an additional number of months of general conditions expense, including Contractor Supervisory labor, and unforeseen costs? Without a change order, should this item have been charged to contingency?

  3. Is there sufficient cost detail provided by subcontractors to assure that contract limitations on maximum, combined overhead and profit can be verified?

  4.  Are construction equipment rentals separately billable from overhead and profit markups?

  5. Will Augusta review the contract to assure that all contingency and allowances are recaptured by the city at project completion on this major contract? Others?

We expect that the Mayor and the City Commission will assure that these questions are answered.***

B.O.


**Augusta Today members Al Gray, Lori Davis, and Dean Klopotik also contributed to this report**

 

**Below is the GMP Construction Contract between RW Allen Construction on the city of Augusta for the TEE Center:

RWA GMP Contract

Breathtaking Events Engulfed Jonah

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Three Gulps

Sunday July 1, 2012
Augusta, GA
By Al Gray

Early last month, big government looked to strike again. Mayor Michael Bloomberg of New York City proposed banning big sugary drinks with the hope of saving us from obesity and diabetes at our own hands. The Big Gulp came to mind for we know that staple of decades, an oversized 7-11 beverage, pretty well. A Big Gulp is the very definition of gluttony. Saint Thomas Aquinas said this about the matter – “Gluttony denotes, not any desire of eating and drinking, but an inordinate desire … leaving the order of reason, wherein the good of moral virtue consists.”

Jonah was a glutton for punishment, the fish that swallowed him was a glutton for a big gulp, and these days we all are gluttons for pushing a failed society beyond all bounds of prudent. Jonah might have wished that a commandment from a leader like Mayor Bloomberg carried the authority to save him from himself or hide him from the Lord. It wasn’t going to work that way.

Our scripture for today is Jonah Chapter 2. Jonah rebelled against the Lord’s instruction to go to Nineveh; he had gulped at the prospect to preaching to imaginably hostile crowds. Then the fish gulped down Jonah. In chapter 2 we read of Jonah gulping in anguish at being separated from the light of the world and the light of God. We get a sense of Jonah’s reality check at the seriousness of his position and his new-found faith that got him out of it.

2 1 From inside the fish Jonah prayed to the Lord his God. 2 He said:

“In my distress I called to the Lord,
and he answered me.
From deep in the realm of the dead I called for help,
and you listened to my cry.
3 You hurled me into the depths,
into the very heart of the seas,
and the currents swirled about me;
all your waves and breakers
swept over me.
4 I said, ‘I have been banished
from your sight;
yet I will look again
toward your holy temple.’
5 The engulfing waters threatened me,
the deep surrounded me;
seaweed was wrapped around my head.
6 To the roots of the mountains I sank down;
the earth beneath barred me in forever.
But you, Lord my God,
brought my life up from the pit.

7 “When my life was ebbing away,
I remembered you, Lord,
and my prayer rose to you,
to your holy temple.

8 “Those who cling to worthless idols
turn away from God’s love for them.
9 But I, with shouts of grateful praise,
will sacrifice to you.
What I have vowed I will make good.
I will say, ‘Salvation comes from the Lord.’”

10 And the Lord commanded the fish, and it vomited Jonah onto dry land.

There are trinities all through the Bible.  The Book of Jonah is the story of the Three Gulps. The first gulp was one caused by Jonah’s imagination of the indifference, ridicule, and hostility he might receive at the hands of a foreign people, amongst crowds of strangers. Most folks we know are like that. They will do anything to avoid speaking in public, about anything, much less preaching about the one Lord in a pagan land.

The second gulp was that of the fish swallowing Jonah. While we can be sure the Lord summoned the great fish for the purpose of bringing obedience to Jonah, we can also imagine that a fish large enough to swallow a man would have a Big Gulp out of natural proximity to prey not too big to swallow.

It was the third gulp of realization in this story that is the most important. Gulping can be out of apprehension of the imagined, such as the prospect of preaching to a novice; it can be a physical act of taking an inordinate swallow, as the fish exhibited; and it can arise at a sudden very real assault on the senses, as the near-drowning, then engulfment of Jonah. There was a sudden need for breath, a desperation causing panicked swallowing of nothing but stale air. Then came realization, not just of his predicament of being in the belly of a fish, but the recognition of how wrong, sinful, and dismissive of God he had been, not just in avoiding Nineveh, but all through his life.

Lastly, the third gulp brought redemption. Jonah made peace with the Lord and promised to follow his commands, after his emotions had ranged from despair to calm assurance in the Lord’s presence and forgiveness.

Are we in this day and age so jaded, so conceited, and so consumed with gluttony from constant immersion in this corrupt society that it will take a massive shock to our senses to bring us to the conclusions to which Jonah was brought? Let us pray to the Lord that we might be mindful of the story of Jonah.

Three gulps there were. One arose from imagination. One arose from the aggressive gluttony of another, albeit that of a fish. One arose from physical assault on a fragile human body.

Mayor Bloomberg cannot save New Yorkers from a Big Gulp, nor can President Obama and Congress spare the American people. There will be no deliverance. Yet there will be redemption for those who believe in our Lord Jesus Christ.

No one had greater trials than Jonah, Job and Moses. Let us pray that, should the time come, the Lord will give us their

perseverance and focus on Him.***
A.G.

Special Report: A TEE Total Mess!

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Making a Hash over $1.3 Million Kitchen Equipment

Originally posted on CityStink
Thursday, June 21, 2012
Augusta, GA
By Al Gray

The author, Al M. Gray, was President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns. Cost Recovery Works is no longer in business, as of December 31, 2020.

In the waning weeks of Winter 2012, Augusta Today contributor Lori Davis submitted an exploratory, wide ranging Georgia Open Records Act Request.

for the City of Augusta’s payments under major contracts. The documents response was massive. Deep in the supporting subcontractor billings to the R.W. Allen, LLC contract for the TEE Center was a most intriguing invoice from Norvell Fixture and Equipment Company showing that $199,656.00 of kitchen equipment as work completed and an additional $76,289.25 worth was stored, for a total billed and paid of $275,845.32! (less 10% retainage). The contract total for kitchen equipment is a surprising $1,329,418.00.

Why was this invoice noteworthy? There was no detailed partnership agreement executed between the City and its TEE Center Partner and Manager, Augusta Riverfront, LLC going into the contracts for construction, leaving the last word on the partnership being the unsigned, undated August 2007 Term Sheet. Repeated references to kitchen equipment are pretty clear that such equipment are the responsibility of the LLC, including this: “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, and any Convention Center or Hotel Capital Cost.” Similar language making the LLC responsible for Kitchen Equipment remain within the executed 1999 Core Agreement of record in the Offices of the Clerk of Augusta Richmond County Superior Court.

No Augusta Funds are to be used to procure kitchen equipment, when $1.3 million of it is under contract?

During negotiations that have not yet produced a signed partnership agreement there was certainly a commitment for Augusta to construct new kitchen space within the TEE Center and relocate the combined kitchen from the existing Convention Center. That had no impact upon equipment ownership. Real property improvements and tangible personal property, such as equipment, are different.

In order to advance the investigation, Augusta Today member Dean Klopotic submitted a follow-up GORA request seeking the most recent R.W. Allen LLC billings under the Tee Center Contract. The City responded with Progress Billing Number 24, covering costs through March 24, 2012, including Kitchen Equipment Invoice Number 6, through March 20, 2012.

The details show $792,984.52 equipment work completed, materials stored of $162,544.34 and a total billed of $955,528.86, less 10% retainage. The R.W. Allen monthly invoice shows no additional kitchen equipment stored. Both Construction Manager and Subcontractor show most of the kitchen equipment as work completed.

At 11:00 AM on Thursday, June 7, Barry White of the Convention and Visitors Bureau conducted a TEE Center tour, which was attended by Ms. Davis and this writer. Project Manager Jacques Ware of Program Management firm Heery International would not permit the use of a video camera, suggesting that we come back for the Media Tour to be held Thursday June 14.

When the entourage reached the second floor of the TEE Center, the empty space was pointed out where the kitchen is to be located. At that juncture, an inquiry was made about the kitchen equipment invoiced back in December. Mr. Ware said that he didn’t authorize payment for a kitchen equipment invoice, asking what kind of equipment was on it. This writer responded, “A number of tilting kettles and ranges,” then pondering out loud if they might be stored. Mr. Ware said the only kitchen equipment there would have to have been, “for the Marriott.” (The Marriott is owned and operated by Augusta Riverfront, LLC.)

An email request to Mr. Barry White to be included in the Media Tour on the 14th received no response. Other attempts were made to get a separate tour along with one or a group of commissioners to investigate the matter. Commissioner Joe Jackson had just returned from vacation and could not schedule a tour in the next week. Commissioner Bill Lockett managed to get the Heery project liaison to get permission to join another June 14 tour, only to see it canceled after several hours.

Commissioner Wayne Guilfoyle was provided with a copy of Kitchen Equipment Invoice on the morning of June 20, whereupon he sought explanation of where the kitchen equipment is from Program Manager Heery International, receiving assurance that the materials were, “either stored or installed.”

It is fairly common practice to bill stored materials. There is clear language on billing documents that they are, “Materials Stored on Job Site (Invoices if Required).”

Where does the situation stand? What are the issues?

Issues and Questions

  • Where is the equipment that Augusta paid for?

  • Has Augusta Riverfront, LLC been relieved of its responsibility for the purchase of kitchen equipment? If so, where? If not, is Augusta being reimbursed for the $1.3 million cost?

  • If the Kitchen Equipment was delivered and used in Conference Center operations and events ($955,528.86 having been delivered, installed or stored prior to the Masters upswing in events) where is the accounting for the revenues?

  • Without an Effective Date having been established for the successor catering agreement, where does accountability lie, especially since Augusta Riverfront, LLC’s Paul Simon having declared the TEE and Conference Center merged months ago?

  • Why do both the R.W. Allen and Norvell Fixture and Equipment Company invoicing show the equipment as “Work Completed” if the equipment is “Stored?”

  • Should Augusta have paid for nearly a $million of equipment months before it is installed in the new kitchen?

  • Why does the invoicing include future charges for repairing Augusta Riverfront, LLC equipment? Whose equipment will it be after Augusta repairs it?

———–

Commissioners Joe Bowles, Joe Jackson, Wayne Guilfoyle, and Bill Lockett have provided Augusta Today and CityStink.net with substantial cooperation in this investigation and report. The public can feel confident that these gentlemen will pursue this matter to a conclusion.

Several of them need to participate in a tour and inspection of the paid-for kitchen equipment. Perhaps the city’s internal auditor can vouch for the accountability of the equipment, including verification of delivery documents to a storage facility before the dates that the invoicing was submitted.

It is hoped that all will aggressively protect the interests of the citizens of Augusta and seek wise counsel as they deal with the aftermath of the total mess that the TEE Center currently represents.*** Stay tuned, more to come.

A.G.

Overlay Somebody Else: My Battle With Columbia County Over Property Rights

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Friday, May 25, 2012
Evans, GA
By Al Gray

New Year’s Day in the year 2000 did not find this writer worried about the world’s computer systems crashing because of the Y2K or much of anything else. Two new clients and two projects in Missouri – a state-of-the-art hot dog plant and a deli meat production facility beckoned. It was a very lucrative contract that took me away from the Augusta area, as nearly all of them have. A most successful bowhunting season had just been concluded. The parents were still able to take care of themselves. 1999 had been good, but 2000 would be even better. It did not start that way, January 1 pleasantries not withstanding.

Sometime in February, after trudging through 15 inches of snow in St. Joe, MO, I returned to my motel room just in time to catch a call from my parents. It seems that they had gotten an official notice about an ‘overlay’ zoning ordinance to cover something called the Evans Town Center Overlay District (ETCOD). It concerned them that the county was looking to pass some sort of control over their commercially zoned property on Washington Road. We were not totally surprised, having attended one of the planning meetings for the town center at Savannah Rapids Pavilion.

Actually seeing the map of ETCOD was an eye-opener. It was a gerrymandered map that looked like a headless woman in a dress stumbling like a zombie. Then there was the matter of the text of the proposed ordinance. It banned any store over 30,000 square feet, imposed expensive architectural upgrades, and made plans to completely rework the zoning map via overlay zoning to impose government land use planning instead of free market economics. It was aimed straight at our family, who had decades long plans for a major shopping center to the west of Ronald Reagan Drive. Worse, it would have ruined decades of planning along with previous county officials which included gifted water and sewer easements and providing for a road into a subdivision.

The night of the first Planning Commission meeting, the elite of the Augusta and Columbia County development sector was in attendance. Your scribe had never made a public speech before. Knees shaking from fear and voice quavering, my speech might have gotten off to a disastrous start, but the first order of business was to loosen things up by poking fun at the gerrymandered map. The room exploded with laughter. A key point was made that the map was discriminatory, lacking uniformity of application. The county attorney would later agree, forcing new notices to be sent to everyone in a 3500 acre circle. Up behind the lectern, a transformation took place. The meek accountants knees were still knocking, but the cause had turned from fear to RAGE!

Things have not been the same since.

When the county was forced to make ETCOD a uniform circle, the action resulted in our family gaining scores of new allies against ETCOD. Even one of the chief proponents realized our position because her family’s land was now in the overlay zone! She exclaimed in a meeting. “We don’t want those rules on OUR PROPERTY!” Neither did a lot of folks. When the planning commission decided to ram through ETCOD, two of the commissioners stayed home in fear. The 3 left decided to ram the vote for the ordinance through. The entire room, it seemed, leaped to their feet and shouted “NO!!!!!!” It was the closest thing to a riot that Columbia County has seen in a public meeting in modern times. The county commission appointed a citizen’s committee headed by contractor Ron Cross to work out a compromise. The Evans Town Center Ordinance was birthed eventually, but the baby was a lot trimmer and caused less labor pain.

There were other battles to come. They are best left to another day.

The salvation of our family came in the form of gifts from our founding fathers. The 5th and 14th amendments to the United States Constitution provide each of us, as citizens with guarantees of Equal Protection Under the Law and that we cannot be deprived of property without Due Process of Law. More recently Columbia County implemented Corridor Overlays, Lincoln County did the same, and last year Augusta attempted to enact a flawed Laney Walker Bethlehem Overlay District. In each instance it was a privilege to help fellow citizens being assailed with threats to their rights from overlay zoning.

Pertinent to today’s events, in which the diabolical Agenda 21 plan is infiltrating all levels of government, the Evans Town Center Plan developed by consultants Rosser- Lowe, was even then replete with references to “smart growth” and “sustainable development.” You have to remember that Columbia County is a solid Republican County, not a place one would suspect that a socialist agenda could take root in. We have to be constantly vigilant everywhere.

The Evans Town Center Plan was supposedly based upon town centers in Redmond, Washington; Reston, Virginia; and Smyrna, Georgia. A key component of largely defeating ETCOD was this analysis comparing those places with the Evans Town Center.

ETCOD BATTLE CHART

When one can dissect the planner’s plans and turn the evidence against them, he can win huge victories against the odds, for the truth overwhelms the planners and allies arrive in droves.

A County Commissioner and two Planning Commissioners said that the ETCOD was a “Done Deal.”

Well, it came UNDONE.

Thanks founders, for the Constitution. Agenda 21? That’s just another undone deal of our making.***

AG

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