When City of Pensacola CFO Dick Barker last week defended why the city didn’t amend Caldwell Associates Architects contract for the proposed Bayview Community Center, he may have unintentionally explained why city contracts have been running over budget.
The finance department doesn’t pay attention to the invoices, only the total contract amounts.
In the case of the Bayview Center, Barker said the purchase order and contract hadn’t changed because the Caldwell’s invoices hadn’t exceeded the contract amount. The agreement was for $739,328, and CAA had only been paid $597,969.
However, Caldwell recently exceeded the contract amount.
“They have submitted invoices today over budget of $24,982,†he said. “That will not get paid. Everything else will get paid except that amount of money. I will not pay that amount of money because it exceeds the budget.â€
However, Caldwell had started billing based on the $8.25-million budget in July 2017, eleven months ago and before the city council approved the higher budget.
| Basic Service |  Contract |
Jul-17 Budget per CAA invoice |
| Schematic Design | Â $Â Â Â Â Â 47,374.20 | Â $Â Â Â Â Â 65,187.90 |
| Design Development | Â $Â Â Â Â Â 78,957.00 | Â $Â Â 108,646.50 |
| Construction Documents | Â $Â Â Â Â 110,539.80 | Â $Â Â Â 152,105.10 |
| Bidding Assistance | Â $Â Â Â Â Â Â Â Â Â 15,791.40 | Â $Â Â Â Â Â 21,729.30 |
| Construction Admin | Â $Â Â Â Â Â 63,165.60 | Â $Â Â Â Â Â 86,917.20 |
| Subtotal | Â $Â Â Â 315,828.00 | Â $Â Â 434,586.00 |
| Additive Services | Â $Â Â Â 423,500.00 | Â $Â Â 427,500.00 |
| Grand Total | Â $Â Â Â 739,328.00 | Â $Â 862,086.00 |
As of its March 7, 2018 invoice, Caldwell had billed the city $729,946.03 for its services. A taxpayer reviewing the contract and the purchase order would have believed only $9,382 remained, but the contract showed several items were still outstanding:
| Building Commissioning | Â $ 50,000.00 |
| Threshold Inspections | Â $ 40,000.00 |
| HVAC Test | Â $Â 15,000.00 |
| Bidding Assistance | Â $Â Â 15,791.40 |
| Construction Admin | Â $Â Â 63,165.60 |
| $183,957.00 |
Without also reviewing the Caldwell invoices, which Barker said didn’t matter to his department, the taxpayers would have had no way to know what work Caldwell had completed and what had yet to be done.
What has the Barker’s “ignore invoices” policy meant for other contracts and purchase orders? Possibly millions of dollars.
In February, the Pensacola City Council voted to award $4.9 million in contracts for the final three groups of the city’s major repaving project. The vote put the total cost of the repaving initiative at $17.3 million–$2.3 million more than the $15 million the city borrowed for the project.
The Government Street stormwater project exceeded its budget and the contractor walked away from the project.
Had the Hayward administration paid attention to the individual invoices would that have made a difference? At the very least, the taxpayers would have a better understanding what was happening with each project.
I don’t know of many successful businesses that ignore their contractor’s invoices and only worry when the total billings exceed the contract amount.
What I don’t understand is why Caldwell isn’t being blamed 100% for this issue. They totally overdesigned the project because they were incentivized to do so. If they get 7% of total construction cost why wouldn’t they?
They should be forced to redesign to meet the budget and all they get paid is 7% of the total construction cost.
I heard they do this to UWF and others all the time. I’m just glad the City caught them and stopped this!!!
That is a ridiculous method of contract administration. Such a method almost assuredly will lead to a scope of work that is not complete and no money left in the contract to complete the job. A better method would be to identify a schedule of value for each segment of the scope of work and only pay up to the amount approved for each completed scope of work. Then at the end the percentage of completion and percentage of contract paid is substantially the same. Contract admin 101. That is exactly how Scott Davidson got paid for work he hadn’t completed.