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Mackenzie District Council completes refurbishment of Fairlie and Twizel offices

Council’s Long-Term Plan for 2018 to 28 (LTP) contained a placeholder funding allocation of $514,000 for a project to refurbish the Fairlie Office.

This allocation of funds recognised that maintenance had been deferred, and no significant improvements or alterations had occurred to the building (the same is true for Councils Twizel Office building) for over 30 years.

In December 2019 Council recognised that as part of the internal change and transformation program, modernisation and upgrade of both the Fairlie and Twizel offices was required to ensure the buildings meet organisational and district requirements for the foreseeable future. As a result, a contract was let to upgrade both premises.

The contract (Contract 1253) was a typical New Zealand Standard 3910 format (NZS 3910) construction contract and included contractor involvement in the finalisation of detailed design works (the contract was tendered on preliminary design) and costs. The works were let in two Separable Portions (one for each building) so that Council could take possession of one site/building when complete and allow works to continue/move to the next site. The contract was awarded to Shores Construction for the tendered sum of $484,291.43. Work on the project was significantly delayed due to Covid 19 lock down.

A number of other unplanned works were subsequently identified as being required which were not covered by the scope of the original contract. These included, but were not limited to:

  • Heating, Venting and Air Conditioning (HVAC);
  • Alternate Accommodation costs;
  • Furniture and fittings;
  • Sundry items.

For both practical and economic reasons, these matters were addressed at the same time as the alterations but dealt with outside of the construction contract referred to above.

Funding for this additional work has come from operational reserves and therefore has had no direct financial impact on the ratepayer.

Work at both the Fairlie and Twizel offices has now been completed except for some very minor matters that sit outside of the construction contract.

Given the nature of the contract, the level of input and change in the design, the final costs of the physical works exceed the tendered sum. An independent and suitably qualified quantity surveyor engaged to review the work confirmed that the final cost was as expected for the scope of work undertaken.

The final construction costs of the project are shown in the table below:

Work ComponentTendered Sum/EstimateFinal Cost
Contract 1253$490,961.95$707,262*

*Final costs determined from contract payment logs and include approved variations funded from project contingency.

As is expected with a contract framework of this nature, the final costs exceeded the tendered sum. Whilst not unexpected, the scale of the increase is not insignificant, and the total project sum did not have a sufficient contingency allocated to the project to allow for the scope of change, in particular Council’s decision to include alterations to the Twizel office.

Moving forward it Is recommended more thought and, when required, external expertise, be put into the scoping of works and budgets to deliver these types of projects.

Members of the public are welcome to view Council offices – if you wish to do so, please contact our customer services team on (03) 685 9010.

Contact information

Name: Customer services team

Phone: (03) 685 9010