Good faith determines contractor selections for the Melrose Plaza project

Good faith determines contractor selections for the Melrose Plaza project

Roanoke Goodwill says there is still room for local contractors to participate in its dynamic Melrose Plaza project even though Richmond-based contractors have been hired to lead it.

The general contractor chosen, Kjellstrom & Lee, committed to hiring local subcontractors and held a type of job fair to build relationships with area businesses, according to Goodwill Industries of the Valleys.

The Roanoke Times received an anonymous outside letter questioning the fairness of the contractor selection process. Goodwill then determined which companies it sought to hire, who would be selected and how much they would be paid.

In addition to the Kjellstrom organization, Richmond architecture firm Enteros Design is also under contract to guide the four-part community center to completion. Officials, who will begin the groundbreaking process this month, say the center will include a grocery store, bank, clinic and school at Melrose Avenue and Northwest 24th Street. It’s one of Goodwill’s largest local efforts and has secured $10 million of the city’s $64.5 million pandemic relief funds. Estimated cost: $17.5 million.

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Goodwill followed “an open and competitive process to be the best steward of all investments in this project,” Goodwill spokeswoman Chelsea Morgan said via email Friday. “We believe all of our operations have been compliant with public procurement guidelines.”

Mike Cagle, executive vice president of MB Contractors of Roanoke, one of the companies not selected, described the process as “a typical procedure for construction management services.”

He said the process was fair. “I’m not happy with how things turned out, but if you don’t win a job, you’re not going to be happy,” Cagle said.

Cagle said MB asked Goodwill about using a general contractor in Richmond. Goodwill explained that it serves a large portion of western, southern and central Virginia, including the part of the Shenandoah Valley where Kjellstrom’s office is located — in Staunton. MB found the explanation adequate, Cagle said. Kihlstrom also has an office in Blacksburg, Goodwill told the newspaper.

Earlier this year, Goodwill requested proposals for pre-construction and construction management services. Kjellstrom & Lee, Avis Construction of Roanoke, Hourigan Group of Richmond, Branch Builds of Roanoke, G&H Contracting of Salem and MB Contractors all responded, and interviews were conducted with Kjellstrom & Lee, Avis Construction and MB Contractors, said Donna Stocker, Goodwill’s chief philanthropy officer. Email October 31.

Goodwill selected Kjellstrom & Lee for its track record of completing large construction management projects under budget, as well as its track record of achieving cost savings, willingness to use local subcontractors and commitment to meeting deadlines for pandemic relief funds, she said. It also charged “the lowest construction management fees,” Stocker said.

Kjellstrom’s contract, signed Sept. 12, calls for $28,000 for pre-construction work and 3.2% of the project cost for construction management services, Stocker said.

The “at-risk” ranking will govern the role Kjellstrom plays.

The construction management company gets involved early to help design the project and establish a maximum price guarantee with the project owner. If costs go up, the construction manager pays for them, Stocker said.

Even early in the project’s life, Enteros was selected through a similar process that began with a good-faith request for architectural design proposals. AECOM, which has an office in Roanoke, and Hughes Associates and Spectrum Design, both of Roanoke, submitted proposals, Stocker said. All interested companies participated in a video question-and-answer session, after which Goodwill interviewed its top two choices before choosing Enteros, Stocker said.

Goodwill contracted with Enteros on March 2 to pay $114,320 for design engineer/schematic design and engineering services. Then, on July 18, Goodwill reached another agreement to pay Enteros $808,613 for design development and construction documents and $333,808 for construction management, Stocker said.

Jeff Sturgeon (540) 981-3251

jeff.sturgeon@roanoke.com

(tags for translation) Commerce

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