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Request Board ratification of a tender agreement between Seminole County, Merchants Bonding Company (Mutual), Ovation Construction Company, Inc., and L7 Construction, Inc. for the Yankee Lake Water Reclamation Facility Renewal and Replacement - Phase II project. (Kristian Swenson - County Manager’s Office)
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Division:
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County Manager Office
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Authorized By:
Kristian Swenson, Assistant County Manager
Contact/Phone Number:
Kristian Swenson/407-665-7246
Background:
On April 2, 2024, Seminole County (“County”) and Ovation Construction Company, Inc. (“Ovation”) entered into a construction contract for the Yankee Lake Water Reclamation Facility Renewal and Replacement - Phase II (“Project”), with Merchants Bonding Company (Mutual)(“Merchants”) serving as surety for the performance and payment bonds in the amount of $2,909,291.89.
A notice to proceed was issued to Ovation to commence work on May 13, 2024, and achieve final completion on May 7, 2025; however, a revised construction schedule provided by Ovation to the County on or about March 4, 2025, indicated final completion would occur between October 9, 2025, and October 22, 2025, significantly beyond the contractual completion deadline.
As such, on March 25, 2025, the Seminole County Board of County Commissioners (“Board”) approved a unilateral termination for cause of the construction contract with Ovation for the Project, and a demand was subsequently made by the County upon Merchants under the performance bond to complete the Project.
Over the next several months, Merchants performed its due diligence and ultimately proposed a tender agreement to the County for consideration, which has been negotiated between Merchants and the County Attorney’s Office, in collaboration with County Management throughout the process.
To move forward expeditiously in the execution of the tender agreement for work to promptly commence on the Project, on June 10, 2025, the Board delegated authority to the County Manager to sign the tender agreement and for it to be ratified by the Board thereafter.
The highlights of the tender agreement include:
• An agreement by the County to revise the termination for cause against Ovation to a termination for convenience. In exchange, Ovation agrees not to submit any bids or proposals to the County for 5 years from the effective date of the tender agreement.
• Merchants tendering L7 Construction, Inc. (“L7) as the completing contractor for the Project.
• Materials procured by Ovation will be delivered to L7 for implementation into the Project, with associated warranties.
• L7 to provide the County performance and payment bonds with a surety in the amount of $2,921,736.00.
• Ovation will make a payment to the County in the amount of $52,194.11, which represents the difference between the original contract price and the price of L7 in addition to an amount agreed to for liquidated damages.
• A mutual release by Ovation, the County, and Merchants.
• Work on the Project to commence on September 1, 2025, substantial completion required by August 7, 2026, and final completion required by September 4, 2026.
Requested Action:
Staff requests the Board ratify the tender agreement executed by the County Manager between Seminole County, Merchants Bonding Company (Mutual), Ovation Construction Company, Inc., and L7 Construction, Inc. for the Yankee Lake Water Reclamation Facility Renewal and Replacement - Phase II project.