Edmond Public Works Authority overhauls water contract allowances to curb project delays

Edmond Public Works Authority overhauls water contract allowances to curb project delaysA new contingency policy will authorize the water resources director to approve minor project changes and unforeseen costs up to 5% of total construction estimates, bypassing the need for immediate board-level change orders.

The policy establishes owner's contingency allowances of 2% to 5% for water capital projects to handle design modifications and unforeseen geotechnical conditions.

Specific allowances will also be built into contracts for upfront costs like building permits and treatment process startup chemicals.

The shift was prompted by recent project bottlenecks, including a valve vault modification that risked up to $5,000 a day in contractor delay costs.

Upcoming applications include a $5 million contingency for an ONC project and $125,000 for sanitary sewer rehabilitation.

The Edmond Public Works Authority (EPWA) in Oklahoma has endorsed a new construction contract allowance policy designed to accelerate water and wastewater capital projects by streamlining how unforeseen costs are handled. During a June 8, 2026 meeting, Senior Water Resources Engineer Will Huggins outlined the new contractual mechanism, noting that the utility previously lacked a formal process for allowances. Under the old system, any project modification, regardless of size, required a formal change order approved by the EPWA board. Huggins illustrated the financial risk of the old model using a recent valve vault modification that required an $80,000 design clarification. Because it lacked a contingency mechanism, waiting for formal board approval could have subjected the city to $5,000 per day in contractor overhead, insurance, and bonding costs if it had been a critical path item. To mitigate these risks, the EPWA is introducing two new contractual tools: an owner's contingency allowance and specific allowances. The owner's contingency will cover known unknowns, unforeseen geotechnical conditions, design errors, and owner-initiated scope modifications. This allowance will generally range from 2% to 5% of the engineer's opinion of probable construction cost. Specific allowances will be used to expedite administrative and operational needs not fully specified in bid documents, such as building permit fees, equipment fixtures, and chemical purchases required for the startup of new treatment processes. Huggins provided examples of how the policy will be applied to upcoming projects. An impending "ONC" project currently out to bid will include a $5 million owner's contingency allowance, representing approximately 1.5% of its probable construction cost. Alternatively, a sanitary sewer rehabilitation contract, which carries higher risks due to working with existing infrastructure, will utilize a 4.5% contingency allowance totaling $125,000. Under the new governance structure, the EPWA will authorize the water resources director to approve allowance spending as issues arise in the field. To ensure transparency, the water department will present quarterly contingency allowance logs to the board, and any unused funds will revert to the EPWA upon project closeout via a final change order. The council strongly supported the measure. Council member Watterson praised the policy, noting it aligns with standard federal contracting practices and prevents major infrastructure projects from stalling over nominal changes. The board requested a progress review of the new water contract framework in 60 to 90 days, with members expressing interest in eventually expanding the contingency model to all citywide public works projects.