Title
Approval of a Resolution Authorizing an Amendment to the Design/Build Agreement with Forma Construction Company for the Hands On Children’s Museum Expansion Project
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a Resolution authorizing an amendment to the design/build agreement with Forma Construction Company for the Hands On Children’s Museum expansion project.
Report
Issue:
Whether to approve a Resolution authorizing an amendment to the design/build agreement with Forma Construction Company for the Hands On Children’s Museum expansion project.
Staff Contact:
Jim Rioux, Project Manager, Public Works Engineering, 360.753.8484
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
The Project
Olympia’s Hands On Children’s Museum (HOCM) is the most visited children’s museum in the Pacific Northwest. The current facility serves over 300,000 annual visitors in a space that was designed for 212,000 visitors. The main building, constructed in 2011 and opened in 2012, encompasses 28,000 square feet across three stories including 12,000 square feet of exhibit space. The Outdoor Discovery Center consists of interactive outdoor exhibits on approximately a half-acre of site.
This project will increase the facility’s existing indoor square footage to accommodate more guests, add exhibits and outdoor learning experiences, make critical facility improvements to meet community needs, enhance early learning, attract more out-of-town visitors, improve the museum layout and flow for a better visitor experience, and align with best practices per square foot. Plans include a new arrival plaza, increasing outdoor exhibit space, a culinary classroom, a flexible event space and traveling exhibit gallery, additional preschool /daycare space and 55 new parking stalls.
The expansion consists of an approximately 18,000 square foot, two-story mass timber and timber-steel addition north of the existing museum, connected by an enclosed elevated pier, together with a detached 1,622 square foot utility building and associated site improvements.
Previous City Council Action
• 05/19/2025 Finance Committee approved a funding strategy and bond sale for the expansion of the Hands On Children’s Museum.
• 06/17/2025 City Council approved the funding strategy and bond sale for the expansion of the Hands On Children’s Museum.
• 07/22/2025 City Council Approved a Resolution authorizing the purchase of real estate owned by the Port of Olympia for expansion of the Hands On Children’s Museum.
• 10/07/2025 City Council Approved a Resolution authorizing the City Manager to execute all documents necessary to complete design and construction of the HOCM expansion project and specifically approved the Progressive Design Build Contract to complete phase 1 validation work for $555,590.00
• 02/03/2026 City Council Approved a Resolution authorizing the City Manager to execute all documents necessary to complete design and construction of the HOCM expansion project and specifically approved the Progressive Design Build Contract to complete phase 1 design work for $2,112,500.00
Project Delivery Method
After researching other project delivery options, City and HOCM staff decided to utilize the Progressive Design Build (PDB) delivery method. The PDB method combines design build with a phased approach, emphasizing early collaboration and risk management.
Progressive Design Build Contract - Phase 2
FORMA Construction has completed sufficient design work to proceed to Phase 2 and establish the project Guaranteed Maximum Price (GMP).
This amendment will authorize FORMA to finish design and complete construction of the project.
Guaranteed Maximum Price
The GMP is the maximum price the city will pay for the Phase 2 scope of work - final design and construction - and is exclusive of Washington State sales tax. It may be adjusted only as permitted by the contract documents, including for Owner-directed changes and for differing or hazardous site conditions. The GMP includes a Design-Builder’s Contingency of $525,869.85, equal to five percent of the estimated cost of the Phase 2 Work, and approximately $467,480 in allowances for scope not yet fully designed. Any unused contingency and any unspent allowance amounts return to the City. In addition, 100 percent of savings are accrued to the City. The GMP does not include the City’s own project contingency, Owner’s Representative and program management fees, special inspection and testing, permit fees paid directly by the City, exhibit fabrication and installation, or loose furniture and equipment, all of which are budgeted separately.
The proposed contract scope and contract price (exclusive of WSST) are summarized below.
Contract Scope Not to Exceed (NTE) Price
Validation Phase $555,590.00
Phase 1 Design $2,112,500.00
Phase 2 Construction $15,888,659.60
NTE Total DB Contract $18,556,749.60
Owner Controlled Contingency $1,003,251.40
Maximum Authorized Contract Amount $19,560,000
Site Conditions and Environmental Risk
The project site is part of the East Bay Redevelopment Site, a contaminated site under a Washington State Department of Ecology Agreed Order and subject to recorded environmental covenants. An Agreed Order Amendment and Cleanup Action Plan Amendment are currently in process with Ecology. The GMP includes excavation, handling, transportation and disposal of contaminated soil only in the quantities expressly stated in the Amendment. Quantities or conditions beyond those stated in the Amendment may result in an adjustment to the GMP.
Schedule and Liquidated Damages
The GMP and the Scheduled Substantial Completion Date are based on Notice to Proceed for Phase 2 on or before November 1, 2026. The Amendment establishes a Scheduled Substantial Completion Date of January 20, 2028, and liquidated damages of $1,000 per calendar day if Substantial Completion is not achieved by that date. Council action after November 1, 2026, would require the Design-Builder to confirm whether the pricing basis remains available or requires adjustment for escalation and would move the Scheduled Substantial Completion Date.
Climate Analysis:
Overall, the project’s impact on greenhouse gas emissions will be a long-term reduction and a near-term increase.
The near-term increase is due to construction activities including site work, contaminated soil hauling under the Ecology Agreed Order, material transport, and the embodied carbon of a new 18,000 SF building. That is unavoidable in any new construction, and the project reduces it where it can - a mass timber and timber-steel hybrid structure in place of conventional steel or concrete, supplier-specific Environmental Product Declarations, low-carbon concrete, high recycled-content steel, locally sourced timber, and a 75% construction waste diversion target.
The long-term reduction comes from how the building operates. The expansion is all-electric with no natural gas service, in compliance with Resolution No. M-2289, using a water-source heat pump loop that moves heat between zones needing heating and cooling simultaneously, a high-efficiency air handler, LED lighting with daylight and occupancy controls, and demand response capability. On-site rooftop photovoltaic arrays offset a portion of consumption. The project is pursuing LEED Silver as a contractual minimum, currently tracking 58 points with 21 more possible.
The base scope includes a code-minimum 8.8 kW photovoltaic (PV) array together with the pathway and readiness provisions required by the energy code. Measures beyond code minimum, including heat pump water heaters and a pathway for a maximum photovoltaic array have been added to the base scope.
The strategies most significantly supported are B4 (energy use in new construction), B6 (electrification), W2 (water consumption), W4 (waste diversion) and W6 (carbon-intensive goods). Transit and active travel are supported by location: the site is walking distance from the Intercity Transit center and earns the full 5 points for LEED Access to Quality Transit, with bicycle parking and improved pedestrian connections to Percival Landing and the East Bay waterfront.
Preparing the facility for maximizing installation of photovoltaic cells later is being implemented.
Alternatives considered and not implemented, with reasons:
• PV beyond the Washington State Electrical Code minimum: deferred to a later date when additional funding may be available.
• Net zero carbon documentation: Not pursued due to budget.
• LEED Green Power and Carbon Offsets: excluded as an ongoing City operating cost rather than a construction cost; remains available post-occupancy.
• Rainwater management through infiltration-based green infrastructure: prohibited within the contaminant delineation areas under the Cleanup Action Plan.
• Reduced parking footprint: code-required parking for the combined campus (123 stalls against 73 existing) exceeds the LEED threshold. A parking demand study and right-sizing strategy are in progress with the City and represent the largest remaining opportunity in the transportation sector.
Equity Analysis:
Low-income children and families are the primary intended beneficiaries of the project. The expansion will add early learning classrooms, exhibit space, and program rooms, and HOCM has historically offered reduced- and no-cost admission to families below the poverty line. Children and adults with disabilities and neurodivergent visitors will benefit from an accessible climber entry platform, elevator access to all three floors, wide corridors, generously sized restrooms with an adult-compatible changing table, and acoustic and thermal comfort standards pursued through LEED. Minority-, women-, small-, veteran-, and locally owned businesses will benefit from utilization goals established through the progressive design-build process, including 10% minority-owned, 6% women-owned, 5% small business, and 30% local business participation.
The construction workforce benefits from prevailing wages under RCW 39.12 and a 15% apprentice participation goal that applies to subcontractors. To date, the Design-Builder reports planned or contracted value of more than $100,000 with minority-owned businesses, $350,000 with women-owned businesses, and more than $3.72 million with local businesses, and has identified a veteran-owned local subcontractor for fire suppression.
Downtown residents, small businesses, museum visitors, and people who use the East Bay public waterfront may experience approximately 13 months of construction impacts beginning in January 2027, including noise, dust, truck traffic associated with contaminated soil hauling under the Ecology Agreed Order, and temporary changes to parking and pedestrian routes on Jefferson Street NE and Marine Drive NE. Museum staff and current visitors may also experience disruption because the museum will remain operational throughout construction. Construction impacts will be managed through site logistics, dust and traffic control, and the soil management plan.
Minority- and women-owned business participation at the Guaranteed Maximum Price (GMP) is concentrated in earthwork, utilities, and painting rather than the higher-value mechanical, electrical, and structural packages, consistent with patterns identified in statewide disparity studies. Mitigation strategies include scope unbundling, adjusted bonding and payment terms, quarterly outreach events, and the Small Business Accelerator Program.
Neighborhood/Community Interests (if known):
The expansion of the Hands On Children’s Museum (HOCM) will enhance a community asset in the heart of downtown Olympia and provide expanded learning opportunities for the community and visitors. The museum will remain fully operational throughout construction, with visitors immediately adjacent to the work area, and the shared parking lot will remain in service. The site is located on the East Bay waterfront within shoreline jurisdiction and the 100-year floodplain. Public and construction traffic will be fully separated, and emergency vehicle access on Jefferson Street NE and Marine Drive NE will be maintained. Construction access, sequencing, and separation of public and construction activities are addressed in the Site Logistics Plan included with the agreement.
Financial Impact:
The costs for design and construction will be funded primarily through an extension of the current Thurston County Public Facilities District (PFD). With the latest extension, the PFD will be able to provide sales tax revenue for HOCM through 2058. The City has issued a 30-year, $20.5M revenue bond that will be paid back with the funds from the PFD. Additional funding sources that may contribute to the project include direct Washington State appropriation for design, pending Federal funding, grant funding, and private fundraising from businesses and individuals.
The Guaranteed Maximum Price is exclusive of Washington State sales tax, which the City pays in addition to the Contract Price under Section A.2 of the Amendment. At the current Olympia combined rate, sales tax on Phase 2 work is estimated at approximately $1.8 million. Owner costs outside the Design-Build contract - including the City’s project contingency, Owner’s Representative and program management fees, special inspection and testing, permit fees paid directly by the City, exhibit fabrication and installation, and loose furniture and equipment - are budgeted separately and are not included in the amounts shown above.
City staff have chosen to add certain elements to the project that are not eligible for PFD funding. A portion of the 2027 Facilities CFP has been identified to cover these expenses.
Staff is also requesting additional authority to increase the contract in the amount by $1,003,251.40 to cover the cost of project elements that are not far enough along in design to include in the GMP and for which funding is uncertain. This Owner Controlled Contingency will only be used if formally approved by the HOCM and the City.
Project Cost Estimate
Cost for Professional Services (A/E, etc.) $2,668,090
Estimated Construction Cost (3% DB risk contingency) $15,888,659
Land Acquisition $ 2,100,000
Project Admin costs (Owner, CM, etc.) $1,303,502
State Required Contingencies (5%) $927,837
Owner Controlled Contingency $1,003,251
Other related project costs $532,310
Sales Tax (10%) $1,855,675
TOTAL PROJECT COST $ 26,279,324
Funding Sources
PFD Revenue Bond $20,500,000
PFD Existing Funding $810,000
Direct Appropriations/Department of Commerce $1,450,000
City Facilities CFP $ 900,000
HOCM Funds(estimate)* $2,619,324
PROJECT TOTAL FUNDING POTENTIAL $26,279,324
*The Hands-on Children’s Museum is pursuing additional grants and engaged in fundraising efforts to add enhanced exhibits and furnishings as part of this project. Costs and funding for those elements are not included in this cost summary.
Options:
1. Move to approve a Resolution authorizing an amendment to the design/build agreement with Forma Construction Company for the Hands On Children’s Museum expansion project. The project will proceed as planned.
2. Direct staff to renegotiate the agreement. Because the Guaranteed Maximum Price and the Scheduled Substantial Completion Date are predicated on Notice to Proceed on or before November 1, 2026, renegotiation would require the Design-Builder to confirm whether the pricing basis remains available or requires adjustment for escalation and would move the Scheduled Substantial Completion Date.
3. Do not approve the Resolution. Phase 2 work would not proceed, and the City would need to determine an alternative path to complete the Project.
Attachments:
Resolution
Amendment
Vicinity Map