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Home My WebLink About15 - Lifeguard Headquarters Rehab ProjectCITY OF t�EW�RT NEWPORT BEACH City Council Staff Report Agenda Item No. 15 November 26, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Public Works Department David A. Webb, Public Works Director 949 - 644 -3330, dawebb(a?newportbeachca.gov PREPARED BY: Peter Tauscher, Associate Civil Engineer 949 - 644 -3316, ptauscher @newportbeachca.gov APPROVED: TITLE: Lifeguard Headquarters Rehabilitation Project —Award of Contract No. 4869 ABSTRACT: The existing Lifeguard Headquarters is in need of major (primarily the interior) rehabilitation and is identified in the City Facility Financing Plan. Staff has now received construction bids for the Lifeguard Headquarters Rehabilitation project and is requesting City Council's approval to award a contract to Optima Reengineering & Project Management (Optima RPM). RECOMMENDATIONS: 1. Approve the project drawings and specifications; 2. Award Contract No. 4869 to Optima RPM for the total bid price of $1,546,000.00 including acceptance of additive bid items A2, A3, A4, A5, A6 and A7 and authorize the Mayor and City Clerk to execute the contract; 3. Establish a contingency of $154,000.00 (approximately 10 percent) to cover the cost of unforeseen work; and 4. Approve Budget Amendment No. 14BA -022 transferring $596,000.00 from the Facilities Financing Fund to the Lifeguard Facilities Fund and appropriating $596,000.00 from the Lifeguard Facilities Fund unappropriated fund balance to Account No. 7414- C1002037 (Lifeguard Headquarters Rehabilitation). FUNDING REQUIREMENTS: The available balance in CIP Account No. 7414- C1002037 (Lifeguard Headquarters Rehabilitation) is approximately $1,148,280.00. At the time of adoption of the FY 2103- 14 CIP budget, it was anticipated that some level of additional funding would be Lifeguard Headquarters Rehabilitation Project — Award of Contract No. 4869 November 26, 2013 Page 2 required based upon the outcome of the design and needed building upgrades. Upon approval of the requested budget amendment, sufficient funds for this project will be available. The rehabilitated building is planned to be furnished and outfitted using existing furniture and equipment and augmented as necessary with the Fire Department's operating budget. Contract costs will be expensed to the Lifeguard Headquarters Rehabilitation Project Account No. 7414-Cl 002037 as follows: Account Description Account Number Amount Lifeguard Headquarters Rehabilitation 7414- C1002037 $ 1,744,000.00 Total Proposed uses are as follows: Vendor Purpose Optima RPM Construction Contract Optima RPM Construction Contingency Incidentals Material testing, special inspection, commissioning 1,744,000.00 Amount 1,546,000.00 154,000.00 44,000.00 Total: $ 1,744,000.00 DISCUSSION: The lifeguard headquarters building rehabilitation project will include reconfiguring existing work spaces; constructing a new meeting /training room; upgrading restrooms, showers, and first aid facilities; installing new HVAC, electrical, plumbing and low voltage systems; refinishing interior walls and floor finishes; replacing windows and doors; and providing significant structural improvements. At 10:00 A.M. on November 5, 2013, the City Clerk opened and read the following bids for this project: BIDDER Low Optima RPM 2 Avi -Con, Inc. DBA CA Construction 3 Hamel Construction, Inc. 4 Pub Construction, Inc. 5 JRH Construction Co. 6 T.B. Penick & Sons, Inc. 7 Horizons Construction Co. International, Inc. 8 H.A. Nicholas, Co. Inc., Inc. TOTAL BID AMOUNT $1,379,000.00 $1,723,000.00* $1,756,000.00 $1,764,000.00 $1,802,901.00 $1,908,058.00 $1,817,000.00 $1,939,000.00 *bid non - responsive The apparent low bidder, Optima RPM, submitted all the necessary forms and possesses a California State Contractors License Classification of "B ", as required by Lifeguard Headquarters Rehabilitation Project — Award of Contract No. 4869 November 26, 2013 Page 3 the project specifications. A check of Optima RPM, references indicates satisfactory completion of similar projects for other local municipalities and public facilities. In addition, City staff met with Optima RPM to discuss their qualifications, proposed bid price, and other project related issues following the bid opening. Optima RPM's total base bid amount of $1,379,000.00 is approximately 30- percent above the Engineer's Estimate of $1,060,000.00. The Engineer's Estimate was verified by the project architect as well as the City's construction management consultant. The higher bid pricing is due to an improving economy and prices relating to the building construction materials market. Furthermore, staff recommends including the following additive bid items into the project as prices received were within expectation: • A2 — installing additional sheer wall panels ($25,000), • A3 — installing reinforced masonry wall ($24,000), • A4 — providing new structural connections ($35,000), • A5 — installing enhanced anchors between walls and floors ($38,000), • A6 — providing connector elements to shear walls ($25,000) and • A7 — installing plywood decking ($20,000). The total of the six recommended additive bid items is $167,000.00 bringing the contract total amount to $1,546,000.00. The additive bid items will provide significant structural upgrades to the existing facility. Alternative bid item Al — Replacement of Generator is not recommended as part of this contract work. Optima RPM's total bid, including the alternative bid items is still the lowest total bid submitted. On November 7, 2013, Hamel Construction, Inc. (third low bidder) submitted the attached formal bid protest letter to the City Clerk's Office with regard to the Lifeguard Headquarters Rehabilitation project. According to the bid protest letter, Hamel suggests Optima RPM does not possess the proper license to enter into a contract for this project. Staff reviewed this complaint and found it without merit as Optima RPM does possess a CSLB Class B (General Building Contractor) license which also allows a general building contractor to take a prime contract and perform specialized licensed trade work involving at least two or more unrelated building trades. The Lifeguard Headquarters Rehabilitation project involves electrical and plumbing trades as well as other general building items which meets the requirements for a contractor with a Class B license. Staff from the Public Works Department and City Attorney's Office reviewed Hamel Construction, Inc.'s bid protest letter and do not agree with the claims and recommend accepting Optima RPM's bid as the lowest responsible bid. As part of the bid review process, staff and the project's construction management consultant, Project Dimension Inc., checked the references submitted with the bid package. Results of the investigation indicate Optima RPM has the experience to complete the Lifeguard Headquarters Rehabilitation project in a timely and efficient manner. Staff recommends accepting Optima RPM as a responsive and responsible Lifeguard Headquarters Rehabilitation Project —Award of Contract No. 4869 November 26, 2013 Page 4 bidder. Pursuant to the contract specifications Optima RPM will have 102 consecutive working days to complete the project. ENVIRONMENTAL REVIEW: Staff found this project exempt from the California Environmental Quality Act ( "CEQA ") pursuant to Section 15302 (replacement of existing facilities involving negligible expansion of capacity) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). The Notice Inviting Bids for this project was advertised in the City's official publication and in construction industry publications. Submitted by: Public Works Director Attachments: A. Location Map B. Hamel Construction, Inc.'s Notice of Bid Protest C. Budget Amendment tr \ N NOT TO SCALE WORK AREA NEWPORT BEACH NEWPORT BEACH LIFEGUARD HEADQUARTERS LIFEGUARD HEADQUARTERS REHABILITATION LOCATION MAP OCFgN FROM\ \WEST CITY OF NEWPORT BEACH PUBLIC WORKS DEPARTMENT C -4869 1 11/26/13 Reply To: 24910 Las Brisas Road, Suite 110 Murrieta, California 92562 Telephone: 951.600.2733 Facsimile: 951.600.4996 www.tylerbursch.com TYLER, BURSCH, LLP LAWYERS &ADVISORS Orange County Office: 15540 -B Rockfield Boulevard Irvine, California 92618 Telephone: 949.707.2733 November 7, 2013 Ms. Leilani I. Brown City Clerk of Newport Beach Office of the City Clerk Post Office Box 1768 Newport Beach, California 92658 Email: lbrown@newportbeachca.gov Fax: (949) 644 -3039 Attachment B San Diego Office: 16870 W. Bernardo Drive, Suite 400 San Diego, California 92127 Telephone: 619.2 99.273 3 VIA ELECTRONIC, FACSIMILE AND U. S. MAIL Re: Hamel Contracting, Inc. Newport Beach Lifeguard Headquarters Rehabilitation Project Contract No.: C -4869 Dear Ms. Brown: The law firm Tyler & Bursch, LLP represents Hamel Contracting, Inc. ( "Hamel Contracting "), which recently submitted a bid for the Newport Beach Lifeguard Headquarters Rehabilitation Project pursuant to Contract No.: C -4869 ( "Contract "). It has come to our attention that the City of Newport Beach ( "City ") may be persuaded to accept Optima RPM, Inc.'s ( "Optima") bid, or in the alternative, Avi -Con, Inc. DBA CA Construction's ( "Avi- Con ") bid. This letter represents Hamel Contracting's formal protest of both Optima's bid and Avi -Con's bid based on the grounds articulated herein. The purpose of competitive bidding is "to guard against favoritism improvidence, extravagance, fraud and corruption, to prevent the waste of public funds, to obtain the best economic result for the public, and to stimulate advantageous market place competition." (emphasis added) (Domar Electric, Inc. v. City of Los Angeles (1994) 9 Cal.4th 161, 173.) Public Contract Code §22038(b) provides that, "If a contract is awarded, it shall be awarded to the lowest responsible bidder." (emphasis added (Pub. Contract Code, §22038(b).) ` .. Responsible bidder' means abidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness capacity, and experience to satisfactorily perform the public works contract." (Pub. Contract Code, § 1103 [codifying language in City ofinglewood - -L.A. County Civic Center Auth. V. Superior Court (1972) 7 Cal.3d 861, 867]; see also Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal.AppAth 1425,1450-1452; Taylor Bus Service, Inc. v. San Diego Bd. of Education (1987) 195 Ca1.App.3d 1331, 1341 -1343; American Bar Association (ABA), Section of Public Contract Law, Model Procurement Code for State and Local Governments (2000), § 3 -101 [a responsible bidder possesses "the capability in all respects of bidders to perform fully the contract requirements, and the Ms. Leilani 1. Brown November 7, 2013 Page 2 of 3 integrity and reliability which will assure good faith performance "]; 10 McQuillin, Municipal Corporations (3d rev. ed. 2009) § 29:81, at pp. 644 -656.) Thus, the "lowest responsible bidder requirement" imposes on governmental agencies a duty to evaluate bidders' possession of such attributes in a reasonable way on the basis of specified criteria timely made known to bidders and the general public. The lowest bidder is not necessarily the lowest responsible bidder. (City of Inglewood, supra, 7 Ca1.3d at p. 867.) Therefore, prior to awarding the Contract, the City has a duty to evaluate Optima's trustworthiness, quality, fitness capacity, and experience to satisfactorily perform the Contract. Among the numerous violations related to the Contract's bidding process, Optima's bid violates Business and Professions Code §7057(b). To be in compliance with §7057(b) a general building contractor cannot perform work pursuant to a prime contract unless, "...the general building contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor to perform the work." Optima cannot self - perform work without the required licenses. Specifically, the Contract calls for plumbing and electrical work and Optima's bid failed to provide for a licensed subcontractor to perform that work. Therefore, Optima's bid violates §7057 of the Business and Professions Code. Furthermore, if the in the event the City accepts Optima's bid, the City would be in violation of §6100 of the Public Contract Code by failing to verify that Optima has the appropriate licenses prior to awarding the Contract. Public Contract Code §6100(a) states, "Any state agency or department, as defined in Section 10357, which is subject to this code, shall, prior to awarding a contract for work to be performed by a contractor, as defined by Section 7026 of the Business and Professions Code, verify with the Contractors' State License Board that the person seeking the contract is licensed in a classification appropriate to the work to be undertaken." The City would be in violation of §6100 by failing to verify Optima's licenses prior to awarding Optima the Contract. Failure to conduct a reasonable investigation pursuant to Optima's bid would constitute a clear violation of the City's duty addressed in City of Inglewood. As Optima's bid failed to conform to the legal standards addressed herein, the City is required to consider the remaining bids properly submitted. In the event the City intends to award the Contract to Avi -Con, Hamel Contracting hereby protests Avi -Con's bid on the grounds it is incomplete. Per the requirements clearly outlined by the City, Avi -Con was required to provide bids related to items Al through A7 as indicated in the Bid Summary. Avi -Con failed to provide the required information pursuant to the Notice Inviting Bids. Due to these deficiencies the City may not consider Avi -Con's bid. Based on these violations, Hamel Contracting hereby demands copies of all information related to the Contract to ensure that the City and /or Optima have not engaged in further violations. The information demanded includes, but is not limited to, Optima's complete bid, all correspondence between the City and Optima related to the Contract, and all documents accumulated as a result of the City's duty to investigate. If the City is inclined to accept Avi -Con's bid, then Hamel Contracting hereby demands the identical information related to Avi -Con's bid. Additionally, if the City fails to revoke Optima's bid pursuant to the violations herein addressed, our client will be Ms. Leilani I. Brown November 7, 2013 Page 3 of 3 forced to take all necessary steps to protect the integrity of the public bidding process. We thank you in advance for your cooperation in this matter. If you have any questions or concerns please do not hesitate to contact our office. JNB:jal cc: Public Works Department Post Office Box 1768 Newport Beach, California 92658 Email: pwinfo@newportbeachca.gov Fax: (949) 644 -3318 ATTACHMENT C City of Newport Beach NO. BA- 14BA -022 BUDGET AMENDMENT 2013 -14 EFFECT ON BUDGETARY FUND BALANCE: X Increase Revenue Estimates X Increase Expenditure Appropriations AND Transfer Budget Appropriations SOURCE: from existing budget appropriations from additional estimated revenues X from unappropriated fund balance EXPLANATION: This budget amendment is requested to provide for the following: AMOUNT: $sss,aoo.00 Increase in Budgetary Fund Balance X Decrease in Budgetary Fund Balance No effect on Budgetary Fund Balance To increase revenue estimates and expenditure appropriations for the interfund transfer from the Facilities Financing Fund to the Lifeguard Facilities Fund and to increase expenditure appropriations for the design contract related to the Lifeguard Headquarters Rehabilitation project. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Amount Fund Account Description Debit Credit 405 3605 Facilities Financing Fund - Fund Balance $596,000.00 * REVENUE ESTIMATES (3601) Fund /Division Account Description 9414 6000 Lifeguard Facility Fund - Transfer In EXPENDITURE APPROPRIATIONS (3603) Description Division Number 9405 Facilities Financing Fund Account Number 9900 Transfer Out Division Number 7414 Lifeguard Facilities Fund Account Number C1002037 Lifeguard Headquarters Rehabilitation Signed: J� ,!'� nancial Approval: Fin or Signed: Administrative Approval: City anager Signed: City Council Approval: City Clerk Automatic $596,000.00 $596,000.00 fi - f� - r Date t1 Date Date