california REPORT TO THE: Housing Authority E Successor Agency ~ Oversight Board fl

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1 glendal~ %~ california CITY OF GLENDALE, CALIFORNIA Joint E City Council N REPORT TO THE: Housing Authority E Successor Agency ~ Oversight Board fl January 24, 2017 AGENDA ITEM Report: project. Contract for Design and Construction Services for the Beeline Maintenance Facility (1) Resolution rejecting all bids, dispensing with competitive bidding and authorizing the Director of Public Works or his designee to directly negotiate with one or both firms that submitted bids. COUNCIL ACTION Public Hearing ~ Ordinance C Consent Calendar LI Action Item N Report Only LI Approved for January calendar ADMINISTRATIVE ACTION Submitted by: Roubik Golanian, Director of Public Works A ~fl~i~n.ture ta Philip Lanzafame, Director of Community Development ~ pj ~ Prepared by: / Kathryn Engel, Transit Manager.e..~ w! Kevin Todd, Facilities Management Administrator Approved by: Scott Ochoa, City Manager Reviewed by: Yasmin K. Beers, Assistant City Manager ~I4 ~a Michael J. Garcia, City Attorney 4- gal

2 RECOMMENDATION Staff respectfully recommends that City Council approve a Resolution rejecting all bids, dispensing with competitive bidding and authorizing the Director of Public Works or his designee to directly negotiate with one or more firms that have submitted bids in order to recommend a design-build contract within the City s financial resources. BACKGROUND!ANALYSIS The Beeline Maintenance Facility project will consist of a two story, 24,000 sq. ft. administrative, operations, and maintenance building, a service/fuel island, bus wash, bus parking, and other associated site improvements. Prepualification of Prospective Design-build Firms The City prequalified prospective design-build firms prior to bidding the project. On May 12, 2016, the City Council approved the solicitation of the Request for Qualifications (RFQ) which was advertised in the newspaper, on the City s procurement webpage, e-bid-board, and sent to 30 potential firms known to perform design-build construction services.. On June 30, 2016, the City received four (4) Statements of Qualification (SOQ). The participating firms were evaluated for design-build experience, experience of key personnel on similar size public works projects, and financial solvency, among other criteria. At the completion of the evaluation process, the following firms were determined to be qualified to participate in the bid process: Firm Name Dorado Design & Construction Kemp Bros. Construction Ledcor Design-Build USA Oltmans Construction Corporate Office Location Pasadena Santa Fe Springs San Diego Whittier Invitation for Bid Process On November 1, 2016, pursuant to Chapter 4.13 of the GMC, the City s Alternative Project Delivery Method Ordinance, the City Council adopted the Preliminary Design Plans, Specification No. 3627, and Contract Documents for the construction of the Beeline Maintenance Facility using the design-build project delivery method, and authorized the Director of Public Works to solicit bids for the project. On November 3, 2016 an Invitation for Bid was issued to the four prequalified design-build firms. On December21, 2016 the City received the following bids: Firm Name Total Base Bid Plus Alternates Dorado Design & Construction $14,837,814 Kemp Bros. Construction $21,500,471 Ledcor Design-Build USA No Bid Oltmans Construction No Bid The low bid submitted by Dorado Design & Construction was deemed non-responsive due to incomplete Disadvantaged Business Enterprise (DBE) documentation. Both of the bids received exceed the City s anticipated Total Base Bid plus Alternates estimate of $13,769,800, which was established in consultation with two independent professional cost estimating firms. The Beeline Facility project budget cannot absorb either of the Bidder s amounts as submitted, therefore, staff recommends rejecting all bids. The project team is confident that the independent engineer s cost estimates are comprehensive and commensurate with the specifications. 2

3 Currently, the construction industry in general is extremely healthy with contractors having multiple projects from which to choose. During these times the City tends to receive bids that are higher than expected or receive fewer bids than anticipated as evidenced by two of the four prequalified bidders opting to not submit a bid. Article VI, Section 9 of the City Charter authorizes City Council to dispense with competitive bidding and have the contract negotiated without further bidding if it is in the best interests of the City to do so. Staff believes that a collaborative negotiation with one or both firms that submitted bids would allow the contractor(s) to better understand unique project requirements and eliminate excessive contingencies that the contractor(s) may have included in their bid. In addition, it is staff s expectation that a negotiated bid will provide further opportunities for value engineering and partnering with the design-build contractor; both of which will reduce the overall project cost and allow the City to construct the best possible facility within the available budget. Any firm that is to be recommended for a contract as a result of negotiations would have to meet all federal requirements as described in the initial Invitation for Bid. With the current economic health, the building industry is robust as evidenced by the multitude of construction projects in Glendale and the Los Angeles area in general. It is expected that there will be even more construction projects with the recent passage of Measure M. With any delay, Glendale risks the chance of losing competent construction firms to more lucrative projects and may incur additional costs as materials and labor will be in higher demand. Currently, the City s Beeline contractor is renting a facility for maintenance. It is in the City s best interest to have its own facility, including a secure facility for its fleet and a facility that utilizes best practices to meet all local, state and federal regulations. The Beeline Maintenance Facility project has significant momentum due to City Council support, investment of staff resources, execution of support contracts, and project expenditures to date. In order to maintain the progress of the project, preserve federal funding participation and obtain the best contractor, materials and labor during a time when contractors, labor and materials are becoming increasingly in higher demand, staff believes it is in the City s best interest to dispense with competitive bidding, reject all bids and negotiate with one or both of the pre-qualified contractors that submitted bids on December21, 2016 in the effort to execute a contract within the City s financial resources. FISCAL IMPACT There is no fiscal impact associated with the adoption of the proposed resolution. ALTERNATIVES Alternative 1: Approve the Resolution rejecting all bids, dispensing with competitive bidding and authorizing the Director of Public Works or his designee to directly negotiate with one or both firms that have submitted bids in order to recommend a design-build contract within the City s financial resources. Alternative 2: The City Council may reject staff s recommendations, in whole or in part, and direct the Director of Public Works to resolicit bids. Alternative 2 would delay the project and 3

4 possibly compromise the project s federal grant funding. In the current construction environment there is neither guarantee of more firms participating nor of lower bid pricing. Alternative 3: The City Council may abandon the design-build methodology to implement the project and direct staff to complete the design documents in order to persue a design-bid build methodology for project implementation. Alternative 3 would delay the project and possibly compromise the project s federal grant funding. In the current construction environment there is neither guarantee of more firms participating nor of lower bid pricing. Alternative 4: The City Council may abandon the Beeline Maintenance Facility project altogether and return the federal grant funding. Alternative 4 would lose the federal funds assigned to the region, and neither Metro nor the City would be able to seek this federal funding in the future for a Glendale transit maintenance facility. Abandoning this project may also jeopardize the City s eligibility to compete for future Metro Call For Projects funding. EXHIBITS None 4

5 RESOLUTION NO. A RESOLU11ON OF THE CITY COUNCIL OF THE CflY OF GLENDALE, CAIJFORNIA, REJECTING ALL BIDS, DISPENSING WITH COMPETITIVE BIDDING, AUTHORIZING THE DIRECTOR OF PUBLIC WORKS OR HIS DESIGNEE TO NEGOTIATE WITH ONE OR BOTH OF THE PRE-QUALIFIED BIDDERS IN ORDER TO MAKE A RECOMMENDATION FOR AWARD OF A DESIGN-BUILD BUILD CONTRACT FOR CONSTRUCTION OF THE BEELINE MAINTENANCE FACILITY USING THE DESIGN-BUILD PROJECT DELIVERY METHOD, SPECIFICATION NO WHEREAS, on May 12, 2016, the Council adopted Resolution No , approving the solicitation of Request for Qualifications of prospective design-build firms prior to prequalify prospective design-build firms prior to bidding on the Beeline Maintenance Facility Project ( Project); and WHEREAS, on November 1, 2016, pursuant to Chapter 4.13 of the GMC, the City s Alternative Project Delivery Method Ordinance, the City Council adopted the Preliminary Design Plans, Specification No. 3627, and Contract Documents for the construction of the Beeline Maintenance Facility using the design-build project delivery method, and authorized the Director of Public Works to solicit bids for the Project; and WHEREAS, the Public Works Department received 2 bids for the Project; and WHEREAS, a detailed review of the bids revealed that 1 to incomplete federal information; and of the bids was non-responsive due WHEREAS, both of the bids received exceeded the City s anticipated Total Base Bid plus Alternates estimate of $13,769,800, which was established in consultation with two independent professional cost estimating firms; and WHEREAS, Public Works Department staff believes that a collaborative negotiation with one or both firms that submitted bids would allow the contractor(s) to better understand unique project requirements and eliminate excessive contingencies that the contractor(s) may have included in their bid and it is staff s expectation that a negotiated bid will provide further opportunities for value engineering and partnering with the design-build contractor; both of which will reduce the overall project cost and allow the City to construct the best possible facility within the available budget; and WHEREAS, any firm that is to be recommended for a contract as a result of negotiations would have to meet all federal requirements as described in the initial Invitation for Bid; and WHEREAS, with any delay, the City risks the chance of losing competent construction firms to more lucrative projects and may incur additional costs as materials and labor will be in higher demand due to the current robust economic health of the construction industry for projects in Glendale and the Los Angeles area where more projects are expected with the recent passage of Measure M; and WHEREAS, the City s Beeline contractor is currently renting a facility for maintenance and it is in the City s best interest to have its own facility, including a secure facility for its fleet and a facility that utilizes best practices to meet all local, state and federal regulations; and WHEREAS, Glendale City Charter, Article VI, Sec. 9 provides an exemption to competitive bidding where the Council determines it is in the best interest of the City to dispense with competitive bidding; and WHEREAS, the Project has significant momentum due to City Council support, invest t of J:\FILES\DCCFILESFACTFIND~BeaIine Maintenance Facility RESO DISPENSE BID MY.dcc

6 staff resources, execution of support contracts, and project expenditures to date and in order to maintain the progress of the project, preserve federal funding participation and obtain the best contractor, materials and labor during a time when contractors, labor and materials are becoming increasingly in higher demand, and staff believes it is in the City s best interest to dispense with competitive bidding, reject all bids and negotiate with one or both of the pre-qualified contractors that submitted bids on December in the effort to execute a contract within the City s financial resources.. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF ThE CITY OF GLENDAth: 1. The foregoing fads are deemed to be true and correct, and are a basis for rejecting the bids, dispensing with competitive bidding, and authorizing the Director of Public Works or his designee directly negotiate with one or both of the firms that submitted bids. 2. The Council hereby: A. Rejects all bids for the Project; B. Dispenses with competitive bidding; and C. Authorizes the Director of Public Works or his designee to directly negotiate with one or both firms that submitted bids in order to recommend a designbuild contract within the City s financial resources. Adopted this day of, 2016 ATTEST: Mayor City Clerk STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) SS I, Ardashes Kassakhian, City Clerk of the City of Glendale, do certify that the foregoing Resolution No. was adopted by the Council of the City of Glendale, California, at a regular meeting held on the day of, 2016, by the following vote: Ayes: Noes: Absent: Abstain: ~PROVEg~~ 2 City Clerk JIFILES1OOCFILESWACTFIN&Seeline Manlenaice Facilily PESO DISPENSE BID MY.doc