HomeMy WebLinkAboutCC 2026-06-23_09e Award Halcyon Complete StreetsItem 9.e.
65501.00014\45123681.1
MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer
SUBJECT: Notice of Award, Halcyon Complete Streets, PW 2023-15
DATE: June 23, 2026
RECOMMENDATION:
1) Reject low bidder, Edward’s Construction Group, Inc., as non-responsive;
2) Authorize the City Manager or designee to execute a construction contract for the
Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. &
Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive
changes as approved by the City Manager in consultation with the City Attorney;
3) Authorize the City Manager to approve change orders of 10% of the contract amount,
$665,362.61, for unanticipated costs during the construction phase of the Project; and
4) Approve two budget amendments for construction of the Project.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Total anticipated construction costs for this project is shown in Table 1.
Table 1: Anticipated Construction Costs
The City Council is asked to approve two budget adjustments; to appropriate $231,718
from the Transportation Facilities Development Impact Fee (DIF) Fund to this CIP project
as stated in the DIF schedule to support 50% of the cost to complete the roundabout; and
to appropriate $1,875,000 of Measure E-24 Local Sales Tax Funds from this CIP project
to the Pavement Management Project (PMP).
Construction 6,653,626.14
Contingency 665,362.61
Surveying/Monumentation 32,242.00
Special Materials Testing 200,000.00
Staff Oversight 100,000.00
7,651,230.75
Page 45 of 355
Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026
Page 2
BACKGROUND:
The City worked with a design consultant to develop plans and specifications. The
engineer’s estimate as designed was $7,380,000. On April 28, 20261, staff presented
100% plans to City Council and received authorization to proceed with advertisement. A
Notice Inviting Bids was issued on May 11, 2026. The Notice Inviting Bids was published
in the local paper, posted on the City’s website, and distributed to plan rooms.
Five bids were received by the bid opening date and time of June 9, 2026, 2:00 PM,
ranging from $6,038,706.51 to $10,331,385.00, as shown in Attachment 2.
ANALYSIS OF ISSUES:
Following the bid opening, City staff reviewed the bids submitted for the Project, including
the bid submitted by Edwards Construction Group Inc. (“Edwards Construction”). Based
on that review, staff determined that the bid submitted by Edwards Construction is non -
responsive because it does not appear to be a balanced bid and does not accurately
reflect the cost to perform certain portions of the Project.
Article 20 of the Instructions to Bidders expressly reserves the City’s right to “reject any
or all Bids and to waive any informality or irregularity in any Bid.” In addition, Article 31,
Basis of Award; Balanced Bid, provides that the City shall award the Contract to the lowest
responsible bidder submitting a responsive bid. Article 31 further provides that the City
may reject any bid which, in the City’s opinion, when compared to other bids received or
to the City’s internal estimates, does not accurately reflect the cost to perform the Project.
Article 31 also authorizes the City to reject as non-responsive any bid that unevenly
weights or allocates costs, including overhead and profit, to one or more particular bid
items.
Based on the bid tabulations, staff identified material discrepancies in the pricing
submitted by Edwards Construction for certain bid items, including general conditions and
temporary traffic control. The amounts included for these items were significantly lower
than the corresponding amounts submitted by the other bidders and appeared to be
materially below the cost reasonably necessary to perform that work. Although a lower
price is generally favorable to the City, the concern here is that the pricing structure does
not appear to accurately reflect the actual cost of performance and instead appears to
unevenly allocate costs across the bid schedule. Balanced bid requirements are intended
to protect the integrity of the bidding process and ensure that the City can fairly compare
bids on an equal basis. Where a bid appears to materially understate certain required
work or shift costs to other portions of the bid, the City may reasonably determine that the
bid is non-responsive because it does not comply with the bidding requirements and may
expose the City to risk during contract administration.
1https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=01614b02-b589-4744-ba18-
6ce404b6e869&Agenda=Agenda&lang=English&Item=44&Tab=attachments
Page 46 of 355
Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026
Page 3
On June 15, 2026, the City informed Edwards Construction that staff had determined its
bid to be non-responsive. On June 16, 2026, Edwards Construction submitted a protest
challenging the merits of that determination. However, Article 31 expressly provides that
“No bidder shall have any claim on account of the City’s exercise of this discretion.”
Notwithstanding that provision, and in coordination with legal counsel, City staff prepared
and sent its response to Edwards Construction on June 18, 2026 reaffirming the City’s
position that Edwards Construction’s bid was properly deemed non -responsive and
advising that staff intended to proceed with a recommendation to award the contract to
V. Lopez Jr. & Sons.
Accordingly, pursuant to the discretion reserved to the City under Article 20 and Article
31 of the Instructions to Bidders, staff has determined that the bid submitted by Edwards
Construction is non-responsive and recommends that the City Council reject the bid. Staff
further recommends that the City Council award the Contract to V. Lopez Jr. & Sons as
the lowest responsive and responsible bidder.
Budget Adjustment
The FY 2025-26 budget includes $9,428,500 for construction of the Project. Staff
identified two budget adjustment requests that are described in more detail below:
Transportation Facilities DIF: Appropriate $231,718 from the Transportation
Facilities Fund towards the Halcyon/Fair Oaks roundabout. The DIF Nexus Study2
completed in 2024 identified that 50% of the Halcyon/Fair Oaks roundabout may
be funded with development impact fees. The original budget included $788,500
because the estimated cost of the roundabout when the budget was developed
was $1,577,000. The actual cost of the roundabout from V. Lopez’s bid sheet
schedule is $2,040,436; 50% of the actual cost is $1,020,218.
Measure E-24 Sales Tax Fund: Reallocate $1,875,000 from the Halcyon Complete
Streets project to the PMP project listed in the agenda as item 9.g. Halcyon
Complete Streets project has adequate funding to complete the project as shown
in Table 2.
Table 2: Halcyon Complete Streets Updated Budget
2 https://www.arroyogrande.org/DocumentCenter/View/12147/Arroyo-Grande---Development-Impact-Fee-
Nexus-Study-Update
Funding Source
FY 2025-26
Budget
Budget
Adjustment
Updated
Budget
Active Transportation Grant 6,765,000 6,765,000
Transportation Facilities DIF 788,500 231,718 1,020,218
Measure E-24 1,875,000 (1,875,000) -
9,428,500 (1,643,282) 7,785,218
Page 47 of 355
Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026
Page 4
Staff recommend that City Council approve an additional $231,718 in Transportation
Facilities DIF and a reduction in Measure E-24 funding for this project. Based on the costs
in Table 1, estimated construction costs to complete this Project total $7,651,230.75 and
are within the non-general fund money available.
ALTERNATIVES:
1. Proceed with staff’s recommendation;
2. Do not proceed with staff’s recommendation; or
3. Provide other direction to staff.
ADVANTAGES:
Completing this Project will provide the following advantages:
Mitigate future disruptions to traffic and parking for maintenance and repairs;
Improve the use of the road for pedestrians and cyclists;
Maximize state funding to improve this vital circulation corridor.
DISADVANTAGES:
Completing this Project will provide the following disadvantages:
Significant disruption to vehicles and pedestrians, including parking.
Potential negative impact to businesses adjacent to the construction site . Staff will
approve traffic control plans, scheduling and sequencing to reasonably minimize
the impacts. City staff will be at the site during construction to adjust the traffic
control as needed (driveway access, etc.).
ENVIRONMENTAL REVIEW:
On July 25, 20233, the City Council adopted a Mitigated Negative Declaration (MND) for
the Halcyon Complete Streets Project. The MND analyzed the environmental impacts of
the Project in compliance with CEQA. Advertising this project for construction will have
no direct or indirect physical impacts and does not constitute a substantial change to the
Project such that revisions to the previously adopted MND are required. Thus, none of
the conditions requiring subsequent environmental review called out in State CEQA
Guidelines section 15162 or Public Resources Code section 21166 are present, and no
further environmental review is required.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
ATTACHMENTS:
1. Resolution
2. Bid Opening Log
3https://pub-arroyogrande.escribemeetings.com/Meeting.aspx?Id=ba95ddc8-1575-42c7-
ae715ba712dab1bc&Agenda=Agenda&lang=English&Item=35&Tab=attachments
Page 48 of 355
Item 9.e.
65501.00014\45123681.1
City Council
Notice of Award, Halcyon Complete Streets, PW 2023-15
June 23, 2026
Page 5
3. City’s June 15 Letter to Edwards Construction
4. Edwards Construction Protest Letter
5. City’s June 18 Letter to Edwards Construction
6. Agreement
Page 49 of 355
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE TO 1) REJECT LOW BIDDER, EDWARD’S CONSTRUCTION
GROUP, INC., AS NON-RESPONSIVE; 2) AUTHORIZE THE CITY
MANAGER OR DESIGNEE TO EXECUTE A CONSTRUCTION
CONTRACT FOR THE HALCYON COMPLETE STREETS PROJECT
(PROJECT) TO THE SECOND LOWEST BIDDER, V. LOPEZ JR. & SONS
(V. LOPEZ) FOR $6,653,626.14, SUBJECT TO ANY MINOR,
TECHNICAL, OR NON-SUBSTANTIVE CHANGES AS APPROVED BY
THE CITY MANAGER IN CONSULTATION WITH THE CITY ATTORNEY;
3) AUTHORIZE THE CITY MANAGER TO APPROVE CHANGE ORDERS
OF 10% OF THE CONTRACT AMOUNT, $665,362.61, FOR
UNANTICIPATED COSTS DURING THE CONSTRUCTION PHASE OF
THE PROJECT; AND 4) APPROVE TWO BUDGET AMENDMENTS FOR
CONSTRUCTION OF THIS PROJECT.
WHEREAS, The FY 2025-26 budget includes $9,428,500 for construction of the Project;
and
WHEREAS, The Transportation Facilities Development Impact Fee (DIF) Fund to this
CIP project as stated in the DIF schedule may support 50% of the cost to complete the
roundabout portion of this project; and
WHEREAS, On April 28, 2026 staff presented 100% plans to City Council and received
authorization to proceed with advertisement. A Notice Inviting Bids was issued on May
11, 2026. The Notice Inviting Bids was published in the local paper, posted on the City’s
website, and distributed to plan rooms; and
WHEREAS, Five bids were received by the bid opening date and time of June 9, 2026,
2:00 PM, ranging from $6,038,706.51 to 10,331,385.00; and
WHEREAS, Following the bid opening, City staff reviewed the bids submitted for the
Project, including the bid submitted by Edwards Construction Group Inc. (“Edwards
Construction”). Based on that review, staff determined that the bid submitted by Edwards
Construction is non-responsive because it does not appear to be a balanced bid and does
not accurately reflect the cost to perform certain portions of the Work; and
WHEREAS, Grant funding and DIF are sufficient to complete this project without the
additional $1,875,000 of general funding originally funded for this project.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby reject low bidder, Edward’s Construction Group, Inc., as non -
responsive;.
Page 50 of 355
RESOLUTION NO.
PAGE 2
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does
hereby authorize the City Manager or designee to execute a construction contract for the
Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. &
Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive
changes as approved by the City Manager in consultation with the City Attorney.
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does
hereby authorize the City Manager to approve change orders of 1 0% of the contract
amount, $665,362.61, for unanticipated costs during the construction phase of the
Project.
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does
hereby approve two budget adjustments: 1)Appropriate $231,718 from the Transportation
Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF
schedule to support 50% of the cost to complete the roundabout , and 2) appropriate
$1,875,000 of Measure E-24 Local Sales Tax Funds from this CIP project to the
Pavement Management Project (PMP).
On motion of Council Member , seconded by Council Member ,
and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 23rd day of June, 2026.
Page 51 of 355
RESOLUTION NO.
PAGE 3
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
ISAAC ROSEN, CITY ATTORNEY
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10574511057451
607333
358030
89
939644
License #
ATTACHMENT 2
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ATTACHMENT 3
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Page 55 of 355
DATE: June 16, 2026
TO:
Shannon Sweeney
Acting Public Works Director / City Engineer
City of Arroyo Grande
1375 Ash Street
Arroyo Grande, CA 93420
FROM:
Brad Edwards, President
Edwards Construction Group Inc.
991 Bennett Ave
Arroyo Grande, CA 93420
RE: Protest Supplement – Rejection of Bid for Halcyon Complete Streets
Project ATPSB1-5199(035)
Dear Ms. Sweeney,
This letter serves as a formal "Protest Supplement" on behalf of Edwards
Construction Group Inc. ("Edwards") regarding the City of Arroyo Grande’s
("City") letter dated June 15, 2026, which notified us of the City’s intent to
reject our bid as non-responsive.
We respectfully but firmly refute the City’s determination that our bid was
"unbalanced" or "non-responsive". Under Public Contract Code § 20162, the
City has a clear statutory duty to award the contract to the lowest responsible
bidder. As the lowest bidder for the Project, Edwards is entitled to the award
unless the City can demonstrate a material failure to comply with the bid
specifications.It is our firm position that the City's invocation of this clause to
disqualify the most competitive proposal constitutes a clear abuse of
administrative discretion. This determination is devoid of a substantial factual
foundation and stands in direct contravention of the core tenets of competitive
public procurement as established under California law.
In public contracting, a bid is only "unbalanced" in a way that warrants
rejection if it is mathematically unbalanced (e.g., front-loading costs in a way
that suggests fraud or severe risk to the project's completion) or materially
unbalanced (e.g., creating an outcome where the lowest total bid price is no
longer actually the lowest price due to skewed quantities). The City’s rejection
fails to meet the threshold of a 'material' deviation from the bid instructions. A
ATTACHMENT 4
Page 56 of 355
mere variance from the engineer’s estimate or the 'average' of other bidders does
not constitute a valid basis for rejection under the Public Contract Code
Arbitrary Misclassification of Price Competitiveness
The City’s June 15 letter alleges that Edwards' pricing for general conditions
and temporary traffic control does not "accurately reflect the cost to perform
the Work" and falls below "staff’s expectations". This reliance on subjective
staff expectations is legally prohibited. In Pozar v. Department of
Transportation (1983) 145 Cal.App.3d 269, the court held that public agencies
have a ministerial duty to follow established, objective criteria in bid
evaluations rather than relying on internal, subjective benchmarks or
expectations.
The "unbalanced" classification is an arbitrary mischaracterization of Edwards’
legitimate competitive advantages. Our headquarters is located at 991
Bennett Ave in Arroyo Grande, providing us with immediate geographic
proximity to the Project site. This proximity allows for significant operational
efficiencies, reduced mobilization costs, and streamlined traffic control
logistics that bidders from outside the immediate area simply cannot match.
Our lower pricing for these line items reflects these real-world efficiencies, not
a failure to understand or allocate the scope of work. Furthermore, our lower
costs for traffic control are legitimately derived from our ownership of a
comprehensive inventory of traffic control signage, which eliminates some of
the rental and lease overhead that other bidders might have factor into their
proposals. Our estimate for traffic control is sufficient to meet all safety
requirements and contract specifications. A lower cost does not equate to a
failure to perform or a failure to comply with the scope of work.
The concept of “responsiveness” in public works bidding refers to whether a
bidder has complied with the material requirements of the bid package (e.g.,
submitting required forms, bonds, and certifications). The City is attempting to
reclassify price competitiveness as non-responsiveness. By rejecting the
lowest bid based on a subjective evaluation of “balanced costs,” the City is
contravening the intent of the Public Contract Code, which is to protect the
public from paying higher costs for the same work. This is a misapplication of
Article 31.
Purpose of Competitive Bidding
Page 57 of 355
The core purpose of competitive bidding is to "guard against favoritism,
improvidence, extravagance, fraud and corruption, and to secure the best
work or supplies at the lowest price practicable" (Konica Business Machines
U.S.A. v. The Regents of the University of California (1988) 206 Cal.App.3d
449). By rejecting the lowest bid due to its competitiveness, the City is
effectively subverting the goal of avoiding the misuse of public funds.
Furthermore, the City’s concerns regarding line-item allocation do not
constitute a "material" irregularity. As established in Valley Crest Landscape,
Inc. v. City of Davis (1996) 41 Cal.App.4th 1432, a bid variation is only
material if it gives a bidder a substantial advantage or benefit not enjoyed by
other bidders. Edwards has sought no such advantage; we have simply
provided the most aggressive and efficient pricing based on our local
presence and operational model.
Procedural Deficiency and Burden of Proof
Furthermore, the City bears the burden of establishing a factual, objective
record to justify the rejection of the lowest responsive bidder. The City’s
reliance on "staff expectations" regarding line-item costs is not a substitute for
the substantial evidence required to disqualify a bidder. Absent a showing that
Edwards’ bid is mathematically or materially unbalanced in a way that
prejudices the City or undermines the project's financial integrity, the rejection
is unsupported. Mere variance from other bidders’ line-item allocations, when
justified by actual operational efficiencies and equipment ownership, does not
constitute a material defect.
Conclusion
The City’s intent to recommend the award to V. Lopez Jr. & Sons despite
Edwards’ lower bid would result in an unnecessary and legally questionable
expenditure of public funds. We formally request that the City rescind its
rejection of Edwards’ bid and proceed with the award to Edwards Construction
Group Inc. as the lowest responsive and responsible bidder.
We look forward to your prompt response. Please provide written confirmation
of receipt of this protest
Sincerely,
Page 58 of 355
Brad Edwards
President, Edwards Construction Group Inc.
Page 59 of 355
CITY OF
City of Arroyo Grande
Public Works Department -Engineering Division
June 18, 2026
Edwards Construction Group, Inc.
Attn: Brad Edwards, President
991 Bennett Av e
Arroyo Grande, CA 93420
CITY OF
Sent via email to brad@weareedwards.com . Hard copy to follow via postal service
CALIFORNIA
RE: Rejection of Edwards Construction Group, Inc. Bid for Halcyon Complete Streets Project
ATPSBl-5199(035)
Dear Mr. Edwards,
The City of Arroyo Grande ("City") is in receipt of Edwards Construction Group, Inc. 's ("Edwards") letter dated
June 16, 2026 protesting the City's determination that Edwards' bid for the above captioned project was non
responsive ("Protest"). The City rejects the request to rescind its rejection of Edwards bid and intends to move
forward with recommendation to the City Council for award of the Project to V. Lopez Jr. & Sons.
It must be remembered, in accordance with Mike Moore's 24-Hour Towing v. City of San Diego (1996) 45
Cal.App.4th 1294, 1303 ("Mike Moores Towing") that "[a] public entity's award of a contract, and all of the acts
leading up to the award, are legislative in character and that "the letting of contracts by a governmental entity
necessarily requires an exercise of discretion guided by consideration of the public welfare[]" Id. at 1211. If the
City Council, in its legislative judgment, guided by considerations of the public welfare, elects to award the
contract to the apparent low bidder submitting a responsive bid, V. Lopez Jr. & Sons, and the rejection of a bid
deemed non-responsive, such action will be lawful unless unsupported, arbitrary, and capricious. The City's
decision in this matter is neither arbitrary nor capricious and is supported by the record.
A mathematically unbalanced bid is defined as a bid "containing lump sum or unit bid items which do not reflect
reasonable actual costs plus a reasonable proportionate share of the bidder's anticipated profit, overhead costs,
and other indirect costs. 23 CFR 635.102 (See also, Paramount Petroleum Corp. v. Intern. Surfacing Systems Inc., 2013 WL 12152641, at 5 (Cal. Super.). A materially unbalanced bid is one where "there is a reasonable doubt
that award to the bidder submitting the mathematically unbalanced bid will result in the lowest ultimate cost to
the Government." 23 CFR 635.102 (See also, Matter of Crown Laundry and Dry Cleaners, Comp. Gen. B-
208795.2, Apri 1 22, 1983 .) Additionally, Section 15.814, 48 Code of Federal Regulations, defines a
"mathematically unbalanced" bid as a bid "based on prices which are significantly less than cost for some contract
line items and significantly overstated in relation to cost for others."
PUBLIC WORKS DEPARTMENT• 1375 Ash Street• Arroyo Grande, California 93420
Phone: (805) 473-5460 • Fax: (805) 473-5462 • E-mail: agcity@arr oyogrande.org • Website: www.arroyogrande.org
ATTACHMENT 5
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Page 61 of 355
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CONSTRUCTION CONTRACT
This CONTRACT is made and entered into this 23rd day of June 2026, by and between City of
Arroyo Grande, sometimes hereinafter called “City,” and V. Lopez Jr. & Sons General
Engineering Contractors Inc., sometimes hereinafter called “Contractor.”
WITNESSETH: That the parties hereto have mutually covenanted and agreed, and by these
presents do covenant and agree with each other as follows:
a. SCOPE OF WORK. The Contractor shall perform all Work within the time stipulated in
the Contract, and shall provide all labor, materials, equipment, tools, utility services, and
transportation to complete all of the Work required in strict compliance with the Contract
Documents as specified in Section (e), below, for the following Project:
HALCYON COMPLETE STREETS PROJECT
ATPSB1-5199(035)
The Contractor and its surety shall be liable to the City for any damages arising as a
result of the Contractor’s failure to comply with this obligation.
b. TIME FOR COMPLETION. Time is of the essence in the performance of the Work. The
Work shall be commenced on the date stated in the City’s Notice to Proceed. The Contractor shall
complete all Work required by the Contract Documents within 280 WORKING DAYS from the
commencement date stated in the Notice to Proceed. By its signature hereunder, Contractor
agrees the time for completion set forth above is adequate and reasonable to complete the Work.
c. CONTRACT PRICE. The City shall pay to the Contractor as full compensation for the
performance of the Contract, subject to any additions or deductions as provided in the Contract
Documents, and including all applicable taxes and costs, the sum of Six Million Six Hundred
Fifty-Three Thousand Six Hundred Twenty-Six Dollars and Fourteen Cents ($6,653,626.14).
Payment shall be made as set forth in the General Conditions.
d. LIQUIDATED DAMAGES. In accordance with Government Code section 53069.85, it is
agreed that the Contractor will pay the City the sum set forth in Section 00 73 13, Article 1.11 for
each and every calendar day of delay beyond the time prescribed in the Contract Documents for
finishing the Work, as Liquidated Damages and not as a penalty or forfeiture. In the event this is
not paid, the Contractor agrees the City may deduct that amount from any money due or that may
become due the Contractor under the Contract. This Article does not exclude recovery of other
damages specified in the Contract Documents.
e. COMPONENT PARTS OF THE CONTRACT. The “Contract Documents” include the
following:
Notice Inviting Bids
Instructions to Bidders
Bid Form
Bid Bond
Designation of Subcontractors
Information Required of Bidders
Non-Collusion Declaration Form
Iran Contracting Act Certification
ATTACHMENT 6
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Public Works Contractor Registration Certification
Fleet Compliance Certification
Performance Bond
Payment (Labor and Materials) Bond
General Conditions
Special Conditions
Technical Specifications
Addenda
Plans and Drawings
Applicable Local Agency Standards and Specifications, as last revised
Approved and fully executed change orders
Any other documents contained in or incorporated into the Contract
The Contractor shall complete the Work in strict accordance with all of the Contract
Documents.
All of the Contract Documents are intended to be complementary. Work required by one
of the Contract Documents and not by others shall be done as if required by all. This Contract
shall supersede any prior agreement of the parties.
f. PROVISIONS REQUIRED BY LAW AND CONTRACTOR COMPLIANCE. Each and
every provision of law required to be included in these Contract Documents shall be deemed to
be included in these Contract Documents. The Contractor shall comply with all requirements of
applicable federal, state and local laws, rules and regulations, including, but not limited to, the
provisions of the California Labor Code and California Public Contract Code which are applicable
to this Work.
g. INDEMNIFICATION. Contractor shall provide indemnification and defense as set forth in
the General Conditions.
h. PREVAILING WAGES. Contractor shall be required to pay the prevailing rate of wages
in accordance with the Labor Code which such rates shall be made available at the City’s
Administrative Office or may be obtained online at http://www.dir.ca.gov and which must be
posted at the job site.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Contract has been duly executed by the above-named
parties, on the day and year above written.
City of Arroyo Grande
Approved By:
Matthew Downing, City Manager
Attested By:
Jessica Matson, City Clerk
Approved As To Form:
Isaac Rosen, Best Best & Krieger
City Legal Counsel
V. Lopez Jr. & Sons General
Engineering Contractors Inc.,
Vince Lopez III, President
Vince@vlopezjrandsons.com
END OF CONTRACT
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EXHIBIT ‘A’
BID FORM INCLUDING BID SCHEDULE
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MEMORANDUM
TO: City Council
FROM: Jessica Matson, Director of Legislative & Information Services/
City Clerk
SUBJECT: Supplemental Information
Agenda Item 9.e – June 23, 2026 City Council Meeting
Notice of Award, Halcyon Complete Streets, PW 2023-15
DATE: June 22, 2026
Attached is correspondence received for the above referenced Item.
Cc: City Manager
Acting Director of Public Works/City Engineer
City Attorney
City Clerk
City Website and Public Review Binder
Enc
Page 67 of 355
June 19, 2026
VIA EMAIL AND U.S. CERTIFIED MAIL AND RETURN RECEIPT
isaac.rosen@bbklaw.com
Isaac Rosen
BEST BEST & KRIEGER LLP
CITY OF ARROYO GRANDE
300 South Grand Avenue, 25th Floor
Los Angeles, CA 90071
Re: Rejection of Bid – Halycon Complete Streets Project ATPSB1-5199(035)
Dear Mr. Rosen:
Edwards Construction Group Inc. (“Edwards Construction”) retained my office to
represent it with respect to the City of Arroyo Grande’s (“City”) improper rejection of the
Edwards Construction bid (“Bid”) for the Halycon Complete Streets Project ATPSB1-
5199(035) (“Project”). This letter is directed to your attention because you are listed as the
City Attorney on the City’s website. If this is not correct, please notify me immediately.
Please direct all further correspondence related to this matter to my attention.
The letter is in response to the City’s letter dated June 18, 2026 (“Protest Rejection Letter”).
The City’s Protest Rejection Letter notified Edwards Construction that the City was
rejecting the Edwards Construction letter dated June 16, 2026, protesting the City’s
determination that the Edwards Construction Bid was nonresponsive and its intent to award
the Project to V. Lopez Jr. & Sons (“Protest Supplement”) and, for the first time, attempted
to provide a legal and factual basis for its rejection of the Bid. The City’ Protest Rejection
Letter, however, still fails to provide an adequate legal or factual justification for its
rejection of the Bid. This letter is addressed to you because the City concluded its Protest
Rejection Letter by stating that it would not respond to any further correspondence from
Edwards Construction.
Edwards Construction is an experienced public works contractor based in Arroyo Grande.
Edwards Construction’s Bid totaled $6,038,707, which is $614,919 less than the bid from
V. Lopez Jr. & Sons. The City’s Rejection Letter rests on a flawed understanding of bid
responsiveness, the discretion afforded to public agencies in California when bidding
public works projects, and fails to establish an adequate basis for rejecting Edwards
Construction’s Bid as nonresponsive. In choosing to reject Edwards Construction’s Bid
arbitrarily, the City created the very appearance of favoritism and corruption that
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June 19, 2026
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California’s public contracting laws were created to avoid. Nothing in the City’s Rejection
Letter comes close to justifying the waste of $614,919 in tax payer dollars which would
result if the City awarded the Project to the second lowest bidder instead of Edwards
Construction.
This letter is intended to be:
1. A request under the California Public Records Act, Government
Code section 7920.000 et seq., for (1) copies of the bids submitted
by all of the bidders for the Project including, but not limited to,
Edwards Construction and V. Lopez Jr. & Sons, (2) the City’s
estimate for the Project, (3) any and all materials the City consulted
or relied on in making its determination that Edwards Construction
was nonresponsive.
2. A request under Government Code section 54954.1 for written
notice of all meetings of the City at which any issues pertaining to
the award of that contract are on the agenda for the meeting. If there
is any fee for this service, please telephone that information to us
immediately, so we can promptly pay the fee.
3. A request to be informed (by telephone or fax) as soon as any staff
reports or recommendations concerning any issues pertaining to the
award of that contract are available to the public, so we can
immediately inspect those reports or recommendations.
4. A request to address the City before or during consideration of any
issues pertaining to the award of that contract, which opportunity is
guaranteed by Government Code section 54954.3, subdivision (a).
If this letter is not sufficient to accomplish any of these purposes, please let us know
immediately what else is required, so we can comply. If we do not hear from you, we will
proceed on the basis that this letter is sufficient.
RELEVANT PROCEDURAL HISTORY
The City opened the bids for the Project on June 9, 2026. (Ex. 1.) Edwards Construction
submitted the lowest bid at $6,038,706.51, with V. Lopez Jr. & Sons the second lowest
bidder at $6,653,626.44, which was $614,919 more than Edwards Construction’s Bid. The
bid spread ranged from Edwards Construction’s low bid to the highest bid of $10,331,385
from Granite Construction.
On June 15, 2026, the City sent Edwards Construction a letter summarily rejecting its Bid
as nonresponsive and informing Edwards Construction that the City intended to award the
Project to V. Lopez Jr. & Sons (“Bid Rejection Letter”). (Ex. 2.) The City’s Bid Rejection
Letter did not provide a detailed factual basis for its determination that Edwards
Construction’s Bid was nonresponsive, merely stating that “the amounts for general
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CITY OF ARROYO GRANDE
June 19, 2026
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conditions and temporary traffic control, among other line items, were significantly lower
than the amounts submitted by other bidders and materially below staff’s expectations for
that work.” The City’s Bid Rejection Letter did not ask for clarification or otherwise solicit
a response. Instead, the City argued “that Edwards Construction has no claim on account
of the City’s exercise of this discretion.” As will be seen, this is a misstatement of the
applicable laws.
Also on June 15, 2026, the City issued its Notice of Intent to Award (“Notice of Intent”),
informing all bidders that the City intended to award the Project to V. Lopez Jr. & Sons.
(Ex. 3.) The Notice of Intent claimed that “[a]ny proposer wishing to protest this intended
award must have done so in accordance with the procedures set forth in the Bid Book” and
that “[p]rotests must have been received by within 5 calendar days of the bid opening,
which was June 9, 2026. As will be seen, not only is this a misstatement of the applicable
laws, but it is also a misstatement of the City’s own Bid Documents.
On June 16, 2026, Edwards Construction submitted a letter responding to the City’s Bid
Rejection Letter and protesting the City’s decision to award the Project to V. Lopez Jr. &
Sons (“Protest Supplement”). (Ex. 4.) Although its response was complicated by the lack
of detail in the City’s Bid Rejection Letter, Edwards Construction explained that, because
it was based in Arroyo Grande, it did not need to include many of the mobilization costs
out of town contractors like V. Lopez Jr. & Sons would incur. Edwards Construction also
explained that it owned many of the traffic control devices that would be needed during
the Project, reducing the rental charges necessary to complete the temporary traffic control
during the Project.
On June 17, 2026, the City issued a letter summarily rejecting Edwards Construction’s
Protest Supplement and confirming that it intended to proceed with awarding the Project
to V. Lopez Jr. & Sons (“Protest Rejection Letter”). (Ex. 5.) For the first time, the City
provided an explanation for its determination. But while the City acknowledged receipt of
Edwards Construction’s Protest Supplement, it did not provide a meaningful response to
Edwards Construction’s explanation. The City did not acknowledge Edwards
Construction’s explanation for its lower general conditions costs in any way, and merely
acknowledged receipt of Edwards Construction’s explanation for its lower temporary
traffic control pricing without further addressing it. The City concluded its Protest
Rejection Letter by claiming that “[t]his will be the City’s final correspondence in this
matter.”
THE CITY CANNOT AWARD THE PROJECT TO A BIDDER THAT DID NOT
SUBMIT THE LOWEST RESPONSIVE BID.
Although the City may reject all bids, it does not have the discretion to reject Edwards
Construction’s Bid and instead award to the Project to V. Lopez Jr. & Sons at a cost
increase of $614,919 to the public. Instead, California law mandates that cities must
competitively bid public works contracts and may only award the contract to the lowest
responsible bidder that submits a responsive bid. (Valley Crest Landscape, Inc. v. City
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Council (1996) 41 Cal.App.4th 1432, 1438 [citing Pub. Cont. Code, § 20162] [“Valley
Crest”].) Here Edwards Construction is the lowest responsible bidder and it submitted a
responsive bid. The City may not award the Project to another bidder.
The Legislature enacted the Public Contract Code to protect “the public from misuse of
public funds” by “stimulating competition in a manner conducive to sound fiscal practices”
and eliminating “favoritism, fraud, and corruption in the awarding of public contracts.”
(Pub. Cont. Code, § 100.) “Because of the potential for abuse arising from deviations from
strict adherence to standards which promote these public benefits, the letting of public
contracts universally receives close judicial scrutiny and contracts awarded without strict
compliance with bidding requirements will be set aside.” (Konica Business Machs. U. S.
A. v. Regents of Univ. of Cal. (1988) 206 Cal.App.3d 449, 456-457] [emphasis added].)
The Public Contract Code is intended to protect the public, and “protect[ing] innocent
bidders and their listed subcontractors from arbitrary or erroneous disqualification from
public works contracting [is] a purpose fully consistent with the act.” (D.H. Williams
Construction, Inc. v. Clovis Unified School Dist. (2007) 146 Cal.App.4th 757, 766.) And
even “a reasoned decision based on the reasonable view of the scope of discretion is still
an abuse of judicial discretion when it starts from a mistaken premise, even though nothing
about the exercise of discretion is, in ordinary-language use of the phrase, beyond the
bounds of reason.” (Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187
Cal.App.4th 1425, 1459 [internal quotes omitted] [emphasis in the original].)
The City may not rely on Mike Moore’s Towing 1 to justify its improper rejection of
Edwards Construction’s Bid. Somewhat curiously for the primary case the City cites as its
justification for its rejection of Edwards Construction’s Bid, Mike Moore’s Towing does
not include a single reference to the Public Contract Code. (See Mike Moore’s 24-Hour
Towing v. City of San Diego (1996) 45 Cal.App.4th 1294, 1303.) Instead, the towing
contracts at issue in that case were advertised and awarded pursuant to the San Diego
Municipal Code, which provided that “contracts for procurement under a request for
proposals ‘will be awarded on the basis of the proposal best meeting City requirements,’
including the best economic advantage for the City.” (Id at 1306-1307 [emphasis added].)
The San Diego Municipal Code’s open-ended grant of discretion to itself stands in stark
contrast with the competitive bidding requirements in the Public Contract Code which
require public agencies like the City to award contracts to the lowest responsible bidder
that submits a responsive bid. Moreover, even Mike Moore’s Towing, explains that “[t]his
test has also been formulated to add an inquiry whether the agency’s decision was ‘contrary
to established public policy or unlawful or procedurally unfair.’” (Id. at 1303 [quoting
Lewin v. St. Joseph Hospital of Orange (1978) 82 Cal. App. 3d 368, 387].) A case analyzing
a statute that gives a city the discretion to determine which bid best satisfied its
requirements and gave it the best economic advantage provides little guidance to the
interpretation of the Public Contract Code.
1 Although the City cites to page 1211 of Mike Moore’s Towing, that page is not part of the decision, which
begins on page 1294.
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CITY OF ARROYO GRANDE
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In contrast with the discussion of the San Diego Municipal Code in Mike Moore’s Towing,
multiple cases discussing the competitive bidding requirements in the Public Contract Code
have rejected decisions by public agencies like the City. In Konica Business Machines, the
court set aside a contract because the deviations in the bid could not be waived under the
Public Contract Code. (Konica Business Machs. U. S. A. v. Regents of Univ. of Cal. (1988)
206 Cal.App.3d 449, 457.) In Valley Crest, the court declared the contract invalid under
the Public Contract Code even though the landscaper had already substantially performed
the contract. (Valley Crest Landscape, Inc. v. City Council (1996) 41 Cal.App.4th 1432,
1443.) In Great West Contractors, the district improperly rejected a bid as nonresponsive
when its investigation and evaluation of the bid was really an investigation of the bidders
responsibility, entitling the contractor to seek damages. (Great West Contractors, Inc. v.
Irvine Unified School Dist. (2010) 187 Cal.App.4th 1425, 1458-1460.) These, and other
similar decisions, confirm that the City’s discretion is constrained by the strict requirements
of the Public Contract Code.
As discussed in greater detail below, the City’s improper determination that Edwards
Construction’s Bid was nonresponsive was unlawful because it went outside the four
corners of the Bid when evaluating its responsiveness, procedurally unfair because it did
not give Edwards Construction an opportunity to respond, and against public policy
because it increased the cost to the public and created the appearance of favoritism, the
very evils the Public Contract code was enacted to prevent. The competitive bidding
requirements in the Public Contract Code, which are strictly enforced by the courts to
protect the public fisc and avoid even the appearance of favoritism and corruption, gives
lie to the City’s argument that it has the discretion to reject Edwards Construction’s Bid
and that Edwards Construction has no recourse for the City’s arbitrary action. Edwards
Construction has every right to challenge the City’s decision waste $614,919 in taxpayer
dollars by awarding the Project to the second lowest bidder.
EDWARDS CONSTRUCTION SUBMITTED THE LOWEST RESPONSIVE BID.
The test for responsiveness focuses on the four corners of the bid documents and does not
consider information or details outside of the bid and bid documents. (Great West
Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal. App. 4th 1425, 1453-1454.)
As a threshold matter, a bid is responsive if it responds to the requirements included in the
bid documents, regardless of the quality of the responses. (Id. at 1456-1457.) Bids must be
evaluated from a practical, rather than hypothetical, standpoint, giving due consideration
to the public interest being served. (Ghilotti, 45 Cal.App.4th at 908-909; MCM
Construction, Inc. v. City and County of San Francisco, 66 Cal. App. 4th 359, 370.) As
discussed above, those public interests are getting the best work at the lowest practicable
price and avoiding favoritism and corruption. (See Domar Electric, Inc. v. City of Los
Angeles (1994) 9 Cal.4th 161, 173.) Due process considerations require that “a bidder
determined to be nonresponsive is entitled to notice of that fact and is entitled to submit
materials, in a manner defined by the district, concerning the issue of responsiveness.”
(Taylor Bus Serv. v. San Diego Bd. of Educ. (1987) 195 Cal.App.3d 1331, 1343.)
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Here the City does not, and cannot, dispute that Edwards Construction submitted a
complete Bid that responded to all of the requirements in the Bid Documents. That is the
test for responsiveness. (See Great West, supra, 187 Cal. App. 4th at 1456-1457.) Edwards
Construction’s Bid is responsive. Instead, the City goes beyond the four corners of Edwards
Construction’s Bid to challenge the quality of Edwards Construction’s responses,
comparing them not just to the City’s estimates but to the responses submitted by the other
bidders as well. This is improper when evaluating a bid’s responsiveness. (See Great West,
supra, 187 Cal. App. 4th at 1456-1457.)
Nor did the City give Edwards Construction notice and an opportunity to respond to the
City’s determination, as it was required to do even for a rejection based on responsiveness.
(See Taylor Bus Serv., supra, 195 Cal.App.3d at 1343.) The City’s Notice of Intent claimed
that protests of the City’s decision to award the Project to V. Lopez Jr. & Sons “must have
been received by within 5 calendar days of the bid opening, which was June 9, 2026.” Five
calendar days after the bid opening date of June 9 is Sunday, June 14, the day before the
City notified Edwards Construction of its determination that Edwards Construction that the
City was rejecting its Bid and instead awarding the Project to V. Lopez Jr. & Sons. Since
1872, over 150 years ago, it has been enshrined in California law that “[t]he law never
requires impossibilities.” (Civ. Code, § 3531.) Yet the City’s position is that Edwards
Construction was required to protest the City’s rejection of its Bid before the City issued
its Bid Rejection Letter, an obvious impossibility.
Nor is the City’s position in its Notice of Intent consistent with its own Bid Documents.
Under Article 30, Filing of Bid Protests, a Bidder’s protest of another bid must “[b]e filed
in writing within five (5) calendar days after the bid opening date.” But that only applies
to a Bidder’s protest of another bid. By its express terms, it does not apply to a bidder’s
response to a determination of that its bid was not responsive by the City. The City’s Bid
Documents are completely silent as to the procedures the City must follow when rejecting
a bid for responsiveness on its own, as well as the procedures bidders must follow in
response. Due process, however, requires that bidders be given an opportunity to respond.
(See Taylor Bus Serv., supra, 195 Cal.App.3d at 1343.)
As reflected in its Bid Rejection Letter and Protest Rejection Letter, the City’s arbitrary
decision to reject Edwards Construction’s Bid as nonresponsive is a perfect example of
why the Public Contract Code and associated case law established these important
limitations on responsiveness reviews by public agencies. Multiple issues with the City’s
arbitrary approach are evident.
For starters, the City’s Bid Rejection Letter merely alleges the “the amounts for general
conditions and temporary traffic control, among other line items, were significantly lower
than the amounts submitted by other bidders and materially below staff’s expectation for
that work” without providing any details or documentation substantiating that claim. (Ex.
2.) Although the City recognizes that “lower pricing is generally favorable,” it goes on to
state that “the concern here is that the bid does not present a balanced allocation of costs
across the bid schedule.” (Ex. 2 [emphasis added].) Notably absent was any indication that
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CITY OF ARROYO GRANDE
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any of Edwards Construction’s other bid items were unreasonably high. By failing to
provide a meaningful basis for its decision, the City’s Rejection Letter makes it impossible
to evaluate the merits of the City’s rejection of Edwards Construction’s Bid, not just for
Edwards Construction, but more importantly under the Public Contract Code, the City’s
taxpayers who the competitive bidding laws were enacted to protect.
Issued three days after its Notice of Intent, the City’s Protest Rejection Letter provides
limited support for its determination for the first time. (Ex. 5.) But the City’s Protest
Rejection Letter fails to justify its rejection of Edwards Construction’s Bid because it rests
on an unreasonable and unsupported reading of the Public Contract Code, fails to provide
the documents supporting its determination, and fails to engage with the information in
Edwards Construction’s Protest Supplement. As further detailed below, the City’s Protest
Rejection Letter ignores Edwards Construction’s explanation of its pricing of the general
conditions and temporary traffic control bid items in its Protest Supplement. And the City
compounds these errors by again refusing to allow Edwards Construction an opportunity
to respond, confirming that its determination is final by dismissively stating that “[t]his
will be the City’s final correspondence in this matter.”
This is precisely why bid rejections that go beyond evaluating the four corners of a bid and
require the application of subtle judgment are outside the purview of a responsiveness
determination and require additional due process protections. (See Taylor Bus Serv. v. San
Diego Bd. of Educ. (1987) 195 Cal.App.3d 1331, 1341-1342 [discussing the additional
requirements for responsibility determinations].) Here, by relying on incomplete
information the City used its subtle judgment to determine that Edwards Construction
could not complete the Project for the listed price. But because the City did not accord
Edwards Construction the due process protections required when evaluating the quality of
response, as opposed to the responsiveness, it was missing critical information necessary
to a full evaluation of the Bid. (Great West Contractors, Inc. v. Irvine Unified School Dist.
(2010) 187 Cal.App.4th 1425, 1455 [explaining that bidder is “entitled to at least a ‘due
process hearing’ on the purported nonresponsibility”].)
The City’s rejection of Edwards Construction’s Bid went beyond the four corners of the
Bid without affording Edwards Construction the due process protections required when the
quality of responses to a bid are evaluated. The City’s determination that Edwards
Construction’s Bid was nonresponsive was arbitrary and an abuse of limited discretion
allowed to public entities under the Public Contract Code.
EDWARDS CONSTRUCTION’S BID IS NOT UNBALANCED.
Edwards Construction’s bid is neither mathematically nor materially unbalanced. The City
withheld the bid schedules submitted by V. Lopez Jr. & Sons and the other bidders, making
it impossible for Edwards Construction to evaluate the City’s claims or whether the City is
holding V. Lopez Jr. & Sons to the same standards it is imposing on Edwards Construction.
This is particularly concerning given that the City’s correspondence has repeatedly
suggested that its decisions are driven by favoritism.
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The City’s Protest Rejection Letter fails to explain how Edwards Construction’s Bid is
materially unbalanced. Lacking any relevant requirements in the Public Contract Code or
published California cases discussing unbalanced bids, the City instead cites federal
regulations. The federal regulations define a “mathematically unbalanced bid” as “a bid
containing lump sum or unit bid items which do not reflect reasonable actual costs plus a
reasonable proportionate share of the bidder’s anticipated profit, overhead costs, and other
indirect costs.” (23 CFR § 635.102 (2026).2) A “materially unbalanced bid” is “a bid which
generates a reasonable doubt that award to the bidder submitting a mathematically
unbalanced bid will result in the lowest ultimate cost to the Federal Government.” (Id.3)
The City also cites 48 CFR § 15.814 for support, but that regulation no longer exists and
has not since 1997. (See 48 CFR § 15.) Only a bid that is both mathematically and
materially unbalanced must be rejected. (23 CFR § 635.114(d) (2026) [explaining that “[a]
bid found to be mathematically unbalanced, but not found to be materially unbalanced,
may be awarded”].)
The City at least attempts to show that Edwards Construction’s Bid is mathematically
unbalanced. But the City’s attempt is flawed. These flaws begin with the mathematical
calculations the City made to support its position. The City cites the average of the other
four bidders in claiming that Edwards Construction’s Bid underpriced the for Section 4 10
General Construction5 and Section 12 Temporary Traffic Control portions of the Project.
But this average includes the bids from JJ Fisher Construction, which totaled 115% of the
City’s estimate, and Granite Construction, which totaled 140% of the City’s estimate.
Including two bids that significantly exceeded the City’s estimate in the four bids used to
calculate the average cost is going to skew the results higher.
More importantly, the City’s arbitrary decision to reject Edwards Construction’s Bid as
nonresponsive without investigation ignores the reasons why Edwards Construction was
able to bid the Project for substantially less than the other bidders, or even the City’s own
estimate. As explained in its Protest Supplement, Edwards Construction is based in Arroyo
Grande, the location of the Project. (Ex. 4.) Its office, which sits on a 1.57-acre lot, is less
than two miles from the Project. In contrast, the second lowest bidder, V. Lopez Jr. & Sons,
is based in Santa Maria, approximately 20 miles away. Edwards Construction’s local
presence provides obvious benefits, particularly related to the mobilization and
demobilization, the very bid items the City is concerned that Edwards Construction
underbid. (See Ex. 5.) 2 In contrast with the CFR’s definitions, the City’s Bid Documents require bidders to include their overhead
and indirect costs in the Mobilization bid item, highlighting the difficulties inherent in applying cases,
statutes, and regulations from different jurisdictions. 3 Although the City claims to quote this provision in its Bid Rejection Letter, the City improperly modifies
the quote by omitting the word “Federal” without indicating the modification. 4 Although all of the Sections of the City’s Bid Schedule include multiple bid items, the City’s Protest
Rejection Letter treats them as if they are a single bid item. Given the City’s failure to provide the supporting
documents this further compounds the difficulty in evaluating whether the City is actually comparing Section
to Section as represented. 5 Which the City erroneously refers to as General Conditions in its Protest Rejection Letter.
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CITY OF ARROYO GRANDE
June 19, 2026
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The General Conditions detail the kind of costs that must be included in the Mobilization
and Demobilization bid item. (Ex. 6, § 00 72 13-6.B.) These include “[p]roviding and
maintaining the field office trailers for the Contractor, if necessary.” (Emphasis added.)
Not only does this recognize that this bid item may vary based on the bidder’s evaluation
of whether a field office is necessary, making it impossible to compare the bid items from
different bidders, but Edwards Construction does not need a field office trailer because its
actual office is close enough to serve as its field office. Similarly, bidders must include
costs for “[f]urnishing, installing, and maintaining all storage buildings or sheds required
for temporary storage of products, equipment, or materials that have not yet been installed
in the Work” and “[a]rranging for and erection of Contractor’s work and storage yard.”
Again, this is work that Edwards Construction did not need to include in its Bid because of
the proximity of its office. Because Edwards Construction will not need the same level of
temporary facilities as out-of-town contractors like V. Lopez Jr. & Sons, it will cost
Edwards Construction less for “[m]oving off the job (demobilization), removal, clean up.”
Although Edwards Construction’s Protest Supplement explained how its Bid benefited
from being a local contractor, the City completely ignored this in its Protest Rejection
Letter.
Similarly, in its Protest Supplement Edwards Construction explained that it owns many of
the traffic control devices that will need to be used during the Project, which again provides
an obvious benefit compared to bidders which must rent all of the required traffic control
devices. The City at least acknowledged the Protest Supplement in its Protest Rejection
Letter, but it did not do so in any kind of material way. Instead, the City simply stated that
“[t]he City is in receipt of Edward’s [sic] argument that its ownership of traffic control
equipment may explain some of this discrepancy.” But that mere acknowledgement is the
sum total of the City’s response. The City simply ignores Edwards Construction’s
explanation in its Protest Rejection Letter.
This leaves Edwards Construction’s pricing for Section 19 Earthwork, which the City did
not address for the first time until its Protest Rejection Letter dated June 18, 2026, three
calendar days after it issued its Notice of Intent. For the first time, the City alleged that a
particular portion of Edwards Construction’s Bid exceeded the City’s estimate and the bids
of the other bidders. In contrast with City’s explanation for Section 10 General
Construction and Section 12 Temporary Traffic Control, the City omitted the average of
the other bidders from its discussion of the Section 19 Earthwork. Because the City failed
to provide the documents supporting its determination, there is no way to determine
whether this was an oversight or whether the City omitted the average of the other bidders
because it did not support the City’s argument.
As the City is aware, two of the four bid items in Section 19 Earthwork are lump sum items.
Of the $515,450 included in Edwards Construction’s Bid for Section 19 Earthwork,
$303,780 (58% of the total) is a lump sum for Excavation while an additional $42,000 (9%
of the total) is a lump sum for Erosion Control. To the extent that these bid items are higher
than the City’s estimate, or the bids from the other bidders, which cannot be determined
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BEST BEST & KRIEGER LLP
June 19, 2026
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because the City has not provided documents supporting its determination, the City has
utterly failed to explain how they could result in the City having to pay a higher overall
price for the Project. They are lump sum costs, independent of the quantity of work actually
performed. While the costs for Tree Removal and Class II Aggregate Base are at least unit
prices, there is no reasonable argument that Edwards Construction’s pricing for these bid
items could result in the District having to pay more for the Project.
Edwards Construction’s Bid is $614,919 less than the bid from V Lopez Jr. & Sons. (See
Ex. 1.) The City, not Edwards Construction, determined the quantities listed on the bid
schedule. Edwards Construction bid a unit price of $690 per tree for the 43 trees the City
estimated would need to be removed in the Tree Removal bid item. To exceed the bid from
V Lopez Jr. & Sons, the City would have had to have underestimated the number of trees
by 892 trees ($614,919 / $690 = 891.2), and that doesn’t even account for the increase in
V Lopez Jr. & Sons’ price for the increased number of trees. Encountering 23 times the
number of trees the City estimated would need to be removed is outside the bounds of
reason.
Similarly, Edwards Construction bid $100 per cubic yard for the 1,400 cubic yards of the
City estimated would be required for the Class II Aggregate Base bid item. To exceed the
bid from V Lopez Jr. & Sons, the City would have had to have underestimated the quantity
of aggregate base required by 6,150 cubic yards ($614,919 / $100 = 6,149.2), and that
doesn’t even account for the increase in V Lopez Jr. & Sons’ price for the increased number
of trees. Although not as extreme as for the Tree Removal, anticipating that the City’s
estimate for the quantity of Class II Aggregate Base is 4.4 times lower is outside the bounds
of reason.
Edwards Construction’s Bid is not unbalanced.
THE CITY’S ARBITRARY DECISION CREATES THE APPEARANCE OF
FAVORITISM AND THE MISUSE OF PUBLIC FUNDS.
The City’s arbitrary rejection of Edward Construction’s Bid creates the very evils the
Public Contract Code was enacted to eliminate. As courts have explained, [t]he purpose of
requiring governmental entities to open the contracts process to public bidding is to
eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate
advantageous marketplace competition.” (Konica Business Machs. U. S. A. v. Regents of
Univ. of Cal. (1988) 206 Cal.App.3d 449, 456.)
By sending the Project out for competitive bidding, but arbitrarily rejecting the lowest
responsive bid, the City is failing to take advantage of the competitive market, thereby
misusing public funds. This results in an increase of $614,919 in the price of the Project.
That increase represents a full 10% of Edwards Construction’s price. That is a significant
additional cost to the City, a cost that will fall on the City’s taxpayers.
Moreover, the City’s rejection raises the specter of favoritism, graft, and corruption. The
City did not notify Edwards Construction of its preliminary determination and give
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CITY OF ARROYO GRANDE
June 19, 2026
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Edwards Construction an opportunity to address the City’s concerns prior to issuing the
Notice of Intent. The City did not even provide a reasoned basis for its rejection prior to
issuing its Notice of Intent, instead relying on nebulous concerns about the pricing of
unspecified bid items.
Instead, the City’s Bid Rejection Letter simply informed Edwards Construction that its Bid
was rejected and absurdly claims that Edwards Construction has no recourse for the City’s
arbitrary action, as if the City could waive the competitive bidding requirements of the
Public Contract Code through self-serving provisions in its Bid Documents. The arbitrary
nature of the City’s Rejection Letter creates the appearance that the City wanted to award
the Project to award the Project to V. Lopez Jr. & Sons and went looking for a justification
to do so, despite the increased cost. This appearance of favoritism is exactly the type of
evil the Public Contract Code was enacted to prevent.
The City’s belated issuance of its Protest Rejection Letter, which for the first time presented
the basis for its rejection of Edwards Construction’s Bid, did not cure the defects. Most
notably, the City did not issue the Protest Rejection Letter until after it issued the Notice
of Intent. And the City’s Protest Rejection Letter again denied that Edwards Construction
had the right to respond to the new allegations included in the letter, including the City’s
allegation that Edwards Construction’s price for Section 19 Earthwork was too high,
something not even hinted at in its original Bid Rejection Letter. Nor did the City address
Edwards Construction’s explanations in its Protest Supplement, the very letter the City was
supposedly responding to. These errors again create the appearance of improper favoritism
rather than reflecting a meaningful attempt to obtain the best work at the best price.
Because the City failed to investigate the reasons why Edwards Construction was able to
bid the Project at a lower price than its competitors before improperly rejecting the Bid as
nonresponsive, the City’s taxpayers are being denied the protections of the competitive
bidding laws. By improperly rejecting Edwards Construction’s Bid, the City is imposing
$614,919 in additional costs on its taxpayers for no discernable benefit, exactly the opposite
of the purposes for the Public Contract Code. That there is no legitimate basis for this
decision, as well as the City’s repeated failure to provide Edwards Construction with the
due process protections afforded under the Public Contract Code, suggest that the City’s
decision is driven by favoritism rather than the public’s best interest.
CONCLUSION
Based on the foregoing, as well as the information in its Supplemental Protest, Edwards
Construction requests that the City rescind its Rejection Letter and instead recommend that
the Project be awarded to Edwards Construction. Edwards Construction submitted the
lowest responsive bid, and there is no justification for wasting $614,919 in taxpayer dollars
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Isaac Rosen
BEST BEST & KRIEGER LLP
June 19, 2026
Page 12
by awarding the Project to a different contractor at a higher cost to the public. Edwards
Construction looks forward to working with the Authority to complete this important
Project without further delay.
Sincerely,
SMTD Law LLP
Jonathan J. Dunn
JJD/tau
Enclosure(s)
c: Client (email only)
Sidney Sweeney, Arroyo Grande, ssweeney@arroyogrande.org
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Exhibit 1
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Exhibit 2
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Exhibit 3
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NOTICE OF INTENT TO AWARD
Date of Notice: June 15, 2026
Project Title: Halcyon Complete Streets
Project Number: PW 2023-15
To All Bidders/Proposers:
This Notice serves to inform all interested parties that the City of Arroyo Grande has
completed its evaluation of the proposals submitted for the above-referenced project.
Based on the results of the evaluation and in accordance with the requirements of the
solicitation, the Agency intends to award a contract to:
V. Lopez Jr. & Sons, General Engineering Contractors, Inc.
1639 E. Donovan Road
Santa Maria, CA 93454
This Notice of Intent to Award does not constitute a contract award. The City Council is
scheduled to consider the award of this project at its meeting on June 23, 2026. No
contract shall be formed until the City issues a formal Notice of Award and executes a
contract with the selected firm.
Any proposer wishing to protest this intended award must have done so in accordance
with the procedures set forth in the Bid Book. Protests must have been received by
within 5 calendar days of the bid opening, which was June 9, 2026.
The City appreciates the time and effort invested by all firms that submitted bids.
Thank you,
Theresa Wren, Capital Improvement Projects Manager
twren@arroyogrande.org
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Exhibit 4
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DATE: June 16, 2026
TO:
Shannon Sweeney
Acting Public Works Director / City Engineer
City of Arroyo Grande
1375 Ash Street
Arroyo Grande, CA 93420
FROM:
Brad Edwards, President
Edwards Construction Group Inc.
991 Bennett Ave
Arroyo Grande, CA 93420
RE: Protest Supplement – Rejection of Bid for Halcyon Complete Streets
Project ATPSB1-5199(035)
Dear Ms. Sweeney,
This letter serves as a formal "Protest Supplement" on behalf of Edwards
Construction Group Inc. ("Edwards") regarding the City of Arroyo Grande’s
("City") letter dated June 15, 2026, which notified us of the City’s intent to
reject our bid as non-responsive.
We respectfully but firmly refute the City’s determination that our bid was
"unbalanced" or "non-responsive". Under Public Contract Code § 20162, the
City has a clear statutory duty to award the contract to the lowest responsible
bidder. As the lowest bidder for the Project, Edwards is entitled to the award
unless the City can demonstrate a material failure to comply with the bid
specifications.It is our firm position that the City's invocation of this clause to
disqualify the most competitive proposal constitutes a clear abuse of
administrative discretion. This determination is devoid of a substantial factual
foundation and stands in direct contravention of the core tenets of competitive
public procurement as established under California law.
In public contracting, a bid is only "unbalanced" in a way that warrants
rejection if it is mathematically unbalanced (e.g., front-loading costs in a way
that suggests fraud or severe risk to the project's completion) or materially
unbalanced (e.g., creating an outcome where the lowest total bid price is no
longer actually the lowest price due to skewed quantities). The City’s rejection
fails to meet the threshold of a 'material' deviation from the bid instructions. A
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mere variance from the engineer’s estimate or the 'average' of other bidders does
not constitute a valid basis for rejection under the Public Contract Code
Arbitrary Misclassification of Price Competitiveness
The City’s June 15 letter alleges that Edwards' pricing for general conditions
and temporary traffic control does not "accurately reflect the cost to perform
the Work" and falls below "staff’s expectations". This reliance on subjective
staff expectations is legally prohibited. In Pozar v. Department of
Transportation (1983) 145 Cal.App.3d 269, the court held that public agencies
have a ministerial duty to follow established, objective criteria in bid
evaluations rather than relying on internal, subjective benchmarks or
expectations.
The "unbalanced" classification is an arbitrary mischaracterization of Edwards’
legitimate competitive advantages. Our headquarters is located at 991
Bennett Ave in Arroyo Grande, providing us with immediate geographic
proximity to the Project site. This proximity allows for significant operational
efficiencies, reduced mobilization costs, and streamlined traffic control
logistics that bidders from outside the immediate area simply cannot match.
Our lower pricing for these line items reflects these real-world efficiencies, not
a failure to understand or allocate the scope of work. Furthermore, our lower
costs for traffic control are legitimately derived from our ownership of a
comprehensive inventory of traffic control signage, which eliminates some of
the rental and lease overhead that other bidders might have factor into their
proposals. Our estimate for traffic control is sufficient to meet all safety
requirements and contract specifications. A lower cost does not equate to a
failure to perform or a failure to comply with the scope of work.
The concept of “responsiveness” in public works bidding refers to whether a
bidder has complied with the material requirements of the bid package (e.g.,
submitting required forms, bonds, and certifications). The City is attempting to
reclassify price competitiveness as non-responsiveness. By rejecting the
lowest bid based on a subjective evaluation of “balanced costs,” the City is
contravening the intent of the Public Contract Code, which is to protect the
public from paying higher costs for the same work. This is a misapplication of
Article 31.
Purpose of Competitive Bidding
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The core purpose of competitive bidding is to "guard against favoritism,
improvidence, extravagance, fraud and corruption, and to secure the best
work or supplies at the lowest price practicable" (Konica Business Machines
U.S.A. v. The Regents of the University of California (1988) 206 Cal.App.3d
449). By rejecting the lowest bid due to its competitiveness, the City is
effectively subverting the goal of avoiding the misuse of public funds.
Furthermore, the City’s concerns regarding line-item allocation do not
constitute a "material" irregularity. As established in Valley Crest Landscape,
Inc. v. City of Davis (1996) 41 Cal.App.4th 1432, a bid variation is only
material if it gives a bidder a substantial advantage or benefit not enjoyed by
other bidders. Edwards has sought no such advantage; we have simply
provided the most aggressive and efficient pricing based on our local
presence and operational model.
Procedural Deficiency and Burden of Proof
Furthermore, the City bears the burden of establishing a factual, objective
record to justify the rejection of the lowest responsive bidder. The City’s
reliance on "staff expectations" regarding line-item costs is not a substitute for
the substantial evidence required to disqualify a bidder. Absent a showing that
Edwards’ bid is mathematically or materially unbalanced in a way that
prejudices the City or undermines the project's financial integrity, the rejection
is unsupported. Mere variance from other bidders’ line-item allocations, when
justified by actual operational efficiencies and equipment ownership, does not
constitute a material defect.
Conclusion
The City’s intent to recommend the award to V. Lopez Jr. & Sons despite
Edwards’ lower bid would result in an unnecessary and legally questionable
expenditure of public funds. We formally request that the City rescind its
rejection of Edwards’ bid and proceed with the award to Edwards Construction
Group Inc. as the lowest responsive and responsible bidder.
We look forward to your prompt response. Please provide written confirmation
of receipt of this protest
Sincerely,
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Brad Edwards
President, Edwards Construction Group Inc.
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Exhibit 5
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MEMORANDUM
TO: City Council
FROM: Jessica Matson, Director of Legislative & Information Services/
City Clerk
SUBJECT: Supplemental Information
Agenda Item 9.e – June 23, 2026 City Council Meeting
Notice of Award, Halcyon Complete Streets, PW 2023-15
DATE: June 23, 2026
The correct Resolution for the above referenced Item Attachment 1 is enclosed.
Cc: City Manager
Acting Director of Public Works/City Engineer
City Attorney
City Clerk
City Website and Public Review Binder
Enc
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ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE TO 1) REJECT LOW BIDDER, EDWARD’S CONSTRUCTION
GROUP, INC., AS NON-RESPONSIVE; 2) AUTHORIZE THE CITY
MANAGER OR DESIGNEE TO EXECUTE A CONSTRUCTION
CONTRACT FOR THE HALCYON COMPLETE STREETS PROJECT
(PROJECT) TO THE SECOND LOWEST BIDDER, V. LOPEZ JR. & SONS
(V. LOPEZ) FOR $6,653,626.14, SUBJECT TO ANY MINOR,
TECHNICAL, OR NON-SUBSTANTIVE CHANGES AS APPROVED BY
THE CITY MANAGER IN CONSULTATION WITH THE CITY ATTORNEY;
3) AUTHORIZE THE CITY MANAGER TO APPROVE CHANGE ORDERS
OF 10% OF THE CONTRACT AMOUNT, $665,362.61, FOR
UNANTICIPATED COSTS DURING THE CONSTRUCTION PHASE OF
THE PROJECT; AND 4) APPROVE TWO BUDGET AMENDMENTS FOR
CONSTRUCTION OF THIS PROJECT.
WHEREAS, The FY 2025-26 budget includes $9,428,500 for construction of the Project;
and
WHEREAS, The Transportation Facilities Development Impact Fee (DIF) Fund to this
CIP project as stated in the DIF schedule may support 50% of the cost to complete the
roundabout portion of this project; and
WHEREAS, On April 28, 2026 staff presented 100% plans to City Council and received
authorization to proceed with advertisement. A Notice Inviting Bids was issued on May
11, 2026. The Notice Inviting Bids was published in the local paper, posted on the City’s
website, and distributed to plan rooms; and
WHEREAS, Five bids were received by the bid opening date and time of June 9, 2026,
2:00 PM, ranging from $6,038,706.51 to 10,331,385.00; and
WHEREAS, Following the bid opening, City staff reviewed the bids submitted for the
Project, including the bid submitted by Edwards Construction Group Inc. (“Edwards
Construction”). Based on that review, staff determined that the bid submitted by Edwards
Construction is non-responsive because it does not appear to be a balanced bid and does
not accurately reflect the cost to perform certain portions of the Work; and
WHEREAS, Grant funding and DIF are sufficient to complete this project without the
additional $1,875,000 of general funding originally funded for this project.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby reject low bidder, Edward’s Construction Group, Inc., as non-
responsive;.
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RESOLUTION NO.
PAGE 2
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does
hereby authorize the City Manager or designee to execute a construction contract for the
Halcyon Complete Streets Project (Project) to the second lowest bidder, V. Lopez Jr. &
Sons (V. Lopez) for $6,653,626.14, subject to any minor, technical, or non-substantive
changes as approved by the City Manager in consultation with the City Attorney.
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does
hereby authorize the City Manager to approve change orders of 10% of the contract
amount, $665,362.61, for unanticipated costs during the construction phase of the
Project.
BE IT FURTHER RESOLVED that the City Council of the City of Arroyo Grande does
hereby approve two budget adjustments: 1)Appropriate $231,718 from the Transportation
Facilities Development Impact Fee (DIF) Fund to this CIP project as stated in the DIF
schedule to support 50% of the cost to complete the roundabout, and 2) appropriate
$1,875,000 of Measure E-24 Local Sales Tax Funds from this CIP project to the
Pavement Management Project (PMP).
On motion of Council Member , seconded by Council Member ,
and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 23rd day of June, 2026.
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RESOLUTION NO.
PAGE 3
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
ISAAC ROSEN, CITY ATTORNEY
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