CC 2015-08-11_08a Reject Bids_Well No. 11
MEMORANDUM
TO: CITY COUNCIL
FROM: GEOFF ENGLISH, PUBLIC WORKS DIRECTOR
BY: MIKE LINN, ASSISTANT CITY ENGINEER
SUBJECT: CONSIDERATION TO REJECT CONSTRUCTION BIDS AND SOLICIT
NEW CONSTRUCTION BIDS FOR THE MUNICIPAL WATER WELL NO.
11 TREATMENT PLANT CONSTRUCTION, WELL EQUIPMENT AND
PIPING INSTALLATION PROJECT, PW 2010-07
DATE: AUGUST 11, 2015
RECOMMENDATION:
It is recommended the City Council:
1. Reject all construction bids received on July 14, 2015 for the subject project; and
2. Direct staff to revise the bid documents and solicit new construction bids for the
subject project at a future date.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The Capital Improvement Program budget includes $285,200 for the subject project.
BACKGROUND:
The existing well is located on the south side of La Canada Street approximately 800
feet north of the intersection with James Way and was drilled and developed to provide
irrigation water for the Rancho Grande project. The well was constructed in 1992 with a
PVC casing that is 6 inches in diameter and 305 feet deep. The City acquired the well
in 2009 as a condition of approval of Tract 1998 to help mitigate impacts of the project
on the City’s water supply.
On August 24, 2010, Council approved a Consultant Services Agreement (CSA) with
Garing, Taylor & Associates to rehabilitate the existing irrigation well and provide the
appropriate treatment facilities for conversion of the well for domestic use. Council has
since approved three additional amendments to the CSA for additional testing,
environmental determination, and future construction support.
On May 13, 2014, Council approved the design improvements for the project, and
adopted Resolution No. 4584 to approve a Negative Declaration for the project, in
accordance with CEQA guidelines.
Item 8.a. - Page 1
CITY COUNCIL
CONSIDERATION TO REJECT CONSTRUCTION BIDS AND SOLICIT NEW
CONSTRUCTION BIDS FOR THE MUNICIPAL WATER WELL NO. 11 TREATMENT PLANT
CONSTRUCTION, WELL EQUIPMENT AND PIPING INSTALLATION PROJECT, PW 2010-07
AUGUST 11, 2015
PAGE 2
ANALYSIS OF ISSUES:
On July 14, 2015, four bids were opened for the subject project (see Attachment No. 1).
The lowest bid, from Brough Construction, Inc., was in the amount of $463,728.
Although staff determined the bidder to be responsible, the lowest bid was
approximately $146,000 above the Engineer’s Estimate of $317,500.
On July 29, 2015, staff met with Garing, Taylor & Associates to review the unit prices for
the construction bids, and explore whether cost savings could be achieved through
changes in the project design. The group concluded the following:
Construction activity is accelerating and many qualified contractors were
apparently too busy to submit bids. Rebidding the project during the fall or winter
months may increase the number of potential bidders and provide lower prices.
The pricing for the premanufactured water treatment facility was considerably
higher than originally quoted during the project design. Garing, Taylor &
Associates will investigate having the City purchase the water treatment facility
separately to furnish to the selected contractor for final installation.
Based on the discussions, staff recommends rejecting all construction bids, exploring
potential design savings including the purchase of the water treatment facility as a
separate contract, and rebidding the construction project at a future date.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Approve staff’s recommendation to reject all construction bids and solicit new
construction bids at a future date for the subject project;
2. Do not award a construction contract for the project; or
3. Provide direction to staff.
ADVANTAGES:
Many qualified local contractors did not submit bids as the current construction climate
is accelerating. Rebidding the project during the winter months may increase the
number of qualified bidders and result in competitively lower prices.
DISADVANTAGES:
Construction activity continues to increase coming out of the recession and there are no
guarantees that more favorable prices will be obtained.
ENVIRONMENTAL REVIEW:
The City Council adopted Resolution No. 4584 approving a Negative Declaration for the
project in accordance with CEQA guidelines.
Item 8.a. - Page 2
CITY COUNCIL
CONSIDERATION TO REJECT CONSTRUCTION BIDS AND SOLICIT NEW
CONSTRUCTION BIDS FOR THE MUNICIPAL WATER WELL NO. 11 TREATMENT PLANT
CONSTRUCTION, WELL EQUIPMENT AND PIPING INSTALLATION PROJECT, PW 2010-07
AUGUST 11, 2015
PAGE 3
PUBLIC NOTIFICATION AND COMMENTS:
The agenda was posted at City Hall on Thursday, August 6, 2015. The agenda and
staff report was posted on the City’s website on Friday, August 7, 2015. No public
comments were received as of the time of preparation of this report.
Attachment:
1. Bid Opening Log Sheet
Item 8.a. - Page 3
I
/
CITY OF ARROYO GRANDE
BID OPENING LOG SHEET
Attachment No. 1
DEADLINE: TUESDAY, JULY 14, 2015 -2:00 PM
PROJECT NAME: MUNICIPAL WELL NO. 11 PROJECT
PROJECT NO. PW 2010-07
ENGINEER'S EST/MA TE: $317,500.00
SUBMITTED BY:
V. Lopez Jr. & Sons
Santa Maria, CA
Speiss Construction Co., Inc
Santa Maria, CA
Brough Construction Inc.
Arroyo Grande, CA
Whitaker Construction Group, Inc.
Paso Robles, CA
c: Director of Public Works
Capital Projects Engineer
Interim City Manager
TOTAL
$564,436.60
$529,076.00
$463,728.00
$521,345.00
Item 8.a. - Page 4