CC 2017-04-11_09f Award Contract_Well No. 11
MEMORANDUM
TO: CITY COUNCIL
FROM: GEOFF ENGLISH, PUBLIC WORKS DIRECTOR
BY: JILL MCPEEK, CAPITAL IMPROVEMENT PROJECT MANAGER
SUBJECT: CONSIDERATION OF AN AWARD OF CONTRACT TO BROUGH
CONSTRUCTION INC. FOR CONSTRUCTION OF THE MUNICIPAL
WATER WELL NO. 11 TREATMENT PLANT CONSTRUCTION, WELL
EQUIPMENT AND PIPELINE INSTALLATION PROJECT, PW 2010-07
DATE: APRIL 11, 2017
RECOMMENDATION:
It is recommended the City Council:
1. Approve the construction plans and specifications for the Municipal Water Well
No. 11 Treatment Plant Construction, Well Equipment and Pipeline Installation
Project, PW 2010-07;
2. Award a contract for the Municipal Water Well No. 11 Treatment Plant
Construction, Well Equipment and Pipeline Installation Project to Brough
Construction, Inc. in the amount of $429,573;
3. Authorize the City Manager to approve change orders for 10% of the contract
amount, $42,957 for unanticipated costs during the construction phase of the
project (total construction costs = $429,573 + $42,957 = $472,530); and
4. Allocate $274,000 from the available $1.1 million Water Availability Fund
balance.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The FY 2015/16 and 2016/17 Capital Improvement Program budget includes $352,550
for the subject project. The engineer’s estimate for the construction contract portion of
the project was $315,384 Total cost of the project is estimated at $626,550 as listed in
the chart below.
Item 9.f. - Page 1
CONSIDERATION OF AN AWARD OF CONTRACT TO BROUGH CONSTRUCTION,
INC. FOR CONSTRUCTION OF THE MUNICIPAL WATER WELL NO. 11
TREATMENT PLANT CONSTRUCTION, WELL EQUIPMENT AND PIPELINE
INSTALLATION PROJECT, PW 2010-07
APRIL 11, 2017
PAGE 2
EXPENDITURES
Treatment Plant Purchase $ 56,903
Construction (by contractor) $ 429,573
Contingency (10% of contract price) $ 42,957
Const Mgt, Inspection, Advertising, Record Drawings $ 39,961
Soils Testing / Electrical Equipment Observation $ 6,000
Electrical Application / Permit $ 5,000
Set Up / Start Up / Training $ 5,500
SCADA Integration $ 24,876
Design and Admin Support $ 15,780
TOTAL PROJECT EXPENDITURES $ 626,550
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
construction 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.
In 2010, design began on the existing irrigation well by providing appropriate treatment
facilities for conversion of the well for domestic use. On May 13, 2014, the Council
approved the design improvements for the project, and adopted Resolution No. 4584 to
approve a Negative Declaration in accordance with the California Environmental Quality
Act (CEQA) Guidelines. The project was advertised and on July 14, 2015, four bids
were received. The lowest bid was approximately $146,000 above the Engineer’s
Estimate of $317,500.
City staff met with the design engineer 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 that many qualified contractors were apparently too busy
to submit bids, and the pricing for the premanufactured water treatment facility was
considerably higher than originally quoted during the project design.
Based on these conclusions, on August 11, 2015, Council approved staff’s
recommendation to reject all construction bids, revise the bid documents and solicit new
construction bids for the project at a future date.
Item 9.f. - Page 2
CONSIDERATION OF AN AWARD OF CONTRACT TO BROUGH CONSTRUCTION,
INC. FOR CONSTRUCTION OF THE MUNICIPAL WATER WELL NO. 11
TREATMENT PLANT CONSTRUCTION, WELL EQUIPMENT AND PIPELINE
INSTALLATION PROJECT, PW 2010-07
APRIL 11, 2017
PAGE 3
In response, City staff worked with the design engineer to revise the bid documents
where the City would purchase the treatment plant and associated equipment
separately and furnish it to the selected contractor for installation. The revised bid
documents were completed, the project was advertised, and on March 9, 2017, three
bids were received. The apparent low bidder was Sansone Company, Inc. in the
amount of $367,370 which was approximately $52,000 above the Engineer’s Estimate
of $315,400.
ANALYSIS OF ISSUES:
On March 16, 2017, the City received a letter from Sansone Company, Inc. requesting
relief from their bid because of a clerical error. Staff reviewed Sansone’s request and
conferred with the City Attorney. It was determined that the City would accept
Sansone’s request to withdraw as they had complied with the procedural requirements
of a bidder’s proof of mistake contained in Public Contract Code Section 5103, as their
request was based on computational errors in preparing their unit prices which resulted
in an error in filling out the bid and not due to an error in judgement, carelessness
inspecting the site of the work, or in reading the plans or specifications.
Public Contract Code Section 5106 allows the City to award the contract to the second
lowest bidder. Staff has reviewed the second lowest bid in the amount of $429,573 and
has determined it to be responsive and Brough Construction, Inc. to be responsible. It is
recommended a construction contract be awarded to Brough Construction, Inc. The
contract time is 90 calendar days. Work is expected to be completed between May and
July 2017.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Award a construction contract to Brough Construction, Inc. for the Municipal
Water Well No. 11 Treatment Plant Construction, Well Equipment and Pipeline
Installation project;
2. Do not award a construction contract for the project; or
3. Provide direction to staff.
ADVANTAGES:
The project will provide an additional 40 to 50 acre-feet per year of water supply for the
City. Based on a 40 year life cycle of the well and equipment, the cost of the project
equates to approximately $400 per acre foot of water. The City currently pays $1,500
per acre foot for Lopez water. The well is in the Pismo formation and not part of the
Santa Maria Groundwater Basin and is exempt from the Sustainable Groundwater
Management Act. The project is consistent with the Council goals to support city
infrastructure and to increase water security.
Item 9.f. - Page 3
CONSIDERATION OF AN AWARD OF CONTRACT TO BROUGH CONSTRUCTION,
INC. FOR CONSTRUCTION OF THE MUNICIPAL WATER WELL NO. 11
TREATMENT PLANT CONSTRUCTION, WELL EQUIPMENT AND PIPELINE
INSTALLATION PROJECT, PW 2010-07
APRIL 11, 2017
PAGE 4
DISADVANTAGES:
An appropriation from the Water Availability Fund balance could take away funding from
other potential projects.
ENVIRONMENTAL REVIEW:
The Council adopted Resolution No. 4584 on May 13, 2014 adopting a Negative
Declaration for the project.
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.
Attachment:
1. Bid Opening Log Sheet
Item 9.f. - Page 4
Attachment No. 1
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