DEPARTMENT
Infrastructure
AGENDA NO.
5d
MEETING DATE June 13, 2023
APPROVAL:
COMMISSION
SECRETARY
Donna Hood
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Construction Contract Novation: Consent Calendar
Project Manager: Randy Anderson
Approve the Assignment of Contract HH-1000R Mountain Tunnel Improvements Project
Summary of
Proposed
Commission Action:
Approve the assignment and assumption of Contract HH-1000R, Mountain Tunnel Improvements Project; and authorize the General Manager to execute an Assignment and Assumption Agreement to assign the existing Contract from Michels Tunneling, a divis ion of Michels Corporation, to a wholly owned Michels Corporation affiliate, Mountain Tunnel Constructors, Inc.
Background: On October 13, 2020, by Resolution No. 20-0210, this Commission awarded Contract No. HH-1000R Mountain Tunnel Improvements Project to Mic hels Tunneling, a division of Michels Corporation , to rehabilitate the Mountain Tunnel and u pgrade related facilities to improve water flow control, water quality, and worker safety during maintenance access.
On September 28, 2022, Michels T unneling (Assignor) requested to assign its rights and obligations under Contract No. HH -1000R Mountain Tunnel Improvements to a wholly owned Michels Corporation affiliate, Mountain Tunnel Constructors, Inc., (Assignee) as part of a Michels Corporation corporate reorganization.
Under the terms of the Assignment and Ass umption Agreement , Assignor and Assignee warrant and agree that:
• The assignment and assumption will not result in any changes in personnel performing the work or any disruptions or delays of the project or any change in price or duration; and
• The performance and payment bonds and insurance for the project will provide continuous coverage for the entire contract duration of all pertinent obligations under t he Agreement starti ng with the in itial formation of the Agreement through Final Completion and extendi ng to provide coverage during the applicable warranty period and for any latent defects in the work discovered after final completion; and Contract: HH-1000R Mountain Tunnel Improvements Project Commission Meeting Date: June 13, 2023
• Assignor and Assignee shall be jointly and severally liable to the City for all obligations owed to the City under the Contract.
Contract Changes
and Modifications
Modification Nos. 1 to 4 increased the contract amount by $1,256,110 , for a total contract amount of $140,229,299, with no change to the contract duration.
Budget & Costs: Funding: SFPUC has allocate d f unds for this a greement from Hetch Het chy Water Capital Improvement Project CUH10221 funds.
Original Not-to-Exceed Amount: $138,973,189
Original Contingency: $13,897,319
Total Not-to-Exceed Amount: $152,870,508
Schedule: Original Duration: 2,160 consecutive calendar days Original Contingency: 216 calendar days
Total Approved Duration Limit: 2,376 consecutive calendar days
Environmental
Review:
On October 23, 2019, the Planning Department approved the Final Mitigated Negative Declaration for the M ountain Tunnel Impr ovements Project (Project) (Planning Department Case No. 2017-014249ENV).
On November 12, 2019, by Resolution No. 19- 0213, this Commission approved the Project and, as required by the California Environmental Quality Act, adopted findings and a Mitigation Monitoring and Reporting Program required by the California Environmental Quality Act (CEQA).
The work under the Assignment and Assumption Agreement is within the scope of the Project as authorized under the Final Mitigated Negative Declaration.
The Final Mitigated Negative Declaration, Mitigation Monitoring and Reporting Program, and SFPUC Resolut ion Number 19-0213 can be found here:
https://sfpuc.sharefile.com/d-sd345eb7dbefb4853813b2795b649aa9b
Compliance with
Chapter 14B: Local
Business Enterprise
Utilization and Non-
Discrimination in
Contracting
Ordinance:
Set: The Contract Monitor ing Divi sion established a Local Business Enterprise (LBE) subcontracting requirement of 3% for this contract.
Submitted: The contractor committed to 5.347% LBE participation in its bid submittal.
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Publi c Utilities Commission (SFPUC) is in the process of rehabilitating the century-old Mountain Tunnel; and
WHEREAS, On October 13, 2020, by Resolution No. 20- 0210, this C ommission awarded Contract No. HH-1000R Mountain Tunnel Improvements Project to Michels Tunneling, a division of Michels Corporation, to rehabilitate the Mountain Tunnel and upgrade related facilities to improve water flow control, water quality, and worke r safety during maintenance access; and
WHEREAS, On September 28, 2022, Michels Tunne ling (Assignor) requested to assign its rights and obligations under Contract No. HH-1000R Mountain Tunnel Im provements to a wholly owned Michels Corporation affiliate, Mountain Tunnel Constructors, I nc. (Assignee); and
WHEREAS, Under the terms and condit ions of t he Assignment and Assumption Agreement, Contract HH-1000R Mountain Tunnel Improvement s Project shall remain in full force and effect; and
WHEREAS, Under the ter ms and c onditions of the Assignment and Assumption Agreement, Assignor and Assignee war rant that : (1) the assignment and assumption will not result in any changes in perso nnel performing the work or any disruptions or delays of the project or any change in the contract price or duration; (2) the performance and payment bonds and insurance fo r the project will provide continuous coverage for the entire duration of all pertinent obligations under the Agreement starting with the initial formation of the Agreem ent through Final Completion and extending to provide coverage during the applicable wa rranty period and for any latent defects in the work discovered after final completion; and (3) Assignor and Assignee shall be jointly and severally liable to t he City for all obligations owed to the City under the Contract; and
WHEREAS, On October 23, 2019, the Pl anning Department approved the Final Mitigated Negative Declaration for the Mountain Tunnel Improvements Project (Project) (Planning Department Case No. 2017-014249ENV); and
WHEREAS, On November 12, 2019, by Resoluti on No. 19- 0213, this Commission approved the Project and, as required by the California Environmental Quality Act, adopted findings and a Mitigation Monitoring and Reporting Program; and WHEREAS, The work under the Assignment and Assumption Agreement is within the scope of the Project as authorized under the Final Mitigated Negative Declaration; and WHEREAS, The San Francisco Planning Department is the custodian of records that are located in the file s for Case Number 2017-014249ENV at 49 South Van Ness Ave nue, Suit e 1400, San Francisco, Californi a, 94103, which have been made available for review by this Commission and the public, and those files are part of the record before this Commission; and WHEREAS, This Commission has reviewed and considered the information contained in the Final Mitigated Negative Declaration, Mitigation Monitoring and Reporting Program , and SFPUC Resolution Numbers 19- 0213, and all written and oral information provided by the Planning Department, the public, relevant public agencies, SFPUC staff and other experts and the administrative files for the Project; now, therefore, be it
RESOLVED, This Commission has reviewed and considered the Final Mitigated Negative Declaration and the record as a whole, and finds that the Final Mitigated Negative Declaration is adequate for its u se as the decision–making body for the Project and incorporates the Mitigation Monitoring and Reporting Program, and the findings contained in Resolution Number 19-0213 by this reference thereto as though set forth in this Resolution; and be it
FURTHER RESOLVED, This Commission further finds that since the Final Mitigated Negative Declaration was finalized, there have been no substantial project changes and no substantial changes in project circumstances that woul d require major revisions to the Final Mitigated Negative Declaration due to the involvement of new significant environmental effects or an increase in the severity of previously identified significant impact s, and there is no new information of substantial importance that would change the conclusions set forth in the Final Mitigated Negative Declaration; and be it
FURTHER RESOLVED, That this Commission hereby approves the assignment of Contract HH-1000R Mount ain Tunnel I mprovements Project with Mountain Tunnel Constructors, Inc., where Mountain Tunnel Constructors , Inc ., assumes all of Michels Tunneling’s obligations and responsibilities under the C ontract, and authorizes the General Manager to execute an Assignment and Assumption Agreement between Michels Tunneling and Mountain Tunnel Cons tructors, Inc., and the San Fr ancisco Public Utilities Commission in a form approved by the City Attorney.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting June 13, 2023.
Secretary, Public Utilities Commission