City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: February 22, 2022
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: René L. Mendez, City Manager
SUBJECT: Resolution No. 2022-15 Approving the Shortlist of Prequalified Design-Build Entities for the Community Center Complex
RECOMMENDATION
It is recommended that the City Council Adopt Resolution No. 2022-15, A Resolution of the City Council of the City of Gonzales approving the Shortlist of Prequalified Design-Build Entities for the Community Center Complex Project, and authorize staff to issue the Request for Proposal to the shortlisted DesignBuild Entities after Council approves the Design Criteria.
BACKGROUND
At the March 1, 2021 City Council meeting, the City Council accepted staff recommendation to use Design/Build delivery for the design and construction of the Community Center Complex Project. As mentioned in the staff report at the March 1, 2021 Council meeting, the benefits of the Design/Build approach are as follows:
Benefits:
1. Increased collaboration between the City, our Program Manager, the architect, and the contractor.
Unlike the traditional design/bid/build approach used for most municipal improvement projects, the contractor is involved during preparation of the final design plans and will provide suggestions to improve the project.
2. Should expedite project completion as site work (ie, grading, tree removal, underground utility work) will begin in advance of approval of the building plans.
AGENDA
ITEM
17 3. Cost management should be easier as there are fewer change orders and claims as the builder is involved throughout the design process, and the City’s Design/Build contract will stipulate a maximum agreed-to-contract amount.
4. Another benefit is the innovation that will come from the Design/Build teams due to the competitive nature of the City’s Request for Proposal as the three short-listed DBE teams will develop a comprehensive design for the project as part of their proposal.
To assist City staff on the project, at the May 3, 2021 City Council meeting, the Council approved a contract with Swinerton Management and Consulting to provide Program Management and Construction Management Services on the project.
In advance of releasing the Request for Qualifications (RFQ), staff was very deliberate in outreach efforts to local architects and contractors to make them aware of the upcoming opportunity. This included:
• Sending a Notice of Pending RFQ to officers of the American Institute of Architects Monterey Bay Chapter and to the Central Coast Builders Association in Salinas for distribution to their members.
• Forwarding the Notice of Pending RFQ to local architects and contractors. • Discussing the project, the upcoming RFQ, and the overall schedule with numerous local architects and contractors
Staff followed the specific requirements in State Public Contract Code (Chapter 4. Local Agency Design Build Projects [22160 – 22169]) for the preparation of the RFQ including detailing the specific criteria to be used in evaluating the submitted Statement of Qualifications.
On July 30, 2021, the City released a RFQ for the Community Center Complex Project for interested architects and general contractors to provide the City with a Statement of Qualifications as Design/Build teams. The RFQ was provided to numerous local contractors and architects. The RFQ was also emailed to various builder exchanges and construction leads services including the Central Coast Builders Association in Salinas for contractors and architects to be aware of the opportunity.
A prequalification conference and site visit were conducted on August 24, 2021. Staff issued several addendums to address questions submitted by the Design-Build Entity (DBE) teams. Addendum #1 included the statement “the City of Gonzales highly encourages the Design Build Teams to include local subconsultants or subcontractor from the Monterey Bay region”. By the September 30, 2021 deadline, the City only received seven Statement of Qualifications (SOQ) packages containing the completed prequalification questionnaire and financial statements.
This item was presented to the Council at the February 7, 2022, meeting at which time, after discussion the Council decided to hold this item over to the February 22nd meeting and directed staff to go back and carefully relook at the process utilized.
REVIEW AND ANALYSIS
As was presented on February 7th, seven SOQ packages were submitted by the following teams comprised of a contractor, lead architect and various design subconsultants (listed in alphabetic order):
• Ausonio Inc of Castroville**, CA/Nineteen Six Architects • Bernards of Fresno, CA/Perkins Eastman
• Blach Construction Company of Monterey**, CA/Steinberg Hart • Diede Construction Inc of Woodbridge, CA/LDA Partners • Dilbeck & Sons, Inc of Salinas**, CA/SVA Architects
• Otto Construction of Monterey**, CA/WRNS Studio
• Quiring General, LLC of Fresno, CA/Paul Halajian Architects [** DBE team includes a local construction firm/general contractor either based or a long tenured office in Monterey County. None of the DBE teams reflect a local Architect firm as the primary firm].
It is important to emphasize that receiving seven DBE SOQs exceeded staff’s expectations and demonstrated builders’ interest in the project and the results of staff’s extensive outreach. The prequalification packages were reviewed by an Evaluation Committee comprised of the City’s Public Works Director, the City’s Finance Director and Swinerton Management & Consulting staff.
While the City was conducting a series of open house/public outreach events and conducting public surveys about the potential amenities of the community center, the Evaluation Committee reviewed and scored the SOQs. Each DBE team had to satisfy a mandatory pass/fail criterion and a weighted scoring criteria that emphasized a requirement of relevant experience with the construction and design of community centers, public libraries, city facilities, and new construction. The Evaluation Committee scored the SOQs using the evaluation criteria and weightings summarized as follows:
Mandatory Pass/Fail Criteria:
1. Cover letter with acknowledgement of addendums
2. Signed Declaration
3. Listing of Design/Build Team including general contractor, architect, landscape architect, structural, mechanical, electrical, civil engineers, and others.
4. Required Licenses and Registrations of Design-Builder’s General Contractor, Architect, and Professional Engineers
5. Prevailing Wage Compliance
6. Ability to provide specified insurance.
All seven submittal packages passed the mandatory requirements.
The following weighted evaluation criteria on relevant experience was utilized to determine the recommended firms. It is important to acknowledge that while all the teams that submitted SOQs that met all the mandatory requirements, they all presented differently when evaluated per the criteria utilized.
This criterion was clearly articulated in the RFQ that was released and approved by the Council. It is not uncommon in the Design/Build approach, if the right criteria is utilized, to see separation in the proposals submitted. Fundamentally the criteria is utilized to determine the firms that best meet established requirements in order to enable the Evaluation Committee to make a recommendation as to which firms will move forward to the next phase of the project.
1. Financial strength – Several financial factors were reviewed to assess the financial strength of the DBE for the project, including working capital, debt to equity ratios, type of financial report submitted: “audited” or “reviewed”, revenue in past three years, and the strongest financial reports received more favorable marks. The reason for this criterion is that the City will set and determine the not to exceed budget and every team moving forward needs to have the financial capability and cash flow to cover all expenses as they occur because City reimbursement will always be in arrears.
2. Relevant experience of the Design/Build Team – The Evaluation Committee looked at the Team’s experience working together on Design/Build Projects. Teams with recent experience on Community Centers, Libraries and/or Teen Centers, and experience on multiple team /build projects received more favorable marks.
3. Relevant experience and training of key personnel – The Evaluation Committee looked at the experience of the team’s proposed Superintendent and Project Manager with experience on relevant Design/Build projects receiving more favorable marks.
4. Details on the contractor’s Apprenticeship program (ie, different crafts in the firm’s apprenticeship training in the past year, when the program was approved by the California Apprenticeship Council, number of apprentices employed by the firm during the past three years).
5. Safety record – The contractor’s safety record was deemed acceptable if their Experience Modification Rate for the previous three-year period was an average of 1.00 or less. The City also asked for the firm’s injury/illness rate and average lost work rate for the previous threeyear period.
6. Termination/Failure to complete contract, violations, claims, arbitration, and litigation In addition to taking a thorough and careful re-review of the process and application of the criteria as directed, staff also worked with and asked the City Attorney to opine on the evaluation process. The City Attorney verified that the process was in compliance with applicable law and was in keeping with the process that had been detailed in the RFQ.
Staff is recommending the same three firms presented on February 7th, to move forward that to receive the DBE RFP: (listed in alphabetical order)
• Bernards of Fresno, CA/Perkins Eastman
• Blach Construction Company of Monterey, CA/Steinberg Hart • Otto Construction of Monterey, CA/WRNS Studio
As presented on February 7th, staff still believes that the SOQs from these three DBE Teams are the strongest submittals based on the following:
1. The submitted financial statements demonstrated these three teams have the capability and wherewithal needed for the project
2. The architect and contractor on these three teams have significant experience working together on numerous Design/Build projects similar in nature to the City’s Community Center Complex Project.
3. The contractor’s Project Manager and Superintendent on each of these three teams have significant experience working on Design/Build projects.
Included in the direction provided to staff at the February 7th meeting to re-review the SOQ evaluation was to determine if the recommended short-list of DBEs should be increased to include a fourth team. As mentioned above, staff including the city attorney, re-reviewed the evaluation criteria and SOQ scores and staff’s recommended short-list DBE teams is unchanged. The reasons are:
1. There was a significant difference in the overall scoring of the top three DBE teams as compared to the other four DBE teams. Two of the top three shortlisted teams have operated in Monterey County for the last 25 years.
2. Throughout the RFQ process, all materials and communications indicated that the top three DBE teams would be shortlisted to receive the Request for Proposals for the project. Changing the selection process post-SOQ submittal would represent a significant and unwarranted change in the selection process that would disrupt the established solicitation and submission process. The top three contractors would be faced with competing against an unanticipated fourth participant and the added contractor would be marked with the stigma of not having made the initial contractor cut. Additionally, the city has no specific established guidelines as to how the Evaluation Committee would go about bringing back a fourth SOQ. Given the high likelihood of protests from or conflict with participants on either side of the SOQ selection process as a result of a change in the selection process, staff strongly recommends against any proposal to accept a fourth SOQ from a participating contractor.
The Council also discussed the desire to utilize and provide opportunities for local firms, companies, and labor. While staff cannot control which firms provided bids, a significant outreach effort was utilized to get the work out locally beyond the typical process. In addition, all the short-listed DBE teams will be encouraged to utilize and will likely include a significant number of local subcontractors, subconsultants and working force due to practicality and economic sensibility.
If the DBE shortlist is approved, the RFP will be issued to three shortlisted DBE teams which includes the final Design Criteria and will be invited to submit a formal proposal. The RFP process will include paying a $100,000 stipend to each of the two unsuccessful DBE teams. Providing a stipend to DBE teams that are not selected is standard practice on Design/Build projects and the guidelines provided by the League of California Cities. The stipend is paid to the short-listed prequalified proposers who submit a complete proposal fulfilling all the requirements, but do not win the project.
The use of a stipend is typical for the proposal phase of a Design/Build project for the following reasons:
1. Enhances interest in the project from highly qualified design-build teams.
2. Helps defray some of the design costs incurred by the unsuccessful design-build teams
3. Provides an incentive for the design/build teams to expend the appropriate time, money, and resources to produce a very creative and comprehensive design and “best value” for the project.
Another reason and benefit of providing the stipend, which is not readily apparent is that the city will own the design documents prepared by the DBE teams and be able to incorporate aspects of their submitted designs in the final overall project design. In short, the city would own all three designs.
The three Design/Build Teams will invest significant time and effort to investigate and evaluate the project, analyze different approaches to performing the work, assembling a design team, coordinate, meetings with the city and prepare a design, detailed sufficiently so the builder and subs can price their work. Selection of the successful DBE will be based on the DBE’s proposal that provides for the “best value” to the City as defined Sections 22160‐22169 of the State Public Contract Code.
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Constructing a Community Center will provide residents with a facility for a wide variety of public and private functions, recreation programs, increase economic vitality of local businesses and other activities which will enhance the quality of life of Gonzales residents.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes No N/A
Explain: Please see explanation above for the Mission.
City services will be delivered in a cost-effective, respectful, and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes No N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: See above.
ALTERNATIVES
Alternatives to staff’s recommendation include:
1. Reject all of the submitted Statements of Qualifications and direct staff to re-issue the Request for Qualifications. Staff does not recommend this option as there is no guarantee that the city will receive better SOQ’s, or that those who already participated would go through the submission process again. Even if the request for SOQ’s was reissued, there is a good chance that the City would end up with the exact same results after incurring additional costs and delays in the overall project timeline.
2. The City Council could direct staff to not use Design-Build delivery for the Community Center Complex Project and use traditional Design-Bid-Build delivery. This option may be attractive in light of the disadvantages set forth in Alternative 1 above. However, abandoning the DesignBuild process at this stage would in all likelihood result in increased costs and Project disruption and delay.
For the reason stated above, Staff does not recommend either of these alternatives.
BUDGET IMPACT
The current cost estimate for the Community Center Complex is $34,800,000 (base program) plus a stand-alone gymnasium ($8,00,000), which is expected to be funded through various sources including Measure X, Community Development Block Grant monies, State funds, other city funds and private contributions.
If approved, the FY 2021-2022 budget impact short-term cost impact is $200,000 as a result of the stipend for two of the DBE firms. The winning DBE firm would be awarded the contact to construct the Community Center Complex.
CONCLUSION
It is recommended that the City Council Adopt Resolution No. 2022-15, A Resolution of the City Council of the City of Gonzales approving the Shortlist of Prequalified Design-Build Entities for the Community Center Complex Project, and authorize staff to issue the Request for Proposal to the shortlisted DesignBuild Entities after Council approves the Design Criteria.
Attachments:
1. Resolution No. 2022-15