Declaration of Non-Responsible Bidder
– V. Lopez Jr. & Sons, Inc.
Agenda Item 11.A
Benjamin A. Fine, P.E.
Director of Public Works/City Engineer
March 7, 2023
Five Cities Lift Station and Lift Station
Maintenance Project
•Replacement of the Five Cities Lift Station across from Pismo North Beach Campground
•2,000 feet of sewer forcemain from the lift station to Addie Street
•Maintenance on six (6) other City sewer lift stations
•Various other repairs to the City sewer collection system
Issue #1: V. Lopez beginning work without
proper planning
•V. Lopez often started work without the necessary
•Materials
•Equipment
•Tools required to complete the work
•This lack of planning often required City intervention •Help complete the work
•Protect public health and safety
•The City lost use of facilities while waiting for work to be completed •Extended the schedule unnecessarily
•V. Lopez could not complete the project on schedule
•Prevented the City from taking beneficial use of the facilities •Resulted in increased costs to the City (project management and inspection fees)
Issue #1: V. Lopez beginning work without
proper planning
•Excavated – Sept. 25, 2018
•Parts for repair not ordered
•Area closed for 14 weeks
•Filled – Jan. 2, 2019
•Re -excavated March 2019
•Park rents $25/hour
•Average income $300/month
•Approximate lost rental $1,800
Issue #1: V. Lopez beginning work without
proper planning
•Plan details 18-in square sump in the bottom of the concrete vault •The plans do not specify the means or methods
•Normal process is to submit a Request for Clarification (RFC) prior to initiating the work if there is confusion •On March 19, 2019, V. Lopez drilled a round hole in the bottom of the sump •Then asked for a detail to allow for a functional waterproof installation. •Additional time and costs to the City
•Proper planning would have identified the need for this sump and incorporated it into the precast vault
Issue #1: improper planning
•Late May 2019, V. Lopez installed bypass pump system at Sunset Palisades Lift Station •Bypass system leaked
•V. Lopez had no contingency plan
•City staff had to:
•Assist V. Lopez with pumping the wet well down
•Monitor the system
•Provide guidance to get the bypass system functioning
•Impacts to project
•It took several days longer to coat the wet well than planned •Required the City to keep a presence on the site in order to respond to issues •Impacts to staff
•Regular duties
•Impact to other projects
•Backlog
Issue #1: V. Lopez beginning work without proper
planning
15 Issue #2: Lack of understanding of municipal
sewage pump station practice and materials
•Sept. 2018 V. Lopez interpreted plans to replace only one set of the existing plug valves
•“the picture” suggested that there was only one set of plug valves
•Notes on the plans clearly show two for a total of four plug valves.
•Municipal lift stations almost always include two pumps •Provide redundancy in case of failure
•To keep the project moving, V. Lopez was compensated
for the cost of replacing the other two plug valves
Issue #2: Lack of understanding of municipal
sewage pump station practice and materials
17 Lopez misinterpreted there to be one pump in lift station despite mandatory site visit, description of the lift station and municipal pump station conventions - Spyglass Lift Station
Issue #2: Lack of understanding of municipal
sewage pump station practice and materials
•The technical specifications for the Five Cities Lift Station project addresses general pump station controls operations. •Two paragraphs appeared to be in conflict regarding how the floats are to operate if the PLC (programmable logic controller) goes down •The PLC is intended to operate the pumps based on input from the submersible level sensing transducer •Backup operation is provided by mechanical float switches. •Rather than submitting an RFI or RFC, V. Lopez, its subcontractors, and suppliers moved forward with fabrication and installation of the control panel based on a loose interpretation of one section of the specifications, without consideration of other paragraphs in the same section.
Issue #2: Lack of understanding of municipal
sewage pump station practice and materials
•Their interpretation - that there would be no independent float back up - is an unconventional way of controlling the pumps for a critical asset like a sewage lift station. •V. Lopez’s abnormal assumption and failure to submit an RFC resulted in:
•Additional delays and inefficiencies
•Additional project management and inspection costs
•April 20, 2020 – change order for $50,214.75 and 47 working days to:
• Modify the incorrect installation that was completed
•Complete the configuration in accordance with the project specifications and industry standard practices.
Issue #2: Lack of understanding of municipal
sewage pump station practice and materials
•V. Lopez interpreted the electrical portion of the project plans and specifications to call for a new 225-amp residential electrical panel to replace the existing 200-amp electrical panel at the Five Cities Lift Station •PG&E handout package for the service relocation called for a 201–400 amp commercial service •Plans and specifications placed all responsibility on the Contractor for:
•The electrical service relocation
•Communicating/confirming PG&E requirements for the service relocation •July 22, 2019 – change order for costs ($2,283) and 20 working days •Maintain progress on the project since the electrical work was on the critical path and V. Lopez was refusing to work •Resulted in additional project management and inspection fees to the City
Issue #3: V. Lopez demonstrated a lack of
understanding of Public Works process
•Failure to request compensatory days when
submitting change order requests
•Submitted a claim for extra working days
after change orders had been finalized
•Failed to accelerate work effort to recover
the project schedule
Issue #3: V. Lopez demonstrated a lack of
understanding of Public Works process
•Multiple times throughout the project, V.
Lopez provided change order proposals
•with a proposed cost increase
• no request for additional working days
•Staff informed V. Lopez multiple times that
its change order proposal should include
•proposed cost and additional working
days to complete the additional work
Issue #3: V. Lopez demonstrated a lack of
understanding of Public Works process
•The change order form includes the following
disclaimer:
•“The amount and time provided in this contract
change order are a full and final accord and
satisfaction of all costs and time directly and
indirectly related and all other claims related
hereto are hereby waived. The Contractor has
reviewed the plans and specifications related to
this change order and all changes thereto are
accounted for …”
Claim Letter
•January 7, 2020 – V. Lopez submitted a letter
seeking 120 working days
•Based on needing additional days for each executed
change order
•Made claims that limiting sections of the Contract
Documents did not apply because its delay claim
“declares void any arguably exculpatory contract
clauses…”
•The City Attorney responded to this claim, although
V. Lopez has insisted on this and since submitting
the letter, V. Lopez refused to sign working day
statements or contract change orders with the stated
contract days.
Issue #3: V. Lopez demonstrated a lack of
understanding of Public Works process
•May/June 2019 Staff had concerns of timeline
•June 29, 2019 staff memorialized these concerns in a letter to V.
Lopez
Schedule Challenges
•The project experienced significant delays resulting in:
•The City extending the Contract time 159 days past
the 300-day contract time
• 459 days total
•153% of the original contract time
•V. Lopez provided 2-week look-ahead schedules at each
progress meeting
•But was inconsistent with updating the overall project schedule
•Went several months between updates
Schedule Challenges
•V. Lopez built the schedule linearly
•Creating a single-track critical path
•When it became apparent V. Lopez was not going
to complete the project on-time
•No effort was made to perform multiple tasks
•Or otherwise recover the project schedule
•This resulted in the City assessing V. Lopez 69 days
of liquidated damages for a total of $69,000
Fiscal Loss
The total approximate financial loss to the City as a direct result of V. Lopez is $323,437.75 comprised of the following:
Construction Management Amendment #1 $69,900.00
Construction Management Amendment #2 $49,000.00
Construction Management Amendment #3 $69,645.00
Additional Engineering Services Amendment #7 $15,395.00 CCO #21 - additional costs $2,283.00CCO #26 - additional costs $50,214.75 Subtotal (Direct Costs) $256,437.75
CCO #21 - 20 working days @ $1,000/day $20,000.00
CCO #26 - 47 working days @ $1,000/day $47,000.00
Total loss $323,437.75
34 Fiscal Loss
Awarded Contract $2,901,486.00
Total Fiscal Loss $323,437.75
Project Total $3,224,923.75
Second Lowest Bid $3,187,808.00
Amount over second low bid $37,115.75
35 Conclusion and Recommendation
•Financial loss of $323,437.75
•(does not include City Staff time or
equipment costs)
•City Staff time spent:
•Negatively impacted other City projects
•Prevented staff from completing normal
duties
•Increased backlog
Conclusion and Recommendation
•Staff recommends adopting Resolution
declaring V. Lopez Jr. & Sons, Inc. as a
non-responsible bidder, thereby
disqualifying them from performing
future work for the City of Pismo Beach
for a period of five years
Questions