Placentia Cit Council
AGENDA REPORT
TO: CITY COUNCIL
VIA: CITY ADMINISTRATOR
FROM: DEPUTY CITY ADMINISTRATOR / PUBLIC SERVICES & INFRASTRUCTURE DATE: MARCH 7, 2023
SUBJECT: REJECT ALL BIDS RECEIVED FOR PHASE 11 CONSTRUCTION OF THE PLACENTIA PUBLIC SAFETY CENTER PROJECT, PROJECT NO. 5213, AND
AUTHORIZE RE -BIDDING OF PROJECT
FISCAL
IMPACT: NONE
SUMMARY:
The City has broken ground on the Placentia Public Safety Center which is being delivered in two separate project phases. The project was phased in order to advance construction of the new police evidence and storage space ahead of the main building so that the City could complete that portion of the project before the lease expires on its rented facility. In addition to breaking ground on Phase I of the project, the City has also approved contracts for the new shooting range equipment as well as the prefabricated engineered Butler Building that will serve as the new evidence and property storage facility.
The current runaway inflationary environment has dramatically increased construction costs at a pace not seen in two generations. Contractors, vendors and specialty subcontractors are raising prices faster than most entities can match and the high demand for construction services has not softened. The City solicited competitive bids from pre -qualified contractors to construct Phase II of this project. A total of three (3) bids were received and the low bid submitted by P.H. Hagopian Contractor, Inc., far exceeds the estimate previously prepared for this project. Given the significant project cost increase, Staff recommends that the City Council reject all bids received for Phase II of this project and authorize the City to solicit new bids.
Ahead of soliciting new bids, Staff will develop an updated pre -qualification package to attract the interest of a larger pool of contractors to bid on this project. Staff received notification on February 21, 2023, that the low bidder for Phase 2 of the project is planning to close its business as of March 10, 2023. Staff will work with the construction management team to solicit separate bids to complete the tenant improvements and final utility connections for the Butler Building so that facility can operate as a stand-alone building in time for the transition from the City's leased facility. By separating the tenant improvement and utility work from the Phase II construction package and widening the pool of potential bidders the City can ensure that every effort has been made to test the market place to maximize value and potentially reduce the project cost with more
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March 7, 2023
City Council Agenda
March 7, 2023
competitive bids. In addition, Staff will prepare an updated project funding plan to cover the project cost increases with options for the City Council to consider. The updated project funding plan will be presented to the City Council along with a recommended construction contract based on new bids and bond funding package in April for its consideration.
RECOMMENDATION:
It is recommended that the City Council take the following actions.
1. Reject all bids received for Phase II construction of the Placentia Public Safety Center and authorize return of the bid bonds; and
2. Authorize staff to solicit new bids for Phase II construction of the Placentia Public Safety Center.
STRATEGIC PLAN STATEMENT:
This item conforms to Strategic Plan Goal 5, Implement Public Infrastructure to Meet Community Needs, and Objective 5.4, Construct the Placentia Public Safety Center.
DISCUSSION:
On March 1, 2022, the City Council selected a preferred project alternative for the Placentia Public Safety Center and directed Staff to finalize the construction drawings and bid documents to construct this facility. The new 18,000+ square foot facility will primarily house the Police Department's evidence and property storage operations and shooting range as well as a new public safety communications center and emergency operations and training center. The City currently leases a Tight industrial/commercial building for property and evidence storage.
The new facility will consist of a manufactured steel Butler Building that will be used for property and evidence storage and the main building that includes the shooting range which will be constructed with CMU block. Since the City's lease for its existing property and evidence building is set to expire in December 2023, the project will need to be phased to allow the construction of the Butler Building to proceed first so that it can be completed prior to the expiration of the City's current lease. Phase I construction is already underway and entails demolition, grading, subsurface utility work, and the footings and slab for the Butler Building. Phase II construction will entail the construction of the main building as well as the tenant improvements for the Butler Building and final utility connections under a separate construction contract. This project delivery methodology will allow the City to construct the building foundation and footings and allow the Butler Building to be erected as a stand-alone effort. This will expedite the completion and occupancy of the newly constructed evidence and property storage building before the City's current lease expires. Construction of the main building will occur concurrently and continue into mid -2024. Staff anticipates beginning operations in that portion of the facility late in June 2024.
City Council Agenda
March 7, 2023
Given the complexity of constructing an essential public safety facility, the project team issued a public prequalification questionnaire to the contracting community ahead of soliciting formal bids for construction to ensure that only qualified contractors with experience in building similar facilities would submit a bid for this project. Only three (3) contractors submitted qualification packages and were prequalified for Phase II construction and were subsequently asked to submit competitive bids.
On February 1, 2023, the City received three (3) bids from the prequalified contractors to construct Phase II. The following table provides the total bid amounts received from each contractor:
Contractor Bid Amount
P.H. Hagopian Contractor, Inc. $11,653,000
Bernards Bros. Inc. $11,693,000
Swinerton $13,172,033
The architect's estimate for Phase II amounts to $7,960,121. Current inflationary pressure and continued strong demand for construction has continued to push costs upwards but given the wide disparity between the architect's estimate and the low bid received, Staff recommends that the City Council reject all bids and authorize soliciting new bids. In addition, Staff was notified on February 21, 2023, that Hagopian will be closing their business as of March 10, 2023.
Accordingly, Staff will develop and issue a revised prequalification package with the goal of attracting a larger pool of potential contractors to bid on this project in an effort to maximize value and potentially reduce the cost for this project phase.
In addition, Staff will work with the project team to solicit separate bids to complete the tenant improvements and final utility connections for the Butler Building so that facility can operate as a stand-alone building, and property storage operations can begin in time for the transition from the City's leased facility. By separating the tenant improvement and utility work from the Phase II construction package and widening the pool of potential bidders the City can be assured that every effort has been made to test the market place, maximize value and potentially reduce the project cost with more competitive bidding. Staff will prepare a new project funding package for the City Council's consideration at the same time it presents a recommended Phase II construction contract and bond package in April 2023.
FISCAL IMPACT:
There is no direct fiscal impact associated with the recommended actions.
City Council Agenda
March 7, 2023
Prepared by: Reviewed and approved:
AUSetka, Stiat,i
Masoud Sepahi, P.E.
City Engineer
Reviewed and approved:
Damien R. Arrula
City Administrator
Luis Estevez
Deputy City Administrator