May 5, 2026, Item #6
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AGENDA REPORT CityofPoway
May 5, 2026
Honorable Mayor and Members of the City Council
Julie Procopio, Director of Development Services~
Douglas Nguyen, Associate Engineer
(858) 668-4605 or [email protected]
CITY COUNCIL
Award of Contract to Palm Engineering Construction, Inc., for the Annual Sewer Line Repair/Replacement Project, Bid No. 26-012 and Determination the Project is Categorically Exempt from the California Environmental Quality Act This action will award a construction contract for the Annual Sewer Line Repair/Replacement project to Palm Engineering, the lowest responsive and responsible bidder. This project consists of the repair, replacement and rehabilitation of existing sewer facilities on three different public streets which include Saint Andrews Drive, Pomerado Road and Somerset Road.
Recommended Action:
It is recommended the City Council:
1) Award the contract for the Annual Sewer Line Repair/Replacement project to Palm Engineering, in the amount of $783,391 and authorize the City Manager to execute the contract (Attachment A); and
2) Make a determination the project is Categorically Exempt from the California Environmental Quality Act (CEQA).
Discussion:
The project consists of the replacement of existing sewer mains, sewer laterals and point repairs at multiple locations throughout the City. Improvements on St. Andrews Drive include the removal and replacement of approximately 338 linear feet of existing eight-inch vitrified clay pipe (VCP) sewer main, removal and replacement of existing concrete pipe supports and rehabilitation of four existing VCP sewer laterals. The sewer laterals will be rehabilitated using cured-in-place pipe (CIPP) lining methods.
Improvements on Pomerado Road include the removal and replacement of approximately 1 0 linear feet of eight-inch VCP sewer main and one existing VCP sewer lateral. Improvements on Somerset Road include the removal and replacement of approximately 13 linear feet of existing eight-inch high strength plastic truss sewer pipe. Construction will require continuous sewer service to be maintained throughout the duration of the project. The work will involve sewer bypassing, traffic control and 1 of 11
May 5, 2026, Item #6
restoration of surface improvements. These improvements are necessary to address deteriorated pipelines and structural deficiencies. They will improve system performance, reduce maintenance demands and extend the service life of the City's sewer infrastructure. Bids were opened on April 2, 2026. A total of three bids were received for the construction contract, ranging as follows:
Company Total Base Bid
Palm Engineering $783,391
DB Pipeline, Inc. $1,252,000
SRK Engineering Inc. $1,568,622
The low bid of $783,391, submitted by Palm Engineering Construction Inc., is an acceptable bid that is responsive to, and meets the requirements of, the bid specifications. The contract time for this project is 115 working days.
Environmental Review:
The proposed sewer repair and replacement project is Statutorily Exempt from the California Environmental Quality Act (CEQA), pursuant to Section 15282(K) of the CEQA Guidelines, in that the project involves the installation of new pipeline and demolition of an existing pipeline, which is less than one mile in length.
Fiscal Impact:
Funds totaling $1,438,302 are available in the Annual Sewer Line Repair & Replace (SW001) project funded by the Sewer Enterprise Fund 5200 for the award of this contract. The City proactively planned for this project as part of the development process for the FY 2025-26 budget.
Public Notification:
Prior to construction, staff will notify the residents near the project locations about the upcoming construction work.
Attachments:
A. Construction Contract
Tracy Stevens
Assistant City Manager
2 of 11
Reviewed By:
Alan Fenstermacher
City Attorney
Chris Hazeltine
City Manager
May 5, 2026, Item #6
SECTION 8
CONSTRUCTION CONTRACT
CITY OF POWAY
ANNUAL SEWER LINE REPAIR/REPLACEMENT PROJECT
(ST. ANDREWS DRIVE, POMERADO ROAD, & SOMERSET ROAD)
This Contract made and entered into this 6th day of May 2026, by and between City of Poway, a municipal corporation of the State of California, hereinafter referred to as "City" and Palm Engineering Construction Company, Inc. hereinafter referred to as "Contractor." The City and the Contractor, for the consideration hereinafter named, mutually agree as follows:
1. • The complete Contract includes all of the Contract Documents, which are incorporated herein by this reference, and include:
a. This Contract
b. Contract Addenda
c. Contract Change Orders
d. Instructions to Bidders, Proposal Requirements and Conditions e. Contract Specifications
f. Contract Plans
g. General Condition
h. Special Conditions
i. Standard Specification for Public Works, most current edition
2. The Contract Documents are complementary, and that which is required by one shall be as binding as if required by all.
3. Contractor shall provide and furnish all labor, materials, necessary tools, expendable equipment, and all utility and transportation services required for the following work of improvement: The Annual Sewer Line Repair/Replacement project will include improvements on existing sewer facilities on three different public streets: St. Andrews Drive, Pomerado Road, and Somerset Road in the City of Poway, CA Improvements on St. Andrews Drive involve the removal and replacement of approximately 338 feet of existing 8-inch VCP sewer line, existing concrete pipe supports, and four existing VCP sewer laterals. The four VCP sewer laterals shall be GIPP lined. Improvements on Pomerado Road will require the removal and replacement of approximately 10 feet of 8-inch VCP and one VCP lateral. Improvements on Somerset Road will involve the removal and replacement 1 3 of 11 ATTACHMENT A
May 5, 2026, Item #6
of approximately 13 feet of existing 8-inch ABS Truss sewer pipe. There will be no interruption in sewer service allowed for this work to take place.
4. Contractor agrees to perform all the said work and furnish all the said materials at their own cost and expense that are necessary to construct and complete in strict conformance with Contract Documents and to the satisfaction of the City Engineer, the work hereinafter set forth in accordance with the Contract adopted by the City Council.
5. City agrees to pay and Contractor agrees to accept in full payment for performance of this work of improvement as described, the stipulated sum of $783,391.00 the "Contract Price."
City agrees to make progress payments and final payment in accordance with the method set forth in the Special Provisions.
6. Contractor agrees to commence construction of the work provided for herein within Fifteen (15) Calendar Days after the date specified in the Notice to Proceed, and to continue diligently in strict conformance with Contract Documents and without interruption, and to complete the construction thereof within 115 Working Days after the date specified in the Notice to Proceed.
7. Time is of the essence of this Contract, and it is agreed that it would be impracticable or extremely difficult to ascertain the extent of actual loss or damage which the City will sustain by reason of any delay in the performance of this Contract. It is, therefore, agreed that Contractor will pay as liquidated damages to the City the following sum of $500.00 per Calendar Day, for each and every Calendar Days delay in finishing the Work in excess of the number of Working Days prescribed above. If liquidated damages are not paid, as assessed by the City, the City may deduct the amount thereof from any money due or that may become due the Contractor under this Contract in addition to any other remedy available to City.
By executing this Contract, Contractor agrees that the amount of liquidated damages is reasonable and shall not constitute a penalty.
8. In accordance with State of California Senate Bill No. 854, Contractor will maintain and will require all subcontractors to maintain valid and current Department of Industrial Relations (DIR) Public Works Contractor registration during the term of this project. Contractor shall notify the City in writing immediately, and in no case more than twenty-four (24) hours, after receiving any information that Contractor's or any of its Subcontractor's DIR registration status has been suspended, revoked, expired, or otherwise changed.
9. Contractor will pay, and will require all subcontractors to pay, all employees on said Contract a salary or wage at least equal to the prevailing salary or wage established for such work as set forth in the wage determinations and wage standards applicable to this work, a copy of which is on file in the office of the City Clerk of the City of Poway. Federal prevailing wage rates apply for federally funded projects.
Travel and subsistence pay shall be paid in accordance with Labor Code§ 1773.1. 2 4 of 11
May 5, 2026, Item #6
10. Contractor shall be subject to the penalties in accordance with Labor Code of § 1775 for each worker paid (either by Contractor or by any subcontractors under Contractor) less than the prevailing rate described above on the work provided for in this Contract.
11. Contractor and subcontractors shall comply with Labor Code § 1810 and § 1811 which stipulates that eight hours labor constitutes a legal day's work, and § 1812 which stipulates that the Contractor and subcontractors shall keep an accurate record showing the name of and actual hours worked each calendar day and each calendar week by each worker employed by them in connection with the work performed under the terms of the Contract. Failure to comply with these sections of the Labor Code will subject the Contractor to penalty and forfeiture provisions of the Labor Code § 1813.
12. Contractor will comply with the provisions of Labor Code§ 1777.5 pertaining to the employment of apprentices to the extent applicable to this Contract.
13. Contractor, by executing this Contract, hereby certifies:
"I am aware of and will comply with the Labor Code § 3700 by securing payment for and maintaining in full force and effect for the duration of the contract, complete Workers' Compensation Insurance, and shall furnish a Certificate of Insurance to the City before execution of the Contract. The City, its officers, or employees, will not be responsible for any claims in law or equity occasioned by failure of the Contractor to comply with this paragraph."
Contractor further agrees to require all subcontractors to carry Workers' Compensation Insurance as required by the Labor Code of the State of California.
14. Contractor shall, concurrent with the execution of this Contract, furnish two bonds approved by the City, one in the amount of One Hundred Percent (100%) of the Contract Price, to guarantee the faithful performance of the work ("Performance Bond"), and one in the amount of One Hundred Percent (100%) of the Contract Price to guarantee payment of all claims for labor and materials furnished ("Payment Bond"). This Contract shall not become effective until such bonds are supplied to and approved by the City.
15. a. Contractor shall procure and maintain at its own expense, until completion of 5 of 11
performance, commercial general liability insurance of not less than One Million Dollars ($1,000,000) combined single limit per occurrence, and Two Million Dollars ($2,000,000) in the aggregate, for bodily injury, personal injury, death, loss or damage resulting from the wrongful or negligent acts by the Contractor or its officers, employees, servants, volunteers and agents and independent contractors.
Contractor shall provide insurance on an occurrence, not claims-made basis.
Contractor acknowledges and agrees that, for purposes of clarification with the intention of avoiding gaps in coverage with any umbrella or excess insurance, personal and advertising injury coverage shall be triggered by an "offense" while 3 May 5, 2026, Item #6
6 of
11 bodily
injury
and
property
damage
coverage
shall
be
triggered
by
an
"occurrence"
during
the
policy
period.
b.
Contractor
shall
further
procure
and
maintain
at
its
own
expense,
until
completion
of
performance,
commercial
vehicle
liability
insurance
covering
personal
injury
and
property
damage,
of
not
less
than
One
Million
Dollars
($1,000,000)
combined
single
limit
per
occurrence,
and
Two
Million
Dollars
($2,000,000)
in
the
aggregate,
covering
any
vehicle
utilized
by
Contractor
or
its
officers,
employees,
servants,
volunteers
and
agents
and
independent
contractors
in
performing
the
services
required
by
this
Agreement.
c.
Contractor
shall
further
procure
and
maintain
at
its
expense,
until
completion
of
performance,
workers'
compensation
insurance
providing
coverage
as
required
by
the
California
State
Workers'
Compensation
Law.
If
any
class
of
employees
employed
by
the
Contractor
pursuant
to
this
Agreement
is
not
protected
by
the
California
State
Workers'
Compensation
Law,
Contractor
shall
provide
adequate
insurance
for
the
protection
of
such
employees
to
the
satisfaction
of
the
City.
This
provision
shall
not
apply
if Contractor
has
no
employees
performing
work
under
this
Agreement.
Contractor
agrees
to
waive
its
statutory
immunity
under
any
worker's
compensation
or
similar
statute,
as
respecting
the
City,
and
to
require
any
and
all
subcontractors
and
any
other
person
or
entity
involved
with
the
Project
to
do
the
same. Worker's
Compensation
Insurance:
o
Contractor
has
no
employees
and
is
exempt
from
workers'
compensation
requirements.
o
Contractor
carries
workers'
compensation
insurance
for
all
employees
.
d.
All
policies
required
by
this
section
shall
be
secured
from
insurers
authorized
to
do
business
in
the
State
of
California
with
an
"A"
policyholder's
rating
or
better
and
a
financial
rating
of
at
least
Class
VII,
in
accordance
with
the
current
Best's
Ratings. e.
Contractor
agrees
to
require
that
all
parties,
including
but
not
limited
to
subcontractors,
architects,
engineers
or
others
with
whom
Contractor
enters
into
contracts
or
whom
Contractor
hires
or retains
pursuant
to
or
in
any
way
related
to
the
performance
of
this
Agreement,
provide
the
insurance
coverage
required
herein,
at
minimum,
and,
except
for
worker's
compensation
coverage,
name
as
additional
insureds
the
parties
to
this
Agreement.
Contractor
agrees
to
monitor
and
review all
such
coverage
and
assumes
all
responsibility
for
ensuring
that
such
coverage
is
provided
in
conformity
with
the
requirements
of
this
Section.
f.
In
the
event
this
Agreement
is
terminated
for
any
reason
prior
to
the
completion
of
all
obligations
and
requirements
of
this
Agreement,
Contractor
agrees
to
maintain
all
coverages
required
herein
until
the
City
provides
written
authorization
to
terminate
the
coverages
following
the
City's
review
and
determination
that
all
liability
posed
under
this
Agreement
as
to
the
party
providing
insurance
has
been
eliminated.
4 May 5, 2026, Item #6
g. Contractor agrees and acknowledges that if it fails to obtain all of the insurance required in this Agreement in accordance with the requirements herein, or to obtain and ensure that the coverage required herein is maintained by any subcontractors or others involved in any way with the Project, Contractor shall be responsible for any losses, claims, suits, damages, defense obligations, or liability of any kind or nature attributable to the City, and/or its officers, employees, servants, volunteers, agents and independent contractors, that result from such failure by Contractor.
16. a. Contractor shall provide certificates of insurance with original endorsements to the City as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the City on or before commencement of performance of this Agreement. Current certification of insurance shall be kept on file with the City at all times until completion of performance and acceptance by the City.
b. Notwithstanding any inconsistent statement in any required insurance policies or any subsequent endorsements attached thereto, the commercial general liability and commercial vehicle liability policies shall bear endorsements whereby it is provided that the City, and its officers, employees, servants, volunteers, agents and independent contractors are named as additional insureds. Additional insureds shall be entitled to the full benefit of all insurance policies in the same manner and to the same extent as any other insureds and there shall be no limitation to the benefits conferred upon them other than policy limits to coverages. c. Contractor shall require the carriers of all required insurance policies to waive all rights of subrogation against the City, and its officers, employees, servants, volunteers, agents and independent contractors.
d. Each policy required herein must be endorsed to provide that the policy shall not be cancelled in coverage or limits (except by paid claims) unless the insurer has provided the City with 30 days prior written notice of cancellation. Contractor agrees to provide the City with 30 days written notice prior to any non-renewal or reduction in coverage or limits.
e. All insurance policies required to be provided by Contractor or any other party must be endorsed to provide that the policies shall apply on a primary and noncontributing basis in relation to any insurance or self-insurance, primary or excess, maintained or available to the City, and its officers, employees, servants, volunteers, agents and independent contractors.
17. a. Contractor shall defend, indemnify and hold harmless the City, its officers, 7 of 11
officials, agents, employees and volunteers from and against any and all claims, demands, actions, losses, damage, injuries, and liability, direct or indirect (including any and all costs and expenses in connection therewith) to the extent actually caused by the negligence of Contractor, Contractor's employees, subcontractors or independent contractors except for any such claim arising out of the negligence or willful misconduct of the City, or its officers, agents, employees or volunteers. 5 May 5, 2026, Item #6
b. The City does not, and shall not, waive any rights that it may have against Contractor under this Section because of the acceptance by the City, or the deposit with the City, of any insurance policy or certificate required pursuant to this Agreement. The hold harmless, indemnification and duty to defend provisions of this Section shall apply regardless of whether or not said insurance policies are determined to be applicable to the claim, demand, action, damage, liability, loss, cost or expense described herein.
18. Any amendments to any of the Contract Documents, including but not limited to Contract Change Orders, must be in writing executed by the Contractor and the City. Any time an approval, time extension, or consent of the City is required under the Contract Documents, such approval, extension, or consent must be in writing in order to be effective.
19. The Contract Documents contain all of the agreements and understandings of the parties and all previous understandings, negotiations, and contracts are integrated into and superseded by this Contract.
20. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Contract shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Contract which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder.
21. The persons executing this Contract on behalf of the parties hereto warrant that they are duly authorized to execute this Contract on behalf of said parties and that, by so executing this Contract, the parties hereto are formally bound to the provisions of this Contract.
22. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, and assigns.
23. In performing its obligations and duties under this Contract, each party shall comply with all applicable local, state, and federal laws, regulations, rules, standards and ordinances.
24. This Contract may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instrument.
25. After completion of the work contemplated by this Contract, Contractor shall file with the City Manager an affidavit stating that all workers and persons employed, all firms supplying materials, and all subcontractors upon the project have been paid in full, and that there are no claims outstanding against the project for either labor or materials, except certain items, if any, to be set forth in an affidavit covering disputed claims or items in connection with a Stop Notice that has been filed under the provision of the laws of the State of California.
6 8 of 11
May 5, 2026, Item #6
26. All
work
shall
be
subject
to
inspection
and
testing
by
City
and
its
authorized
representatives
during
manufacture
and
construction
and
all
other
times
and
places,
including,
without
limitation,
the
plans
of
Contractor
and
any
of
its
suppliers.
Contractor
shall
provide
all
reasonable
facilities
and
assistance
for
the
safety
and
convenience
of
inspectors.
All
inspections
and
tests
shall
be
performed
in
such
manner
as
to
not
unduly
delay
the
work.
The
Work
shall
be
subject
to
final
inspection
and
acceptance
notwithstanding
any
payments
or
other
prior
inspections.
Such
final
inspection
shall
be
made
within
a reasonable
time
after
completion
of
the
work.
27. Whenever
Contractor
has
knowledge
that
any
actual
or
potential
labor
dispute
is
delaying
or
threatens
to
delay
the
timely
performance
of
the
Contract,
Contractor
shall
immediately
give
notice
thereof,
including
all
relevant
information
with
respect
thereto,
to
City.
28. Contractor
agrees
to
contact
the
appropriate
regional
notification
center
in
accordance
with
Government
Code
Section
4216
.2.
29. Contractor
shall
submit
its
detailed
plan
for
worker
protection
during
the
excavation
of
trenches
required
by
the
scope
of
the
work
in
accordance
with
Labor
Code
Section
6705.
30. a.
Contractor
shall,
without
disturbing
the
condition,
notify
City,
in
writing,
as
9 of
11 soon
as
Contractor,
or
any
of
Contractor's
subcontractors,
agents,
or
employees
have
knowledge
and
reporting
is
possible,
of
the
discovery
of
any
of
the
following
conditions:
i.
The
presence
of
any
material
that
Contractor
believes
is
hazardous
waste,
as
defined
in
Section
25117
of
the
Health
and
Safety
Code;
ii.
Subsurface
or
latent
physical
conditions
at
the
site
differing
from
those
indicated
in
the
specifications;
or
iii.
Unknown
physical
conditions
at
the
site
of
any
unusual
nature,
different
materially
for
those
ordinarily
encountered
and
generally
recognized
as
inherent
in
work
of
the
character
provided
for
in
this
Contract.
b.
Pending
a determination
by
City
of
appropriate
action
to
be
taken,
Contractor
shall
provide
security
measures
(e.g.,
fences)
adequate
to
prevent
the
hazardous
waste
or
physical
conditions
from
causing
bodily
injury
to
any
person.
c.
City
shall
promptly
investigate
the
reported
conditions.
If City,
through
and
in
the
exercise
of
its
sole
discretion,
determines
that
the
conditions
do
materially
differ
or
do
involve
hazardous
waste,
and
will
cause
a
decrease
or
increase
in
Contractor's
cost
of,
or
time
required
for,
performance
of
any
part
of
the
work,
then
City
shall
issue
a
change
order.
d.
In
the
event
of
a
dispute
between
City
and
Contractor
as
to
whether
the
conditions
materially
differ,
or
involve
hazardous
waste,
or
cause
a
decrease
or
7 May 5, 2026, Item #6
increase in Contractor's cost of, or time required for, performance of any part of the work, Contractor shall not be excused from any scheduled completion date, and shall proceed with all work to be performed under the contract. Contractor shall retain any and all rights that pertain to the resolution of disputes and protests between the parties.
31. This Contract is to be governed by the laws of the State of California.
32. All work shall be guaranteed for a period of one (1) year from the date of acceptance by the City. Contractor shall promptly make all needed repairs arising out of defective materials, workmanship, and equipment.
City is hereby authorized to make such repairs if within ten (10) days after giving written notice to Contractor, or its agent, Contractor should fail to make or undertake with due diligence the aforesaid repairs; provided, however, that in case of an emergency, where, in the opinion of City, delay would cause serious loss or damage, repairs may be made without notice being sent to Contractor, and Contractor shall pay the costs thereof. (Remainder of page intentionally left blank)
8 1 O of 11
May 5, 2026, Item #6
IN WITNESS WHEREOF, the said Contractor and the City Manager, City Clerk and City Attorney have caused the names of said parties to be affixed hereto, the day and year first above written.
Contractor's Name:
Palm Engineering Construction Company, Inc. DBA Palm Engineering Print Name of Construction Company
By:
Signature
Rasoul Shahbazi
Print Name
Contractor information:
Address for Notices and Payments
7330 Opportunity Rd Ste A & 81
San Diego, CA 92111
Telephone Number: 619-291-1495
Email: [email protected]
ATTEST:
Carrie Gallagher, CMC, City Clerk
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Alan Fenstermacher, City Attorney
11 of 11
CITY OF POWAY
a Municipal Corporation
Chris Hazeltine, City Manager
9