August 19, 2022
Public Works
DATE: August 19, 2022
TO: Mayor Butt and Members of the City Council
FROM:
Dave Aleshire, City Attorney
Joe Leach, Director of Public Works
Subject:
Booker T. Anderson Community Center Fire Restoration
Contract Termination
FINANCIAL IMPACT: Any expenditure of funds to settle any claims arising from this contract termination will be funded from the Risk
Management Budget. Account Strings: 50182316-
400642-23008. The City would reserve the right to file a claim against the Contractor Performance Bond.
PREVIOUS COUNCIL
ACTION:
March 1, 2022
STATEMENT OF THE
ISSUE:
Public Works staff is requesting authorization to
terminate the contract with Angotti & Reilly, Inc. for the Booker T. Anderson Community Center Fire Restoration,
located at 960 S. 47th St., Richmond
RECOMMENDED ACTION:
APPROVE termination of contract with Angotti & Reilly,
Inc., for the Booker T. Anderson Community Center Fire
Restoration, located at 960 S. 47th St., Richmond,
previously approved for an amount not to exceed
$2,583,900 ($2,349,000 low bid plus $234,900
contingency); and AUTHORIZE City staff to negotiate
with the next lowest bidder or re-bid the contract – Public Works Department (Joe Leach 510-620-5478).
AGENDA
REPORT
August 19, 2022
DISCUSSION:
The Booker T. Anderson Community Center suffered extensive fire damage on October 28, 2020, as the result of homeless activity at the Park. This fire was concentrated on the West side of the building affecting the Library, Multi-Use Rooms, and Graphic Arts Room. The facility fire damage was abated including demolition and shoring of all affected materials, including non-salvageable or non-cleanable building materials such as glue lam beams, shear walls, vertical load walls, and removal of all damaged building materials such as drywalls, floor coverings, insulation, windows, electrical, plumbing, etc.
On October 27, 2021, bids for these proposed services were solicited on BidsOnline.
Bidding contractors attended a pre-bid mandatory meeting on-site on Tuesday, November 9, 2021, or Thursday, November 18, 2021, to fully understand the scope of work involved.On December 16, 2021, five bids were received as follows:
1. Lg Engineering $ 1.00 (Bid for trucking services contact)
2. IBS USA Inc. $2,146,392.00
3. Angotti & Reilly, Inc. $2,349,000.00
4. Arntz Builders, Inc. $2,668,981.00
5. Agbayani Construction Corporation $3,450,000.00
LG Engineering’s bid was disqualified for submitting a bid for trucking services only. IBS USA, Inc. failed to fill out the proper bid form which was set forth in Addendum No.1, dated November 18, 2021. Therefore, the next lowest responsible bid was from Angotti & Reilly, Inc. The selected Contractor was required to sign a First Source and Compliance Agreement with the City as part of the contract execution process to ensure the local employment ordinance goal is met.
City Council awarded the contract to Angotti and Reilly, Inc. (“Contractor”) on February 1, 2022. The contract (“Contract”) was executed on May 16, 2022, and the pre- construction meeting was held on May 20, 2022. At this meeting, Contractor verbally asked Mark Albertson, Architect of Record, and Yader A. Bermudez, Public Works, Retired Annuitant if the Builder’s Risk Insurance was required. Mark Albertson confirmed that it was required and advised Contractor to check the Bid Solicitation Specifications and Construction Agreements.
See Attachment 1 - Project Specifications Section 00 60 00 BOND AND INSURANCE FORMS
See Attachment 2 - Executed Construction Agreement Section 1.9.c, Insurance and Bonds Requirements.
On the same day, Yader A Bermudez, delivered to the Contractor the project Notice to Proceed (NTP) to start working on June 1, 2022 (Attachment #3).
August 19, 2022
On May 25, 2022, Contractor submitted RFI#1, again requesting confirmation that the existing City Insurance Policy on the Community Center covered Builder’s Risk for the Contractor for this project. After City staff reviewed and discussed, Mark Albertson provided a written response to RFI#1 on June 22, 2022 (Attachment #4).
On June 23, 2022, Angela Walton, Public Works Administrative Services Project Manager, sent an email to Contractor requesting prompt submission of the missing Builder’s Risk Insurance to get the Contract set up in the City’s MUNIS System (Attachment #5).
On July 11, 2022, the City set up a ZOOM meeting with the Contractor and his attorney to try to find a solution regarding Contractor’s lack of Builder’s Risk Insurance. City Risk Manager, Laura Marquez, clarified to the Contractor and their attorney that the California Joint Powers Risk Management Authority (CJPRMA) does not cover the Contractor’s work; it only covers work done by City’s forces in the maintenance of City facilities. Therefore, the Contractor was required to provide its own Builder’s Risk Insurance. The City, in an effort to get the project going, offered to accept the Contractor’s Liability Insurance subject to the policy listing the City on the additional insured endorsement. To facilitate this accommodation, the City provided a copy of the CJPRMA to the Contractor for their review on July 12, 2022. The Contractor agreed to send updated Workers’ Compensation Insurance to the City. It was the City’s understanding at the end of this meeting that the Contractor and the City had reached an agreement regarding the insurance requirements to proceed with the project construction.
On July 19, 2022, Contractor emailed City staff to request City add Contractor to City’s California Joint Powers Risk Management Authority (CJPRMA) policy. On July 20, 2022, Laura Marquez responded to Contractor denying this request (Exhibit 9). In the response, the City requested that Contractor provide general liability insurance and designate the City of Richmond as an additional insured (as set forth in the contract requirements) or comply with the contract, bid specifications, and City’s direction to provide the Builder’s Risk Policy (which the City previously agreed to waive since the City’s Builder’s Risk Insurance covers the City’s property). See Exhibit 8.
On August 3, 2022, Contractor submitted Contract Change Order for City to pay for Contractor’s Builder’s Risk Insurance in the amount of $8,338 plus temporary fencing and lighting. These items were already covered under their mobilization contract and shown on the construction plans for a grand total of $23,895 (Attachment 6).
On August 11, 2022, the Contractor’s attorney sent a letter to the City citing previous and potential future vandalism as cause for project delays and continue to insist on the City providing Builder’s Risk Insurance or approving the proposed change order for triple the cost of the Builder’s Risk Insurance provided by Woodruff and Sawyer (Attachment 7).
August 19, 2022
City staff has determined that this Contractor has not been responsive to the Contract requirements for Builder’s Risk Insurance, despite the City’s efforts to be accommodating in order to move the project forward. It has been more than 75 calendar days since the NTP was issued and it is evident that the Contractor is not willing to start the work in good faith in accordance with the Contract. Therefore, given the difficulties at the outset to manage Angiotti and Reilly, Inc. to deliver this project in accordance to budget and schedule, City staff recommends City Council authorize termination of the Contract and negotiation with the next lowest bidder or re-bid the Contract.
DOCUMENTS ATTACHED:
Attachment 1 - Project Specifications Insurance Requirements Attachment 2 - Construction Agreement Insurance Requirements Attachment 3 - Notice To Proceed (NTP)
Attachment 4 - RFI#1 with Response
Attachment 5 - Angela Walton’s email requesting the Builder Risk Insurance Attachment 6 - Contractor’s Builder Insurance Change Order Request.
Attachment 7 - Contractor’s attorney letter
Attachment 8 - Laura’s response to Contractor
Attachment 9 - Contractor’s email dated July 19, 2022