PUBLIC WORKS DEPARTMENT
City of
Richmo
Water Resource Recovery Division
April 23, 2021
Steven Suskind, PE - Capital Project Manager
Chandrasekar Venkatraman (CV), P.E., PMP, CFE - Director of Capital Program Management
VEOLIA NORTH AMERICA
601 Canal Boulevard, Richmond, CA 94804
[email protected]
[email protected]
Re: Proposal Selection - Sludge Thickener Project
Dear Mr. Suskind & Mr. Venkatraman:
This letter serves to notify you that the City of Richmond (the "City") will select Myers & Sons Construction ("Myers") to provide design and construction services for the Sludge Thickener Project (the "Project"). Although the City has not received Veolia's scoring sheets related to the interviews and proposals for this Project, pursuant to its agreement with Veolia, the City retains the ultimate authority to select the contractor.
Based on the two most heavily weighted components of the scoring evaluation system (proposed by Veolia) - (1) exceptions to the Design-Build contract and (2) Project cost — Myers' submitted the superior proposal. The City anticipates that Veolia's evaluations would support this finding, as any advantages of Overaa's proposal are outweighed by differences in price and the number of exceptions to the Design-Build contract between the proposals.
1. Myers' proposal accepts the Design-Build Contract with almost no exceptions.
Per the scoring method for evaluating each proposal, "acceptance of Design-Build Contract with no exceptions" is the single most heavily weighted factor aside from costs. Myers' only exception is that the performance of the new sludge thickening facility could not be guaranteed due to the lack of data related to the sludge characteristics, as the sludge will change in quantity and type as the aeration basin conversion project occurs. The City views this exception as reasonable and unlikely to impact the Project.
On the other hand, Overaa's proposal contained several significant exceptions. First, Overaa objected to contract language related to delays and the parties' responsibilities for such delays. While the contract mirrors standards found in the Public Contract Code, Overaa requests broader circumstances for when the City and Veolia may be liable for 450 Civic Center Plaza, Richmond, CA 94804-1630
Telephone: (510) 620-6594 Fax: (510) 307-8195 www.ci.richmond.ca.us Suskin/Venkatraman
Veolia
Sludge Thickener Award Approach
April 23, 2021
delays. Overaa also seeks to broaden the definition of "uncontrollable circumstances" and to allow for the reservation of issues related to change orders, with a determination of the amount owed occurring later, after the changed work has been done. Lastly, the language in Overaa's proposal indicates that they have not yet reviewed the construction-phase specific contract, meaning that additional exceptions may occur during Phase Il negotiations.
Based on the factors described above, Myers clearly outperforms Overaa with respect to this evaluation category. Being one of the more heavily weighted factors in the overall scoring process means that the differences here are more significant than other criteria which are less distinguishable based on the proposals.
2. Myers' significantly outperforms Overaa with respect to cost.
Cost plays an important role under the parameters of the scoring evaluation, accounting for almost 30% of the total points possible. For design service fees under Phase I of the Project, Overaa's total fee is approximately 76% higher than Myers, for a total difference of $341,413. Importantly, unlike the preliminary estimates under Phase II, the Phase I design fees contemplate generally comparable design scopes, for which one would expect fees to be relatively similar. However, the difference between each proposals' Phase I fees is significant and unexpected
That said, because the Phase II estimates are considered preliminary and not contractually binding, a reasonable variance between proposals is expected. Myers' total estimate for Phase II is generally consistent with the City's published project budget and contains a very detailed itemization of the estimated costs. In contrast, Overaa's total estimate is much higher than the Project budget and its scope of work includes additional items not requested by the City. Thus, as the starting point for any negotiations, assuming Overaa's proposal was significantly value-engineered, the costs between the two proposals are not comparable.
3. Any advantages to Overaa's proposal do not outweigh the cost and limited number of exceptions in Myers' proposal.
While it is reasonable that Veolia could find that certain evaluation criteria may favor Overaa with respect to creativity and its familiarity with the City and Veolia, both proposals and interviews demonstrated that each team possesses the necessary qualifications and competence to complete the Project in a satisfactory manner. To maintain the integrity of the evaluation system, subjective preference should be disfavored when concrete factors such as cost and the number of exceptions clearly favor one proposal. While it may be reasonable for scores for each evaluation to reflect intangible aspects of the proposal and interview, in our view these factors do no outweigh Myers' Suskin/Venkatraman
Veolia
Sludge Thickener Award Approach
April 23, 2021
clear advantage in costs and the limited number of exceptions to the Design-Build contract.
It is for these reasons that the City will select Myers to undertake the Project.
Please feel free to contact me ([email protected], (510-620-5478) with any questions or to discuss further.
Sincerely,
Joe Leach, PE
Public Works Director
Copies: Yader Bermudez, City of Richmond ([email protected]) Ben Kellman, Mack 5 ([email protected])