910 Calle Negocio
2nd Floor
San Clemente, California
www.san-clemente.org
AGENDA REPORT
CITY OF SAN CLEMENTE
CITY COUNCIL MEETING
CITY OF SAN CLEMENTE
Meeting Date: May 21, 2024 Agenda Item: 8C
Department: Public Works
Prepared By Belgin Cuhadaroglu, Associate Civil Engineer Subject:
..titl e
BID PROTEST HEARING FOR THE CYPRUS SHORE GRADING, STORM DRAIN, AND SEWER LIFT STATION AND FORCE MAIN IMPROVEMENTS, CIP PROJECT NOS. 12004 & 12210, AND CONSIDERATION OF A RESOLUTION AWARDING A CONSTRUCTION
CONTRACT FOR THE PROJECT TO THE LOWEST RESPONSIVE AND RESPONSIBLE
BIDDER, APPROVING SUPPLEMENTAL APPROPRIATIONS FROM THE STORM DRAIN
FUND DEPRECIATION RESERVE, THE SEWER FUND CONNECTION FEE RESERVE AND
THE SEWER FUND DEPRECIATION RESERVE, AND AUTHORIZING THE CITY MANAGER TO..body EXECUTE THE CONSTRUCTION CONTRACT
Fiscal Impact:
The consideration of the bid protest will affect the fiscal impact on the project. The current low bidder is not the protestor and if the protest is ratified by the City Council, the next lowest qualified bidder, who is also the protestor, would be awarded the contract at a higher estimated cost.
If the bid protest is granted, the total estimated construction cost for the Cyprus Shore Grading, Storm Drain and Sewer Improvements project would be $6,512,472, funded from the Storm Drain ($1,873,399) and Sewer ($4,639,073) Funds. If the bid protest is denied, the lower bid estimate of $5,428,125, would be funded from the Storm Drain ($1,513,679) and Sewer ($3,914,446) Funds.
Regardless of the outcome of the bid protest hearing, supplemental appropriations will be needed. If the bid protest is granted, the following supplemental appropriations would be needed:
1. $1,095,199 from the Storm Drain Fund Depreciation Reserve into Account No. 059-553- 45300-000-12004;
2. $300,000 from the Sewer Fund Connection Fee Reserve;
3. $3,044,284 from the Sewer Fund Depreciation Reserve into Account No. 054-477-45300-000- 12210.
If the bid protest is denied, the following supplemental appropriations would be needed:
1. $735,479 from the Storm Drain Fund Depreciation Reserve into Account No. 059-553-45300- 000-12004;
2. $300,000 from the Sewer Fund Connection Fee Reserve; and
3. $2,319,657 from the Sewer Fund Depreciation Reserve into Account No. 054-477-45300-000- 12210.
1 Attachment 3
Meeting Date: May 21, 2024 Agenda Item: 8C
CITY OF SAN CLEMENTE
Summary:
The existing Cyprus Shore sewer lift station and storm drain system were compromised due to coastal bluff movement at Cyprus Shore development beginning in fall 2021. Both systems are currently operating on a temporary basis with an above ground structure and utilizing surface water flow through the park for the storm drain system. Rehabilitation and replacements are needed to continue service to the area and minimize disruption to the community.
The landslide area impacting City facilities was stabilized by the Orange County Transportation Authority (OCTA) and the City received a Coastal Development Permit to construct the following:
replacement of a portion of the storm drain system, replacement of the sewer force main, modifications to the gravity sewer pipeline, construction of a new submersible sewer lift station, removal and replacement of existing asphalt pavement (A.C.), curb and gutters, sidewalks, and construction of new concrete junction structures and six catch basins. The City formally bid the project to obtain the lowest competitive price.
The City has received a protest in relation to the project bids. The protest is presented to the City Council who will determine whether to grant or deny the protest. If the protest is granted, the protestor will become the lowest responsive bidder, but if the protest is denied, the lowest responsive bidder is the bid under protest. The project is located within the Cyprus Shore HOA, as shown below:
Background:
The Project:
In the fall of 2021, coastal bluff movement compromised the existing sewer lift station and storm drain system. On September 20, 2021, City staff installed a temporary emergency sewer bypass pump system adjacent to the Cyprus Shore Clubhouse near the intersection of Calle Ariana and Avenue de las Palmeras to prevent and mitigate impairment to property and public services.
In the fall of 2023, City staff connected a temporary motor control center to operate the pump station in its existing location and eliminate the need for expensive pump watch. Additionally, a temporary above ground storm drain system was installed to direct storm flows through the homeowner association park. Both systems have functioned for the past few years, but are temporary and in need of replacement to minimize disruption to the community. 2 PROJECT
LOCATION
Meeting Date: May 21, 2024 Agenda Item: 8C.
CITY OF SAN CLEMENTE
The City considered several design alternatives, but decided to replace facilities relatively close to the existing infrastructure due to a slope stabilization project by the Orange County Transportation Authority (OCTA), which consisted of a series of tiebacks and grade beams. With the stabilization of the area, the City was able to change the project to be more comprehensive and the California Coastal Commission approved a Coastal Development Permit on February 9, 2024 to relocate the wet well away from the original landslide, grading for access to the existing electrical equipment building, and replacement of the storm drain and sewer forcemain.
AKM Consulting Engineers and Kreuzer Consulting Group designed and prepared a bid package to replace the sewer lift station and restore the storm drainage while enhancing the drainage system by installing new catch basins. The work to be performed includes constructing a new submersible sewer lift station in a 7-foot diameter, 28-foot deep circular wet well on Avenida de Las Palmera, just west of Calle Ariana, replacement of approximately 217 linear feet of storm drain pipeline within the existing alignment and easement, construction of approximately 168 feet of lateral storm drain pipelines with 6 catch basins, repair of the motor control center and access to the existing sewer lift station electrical room, replacement of approximately 1,100 feet of the existing 6-inch sewer force main pipe with a new 6-inch PVC pipe, minor surfacing and repairs to the vehicular access road, as well as removal of asphalt from the portions of the road that have dropped below grade and the planting of 2,071 square feet of native vegetation in its place. 3 Meeting Date: May 21, 2024 Agenda Item: 8C.
CITY OF SAN CLEMENTE
The Bids:
Staff notified local contractors and advertised the project for competitive bidding on PlanetBids website and in the San Clemente Times. Three bids were received on April 23, 2024, ranging from $4,145,075 to $5,227,738. The results are presented below.
Vendor Name City
Base Bid
Amount
Total Base Bid
& Alternate
Amount
GMZ Engineering Inc. Westlake Village, CA $4,095,075.00 $4,145,075.00 Kay Construction
Company, Inc. Santee, CA $4,899,837.00 $5,056,237.00
GCI Construction, Inc. San Clemente, CA $5,080,738.00 $5,227,738.00 The apparent lowest bid for the base bid amount is GMZ Engineering, Inc. of Westlake Village, California at $4,095,075. The City received one bid from a local contractor, GCI Construction, Inc., with a base bid in the amount of $5,080,738. According to the San Clemente Municipal Code section 3.40.030 (E) regarding the Local Vendor Preference for a sealed bid, the maximum preference amount is $150,000. Applying the maximum preference amount, GCI’s base bid is reduced by $150,000 to $4,930,738. Even with the local preference applied, the bidding position would not change.
4 CONNECT TO
EXISTING AC
FORCEMAIH
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' EXISTING 6'" AC FORCE
MAIN TO BE PARALLELED
_ _:__ ___ _:_ ___ -_,, ___,'!' a;l<-_~---+---FUTURE PARALLEL 6" PVC FORCE MAIN
~-----+-- CONSTRUCT NEW
48'" MANHOLE ON
EXISTINGB"
SEWER
CONSTRUCT B N VCP
GRAVITY SEWER PER
SEWER PLAN SHEET
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Meeting Date: May 21, 2024 Agenda Item: 8C.
CITY OF SAN CLEMENTE
The Bid Protest:
Following the bid opening, the second lowest bidder, Kay Construction Company, Inc. submitted a bid protest letter (Attachment 3) regarding what staff would recommend is a minor irregularity in GMZ Engineering’s bid documents. Specifically, in the subcontractor listing submitted by GMZ Engineering, it identified that the following subcontractors would be doing the following percentages of the work:
Work to be
done by
Subcontractor
Subcontractor
Location of
Business
CSLB
Contractor
License No.
DIR
Registration
Number
% of the
Work
A/C Paving Hardy &
Harper, Inc.
32 Rancho
Circle Lake
Forest, CA
92630
215952 1000000076 100%
Coating National
Coating &
Lining
26713
Madison Ave.
Murrieta, CA
92562
886430 1000013795 100%
Electrical and
Controls
TESCO
CONTROLS
LLC
8440 Florin
Road
Sacramento,
CA 95828
1092377 1000942924 90%
Kay Construction Company protested on the grounds that GMZ Engineering’s bid was nonresponsive because it entered “100%” and “90%” on the above table in the bid forms for using subcontractors (i.e., Hardy & Harper, National Coasting & Lining and Tesco Controls) for the project, which totaled 290%, if added together.
To clarify this issue, GMZ Engineering submitted documentation (Attachment 4) demonstrating that the above subcontractors, while performing 100% or 90% of the specified subcontractor work (i.e., paving, coating and electrical and controls), will only perform a total of 20.07% of total work on the Base Bid, which is under the allowed 49%.
A city generally has the discretion to determine bid responsiveness and may either demand strict compliance with the bid specifications or can choose to waive a defect that is inconsequential or is an immaterial deviation. See Taylor Bus Serv., Inc. v. San Diego Bd. of Educ. (1987) 195 Cal.App.3d 1331, 1343. A bid defect cannot be considered inconsequential or immaterial if it gives the bidder an unfair competitive advantage or benefit over other bidders.
In this instance, staff believes the irregularity is an inconsequential and immaterial bid defect. The irregularity does not affect the amount of the bid, make the bid materially different than intended, or give GMZ Engineering an unfair competitive advantage or benefit over the other bidders.
Based on the bid specifications, staff estimated that the paving, coating and electrical and control subcontracting work was less than 49% and GMZ Engineering’s documentation confirms that, which makes GMZ Engineering’s bid responsive and binding. While the City Council has the discretion to demand strict compliance with the bid specifications and find GMZ Engineering’s bid non-responsive, that would not appear to be in the best interest of the City or the public in this case. Accordingly, staff recommends that the City Council waive strict compliance with the bid documents for this deviation, deny the bid protest and award the contract to GMZ Engineering. 5 Meeting Date: May 21, 2024 Agenda Item: 8C
CITY OF SAN CLEMENTE
Contract Award:
As a public works project, the contract must be awarded to the lowest responsive and responsible bidder. If the City Council denies the bid protest, GMZ Engineering would be the lowest responsive and responsible bidder. If the City Council grants the bid protest, Kay Construction Company would be the lowest responsive and responsible bidder.
Staff recommends awarding the contract to GMZ Engineering, Inc. for the base bid and alternative amount to replace the storm drain outlet in OCTA’s right-of-way. The total estimated project construction cost, assuming GMZ Engineering is awarded the contract, is summarized below:
Construction Management and Inspection,
and Engineering support services $ 405,000
Soils Testing, Inspection and Monitoring 90,550
Construction Contract 4,145,075
Contingency (19%) 787,500
Total Estimated Construction Cost $5,428,125
The attached draft contract and Resolution are drafted assuming that the City Council determines that GMZ Engineering is the lowest responsive and responsible bidder. If the City Council decides not to waive the inconsequential, immaterial irregularity in GMZ Engineering’s bid, then the estimated project costs would increase by over $1 million and appropriate changes should be made to the draft contract and Resolution.
As required by City policy and state law, the Contractor will be required to provide performance and payment bonds simultaneously with execution of the construction contract (Attachment 2).
Project plans and specifications are on file in the City Clerk’s office.
The City Council will note that the draft construction contract (Attachment 2) proposes to award the entire scope of work to the lowest responsive and responsible bidder after the formal protest is decided. While a formal protest was not submitted regarding the above ground electrical work, questions were raised about whether it would be appropriate to subtract all of the above ground electrical work (some of which was partially modified via an addendum to the bid documents) and re-bid that portion of work.
Staff conducted an analysis of all the electrical work related to the motor control center and generator (i.e., all of the above ground electrical work, some of which was partially modified via an addendum) and the bids were competitive with the three contractor estimates finishing in the same bidding positions regardless of whether the electrical work is inclusive or bifurcated. Staff believes that it is in the City’s best interest to award the entire contract to one contractor to ensure that the contractor will be responsible for the entire scope of work and that complications that could arise out of tying the underground electrical work together with the above ground electrical work are avoided.
However, should the City Council decide that the partial modifications to some of the above ground electrical work via addendum, even with the time extension, was a bidding irregularity justifying re-bidding because it improperly gave a contractor a competitive advantage or benefit, 6 Meeting Date: May 21, 2024 Agenda Item: 8C
CITY OF SAN CLEMENTE
staff should be directed to rebid that portion of the work accordingly. Since subtracting of the above ground electrical work does not impact any of the bidding positions of any of the bidders, the bulk of the construction contract can be awarded now either with or without the electrical panel work.
Regardless of the outcome, staff will return to the City Council to award a professional services contract for geotechnical consultant services needed for this project. The professional services agreement is going through a formal request for proposal process now, per City policy.
Council Options:
Adopt Resolution No. 24-72 (Attachment 1), denying the bid protest, waiving strict compliance with the bid documents, awarding the contract for the Cyprus Shore Grading, Storm Drain and Sewer Lift Station Improvements to GMZ Engineering, Inc., and authorizing the City Manager to execute a construction contract in an amount of $4,145,075, plus a 19% project contingency of $787,500.
Modify and adopt Resolution No. 24-72, granting the bid protest and awarding the contract to Kay Construction Company, Inc. in the amount of $5,056,237, plus a 19% project contingency. Make other modifications to and adopt Resolution No. 24-72. Continue the item and direct staff to provide additional information. Do not adopt Resolution No. 24-72 and put the project on hold.
Environmental Review/Analysis
This Project was previously determined to be exempt from the California Environmental Quality Act (CEQA) under Class 2 (Replacement or Reconstruction of Existing Structures and Facilities, 14 CCR section 15302) of the State CEQA Guidelines. A Notice of Exemption was filed with the County of Orange Recorder’s Office on October 19, 2023 for this Project. (See Attachment 5) Recommended Actions:
Staff recommends that the City Council:
1. Conduct a bid protest hearing, open the hearing, hear public testimony and comments, including any evidence and argument presented by the bidders, and close the hearing.
AND adopt Resolution No. 24-72, which will:
..recommendation
2. Deny the bid protest submitted by Kay Construction Company, Inc. and waive strict compliance with the bid documents with respect to the inconsequential and immaterial deviation in the bid submitted by GMZ Engineering, Inc.;
3. Award the Cyprus Shore Grading, Storm Drain and Sewer Lift Station Improvements, CIP Project No. 12004 & 12210, construction contract to GMZ Engineering, Inc. as the lowest responsible and responsive bidder;
7 Meeting Date: May 21, 2024 Agenda Item: 8C
CITY OF SAN CLEMENTE
4. Authorize the City Manager to execute a construction contract with GMZ Engineering, Inc. in an amount of $4,145,075, in a form substantially similar to Contract No. C24-23 (Attachment 2);
5. Approve a 19% project contingency of $787,500; and
6. Approve a supplemental appropriation in the amount of $735,479 to account #059-553-45300- 000-12004 from the Storm Drain Fund Depreciation Reserve and a supplementation appropriation of $2,619,657 to account #054-477-45300-000-12210 with $300,000 from the Sewer Fund Connection Fee Reserve and $2,319,657 from the Sewer Fund Depreciation Reserve.
7. ..recommendation
..endAttachment:
1. Resolution No. 24-72
2. Construction Contract with GMZ Engineering, Inc.
3. Protest Letter from Kay Construction
4. Letter from GMZ Engineering, Inc.
5. Notice of Exemption
Notification:
All bidders
8