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: June 18, 2024 Agenda Item: 11Q
Submitted By: Public Works
Prepared By: Belgin Cuhadaroglu, Associate Civil Engineer Subject:
..titl e
CONSIDERATION OF A RESOLUTION AWARDING A CONSTRUCTION CONTRACT TO ACE CAPITAL ENGINEERING, INC. FOR THE CITY HALL STANDBY GENERATOR ADDITION AND ELECTRICAL DISTRIBUTION SYSTEM UPGRADE, CIP PROJECT NO. 14812, IN THE AMOUNT OF $551,994, AUTHORIZING THE CITY MANAGER TO EXECUTE THE CONSTRUCTION ..body CONTRACT, AND APPROVING A 15% PROJECT CONTINGENCY Fiscal Impact:
The estimated total project construction cost of $674,794 is within the available approved project budget of $711,466 from Account No. 030-818-45300-000-14812.
Summary:
A stationary standby generator in the northwest corner of the City Hall parking lot is proposed to improve the power system reliability for City Hall in the event of a power outage. The generator is designed to provide 72 hours of operation, including the Orange County Sheriff Department (OCSD) Substation.
Before the City Council is the award of a construction contract to ACE Capital Engineering, Inc., in the amount not to exceed $551,994, and approval of a 15% project contingency of $82,800 for the installation of the standby generator.
Project
Location
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1 Attachment 3
Meeting Date: June 18, 2024 Agenda Item: 11Q
CITY OF SAN CLEMENTE
Background:
The City pre-purchased a 350kW generator with a 72-hour run sub-base fuel tank and related electrical components is proposed to be installed by the proposed contractor within the City Hall parking lot to provide redundant back-up operating power for the City Hall building, including the OCSD Substation during a power outage.
On April 20, 2021, the City Council accepted a grant, in the amount of $300,000, from the California Office of Emergency Services' Community Power Resiliency Allocation program and allocated the grant to the Orange County Sheriff Department (OCSD) Substation project budget (Attachment 4). On August 16, 2022, the City Council approved a purchasing contract with Caterpillar Inc. (CAT), in the amount of $350,000, for a Standby Generator Equipment and Related Distribution Systems (Attachment 5).
Michael Baker International (MBI) designed and prepared a bid package to install the standby generator and electrical distribution system. The project includes the installation of the 350kW generator, generator distribution switchboard (GDB) along with four automatic transfer switches (ATS) on the north side of the building, associated conduits, cables, and appurtenances.
Staff notified local contractors, and advertised the project for competitive bidding on the Planet Bids website and in the SC Times. Eight bids were received on June 4, 2024, ranging from $357,250 to $1,775,671 (for the Base Bid). The results are presented below.
Company Name
Company
Location
Base Bid
Amount
Base Bid +
Alternate Bid
Amount
Potential Electrical Design
Services La Jolla, CA 357,250 $447,250.00
Ace Capital Engineering Lake Forest, CA 535,815 $551,994.00 Mel Smith Electric, Inc. Stanton, CA 650,000 $651,280.00 M. Brey, Inc. Beaumont, CA 649,156 $664,118.00
Cora Constructors Inc. Palm Desert, CA 715,000 $718,000.00 2 - --- -- -
Meeting Date: June 18, 2024 Agenda Item: 11Q
CITY OF SAN CLEMENTE
PC Inc. Santa Maria, CA 720,857 $756,899.80
GCI Construction, Inc. San Clemente, CA 799,500 $808,500.00 Global Power Group, Inc Lakeside, CA 1,775,671 $1,857,421.00 The apparent lowest bid for the base bid amount is Potential Electrical Design Services, Inc. of La Jolla, California, at $357,250. However, they failed to submit the required bid proposal forms (including designation of subcontractors) and failed to submit a bid bond. Therefore, their bid is not responsive bid with the requirements of the Contract Documents and staff recommends that their bid be rejected as non-responsive.
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.
Potential Electrical Design Services, Inc.’s bid was non-responsive in several respects. Staff believes that at least two of the ways that the bid was non-responsive are significant and are recognized as ways that a bid defect could give an unfair competitive advantage to the bidders (specifically, the failure to specify subcontractors and the failure to submit a bid bond).
Accordingly, unless the City Council finds these defects were inconsequential and immaterial, it would not have the discretion to waive them. And, in any event, the City Council has the discretion to demand strict compliance with the bid specifications and find Potential Electrical Design Services’ bid non-responsive, which would appear to be in the best interest of the City and the public in this case. Accordingly, staff recommends that the City Council demand strict compliance with the bid documents, reject Potential Electrical Design Services, Inc.’s bid as nonresponsive and award the contract to ACE Capital Engineering, Inc. as the lowest responsive and responsible bidder.
The City received one bid from a local contractor, GCI Construction, Inc., with a base bid in the amount of $799,500. 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 $649,500. Even with the local preference applied, their bid was not the lowest responsive bid.
Contract Award:
As a public works project, the contract must be awarded to the lowest responsive and responsible bidder. The lowest responsive and responsible bidder is ACE Capital Engineering, Inc., of Lake Forest, California.
Based on the lowest base bid and alternate bid items (i.e., additional concrete demolition and repair for $16,179), the estimated construction cost for this project is as follows:
Construction Management and Inspection $40,000
Construction $551,994
Contingency (15%) $82,800
Total Estimated Construction Cost $674,794
3 Meeting Date: June 18, 2024 Agenda Item: 11Q
CITY OF SAN CLEMENTE
As required by state law and City policy, 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.
Council Options:
Adopt Resolution No. 24-107 (Attachment 1), rejecting the apparent lowest bidder’s bid as non-responsive, awarding the contract for the City Hall Standby Generator Addition and Electrical Distribution System Upgrade to ACE Capital Engineering, Inc., and authorizing the City Manager to execute a construction contract, in the amount of $551,994 plus a 15% project contingency of $82,800.
Modify and adopt Resolution No. 24-107, finding the bid defects immaterial and inconsequential and waiving them, awarding the contract to Potential Electrical Design Services, Inc. in the amount of $447,250, plus a 15% project contingency. Continue the item and direct staff to provide additional information. Do not adopt Resolution No. 24-107 and put the project on hold.
Environmental Review/Analysis:
This Project was previously determined to be categorically exempt from the California Environmental Quality Act (CEQA) under Section 21084 of the state CEQA Guidelines, Class 3 (New Construction or Conversion of Small Structures, 14 CCR 21084). A Notice of Exemption was filed with the County of Orange Recorder’s Office on January 26, 2023 for this Project. (See Attachment 3.)
Recommended Actions:
Staff Recommendation ..recommendation
Staff recommends that the City Council adopt Resolution No. 24-107, which will:
1. Demand strict compliance with the bid documents and reject the bid submitted by Potential Electrical Design Services, Inc. as non-responsive;
2. Award the City Hall Standby Generator Addition and Electrical Distribution System Upgrade, CIP Project No. 14812, construction contract to ACE Capital Engineering, Inc. as the lowest responsible and responsive bidder;
3. Authorize the City Manager to execute a construction contract with ACE Capital Engineering, Inc., in an amount of $551,994, in a form substantially similar to Contract No. C24-37 (Attachment 3); and
4. Approve a 15% project contingency of $82,800.
..end
4 Meeting Date: June 18, 2024 Agenda Item: 11Q
CITY OF SAN CLEMENTE
Attachment:
1. Resolution No. 24-107
2. Contract No. C24-37
3. Notice of Exemption
4. Staff Report-April 20, 2021
5. Staff Report-August 16, 2022
Notification:
All Bidders.
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