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2nd Floor
San Clemente, California
www.san-clemente.org
AGENDA REPORT
CITY OF SAN CLEMENTE
CITY COUNCIL MEETING
CITY OF SAN CLEMENTE
Meeting Date: January 20, 2026 Agenda Item: 10B.
Submitted By: Public Works
Prepared By: Belgin Cuhadaroglu, Senior Civil Engineer
Subject:
..titl e
BID PROTEST HEARING FOR THE CALLE FRONTERA SEWER LIFT STATION SOIL STABILIZATION PROJECT, CIP PROJECT NO. 32201, AND CONSIDERATION OF A
RESOLUTION AWARDING A CONSTRUCTION CONTRACT FOR THE PROJECT TO THE
LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, AUTHORIZING THE CITY MANAGER
TO EXECUTE THE CONSTRUCTION CONTRACT, AND FINDING THE PROJECT CATEGORICALLY ..body EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT Fiscal Impact:
The consideration of the bid protest will affect the fiscal impact on the project, if the local contractor, second low bidder, becomes a low bidder per the San Clemente Municipal Code section 3.40.030 (E). The apparent low bidder is the protestor.
If the bid protest is denied, the total estimated construction cost for the Calle Frontera Sewer Lift Station Soil Stabilization project will be $885,404 (i.e., selecting Alliance Diversified Enterprises, Inc.), funded from the Sewer Depreciation Reserve Fund, Account No. 054-476-43890-000- 32201. If the bid protest is granted, the total estimated construction cost based on the lower bid estimate, from Wright Construction Engineering Corporation, is $853,202, which is funded from the same account. The available approved project budget is $1,969,517.
Summary:
Due to the ongoing soil movement that the Calle Frontera Sewer Lift Station (Station) has been experiencing, a geotechnical team (i.e., Ninyo & Moore Geotechnical Consultants) recommended additional support of the Station. The work includes caissons and grade-beam foundation to control future movement of the existing building and to prevent formation of deterioration cracks in the wet well structure.
City staff publicly bid the project and 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
following a hearing. If the protest is granted, the
protestor will become the lowest responsive
bidder (i.e., Wright Construction Engineering
Corporation); however, if the protest is denied,
the lowest responsive bidder is Alliance
Diversified Enterprises, Inc.
1 Attachment 3
Meeting Date: January 20, 2026 Agenda Item: 10B.
CITY OF SAN CLEMENTE
Background:
The Frontera Sewer Lift Station is constructed in the late 1970s. The tributary area to this Station is approximately 670 acres. Upon receipt of the wastewater, the Station discharges through a 12- inch diameter forcemain in Calle Frontera to a manhole just west of Avenida Vista Hermosa, at which point the wastewater is conveyed through the collection system to the City’s Water Reclamation Plant for treatment.
A building settlement monitoring and investigation conducted by a geotechnical team (i.e., Ninyo & Moore Geotechnical) revealed that the near-surface soils had high expansion potential and are prone to slope failure. The geotechnical team recommended additional foundation support with caissons and grade-beam to control future movements of the existing building and prevent the formation of deterioration cracks in the wet well structure.
Stantec Consulting Services, Inc. designed and prepared a formal bid package for the Calle Frontera Sewer Lift Station Soil Stabilization. The work to be performed generally includes installation of concrete piles, constructing concrete pile caps and grade-beams, modifying lift station aboveground plumbing to recenter pipes in existing sleeves, and other miscellaneous site improvements.
Staff notified local contractors, advertised the project for competitive bidding on the PlanetBids website, and in the San Clemente Times. Five bids were received on November 12, 2025, ranging from $741,902 to $1,809,444 as shown on the table below.
Company Name
Company
Location Bid Amount
Wright Construction Engineering Corp. San Marcos, CA $ 741,902 Alliance Diversified Enterprises, Inc. San Clemente, CA $ 769,904 RE Chaffee Construction, Inc. Wrightwood, CA $ 1,166,900 Tharsos, Inc. La Mesa, CA $ 1,264,970
Bosco Constructors, Inc. Chatsworth, CA $ 1,809,444
The apparent lowest bid is Wright Construction Engineering Corp. of San Marcos, California at $741,902. However, the City received one bid from a local contractor, Alliance Diversified Enterprises, Inc., in the amount of $769,904. According to the San Clemente Municipal Code 2 I I J
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Meeting Date: January 20, 2026 Agenda Item: 10B.
CITY OF SAN CLEMENTE
section 3.40.030 (E) regarding the Local Vendor Preference for a sealed bid, the seven percent preference amount is $53,893. Applying the seven percent preference amount, Alliance Diversified Enterprises, Inc. bid is reduced by $53,893 to $716,011. With the local preference applied, Alliance Diversified Enterprises, Inc. is the lowest bidder.
The Bid Protest:
Following the bid opening on November 13, 2025, staff received a bid protest letter from Wright Construction Engineering Corp. (Attachment 3) regarding irregularities in the Alliance Diversified enterprises, Inc. bid documents.
Wright Construction Engineering Corp. protested on the grounds that Alliance Diversified Enterprises, Inc. (ADEI) bid was non-responsive based on the following irregularities:
1. “ADEI did not include a surveyor in their subcontractor form.
2. The bid was signed by the project manager and ADEI did not submit the appropriate documents to demonstrate signing authority of the project manager.
3. The bid bond was missing a notary acknowledgment, thus making the bid bond in violation of California Civil Code 1188.
4. ADEI did not include names/contact info on the experience form in the bid.
5. ADEI should not have been granted the 7% local vendor preference as a local bidder, per SCMC 3.40.030(E), as their principal place of business is in Escondido.
6. Violations illustrated above create an unfair competitive advantage for Alliance Diversified Enterprises, Inc. at the expense of all fully compliant bidders…” 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 response to Wright’s protest, staff has the following responses, as numbered per the above items:
1. Surveying is not listed as a bid item in the bid schedule, and will not be required of the contractor (See Attachment 5). The design engineer had performed the necessary survey during the design phase. Accordingly, this item is not a defect.
2. The instructions to the bidders (i.e. Section 00200 of the project Specifications) provide that the bidder may be requested to submit documentation, not that they must include them with the bid. (See Attachment 4). The City requested and obtained a letter of authorization from 3 Meeting Date: January 20, 2026 Agenda Item: 10B.
CITY OF SAN CLEMENTE
ADEI that the project manager was properly authorized to sign the bid (See Attachment 6).
Accordingly, this item is not a defect.
3. The stamp of the bid bond was not visible when scanned because it was white. ADEI submitted the original hard copy of the bid bond within 24hrs as required in the specifications.
Thus, the bid was not deficient. Further, Civil Code section 1188 is not applicable; it has to do with transfers of property. Accordingly, this item is not a defect.
4. The City requested and obtained names/contact information on the experience form (See Attachment 7). Requesting names/contact information on the experience form after the close of bids does not prejudice other bidders or give ADEI an unfair advantage. Accordingly, staff believes that this irregularity is inconsequential and recommend that it be waived.
5. Under San Clemente Municipal Code section 3.40.030, "local bidder" means a business with a physical location in San Clemente as indicated on an approved business license. ADEI has a San Clemente business license and conducts business out of a physical location in San Clemente located at 209 Avenida del Mar, Suite 201B (which is an office that they share with a company called WGI). (See Attachment 8). Accordingly, ADEI complies with the local bidder requirement that allows it to benefit from the 7% local vendor preference.
6. As noted, the only actual defect in the bid is the missing contact information from ADEI’s experience form, which staff believes is immaterial. The information has since been obtained and its omission does not prejudice the other bidders or create an unfair competitive advantage for ADEI.
Based on the above responses, staff believes that Alliance Diversified Enterprises, Inc. bid was responsive, and finds the defects were inconsequential and immaterial; therefore, staff recommends that the City Council waive the minor irregularities (item 4, providing names/contact information after the bid close), and award the contract to Alliance Diversified Enterprises, Inc. as the lowest responsive and responsible bidder.
Alternatively, after conducting the bid protest hearing, if the City Council determines that the irregularities in Alliance Diversified Enterprises are material or declines to waive them and insist on strict compliance, the contract should be awarded to the second lowest bidder after the application of the local vendor preference (Wright Construction Engineering Corp).
Based on the lowest responsive and responsible bidder being Alliance Diversified Enterprises, Inc., in the amount of $769,904, the estimated total construction cost for this project is as follows:
Construction Administration, Management and Inspection $115,500 Construction $769,904
Estimated Total Construction Cost $885,404
As required by state law and City policy, the selected 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. 4 Meeting Date: January 20, 2026 Agenda Item: 10B.
CITY OF SAN CLEMENTE
Council Options:
The City Council should conduct the bid protest hearing and then may:
Adopt Resolution No. 26-07 (Attachment 1), rejecting the bid protest submitted by Wright Construction Engineering Corp., waiving the immaterial bid error in the bid submitted by Alliance Diversified Enterprises, Inc., awarding the contract for the project to Alliance Diversified Enterprises, Inc., as the lowest responsible bidder submitting a responsive bid, and finding the project categorically exempt from the California Environmental Quality Act (CEQA) under Class 3 (New Construction or Conversion of Small Structures, 14 CCR Section 15303) of the State CEQA Guidelines, and authorizing the City Manager to execute a construction contract in an amount not to exceed $769,904.
Accept the bid protest and modify and adopt Resolution 26-07 by awarding the contract to Wright Construction Engineer Corp. with the appropriate findings. Continue the item and direct staff to provide additional information. Do not adopt Resolution No. 26-07 and put the project on hold.
Environmental Review/Analysis:
This Project was determined to be categorically exempt from the California Environmental Quality Act (CEQA) under Section 15303 of the state CEQA Guidelines, Class 3 (New Construction or Conversion of Small Structures), 14 CCR Section 15303). The Notice of Exemption was filed with the County of Orange Recorder’s office on August 7, 2025. (See Attachment 9.) Recommended Actions:
..recommendation
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, after the protest hearing, adopt Resolution No. 26-07, which would:
2. Find the Calle Frontera Lift Station Soil Stabilization, Project No. 32201, categorically exempt from CEQA under Class 3 (New Construction or Conversion of Small Structures, 14 CCR section 15303) of the State CEQA Guidelines;
3. Deny the bid protest submitted by Wright Construction Engineering Corp. and waive the immaterial bid irregularity in the bid submitted by Alliance Diversified Enterprises, Inc.;
4. Award the Calle Frontera Lift Station Soil Stabilization, CIP Project No. 32201, construction contract to Alliance Diversified Enterprises, Inc., as the lowest responsible and responsive bidder after application of the local vendor preference; and
5. Authorize the City Manager to execute a construction contract with Alliance Diversified Enterprises, Inc. in an amount not to exceed $769,904, in a form substantially similar to Contract No. 26-02 (Attachment 2).
..end
5 Meeting Date: January 20, 2026 Agenda Item: 10B.
CITY OF SAN CLEMENTE
Attachment:
1. Resolution No. 26-07
2. Construction Contract with Alliance Diversified Enterprises, Inc.
3. Protest Letter from Wright Construction Engineering Corp.
4. Section 00200 of the project Specifications
5. Alliance Diversified Enterprises, Inc.’s Bid Documents
6. Authorization letter
7. Names/contact information for experience form
8. Alliance Business License
9. Notice of Exemption
Notification:
All Bidders.
6