TO: HONORABLE MAYOR FROM: Matt Loesch
AND CITY COUNCIL
SUBJECT: SEE BELOW DATE: June 13, 2023
Approved Date
6/13/24
COUNCIL DISTRICT: 3
SUBJECT: ACTIONS RELATED TO THE 10202 - THE TECH INTERACTIVE
CHILLERS AND COOLING TOWER REPLACEMENT PROJECT
REASON FOR SUPPLEMENTAL
The purpose of this memorandum is to provide additional information obtained after bids were opened.
RECOMMENDATION
(a) Report on bids and award of a contract for the construction of 10202 – The Tech Interactive Chillers and Cooling Tower Replacement Project to the lowest responsive, responsible bidder, ACCO Engineered Systems Inc., for the base bid and Bid Alternate No. 2 and No. 4 in the amount of $3,702,913; and
(b) Approve a 15% contingency in the amount of $555,437.
BACKGROUND
A memorandum dated May 30, 2023 was forwarded to City Council for the June 20, 2023 City Council meeting. The purpose of this supplemental memorandum is to provide additional information obtained after the bid opening.
ANALYSIS
Bids were opened on May 25, 2023 with the following results:
COUNCIL AGENDA: 6/20/23
FILE: 23-917
ITEM: 2.29
HONORABLE MAYOR AND CITY COUNCIL
June 13, 2023
Subject: Supplemental - 10202 – The Tech Interactive Chillers and Cooling Tower Replacement Project
Contractor Base Bid Bid Alt.
Total Total Bid Variance
Amount
Over/(Under)
Percent
ACCO Engineered Systems
Inc.
(San José)
$1,907,658 $2,029,538 $3,937,196 ($275,804) (7)
Environmental Systems Inc.
(Santa Clara) 2,030,400 1,964,000 3,994,400 (218,600) (6) Engineer’s Estimate 1,800,000 2,413,000 4,213,000 -- --
Contractor Bid Alternate
No. 1
Bid Alternate
No. 2
Bid Alternate
No. 3
Bid Alternate
No. 4
ACCO Engineered Systems
Inc.
(San José)
$141,145 $114,473 $93,138 $1,680,782
Environmental Systems Inc.
(Santa Clara) 267,400 280,400 168,400 1,247,800
Engineer’s Estimate 310,000 300,000 103,000 1,700,000
Section 3-1.01D of the City of San José Special Provisions specifies how the City will determine the low bid when bid alternates are included. The section requires the City to determine the low bid by adding the base bid to any bid alternates until a ceiling price is reached. The low bidder will be the bidder whose total amount calculated under the preceding sentence (1) includes the greatest number of Bid Alternates or (2) offers an equal number of Bid Alternates for the lowest price. If the addition of the first Bid Alternate to the base bid results in a figure greater than the ceiling amount in the case of every responsive bidder, the low bid will be determined by the base bid alone.
In this instance, the ceiling price was set at $4,000,000, and the low bid was therefore determined by adding the base bid to all four bid alternates. Neither bidder exceed the ceiling threshold, therefore based on the criteria specified in Section 3-1.01D of the Special Provisions, ACCO Engineered Systems Inc. was determined to be the low bidder for the project. The low bid submitted by ACCO Engineered Systems Inc. is 7% below the Engineer’s Estimate.
Section 3-1.01D of the City of San José Special Provisions further specifies that once the low bidder has been identified in the preceding manner, the City may elect to award the base bid item alone or any or all Bid Alternate items in any sequence to that low bidder, even if the resulting contract amount no longer represents the lowest total price for the particular items chosen. In this instance, the City has chosen to award the base bid item with Bid Alternate No. 2 and No. 4 to the low bidder, ACCO Engineered Systems Inc. The base bid of this project provides two new chillers, two new condenser water pumps, and refurbishes the existing single-cell cooling tower.
HONORABLE MAYOR AND CITY COUNCIL
June 13, 2023
Subject: Supplemental - 10202 – The Tech Interactive Chillers and Cooling Tower Replacement Project
However, Bid Alternate No. 4, replaces the existing cooling tower with a two-cell cooling tower with a filtration system, instead of refurbishing the existing single cell cooling tower, as well as converts the cooling system from constant flow to variable flow to meet current code requirements. The Bid Alternate No. 2 provides temporary chiller during the replacement of the existing chiller.
The bid submitted by ACCO Engineered Systems Inc., including the base bid and Bid Alternates No.2 and No. 4, is 3% below the Engineer’s Estimate. Staff considers the low bid submitted for this project to be competitive and reasonable for the work to be performed and recommends the award of the contract to ACCO Engineered Systems Inc.
ACCO Engineered Systems Inc. has completed projects for the City of San José, including the San José Civic Center HVAC Systems Project in 2003. Additionally, the company completed projects with similar scope in the San Francisco Bay Area, such as the Salesforce Tower and the Mission San Francisco-Central Plant Renovation in San Francisco and Levi’s Stadium in City of Santa Clara.
Construction is scheduled to begin in August 2023, with anticipated completion in December 2024.
Contingency
San José Municipal Code Section 27.04.050 provides for a standard contingency of 15% on public works contracts involving the renovation of a building or buildings. The standard contingency of 15% is appropriate for this project.
Project Labor Agreement Applicability
The City’s Project Labor Agreement is applicable to this project because the Engineer’s Estimate is over $1.2 million.
Local and Small Business Outreach
In order to facilitate small and local business participation on this project, Procurement staff used Biddingo to outreach to local and small business enterprises. Chapter 4.12 of the San José Municipal Code defines a “local business enterprise” as one with a legitimate business presence in Santa Clara County and a “small business enterprise” as a local business enterprise with 35 or fewer employees. Procurement staff sent bid invitations to 11,184 vendors, and documents were downloaded by 19 vendors, seven of which were located within Santa Clara County and, therefore, local. The recommended contractor is a local but not a small business enterprise. In addition, King Crane (San José), Sunbelt Controls (San José), Silver Creek Electric (Morgan Hill), Innovate Concrete (San José) and TC Platner Corporation (Mountain View) are local business enterprises listed as subcontractors. The approximate value of work for these businesses is $400,000.
HONORABLE MAYOR AND CITY COUNCIL
June 13, 2023
Subject: Supplemental - 10202 – The Tech Interactive Chillers and Cooling Tower Replacement Project
COST SUMMARY/IMPLICATIONS
This project supports the City’s most urgent repair needs with the goal to ensure uninterrupted operations at the Tech Interactive Museum. The construction of 10202-The Tech Interactive Chillers and Cooling Towers Replacement project will provide the museum a new reliable, highly efficient cooling system. The funding source for this project is through the General Fund Capital Projects Strategic Support CSA.
1. AMOUNT OF RECOMMENDATION/COST OF PROJECT:
*Project delivery includes estimates of $293,664 for Design Services and $560,165 for Construction Management, Commissioning and Inspection Services.
**Construction Contract for base bid with Bid Alternatives No.2 and No.4
2. COST ELEMENTS OF CONTRACT AS RECOMMENDED AS PART OF THE MEMORANDUM:
Mobilization and Demobilization $25,000
Site survey, construction documents, submittal preparation, and inspection.
16,000
Demolition 75,000
Mechanical and Plumbing work 3,404,859
Electrical work 72,925
Start-up, testing, commissioning support and training. 55,471 Closeout Documentation 53,658
TOTAL CONSTRUCTION CONTRACT $3,702,913
3. SOURCE OF FUNDING: Allocated funding for this project in the General Fund (Fund 001) totals $5,114,000. Of this amount, $3,914,000 is allocated in The Tech Interactive Controls Module appropriation and $1,200,000 is allocated in the Tech Interactive Chiller and Cooling Tower Replacement appropriation.
4. FISCAL IMPACT: No additional operating and maintenance costs are anticipated to be generated from this renovation project.
Project Delivery* $853,829
Construction** 3,702,913
Contingency 555,437
TOTAL PROJECT COSTS $5,112,179
Prior Years’ Expenditures and Encumbrances 769
TOTAL REMAINING PROJECT COSTS $5,111,410
HONORABLE MAYOR AND CITY COUNCIL
June 13, 2023
Subject: Supplemental - 10202 – The Tech Interactive Chillers and Cooling Tower Replacement Project
BUDGET REFERENCE
The table below identifies the fund and appropriation to fund the contract recommended as part of this memorandum.
*A year-end adjustment is recommended in the Approval of Various Budget Actions for Fiscal Year 2022-2023 memorandum to reallocate $1,075,000 of project savings from The Tech Interactive Fire Alarm System appropriation to The Tech Interactive Controls Module Improvements appropriation. A rebudget action is recommended in the Recommended Amendments to the 2023-2024 Proposed Operating and Capital Budgets (Manager’s Budget Addendum) in the amount of $3,400,000 for the Tech Interactive Controls Module Improvements appropriation.
**The 2023-2024 Adopted Capital Budget is scheduled to be approved by the City Council on June 13, 2023 and adopted on June 20, 2023.
CEQA
Categorically Exempt, File No. ER22-272. CEQA Guidelines Section 15301, Existing Facilities.
/s/
MATT LOESCH
Acting Director of Public Works
For questions, please contact Sal Kumar, Public Works Interim Deputy Director, at [email protected] or (408) 793-5307.
Fund
#
Appn
# Appn Name
Total
Appn
Amt. for
Contract
2023-2024
Adopted
Capital
Budget
Page**
Last Budget
Action (Date,
Ord. No.)
001 7875 The Tech
Interactive Controls
Module
Improvements
$3,400,000* $2,502,913 N/A 6/20/2023
001 New The Tech
Interactive Chiller
and Cooling Tower
Replacement
$1,200,000 $1,200,000 N/A 6/20/2023