City Council
Report
City Council Meeting: February 28, 2023
Agenda Item: 5.C
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To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Architecture Services Subject: Award Bid SP2486 to Swinerton Builders for the 3200 Airport Ave Renovation Project
Recommended Action
Staff recommends that the City Council:
1. Award Bid #SP2486 to Swinerton Builders for the construction of the 3200 Airport Avenue building renovation for the Public Works Department;
2. Authorize the City Manager to negotiate and execute a contract with Swinerton Builders, in an amount not to exceed $9,084,792 (including a $1,184,973 contingency);
3. Authorize the Director of Public Works to issue any necessary change orders to complete additional work within contract authority.
4. Award Bid #SP2486 to Totum Corporation for construction management services for the Public Works Department;
5. Authorize the City Manager to negotiate and execute an agreement with Totum Corporation, in an amount not to exceed $653,793.
6. Adopt a finding of Categorical Exemption pursuant to Sections 15301 (Existing Facilities) and 15302 (Replacement/Reconstruction), of the California Environmental Quality Act (CEQA) Guidelines.
Summary
The Santa Monica Airport seeks to renovate the 3200 Airport Avenue building to comply with current code regulations, address deferred maintenance issues, minimize ongoing maintenance costs, and maximize the building’s revenue potential. The building is the location of the original administration building at the Santa Monica Airport. It is a 16,966 sq. ft single-story wood frame building with a wooden truss gable roof. Renovation would bring the structure into compliance with current building codes and achieve LEED Gold certification while preserving the historic character of the building’s exterior 2 of 7
aesthetic. If approved, staff anticipates construction would commence as soon as spring of 2023 and be completed in the spring of 2024. Staff recommends awarding the construction services contract to Swinerton Builders to renovate and structurally retrofit 3200 Airport Avenue, and the construction management services contract to Totum Corporation to maintain contractor oversight and ensure that the project design intent and milestones are met.
Discussion
Built between 1940-1947, the building’s exterior features offer a demonstration of historic character unique to the region. Over decades, the building has been subdivided into multiple small and medium sized offices and leased to several commercial tenants.
The building was part of a Property Condition Assessment (Attachment A) that included a Tier 1 Seismic analysis and a comprehensive building assessment. The analysis and assessment identified numerous deficiencies of the building envelope, interior finishes, and building systems resulting in water intrusion, deterioration of building materials, and lack of thermal comfort within the building. Despite its current condition, the space maintains a 4% vacancy rate. However, as maintenance requests become more and more frequent, staff has determined that a renovation would not only minimize ongoing maintenance costs but would also maximize the building’s revenue potential.
The proposed building improvements have led to lease negotiations with Clover Restaurants, Inc. (Clover) for half of the building. Clover would lease approximately 8,500 square feet of building, outdoor patio, and parking space for restaurant use. The negotiations include stipulations that require a stringent timeline for the completion of the City’s renovations in order for the tenant to begin their tenant improvements. Any delays in construction would both jeopardize securing a lease with the tenant and increase the loss of revenue due to vacancies during construction and immediately thereafter. Therefore, the project schedules requested within the Request for Bids (RFB) and experience in completing similar projects on time were critical in the evaluation and recommendation of award for this project. 3 of 7
The evaluation committee and interview panel consisted of Architecture Services staff, Airport staff, and the design consultant for the 3200 Airport Avenue building renovation.
Swinerton Builders was recognized in the evaluation and interview process for their indepth understanding of the project, their experience in completing similar projects within similar timelines, and their comprehensive and thoughtful project schedule.
The lowest bidder submitted a very generalized schedule that did not present sufficient information and detail to demonstrate a satisfactory understanding of the scope of work activities and critical elements necessary to build the project as defined in the plans and specifications provided. Staff also reviewed three projects the lowest bidder completed for the City of Santa Monica with contract amounts of $3.9 million, $1 million, and $406,000. The construction durations extended fourteen, twelve and eight months past their original projected completion dates, respectively.
Prior to contemplating a recommendation, staff requested three qualified construction management firms to review and critique the sample project schedules submitted by each contractor. They indicated that Swinerton Builders’ schedule is substantially more thought out and planned, while the lowest bidder’s schedule as submitted is insufficient and unacceptable.
As previously mentioned, any delay to the renovation schedule jeopardizes the execution of a multimillion-dollar lease agreement and would result in additional losses ranging from $34,000 to $58,000 per month due to prolonged vacancies.
The final consideration that informed staff’s recommendation involves the contractors’ relationship and proposed agreement with their subcontractors. During their interview, Swinerton demonstrated a long history of working with their subcontractors as well as the ability to self-perform certain work should their subcontractor for some reason not be able to perform. In addition, their proposed subcontractor agreement stipulates that subcontractor failure to remain on schedule renders them liable for liquidated damages, as well as all costs associated with accelerating the work in order to get back on schedule. In contrast, the low bidder’s sample agreement assesses liquidated damages 4 of 7
against the subcontractor but remains silent on accelerating the work to meet the original schedule. For these reasons, staff recommends awarding the agreement to Swinerton Builders.
In addition to staff’s recommendation for construction services, staff requests Council approval for construction management services. This would provide contractor oversight to ensure project design intent and milestones are being met.
Vendor Selection
Bidder Recommendation (Contractor)
Best Bidder Swinerton Builders
Evaluation
Criteria
The ability, capacity and skill of the bidder to perform or provide the services; the capacity of the bidder to perform the contract or provide the service promptly, within the time specified, and without delay or interference; the sufficiency of the bidder’s financial resources; the character, integrity, reputation, judgment, training, experience and efficiency of the bidder. The City shall have absolute discretion in determining the applicability and weight of the criteria listed above.
The City is not required to select the bid with the lowest price.
Municipal Code SMMC 2.24.180
RFQual Data
Date
Posted Posted On
Advertised In
(City Charter &
SMMC)
Vendors
Downloaded
Submittals
Received
Date
Publicly
Opened
04/25/22 City's Online
Bidding Site
Santa Monica
Daily Press 96 5 06/01/2022
Bid Data
Date Posted Posted On
Vendors
Downloaded
Date Publicly
Opened
09/29/2022 City's Online Bidding Site 3 11/23/2022
Submittals Received
West Valley Investment
Group, Inc. $6,771,500 Olympos Painting, Inc. $12,141,000 Swinerton Builders $7,899,818 Engineer’s Estimate $7,222,535 5 of 7
Best Bidder Justification
The decision was made based on the experience and the quality of the firm’s proposed team, their in-depth knowledge of the 3200 Airport Avenue project plans, their longstanding relationships with subcontractors, and the results of their interview with the City.
Bid Protest
On January 23, 2023, West Valley Investment Group, Inc. submitted a bid protest alleging that West Valley was the lowest responsive and best bidder. Although responsive, staff does not believe they are the best bidder. It is critical for the 3200 Airport Avenue Renovation Project to be completed expeditiously to mitigate a potential loss of a $5.3 million lease revenue due to project delays. The second lowest bidder can meet the City’s aggressive schedule and more than justify the difference in cost by minimizing vacancy losses and ensuring the negotiated $5.3 million lease is executed.
In accordance with the appeals procedure set forth in the Notice Inviting Bids, the Public Works Director evaluated the bid protest and issued a final determination recommending Swinerton Builders as the best bidder. A copy of the bid protest and the Public Works Director’s Bid Protest Determination letter are available in Attachments B and C, respectively. In addition, the proposed lease agreement for 3200 Airport Avenue is included in tonight’s agenda for Council consideration.
Bidder Recommendation (Construction Manager)
Best Bidder Totum Corporation
Evaluation Criteria Price; the quality of the services offered; the ability, capacity and skill of the bidder to perform or provide the materials or services; the capacity of the bidder to perform the contract or provide the service promptly, within the time specified, and without delay or interference; the character, integrity, reputation, judgment, training, experience and efficiency of the bidder. The City shall have absolute discretion in
determining the applicability and weight of the criteria listed above.
The City is not required to select the bid with the lowest price.
Municipal Code SMMC 2.24.180
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Bid Data
Date Posted Posted On
Advertise In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
12/09/2022 City's Online
Bidding Site
Santa Monica Daily
Press
60 01/06/2023
Best Bidder Justification
Totum Corporation demonstrated competence, capacity, and the skill in providing construction management services. While all firms who submitted provided experience in managing projects similar to the 3200 Airport Ave Renovation, Totum Corporation’s proposal included a construction manager and construction administration staff into their cost for only 3% more than the lowest bidder. Combined with the positive feedback from previous clients, Totum Corporation is, in staff’s opinion, the best bidder.
Past Council Actions
Meeting Date Description
04/10/18 (Attachment A) Airport’s Property Condition Assessment of nine Airport properties.
Environmental Review
The project is categorically exempt from CEQA pursuant to Section 15301 and Section 15302 of the CEQA Guidelines. Section 15301 exempts Class 1 (Existing Facilities) projects from CEQA, which include the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. Section 15302 exempts Class 2 (Replacement or Reconstruction) projects which include the replacement or reconstruction of existing structures and facilities where the new structure will be located in the same site as the structure replaced and will have substantially the same purpose and capacity as the Submittals Received
Simpson & Simpson $632,000 Cumming Management
Group $1,154,800
Totum Corporation $653,793
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structure replaced. The project would renovate the existing city facility at 3200 Airport Avenue, and therefore, it has been determined that the project would fall within the Class 1 and Class 2 categorical exemptions. Furthermore, staff has determined that none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, section 15300.2 apply to this project.
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the Airport Fund to award a contract to Swinerton Builders for construction services and Totum Corporation for construction management services.
Contract/Agreement
Vendor FY 2022-23 CIP Account # Total Contract
Amount
Swinerton Builders C5704690.689000 $7,899,818
Totum Corporation C5704690.689000 $653,793
Total $8,553,611
Prepared By: Phillip Ticun, CIP Project Manager
Approved Forwarded to Council
Attachments:
A. Staff Report 20180410
B. Bid Protest
C. Bid Protest Response
D. Totum_Oaks_Initiative_Disclosure_Form
E. Swinerton_Oaks_Initiative_Disclosure_Form
F. Rendering_1_Office_Space_Exterior
G. Rendering_2_Office_Space_Interior
H. Rendering_3_Office_Space_Interior