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ATG. 10/18/05
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TITLE: ACCEPTING BIDS AND AWARDING A CONTRACT FOR
CONSTRUCTION OF MAHR RESERVOIR IMPROVEMENTS,
PROJECT NO. 3890, AND APPROPRIATION OF FUNDS
RECOMMENDED ACTION:
CONTRACTOR 1. TC Construction
2. Orion Construction 3. W ier Construction
4. SCW Contracting
Board of Directors of Carlsbad Municipal Water District (CMWD) Adopt Resolution No. 1256 accepting bids and awarding a contract for the construction of the
Mahr Reservoir Improvements, Project No. 3890, and appropriation of funds.
LOCATION BID AMOUNT Santee, CA $2 , 360,300 .OO
San Marcos, CA $2,447,975 .OO Escondido, CA $2,556,741.25
Fallbrook, CA $3,154,000.00
ITEM EXPLANATION:
Mahr Reservoir is an existing earthen fill dam constructed in 1982 to store recycled water from the Meadowlark Water Reclamation Facility (MWRF). It is located east of Rancho Santa Fe Road just south of Melrose Drive. Both Mahr Reservoir and the MWRF are owned and operated by
Vallecitos Water District (VWD).
On August 5, 2003, the Carlsbad Municipal Water District (CMWD) entered into an agreement with VWD to purchase up to 3.0 million gallons per day (mgd) of recycled water from the MWRF. As part
of the agreement, CMWD is entitled to use 32 million gallons of the storage volume in
Mahr Reservoir. However, certain improvements to Mahr Reservoir are required to meet water quality and operational storage needs for CMWD’s Phase II recycled water system. These improvements include:
The improvements listed above are to be constructed by CMWD, and VWD will operate and maintain the Mahr Reservoir Improvements in accordance with an operations and maintenance
manual prepared by CMW D.
On June 28, 2005, the plans and specifications for Project No. 3890 were approved to advertise for
construction bids. On August 30, 2005, the following four (4) sealed bids were received:
Removal of debris and fine grading of the interior area of Mahr Reservoir Reconfiguring and constructing new inlet/outlet, piping, and remote controls
Installation of an aeration system, disinfection system, and chemical treatment system Constructing a control and chemical storage building and miscellaneous site work
All the bids submitted exceed the Engineer’s Estimate; however, an extensive review of the bids received, as well as the specifications and plans, and discussions with contractors and material suppliers indicate that costs have increased significantly in the last six to nine months and continue to increase for steel pipe, fuel for equipment, electrical and mechanical equipment, and concrete. Therefore, requesting new construction bids will not result in a lower construction cost.
The apparent low bidder was TC Construction with a bid of $2,360,300. The second lowest bidder was Orion Construction with a bid of $2,447,975, for a difference of $87,675. TC Construction failed
to submit Minority Business EnterpriseNVomen Business Enterprise (MBENVBE) Form No. 4 with their bid package as required by the bid specifications. If there are no subcontractors to list on the form, the contractor must check a box on the form and still submit the form. The form was submitted
by TC Construction 24 hours after bid opening. Orion Construction is protesting the bid from
TC Construction and has requested that the bid be declared non-responsive.
Page 2 of Agenda Bill No. 603
ITEM DESCRIPTION ESTIMATED COST
Construction Cost by Orion Construction $2,447,975
Construction Contingencies $1 22,889
$1 00,000
Final Design $286,136
PROJECT TOTAL COST $2,957,000
CURRENT APPROPRIATION $2,346,000
&ADDITIONAL APPROPRIATION REQUIRED $61 1,000
Inspection, Testing and Construction Management
Bid documents state: “Failure to take the (5) affirmative steps listed under the Requirements
Section A, prior to bid opening and to submit Minority Business EnterpriseNVomen Business Enterprise Information Form 4, (Attachment B), with the bid shall cause the bid to be rejected as
non-responsive.” Moreover, Form No. 4 clearly states, “Failure to complete and submit this form
with the bid will cause the bid to be rejected as non-responsive.”
The CMWD does not have an ordinance requiring a MBENVBE outreach program and the
requirements in the contract were not a part of a local affirmative action program. However, the State Water Resources Control Board (SWRCB) requirements for MBENVBE contractors were
included with the bid package because the CMWD believed it was necessary in order to obtain
SWRCB and federal funding for the project. The proposed project will not be provided with Federal
funds from the SWRCB, but will receive Federal funds from the Bureau of Reclamation. In order to
receive Federal funds, the CMWD must meet the following good faith requirements:
1.
2.
3.
Divide requirements into small tasks to encourage maximum participation.
Establish delivery schedules to encourage maximum MBE/MBE participation.
Use services of the U.S. Small Business Administration (SBA) and the U.S. Department of
Commerce (DOC) to solicit qualified MBENVBE).
4. Include MBENVBEs on solicitation lists; and
5. Solicit available MBEs and WBEs when they are potential sources.
The CMWD implemented the good faith requirements by including the SWRCB criteria in the bid package. The bid specifications provided by the SWRCB require the contractor to meet the good
faith requirements listed above. These specifications require Form No. 4 to be submitted with the
bid. Therefore, staff is recommending that the low bid submitted by TC Constructed be rejected,
and the project be awarded to the second low bidder, Orion Construction, in the amount of
$2,447,975.00
ENVIRONMENTAL REVIEW:
The Mahr Reservoir project is a part of the Phase II project. A Mitigated Negative Declaration (MND)
was prepared for the Phase II project. The Carlsbad City Council approved the MND on
January 25, 2000 under Case No. EIA 99-09, Resolution No. 2000-37. The United States
Department of the Interior completed its review of the Phase II project for compliance with the
National Environmental Policy Act (NEPA) and formally approved the finding of no significant impact
(FONSI) on March 1, 2002.
FISCAL IMPACT:
The total project cost for the Mahr Reservoir Project is estimated at approximately $2,957,000 as shown in Table 1. To fund this project will require an increase in the project’s appropriation of
$61 1,000 as shown in Table 1.
2
Page 3 of Agenda Bill No. 603
DESCRIPTION
CWRF, Microfiltration and SCADA
Pipelines
Flow Equalization
Booster Pumping Stations
Summary of Phase II Proiect Costs
The Mahr Reservoir Improvement Project is part of Phase II of the Encina Basin Water Reclamation Program. This construction project is the last of 21 separate construction contracts that comprise the Phase II project. The current appropriation for Phase II is $49,676,270 as shown in Table 2.
An additional appropriation of $61 1,000 is required to complete the Mahr Reservoir Improvements.
Table 2 shows the estimated remaining balances that will be available for each project component once construction is completed. Based on current and planned expenditures, the total project cost is not expected to exceed the current estimated cost.
EXPENDITURES ESTIMATED
THROUGH 9/30/05 REMAINING
PROJECT PLUS PLANNED CURRENT BALANCES AND NEW
NO. EXPENDITURES APPROPRIATON APPROPRIATION
36753 $14,741,000 $1 4,790,030 (49,030)
21,852,521 (604,521 ) 38871 $21,248,000
38881 $4,093,000 $4,093,280 (280)
38891 $4,700,000 $4,918,574 (218,574)
TABLE 2 - PHASE II PROJECT
CAPITAL COST SUMMARY I I I I I
Mahr Reservoir Improvements
CWRF Land Purchase
TOTAL
~ ~~ ~~~~ 38901 $2,957,000 2,346,000 $61 1,000
--- $1,675,865 1,675,865 -0-
$49,414,865 $49,676,270 (261,405)
Environmental Protection Agency (EPA)
Bureau of Reclamation (BUREC)
California State Water Resources Control Board (SW RCB) Grant
California State Water Resources Control Board (SW RCB) Loan
CMWD Recycled Water Fund
TOTAL
Summary of Phase II Proiect Financinq
$2,168,993
10,500,000
$5,000,000
$27,000,000
$5,007,277
$49,676,270
With regard to capital costs, Phase II is budgeted at $49,676,270 million, and is being funded through
five sources.
0 The first source is a grant in the amount of $2,168,993 from the Environmental Protection
Agency (EPA), which has been received.
0 The second source is a grant authorized under Bureau of Reclamation (BUREC) policy
Title XVI of P.L. 102-575, as amended by P.L. 104-266 for the North San Diego County Area
Water Recycling Project. To date we have received $6,375,000 in grant. The BUREC
“Assistance Agreement” with CMWD for funding is based on receiving 25 percent of
$36,890,000 or $9,222,500. We requested an amendment to increase the grant based on
an increase in the project cost to $46,800,000. This amendment was approved on August 19,
2005 and executed on September 15, 2005. This increase in project cost results in an
allowable grant of up to $11,700,000. The actual grant amount received will depend on
appropriations approved by Congress. Staff is estimating the total grant received will be
approximately $1 0,500,000 because of the amount of grant funds remaining in the original
authorization.
Page 4 of Agenda Bill No. 603
0 The third and fourth sources are from the California State Water Resources Control Board,
which approved a $5 million grant and a low-interest loan up to $32 million. Staff is estimating
that the SWRCB loan will be approximately $27 million. Repayment of the loan will be from
operating revenues and connection fees.
0 The fifth source is the Recycled Water Fund, where $5.1 million is the estimated total
contribution.
In conclusion, the current appropriation for Mahr Reservoir is $2,346,000. Staff is recommending
that the Mahr Reservoir, Project No. 3890, be increased by $61 1,000 to $2,954,000.
EXHIBITS:
1. Location Map.
2. Board of Directors of Carlsbad Municipal Water District (CMWD) Adopt Resolution
accepting bids and awarding a contract for the construction of the No. 1256
Mahr Reservoir Improvements, Project No. 3890, and appropriation of funds.
3. Bid protest letter from Orion Construction dated September 1, 2005, and from Law Offices of
Wesley W. Peltzer, dated September 27, 2005.
DEPARTMENT CONTACT: David Ahles, (760) 602-2748, dahleBci.carlsbad.ca.us
LOCATION MAP
PROJECT NAME
MAHR RESERVOIR IMPROVEMENTS
PROJECT EXHIBIT NUMBER I 3890
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RESOLUTION NO. 12%
A RESOLUTION OF THE BOARD OF DIRECTORS OF
CARLSBAD MUNICIPAL WATER DISTRICT (CMWD)
ACCEPTING BIDS AND AWARDING THE CONSTRUCTION OF
THE MAHR RESERVOIR IMPROVEMENTS, PROJECT NO. 3890,
AND APPROPRIATION OF FUNDS.
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District has
jetermined it necessary, desirable, and in the public interest to construct the Mahr Reservoir
mprovements, Project No. 3890; and
WHEREAS, an agreement was approved by Resolution No. 1188, dated August 5, 2003,
letween Vallecitos Water District and CMWD for the purchase of up to 3.0 million gallons per day
:mgd) of recycled water beginning after completion of an expansion of the Meadowlark Water
qeclamation Facility, which will provide for CMWD's continuous use of Mahr Reservoir for
*ecycled water storage up to 32 million gallons; and
WHEREAS, four (4) sealed bids were received on August 30,2005 for the project; and
WHEREAS, the low bid received by TC Construction was determined to be
ion-responsive and was rejected by staff; and
WHEREAS, the lowest responsive, responsible bid for the project was submitted by
3rion Construction in the amount of $2,447,975; and
WHEREAS, the estimated project cost for the Mahr Reservoir Project is $2,957,000
2nd the current appropriation is insufficient to construct the Mahr Reservoir Improvements,
'reject No. 3890; and
WHEREAS, an additional appropriation of $61 1,000 from the Recycled Water Fund is
,equired to complete the Mahr Reservoir Improvements, Project No. 3890; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Carlsbad Municipal
Mater District (CMWD) of the City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That the bid submitted by Orion Construction, in the amount of $2,447,975, for the
:onstruction of the Mahr Reservoir Improvements, Project No. 3890, is hereby accepted and the
ixecutive Manager is authorized and directed to execute a contract therefore.
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3. That the Executive Manager is authorized to approve construction change orders
or Project No. 3890 up to $122,889.
4. That the award of this contract is contingent upon Orion Construction executing the
equired contract and submitting the required bonds and insurance policies, as described in the
:ontract, within twenty (20) days of adoption of this resolution with the understanding that the
fxecutive Manager may grant reasonable extensions of time.
5. That the Finance Director is authorized to appropriate $61 1,000 from the Recycled
Nater Fund to the Mahr Reservoir Improvements, Project No. 3890.
PASSED, APPROVED AND ADOPTED at a special meeting of the Carlsbad Municipal
Nater District held on the 18th day of October , 2005 by the following vote, to wit:
AYES: Board Members Lewis, Hall, Kulchin, Packard, and Sigafoose
NOES: None
ABSENT: None
ZLAUDE A. LEWIS, Pr&i&nt* v
ATTEST: -
(SEAL)
7
09/01/2005 16: 07 7605979654 ORION PAGE 01/81
EXHIBIT 3
CONSTRUCTION CORPORATION
1232 KEYSTONE WAY
VlSTA CA. 92083
LICENSE #549309
September 1, 2005
City of Carlsbad
1635 Faraday Ave
Carlsbad, Ca. 92008
VU FACSJMILE (3601 602-8562
Attention: Kevin Davis
Reference: Endna Basin Water Redamation Prowam, Phase If - Mahr Resewoir IniMdve rnentscontract No. 38901,3890
Dear Mr. Davis
On August 30,2005 we submitted a bid far the refkrenced project placing second out of four bidders.
The contract documents (page 6 of 67) require that the State MBE/WBE Information (Attachment E;) be
submitted as part of the Bidders proposal. Further, the statement on the bottom of Attachment B reads
“Failure to complete and submit this form With the bid will cause the bid to be rejected as non-
responsive.”
It is our understanding that the apparent low bidder, T.C. Co11struction, hiled to submit Attachment: B
with their bid proposal. As such, their bid should be rejected as non-responsive.
Orion Construction Corporation submitted Attachment 6 with our bid and permed the MBE/WBE
Good Faith Effort required by the contract specifications. Therefore, we are the low responsive bidder.
Thank you for your attention to this matter.
dobert B, Wilson
Chief Estimator
’- 8 PRONE: 760-597-9660
FAX: 760-597-9661
LAW OFFlCES OF WESLEY W. PELTZER
A PROFESSIONAL CORPORATION
75 I RANCHER05 DRIVE, SUITE 4
SAN MARCOS, CALIFORNIA 92069
TELEPHONE (760) 744-7 125
FAX (760) Y44-8259
E-MAIL: WWPELTZEROAOLCOM
September 27,2005
Via Facsimile & U.S. Mail
Kevin Davis
Public Works Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
Re: Bid Protest of Orion Construction Corporation on Encina Basin Water
Reclamation Program, Phase II - Mahr Reservoir Improvements;
Project No. 3890
Contract No. 38901
Our File No. 3603.029
Dear Mr. Davis:
Our ofice represents Orion Construction Corporation concerning its challenge to
the bid of T.C. Construction on the above-referenced contract. It is our understanding that
T.C. Construction failed to submit rhe required MBE/WBE information (Attachment B) at
the time of its bid or prior to bid opening as mandated by the contract documents. The
contract documents themselves and the contract requirements of the State Water Resources
Control Board clearly declare that the failure of a bidder to submit the MBWWBE form at
the time of bid will cause the bid to be rejected as non-responsive. Accordingly, we
respectfully request that the City of Carlsbad find the bid of T.C. Construction non-
responsive in accordance with the mandates of the contract documents and the contract
requirements of the Water Resources Control Board.
The notice inviting bids clearly declares: “Failure to take the five (5) affirmative
steps listed under Requirements Section A, prior to bid opening and to submit “Minority
Business EnterprbelWomen Business Enterprise Information (Attachment B) .With the bid
shall cause the bid to be reiected as a non-responsive bid.” (Emphasis added.)
The notice inviting bids also clearly mandates that the bid include the “State
MBE/WBE information (Attachment B).” (Notice Inviting Bids p. 6).
The State Water Resources Control Board contract requirements were also included
The compliance guidelines for the SRF Loan Program wirh the bid documents.
4
Z00d 6L0’ON
Kevin Davis
September 27,2005
Page 2
MEE/WBE clearly declares: “Failure to take the five (5) finnative steps listed under the
Requirements, Section A, prior to bid opening and to submit “Minority Business
Enterprisernomen Business Enterprise Information” (form 4) with the bid shall cause the
bid to be reiected as a non-responsive bid.’’ (BP-20). This mandate is again repeated in
section 5 of the Water Resources Control Board contract requirements which again
declares that “Failure of the apparent low bidder to perform the five “good faith” effort
steps prior to bid opening and submittal of forrn 4 with the bid, will result it its bid being
declared non-responsive.” (BP-25, section 5 (Reporting Requirements) $5).
The MBE/WBE form itself clearly declares in boldface darkened type; “Fdure to
complete and submit this form with the bid will cause the bid to be rejected as non-
respomive.”
Public Contract Code $2001 governing MBENBE requirements also mandates the
required information be submitted at the time of the bid. Public Contract Code tj2001(a)
provides in pertinent part: “Any local agency, as defined in subdivision (d) of Section
2000 that requires that contracts be awarded to the lowest responsible bidder meeting, or
making a good faith effort to meet, participation goals for minority, women, or a disabled
veteran business enterprises shall provide in the general conditions under which bids will
be received, that any person making a bid or offer to perform a contract shall, in his or her - bid or offer, set forth the following infodon . . .”.
Under the clear terms of the contract documents, the State Water Resources Control
Board contract requirements, and Public Contract Code 52001(a) the failure of T.C.
Construction to submit the MBE/WBE form (Attachment B) with its bid mandates that its
bid be rejected as non-responsive.
We note also that the failure of T.C. Construction to submit the required
MBE/WBE information by the date of the bid afforded T.C. Construction the opportunity
to get out’of both its bid and its bid bond by claiming a clerical mistake in its failure to
submit the required information. Under a long line of California cases, this afYorded T.C.
Construction an advantage over other bidders that also requires rejection of its bid. (VaZley
Crest Landscape, Inc. v, City Council (1996) 41 Cal.A~p.4~ 1432,1442 [contractor had an
unfair advantage because it could have withdrawn its bid]; MCM Construction, Inc. v. City
and Cuunry of San Francisco (1998) 66 Cal.App.4* 359,373-374 [public agency may not
waive even inconsequential requirement that gives the bidder an advantage or benefit]).
Since the contract documents mandate disqualification of any bidder failing to
submit the required MBE/Wl3E form at the time of its bid, this was a material term of the
contract and non-waivable under the clear terns of the bid documents.
Z00d 6L0’ON
”
Kevin Davis
September 27,2005
Page 3
Here, T.C. Construction was given the opportunity for a “last look” at all bids and
was given the opportunity to submit the MBE/WBE information required to be submitted
at the time of its bid after the bid opening.
In Domar, the California Supreme Court upheld the decision of the City of Los
hgeles rejecting the low bid due to the absence of the required good faith effort
documentation required by the MBE/WBE requirements. (Domar Electric, Inc. v. City of
Las Angeles (1994) 9 Cal.4” 161, 175-176). In doing so, the California Supreme Court
declared: “Finally, the Board’s action in rejecting Domar’s bid due to the absence of the
required good faith effort documentation is consistent with the general rule that bidding
requirements must be strictly adhered to in order to avoid the potential for abuse in the
competitive bidding process.” (Id. pp. 175- 176).
Here, bidders were clearly informed that their bids would be rejected as non-
responsive if they hiled to submit the required MBE/WBE documentation at the time of
their bids. This was a mandatory disqualification under the clear terms of the contract
documents and the State Water Resources Board’s contract requirements.
For these reasons, we respectfully request that the City of Carlsbad find the bid of
T.C. Construction non-responsive in accordance with the mandates of the contract
documents. If you would like to discuss any aspect of this letter with us, please give us a
call at your convenience.
Sincerely,
LAW JQFFICESmmSLEY W. PELTZER
Wesley W. PeItzer
WWP:pf
cc: Richard Dowsing
PQ0d 6LB’ON