san]ose cityof memorandumfeeder from switchgear m5 to switchgear s16b 6. feeder from switchgear m5...

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CITYOF SAN]OSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: SEE BELOW ., ¥' COUNCIL AGENDA: 04-22-08 ITEM: }.\ Memorandum FROM: John Stufflebean DATE: 04-01-08 Date COUNCIL DISTRICT: City-Wide SUBJECT: REPORT ON BIDS AND AWARD OF CONTRACT TO THE LOWEST RESPONSIVE BIDDER ROSENDIN ELECTRIC, INC. FOR THE SAN JOSE/SANTA CLARA WATER POLLUTION CONTROL PLANT, FY 2007-2008 CAPITAL IMPROVEMENT PROGRAM, SWITCHGEAR M5, INTERIM RING BUS, AND MEDIUM VOLTAGE CABLES REPLACEMENT DESIGN-BUILD PROJECT RECOMMENDATION a) Consent to the request of Helix Electric to be relieved of its low bid for the Switchgear M5, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build Project based upon a mistake in filling out the bid. b) Report on bids and award of contract for the Switchgear M5, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build Project to the lowest responsive bidder, Rosendin Electric, Inc., for the base bid and Add Alternate Nos. 1through 6 in the total amount of $11,319,500; and approval of a budget contingency in the amount of $1,131,950. OUTCOME Approval of this construction contract will provide for the installation of new Switchgear M5 and the interim ring bus, and for the replacement of aging 4160V cables at the Plant. This project will improve the Plant's electrical reliability. Approval of a standard 10% contingency will provide funding for any unanticipated work necessary for the completion of the project. BACKGROUND On February 2007, City Council approved an agreement with AEPC Group, LLC for consultant services to prepare preliminary design work leading to the request for bids for the design-build of

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CITYOF~SAN]OSECAPITAL OF SILICON VALLEY

TO: HONORABLE MAYORAND CITY COUNCIL

SUBJECT: SEE BELOW

APProv~z&-_., ~1 ¥'

COUNCIL AGENDA: 04-22-08ITEM: }.\

MemorandumFROM: John Stufflebean

DATE: 04-01-08

Date

COUNCIL DISTRICT: City-Wide

SUBJECT: REPORT ON BIDS AND AWARD OF CONTRACT TO THE LOWESTRESPONSIVE BIDDER ROSENDIN ELECTRIC, INC. FOR THE SANJOSE/SANTA CLARA WATER POLLUTION CONTROL PLANT, FY2007-2008 CAPITAL IMPROVEMENT PROGRAM, SWITCHGEAR M5,INTERIM RING BUS, AND MEDIUM VOLTAGE CABLESREPLACEMENT DESIGN-BUILD PROJECT

RECOMMENDATION

a) Consent to the request of Helix Electric to be relieved of its low bid for the Switchgear M5,Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build Project basedupon a mistake in filling out the bid.

b) Report on bids and award of contract for the Switchgear M5, Interim Ring Bus, and MediumVoltage Cables Replacement Design-Build Project to the lowest responsive bidder, RosendinElectric, Inc., for the base bid and Add Alternate Nos. 1 through 6 in the total amount of$11,319,500; and approval of a budget contingency in the amount of $1,131,950.

OUTCOME

Approval of this construction contract will provide for the installation of new Switchgear M5 andthe interim ring bus, and for the replacement of aging 4160V cables at the Plant. This projectwill improve the Plant's electrical reliability. Approval of a standard 10% contingency willprovide funding for any unanticipated work necessary for the completion of the project.

BACKGROUND

On February 2007, City Council approved an agreement with AEPC Group, LLC for consultantservices to prepare preliminary design work leading to the request for bids for the design-build of

HONORABLE MAYOR AND CITY COUNCIL04-01-08Subject: Switchgear M5, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build ProjectPage 2

the Switchgear M5, Interim Ring Bus, and Cable Replacement project. That portion of the workhas been completed.

The scope of work for this design-build contract will include design and construction of a newswitchgear, modification of the Plant's existing electrical distribution system to facilitate thering-bus system of operation, and replacement of antiquated cables. The project will increaseoperational reliability, maintenance flexibility, and energy efficiency of the Plant's electricaldistribution system. City determined that the design-build approach would result in lowerproject cost, faster project completion, and better coordination between the design-buildcontractor and the City.

In accordance with City's prequalification policy the Director shall pre-qualify Contractors forall public works projects in which the engineer's estimate exceeds $10,000,000 unless theDirector determines that prequalification would not be justified. Staff analysis determined thatpre-qualification of contractors was not justified for this project based on the following reasons:

• The scope of the work involved in this project is mostly related to digging of trenches andpulling of cables, which is not considered to be highly complex or technical in nature.

• Based on past experience with bidding on electrical projects at the Plant and not receivingenough number of competitive bids, limiting contractors by pre-qualification was notdesirable.

• Unlike other construction projects, where labor costs dominate the bid-price, this project hasapproximately 60% of the cost in electrical cabling and equipment, for which detailedspecifications were prepared as part ofthe 30% design-bid package. Hence the concern withquality of contractors impacting the project was minimal.

In addition to the base bid scope of work there are 6 Add Alternate bid items:

Add Alternates Description

1. Feeder from Switchgear M5 to Switchgear S112. Feeder from Switchgear M5 to Switchgear S73. Feeder from Switchgear M5 to Switchgear S13-24. Feeder from Switchgear M5 to Switchgear S95. Feeder from Switchgear M5 to Switchgear S16B6. Feeder from Switchgear M5 to Switchgear ESB

Engineer's Estimate

$384,787$77,720$211,326$747,139$1,084,905$207,590

HONORABLE MAYOR AND CITY COUNCIL04-01-08Subject: Switchgear MS, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build ProjectPage 3

ANALYSIS

Bids were opened on 24 January 2008 with the following results:

Variance Over/(Under)Engineer's Estimate

AddAltsContractor Base Bid 1 through 6 Bid Total Amount Percent

Anderson Pacific $11,222,000 $2,005,000 $13,227,000 $2,028,435 18%(Santa Clara)Shimmick Construction $10,294,000 $1,099,200 $11,393,200 $194,635 2%(Hayward)Rosendin Electric $9,911,000 $1,408,500 $11,319,500 $120,935 1%(San Jose)Engineer's Estimate $8,485,098 $2,713,467 $11,198,565Helix Electric $6,955,000 $1,262,000 $8,217,000 ($2,981,565) (27%)(Martinez)

Add Add Add Add Add AddContractor Alt 1 Alt2 Alt 3 Alt4 Alt 5 Alt 6Anderson Pacific $725,000 $78,000 $78,000 $78,000 $878,000 $168,000Shimmick Construction $274,000 $53,200 $67,000 $150,000 $432,000 $123,000Rosendin Electric $308,100 $47,400 $54,000 $336,000 $535,000 $128,000Helix Electric $240,000 $66,000 $86,000 $120,000 $620,000 $130,000Engineer's Estimate $384,787 $77,720 $211,326 $747,139 $1,084,905 $207,590

Withdrawal of Low Bid

After bid opening, Helix Electric, the apparent low bidder on the project, contacted theEnvironmental Services Department requesting to withdraw their bid citing a calculation error.They submitted their bid calculations and a letter explaining the error. The City of San JoseStandard Specifications, section 2-1.095 Relief of Bidders, allows for the City to relieve aContractor of its bid based on mistake if the following conditions exist: (l) the contractor giveswritten notice of the mistake within 5 days of bid opening, (2) the mistake made the bidmaterially different than the contractor intended, and (3) the mistake was made in filling out thebid and not due to an error in judgment or to carelessness by the contractor in inspecting the sitefor the work, or in reading the plans and specifications. Staffhas evaluated the documentssubmitted by Helix Electric (which are attached) and determined that all the necessary criteriahas been met and that Helix Electric should be relieved of its bid.

HONORABLE MAYOR AND CITY COUNCIL04-01-08Subject: Switchgear MS, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build ProjectPage 4

The next lowest bidder is Rosendin Electric, Inc., with a total bid amount of $11 ,319,500, whichis 1% over the engineer's estimate. In addition to the base bid, staff recommends award of AddAlternates 1 through 6 as part of the contract due to the favorable price for each of the AddAlternate bid submitted by Rosendin Electric, Inc. Rosendin Electric, Inc. has successfullycompleted the Reliability Improvement for Switchgears M3 and M4 Project in 2007, the MCCG1, G2 Replacement Project in 2005, theWPCP Reliability Improvement Project (as asubconsultant) in 2008, as well as various CIP construction projects at the Plant in the past.Based on staffs experience with this contractor on prior projects, staffbelieves that RosendinElectric, Inc. possesses adequate knowledge and technical capabilities to implement this project.

Council Policy provides for a standard contingency of 10% on public works projects involvingutilities. Given the project is a design-build contract, where the Contractor has the flexibility toadapt the design to meet the project costs, staff considers the standard contingency appropriatefor this project. However, given recent experiences related to the discovery of unknown utilitiesduring construction projects at the Plant, some adaption of design and execution of change orderson this project is likely possible.

EVALUATION AND FOLLOW-UP

The project is currently within budget with a projected completion of March 2010. Shouldadditional changes to the project be required due to change orders executed beyond theappropriated contingency, Staff will bring forward those changes for approval by Council.

POLICY ALTERNATIVES

Alternative # 1: Reject all bids and drop the project.Pros: Ability to fund alternative capital projects.Cons: Continued use of existing degraded electrical distribution system poses a great risk toreliable operation of the plant.Reason for not recommending: Ifthis project is not implemented, the Plant's electricaldistribution system is susceptible to failure which could lead to the Plant's inability to distributepower and treat wastewater, thereby causing severe damage to electrical distribution system andequipment from flooding and potentially discharging untreated wastewater into the bay.

PUBLIC OUTREACH/INTEREST

A Notice-to-Contractors, inviting qualified firms to submit bids, was published by the CityClerk's Office in the San Jose Post Record, and by the Project Manager on the EnvironmentalServices Department website and Public Works Department Bid Hotline website. This memo isalso posted on the City's website for the April 22, 2008 Council Agenda.

IZ1 Criteria 1: Requires Council action on the use of public funds equal to $1 million orgreater; (Required: Website Posting)

HONORABLE MAYOR AND CITY COUNCIL04-01-08Subject: Switchgear MS, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build ProjectPage 5

D Criteria 2: Adoption of a new or revised policy that may have implications for publichealth, safety, quality oflife, or financial/economic vitality of the City. (Required: E­mail and Website Posting)

D Criteria 3: Consideration ofproposed changes to service delivery, programs, staffingthat may have impacts to community services and have been identified by staff, Councilor a Community group that requires special outreach. (Required: E-mail, WebsitePosting, Community Meetings, Notice in appropriate newspapers)

COORDINATION

This project and memorandum have been coordinated with Office of Employee Relations(Contracting-In), Risk Management, Office of Equality Assurance, the City Manager's BudgetOffice, and the City Attorney's Office. This item is scheduled to be heard at the Aprill 0, 2008,Treatment Plant Advisory Committee (TPAC) meeting.

FISCALIPOLICY ALIGNMENT

This project is consistent with the Council approved Budget Strategy to focus on rehabilitatingaging Plant infrastructure, improve efficiency, and reduce operating costs. This project is alsoconsistent with the budget strategy principle of focusing on protecting our vital core services.

COST SUMMARYIIMPLICATIONS

1. AMOUNT OF RECOMMENDATION/COST OF PROJECT: $12,451,450

Project DeliveryConstructionContingency

TOTAL PROJECT COSTS

Prior Year Expenditures

REMAINING PROJECT COSTS

2. COST ELEMENTS OF PROJECT:

$411,488$11,319,500

$1,131,950

$12,862,938

($411,488)

$12,451,450

3. SOURCE OF FUNDING: 512 - San Jose-Santa Clara Treatment Plant Capital Fund.Existing funds are available for this project. No additional appropriation action is required.

HONORABLE MAYOR AND CITY COUNCIL04-01-08Subject: Switchgear M5, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build ProjectPage 6

4. OPERATING COSTS: The proposed operating and maintenance costs of this project havebeen reviewed and it has been determined that the project will have no impact to theTreatment Plant Operations and Maintenance budget.

BUDGET REFERENCE

The table below identifies the fund and appropriations proposed to fund the contractrecommended as part ofthis memo and remaining project costs, including project delivery,construction, and contingency costs. .

Fund # Appn Appn. Name RC# Total Appn. Amt. for Proposed Last Budget# Contract Budget Action

Page (Date,Ord.No.)

"

Remaining Project Costs 12,451,450

Current Funding Available

512 4124 M5, Ring Bus, 144923 9,588,000 9,588,000 V-154 2/12/2008,

and Cables Ord. No.

Replacement 28241

512 4341 IPlant Electrical 071133 5,000,000 2,863,450 V-155 6/19/2007Reliability

Total Current Funding Available 14,588,000

Total Funding for Remaining 14,588,000 12,451,450Pro.iect Costs

CEQA

Exempt, PP04-03-079.

J HN STUFFLEBEANirector, Environmental Services Department

Attachment

For questions, please contact Bhavani Yerrapotu, Division Manager, Environmental Services, at(408) 945-5321.

HELIX ELECTRICCONSTRUCTORS, ENGiNEERS

January 29, 2008

Mr. Thai KhuuCity of San Jose ~ Environmental Services Department ~ San Jose Water Pollution Control Plant700 Los Esteros RdSan Jose CA 95134-1001Tel: 408-945-5395 - Fax: 408-945-5442 - Email: [email protected]

Re: San Jose S\vitchgear MS, Interim Ring Bus, and Medium Voltage Cables Replacement Design-Build Project

Subject: Witbdnl'wal of Bid

Mr. Thai Khuu:

Hel ix Electric, Inc, is hereby withdrawing their bid for the above referenced job due to a clerical error.

Attached, please find a copy of the complete original estimate, for the following pages:

J} Bid Summary (This page has been redlined with U1TOWS for you to follow)2) Base Bid - (5) Pages of Estimate Sheets 1 through 53) Alternates I through 6- (The last 5 pages)

rhe 5 pages of tile Estimate Sheets will summarize the whole estimate and all costs are transferred to the front BidSummary page. The Bid Summary page will total all the individual costs such as (A) Labor, (B) Material, (C) Quotes,(D) Subcontracts and (F) Job Expense.

Our error is on page 3 of the Estimate Sheet. (This page has been redlined with an arrow for you to follow) The firstand second bullet states the following:

• Page 3, lineJ - Trench - 3,700' x 180 ft = $660,000• Page 3, line 6 - Trench - 3,200' x 180ft = $600,000

These totals are located in the box on the right hand side of page 3, We have added a contingency of $100,000 whichequals a IOtal of $1 ,360,000.

We then cut $200,000 out of the total price, which equals to S1,160,000.

The clerical error occurred when transferring this total of $1,160,000 to the Bid Summary Sheet. Halfway dOWl1 thesheet, where you see (D) subcontract, fifth line down on the Trench line, S160,000 was transferred rather than the$1,160,000.

The subcontractor's total should have been SI ,786,000. However, only $786,000 was transferred to the Base Bid totalline.

Instead of the cost being $5,531,000, the Base Bid total cost should have been $6,531,000 + mark-up = $8, 164,000.

With regret, we withdraw our bid. Please accept our sincere apologies for this error.

If you have any questions, please do not hesitate to contact me at 858-535-0505.

8260 Camino Santa Fe, Suite A, San Diego, CA 92121Phone: (858) 623-1232·· Fax: (858) 535-0357 - Email: [email protected]

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