REPORT TO COUNCIL
SUBJECT
Title
Award of Bid No. PW18-22 for the SMaRT Station Stormwater Management System Upgrade Re-Bid (UY-15-01), Waiver of Minor Bid Irregularity, Finding of California Environmental Quality Act (CEQA) Categorical Exemption, and Approval of Budget Modification No. 5 in the amount of $1,698,043
Report
REPORT IN BRIEF
Approval is requested to award a construction contract in the amount of $2,307,425 to Pacific Underground Construction, Inc., of San Jose, for the SMaRT Station Stormwater Management System Upgrade Re-Bid. Approval is also requested for a 10% construction contingency in the amount of $230,743 and for Budget Modification No. 5 in the amount of $1,698,043.
EXISTING POLICY
Section 1309 of the City Charter requires public works construction contracts to be awarded to the lowest responsive and responsible bidder. Further pursuant to Section 2.09.040 of the Sunnyvale Municipal Code, City Council approval is required for public works contracts greater than $100,000 in any one transaction and pursuant to Section 2.09.120 (c) may waive a minor bid irregularity if the discrepancy does not affect the bid amount or give the bidder an advantage over others.
Pursuant to Sunnyvale Charter Section 1305, at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by affirmative votes of at least four members to authorize the transfer of unused balances appropriated for one purpose to another, or to appropriate available revenue not included in the budget.
ENVIRONMENTAL REVIEW
The proposed project is categorically exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline Section15301 as it involves the maintenance or repair of an existing facility, which includes public owned utility facilities, involving negligible or no expansion of use beyond which presently exists.
BACKGROUND AND DISCUSSION
In 2013, San Francisco Baykeeper (“Baykeeper”) filed a lawsuit claiming that the City had failed to comply with the Industrial Stormwater Permit requirements of the federal Clean Water Act with regard to stormwater runoff at the SMaRT Station and various locations on the closed Sunnyvale Landfill. On December 6, 2013, a negotiated settlement agreement between the City and Baykeeper became effective.
Among the required actions in the Baykeeper settlement was a Feasibility Study to determine the most effective Best Management Practices (BMPs) for managing industrial stormwater at the SMaRT Station. In September 2014, the City Council approved a contract with Geosyntec Consultants for preparation of a Feasibility Study and Implementation Plan required in the Baykeeper settlement (RTC No. 14-0803). In December 2014, a feasibility study was presented to staff by Geosyntec Consultants that evaluated three options for managing industrial stormwater at the SMaRT Station. The alternative selected by the City is a system of diversion of the industrial portion of the stormwater from the SMaRT Station to the Water Pollution Control Plant. In May 2015, Baykeeper approved a plan and timeline for the implementation of this alternative.
On July 1, 2015, the Stormwater Regional Control Board (SWRCB) adopted a new Industrial General Stormwater Permit (Order No. 2014-0057-DWQ) expanding the description of industrial areas to cover haul roads adjacent to industrial sites. Under this new permit, the entrance road to the SMaRT Station and the entry/exit truck scales are now considered industrial activity areas. This required an addendum to the Feasibility Study to include this area in the stormwater management system. Geosyntec submitted a proposal, and was awarded a contract to prepare this addendum in September 2015 (RTC No. 15-0794). The addendum was completed in late November 2015, which allowed design to begin on the stormwater management system, which will divert industrial stormwater flows from the SMaRT Station to the WPCP.
This project was initially advertised for competitive bidding in May 26, 2017 and only one bid, in the amount of $2,173,330, was received. The bid amount was 83% higher than the engineer’s estimate of $1,185,870 so the bid was rejected by the City Council (RTC No. 17-061).
City staff reached out to contractors that downloaded the project specifications who expressed interest in a re-bid. The City further evaluated the plans and specifications and some potential cost saving modifications were made. These modifications included removal of two proposed storm connections, which were incorporated into the current construction activity for the WPCP Package 2 project. The project documents were updated and the project was publicly re-advertised on April 27, 2018, on the City’s DemandStar public procurement network. A sole bid was received in the amount of $2,352,275, from Pacific Underground Construction, Inc. The high bid amount was attributed the contractors’ busy schedules and escalating costs throughout the construction industry.
The sole bidder did not submit the bid on the “revised” bid form. As a sole bidder, this discrepancy does not provide a material advantage over another bidder. Staff, therefore, confirmed with Pacific Underground Construction, Inc. that the unit price originally bid will be honored on the “revised” bid form, as detailed in the bid summary in Attachment 1. This resulted in a bid savings of $44,850. In consideration of Sunnyvale Municipal Code Section 2.09.150, awarding to this contractor is in the best interest of the City given the Baykeeper implementation timeframe requirements.
The improvements are necessary for the City to comply with the requirements of the settlement agreement with Baykeeper. Advertising an additional re-bid of the project would further delay the project start by at least six months and may result in further cost increases due to current industry cost escalations. Therefore, staff is recommending City Council waive the minor bid irregularity and award a contract to Pacific Underground Construction, Inc.
FISCAL IMPACT
This project is funded by the SMaRT Station Fund - Replacement Sub-fund, which receives revenues and shares expenses with the cities of Mountain View, Palo Alto and Sunnyvale consistent with the SMaRT Station Memorandum of Understanding. Funds are appropriated and spent from Capital Project 811250 and are used to replace a variety of equipment at the SMaRT Station based on a detailed equipment replacement schedule. Total cost of the contract with contingency is $2,538,168. The project has $840,125 available for the work to be done under this contract. Therefore, an additional $1,698,043 is needed to fund the project.
Funding for this budget modification will be provided through a combination of contributions from the partner cities and an appropriation from Capital Reserves. While this reduces the reserves significantly, the SMaRT Station Replacement Sub-fund assumes funding for the full replacement or rehabilitation of the facility beginning in FY 2020/21 through the issuance of debt. Therefore, staff is keeping the reserves and partner contributions to a minimum in anticipation that the facility will undergo a significant renovation and upgrade. Sunnyvale’s share is funded from the Solid Waste Management Fund. Staff has met with Mountain View and Palo Alto, who have agreed to contribute an additional $199,325 and $180,795 respectively.
Budget Modification No. 5
FY 2018/19
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
1) Make a finding of California Environmental Quality Act (CEQA) categorical exemption pursuant to CEQA Guidelines Section 15301 as it involves the maintenance or repair of an existing facility, which includes public owned utility facilities, involving negligible or no expansion of use beyond which presently exists; 2) make a determination to waive the minor bid irregularity for Pacific Underground Construction, Inc. 3) award a contract in substantially the same form as Attachment 2 to the report in the amount of $2,307,425 to Pacific Underground Construction and authorize the City Manager to execute the contract when all necessary conditions have been met; 4) approve a 10% construction contingency in the amount of $230,743; and 5) approve a Budget Modification No. 5 in the amount of $1,698,043.
Staff
Prepared by: Gregory S. Card, Purchasing Officer
Reviewed by: Timothy J. Kirby, Director of Finance
Reviewed by: Ramana Chinnakotla, Director of Environmental Services
Reviewed by: Chip Taylor, Director of Public Works
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Bid Summary
2. Draft General Construction Contract