REPORT TO COUNCIL
SUBJECT
Title
Reject All Bids Received for the Peery Park Area Transportation Improvements (PW23-16) and Make a Finding that the Action Does Not Constitute a “Project” Within the Meaning of the California Environmental Quality Act Guidelines Section 15378(b)(4)
Report
REPORT IN BRIEF
Approval is requested to reject all bids received in response to an invitation for bids for PW23-16: Peery Park Area Transportation Improvements. The first apparent low bidder is deemed non-responsive and all bids have exceeded 90 days for pricing hold.
EXISTING POLICY
Pursuant to Section 2.09.140(b) of the Sunnyvale Municipal Code, the City Council may reject bids or proposals received in response to formal competitive bid solicitations. This Code section also provides that if all bids are rejected, the City has the discretion to re-advertise.
ENVIRONMENTAL REVIEW
The rejection of all bids is not subject to the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15061 (b)(4) as CEQA does not apply where the project is rejected or disapproved.
BACKGROUND AND DISCUSSION
The Peery Park Area Transportation Improvements project (Project No. TR-18-09) was advertised on DemandStar on July 14, 2023. Twenty-five (25) contractors requested bid documents and five (5) sealed bids were received and opened on August 9, 2023. The first lowest bidder, QLM, Inc. (QLM) submitted a bid in the amount of $3,764,126.40. QLM failed to submit the required bid forms and therefore its bid was deemed non-responsive. Joseph J. Albanese, Inc. (Albanese) submitted the second lowest bid in the amount of $3,786,120 (Attachment 1, Bid Summary).
This project is federally funded and administered by Caltrans. As such, the project requires all contractors to meet a 23% Disadvantaged Business Enterprise (DBE) participation goal or, alternatively, demonstrate adequate Good Faith Efforts (GFE) towards meeting the 23% DBE participation goal. All bidders were required to submit documentation identifying the percentage of subcontracted work performed by DBE firm(s) or what GFE were completed in an attempt to solicit and contract with DBE subcontractors to meet the 23% goal. As a Caltrans-administered grant, bids that exceed $2 million and do not meet the DBE goal require a review of GFE documents by both City staff and Caltrans to determine whether an adequate level of GFE was made to solicit the required DBE participation goal for the project.
Albanese submitted a bid with a DBE participation rate of 2.5%, far less than the DBE goal of 23%, with documented GFE for review. The bid and the GFE documents were initially reviewed by City staff. Staff determined that Albanese did not demonstrate sufficient GFE to meet the DBE participation goal of this project. The City then provided the information to Caltrans on August 29, 2023 for review. On September 27, 2023, Caltrans District 4 Office of Local Assistance responded and concurred with the City’s determination.
The City communicated this determination to Albanese on September 28, 2023 and provided them the opportunity for an administrative reconsideration hearing pursuant to 49 C.F.R. Section 26.53 and the Caltrans Local Assistance Procedures Manual. On October 5, 2023, Albanese responded with additional information to demonstrate their GFE for this project. A reconsideration hearing meeting with Albanese and an independent panel made of high-level staff from the Department of Public Works was scheduled for November 2, 2023. On October 31, 2023, the City received written notice from Albanese that it was withdrawing its request for the reconsideration hearing and that it would accept the determination.
The third lowest bidder, Redgwick Construction Co. (Redgwick), submitted a bid in the amount of $4,250,530. Redgwick also did not meet the DBE goal through percentage of DBE subcontracted work and therefore a similar review of Redgwick’s GFE would be required. In addition, Redgwick’s bid was $952,000 over Caltrans’ authorized construction budget of the project.
As stated in the bid documents, bidders are required to submit a bid bond that guarantees their bid pricing to be held for 90 calendar days. This is a standard practice in public works construction bidding. On November 8, 2023, the bids of the project expired and likely would not be guaranteed at the bid amounts due to changes in prevailing wages and the impacts of inflation. As such, staff is recommending that the City Council reject all bids and allow staff to re-bid this project with minor changes to continue to take advantage of available grant funding and to meet Caltrans’ bid requirements. As the Council is being asked to reject all bids, no formal action needs to be taken regarding the non-responsive bidders discussed above.
FISCAL IMPACT
There is no fiscal impact resulting from rejecting the bids.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Reject all bids received in response to Invitation for Bids PW23-16 Peery Park
Staff
Prepared by: Lisa Vo, Interim Purchasing Officer
Reviewed by: Tim Kirby, Director of Finance
Reviewed by: Chip Taylor, Director of Public Works
Reviewed by: Jaqui Guzmán, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Bid Summary