HomeMy WebLinkAbout3/16/2011 - STAFF REPORTS - 2J oe
PALA4 Sp
J6
G►
v u+
A ~CO N' q3 k
ORpT4p
91
441F0ItNN City Council Staff Re ort
Date: March 16, 2011 CONSENT CALENDAR
Subject: APPROVAL OF A NOTICE TO PROCEED FOR VEOLIA WEST
OPERATING SERVICES, INC., FOR THE CONSTRUCTION PHASE OF
THE ELECTRICAL SYSTEM UPGRADE, CITY PROJECT 09-03
From: David H. Ready, City Manager
Initiated by: Public Works and Engineering Department
SUMMARY
Approval of this item will authorize Veolia West Operating Services, Inc., ("Veolia") to
proceed with construction of an overall electrical system upgrade at the City's
wastewater treatment plant.
RECOMMENDATION:
Authorize the Director of Public Works/City Engineer to issue a Notice to Proceed for
Veolia West Operating Services, Inc., in the amount of $4,365,513 for the construction
phase of the Wastewater Treatment Plant Electrical System Upgrade, City Project No.
09-03, inclusive of a pre-approved 10% construction contingency.
STAFF ANALYSIS:
The City and Veolia continue to coordinate on various capital improvement projects at
the City's Wastewater Treatment Plant (WWTP). The WWTP was initially built in the
1950's with several upgrades during the 1980's. The electrical system, including the
main power feed, motor control centers, and other components are 40 or more years
old and have met their life expectancy. Upgrading the existing electrical system is the
most critical and highest priority project of the WWTP capital improvement plan.
On October 6, 2010, the City Council authorized Veolia to solicit bids for the
Wastewater Treatment Plant Electrical System Upgrade, City Project No. 09-03.
Previously, the City issued a Notice Inviting Statements of Qualifications ("SOQ") on
March 24, 2009, on behalf of Veolia, requesting qualifications from contractors in the
following trades: Scaffolding, Fencing, Earthwork, Paving, Demolition, Concrete, Metals,
Coatings, Painting, Mechanical, HVAC and Electrical. To ensure a far-reaching and
ITEM:1 ;lO. _.
City Council Staff Report
March 16, 2011 - Page 2
Veolia Notice To Proceed (CP09-03)
broad solicitation, Notices for the SOQ were published in the following newspapers:
The Desert Sun, The Orange County Register, the Press Enterprise and San Diego
Union-Tribune. The deadline to submit qualifications was May 8, 2009, and at that time
29 firms submitted qualifications. After reviewing the submitted qualifications, 26 of the
firms were pre-qualified for future wastewater capital projects.
For this project, given the scope relates to electrical systems and infrastructure, 17 of
the 26 pre-qualified contractors were eligible to bid this project. On November 1, 2010,
Veolia requested bids from the 17 prequalified contractors. A mandatory job-walk was
held on November 12, 2010. Eight of the 17 prequalified contractors attended the
mandatory job-walk and were subsequently eligible to submit a bid to Veolia. By the
2PM deadline of January 28, 2011, Veolia received bids from the following two pre-
qualified contractors:
1. Davis Electric, Inc.; Yucaipa, CA; Bid Amount: $2,841,842
2. Harbor Construction; Irvine, CA; Bid Amount: $4,358,000
The final engineer's estimate for the construction items bid by Veolia was $4,560,000
(or $5.13 Million when including a 12.5% mark-up in accordance with the City's
agreement with Veolia). The low bid submitted by Davis Electric is substantially lower
than the engineer's estimate, which is a result of the contractor's current familiarity with
the Palm Springs WVVfP as a sub-contractor on the Digester No. 1 Rehabilitation
project. The low bid also demonstrates that the current construction market remains
competitive.
Veolia has submitted a proposal to the City for the construction phase of this project
(reflecting the low bid submitted by Davis Electric). The final Veolia proposal as
compared to the estimated costs reported to Council in October 2010 is summarized as
fol lows:
Item of Work Estimated Cost Final Cost
1. Demolition, Site Work and Mechanical: $858,769 $604,527
2. Electrical: $4,278,375 $2,592,546
3. PLC Equipment: $51,514 $44,417
4. SCE Costs: $67,743 $647233
5. Landscaping Repairs: $57,843 $57,843
6. Professional Construction Services: $150,855 $139,953 (1)
7. Veolia Integrated/Automated Services: $33,750 $33,750 (2)
8. Veolia Construction Management Services: $254,793 $396,849 (3)
9. Veolia General Liability Insurance: $50,460 $34,530 (4)
Total: $5,8047102 $3,968,648
(For Notes, see next page).
City Council Staff Report
March 16, 2011 - Page 3
Veolia Notice To Proceed (CP09-03)
Notes:
(1) Given the complexities of this project, direct involvement during construction by the
professional engineering firms responsible for the design is required. Veolia has
negotiated agreements with Carollo Engineers and IQA Solutions Inc. for
engineering services; with CHJ Inc. for materials testing and inspection; and with
SCEC for AQMD permitting services.
(2) Veolia's separate Automation/Integration Group has been contracted to coordinate
programming of all new electrical systems, new Programmable Logic Computers
(PLCs) that operate new equipment, and to ensure all systems at the WWTP
operate correctly with the WWTP's industrial control ("SCADA") systems.
(3) Veolia's original estimate assumed a 6 month construction period. The construction
schedule submitted by Davis Electric requires a 9 month construction period.
Additional hours have been included in Veolia's final proposal to accommodate the
extended construction period.
(4) With any capital project undertaken at the WWTP, Veolia operates as the general
contractor under its own contractor's license. As the general contractor, Veolia is
responsible for ensuring all construction is performed in accordance with state and
federal rules and regulations, and is liable for all risks and damages that may occur.
Accordingly, Veolia obtains general liability insurance for each project, which is
passed as a direct cost to the City at a rate of 0.87% of the overall cost of the
project.
Local Business Preference Compliance
Section 7.09.030 of the Palm Springs Municipal Code, "Local Business Preference
Program," requires prime contractors to use good faith efforts to sub-contract the supply
of materials and equipment to local business enterprises and to sub-contract services to
businesses whose work force resides within the Coachella Valley; submission of good
faith efforts is required. Generally, this provision of the Municipal Code does not apply
to Veolia, as the City's current agreement with Veolia gives Veolia the right to submit
proposals for construction of capital projects at the WWTP as the City's general
contractor. However, staff has advised Veolia to ensure local firms are provided an
opportunity to participate in WWTP capital projects, and required Veolia to include the
local business preference requirement in its solicitation of bids.
Included with Veolia's proposal are subcontracts with two local firms:
1. Randy Purnel Landscape Architects (RPLA) (Rancho Mirage, CA). RPLA will
coordinate all required landscaping improvements as part of this project.
2. CHJ, Inc. (Palm Desert, CA). CHJ Inc. will provide all grading observation,
compaction testing, materials inspection and testing services.
City Council Staff Report
March 16, 2011 - Page 4
Veolia Notice To Proceed (CP09-03)
Also, the bid submitted by Davis Electric demonstrated good faith efforts to solicit local
firms as part of its bid. Included with their bid were copies of advertisements with the
Desert Sun on Nov. 18, 19, 20, 21, 24, 25, and 26.
Contingency Fund
Given the complexity of this project, it is recommended that a construction contingency
of 10% be authorized. The suggested total authorized amount, inclusive of a 10% pre-
approved contingency, is $4,365,513
Summary
In accordance with Section 5.3(f) of the Amended and Restated Wastewater Services
Agreement between the City and Veolia, Veolia is entitled to make a first proposal to do
any Capital Project related to the wastewater treatment plant. The Agreement provides
for a mark-up and profit margin varying between 12.5% and 16%. For this project,
Veolia has proposed a 12.5% mark-up (the lowest mark-up available by contract) which
is not applied to Veolia's own labor rates and general liability insurance cost.
Staff recommends that the Council authorize the Director of Public Works/City Engineer
to issue a Notice to Proceed to Veolia in the amount of $4,365,513 which is inclusive of
a 10% pre-approved contingency fund.
FISCAL IMPACT:
Sufficient funds are available in account No. 420-6800-57022 (Electrical System
Upgrade).
SUBMITTED:
Prepared by: Recommended by:
Marcus L. Fuller David J. Barakian
Assistant Director of Public Works Director of Public Works/City Engineer
Approved by-
Thomas J. Wils n, Asst. City Manager David H. Ready, ger