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AGENDA BILL Agenda Item No. 5(D) Date: August 20, 2013 To: El Cerrito City Council From: Yvetteh Ortiz, Interim Public Works Director/City Engineer Subject: 2013 Street Improvement Program, City Project No. C-3072 ACTION REQUESTED Adopt a resolution approving the following actions: 1) Approve plans for the 2013 Street Improvement Program Project, City Project No. C-3072; and 2) Authorize the City Manager to award a contract, contingent on successful negotiations with VSS International, Inc. (the lowest responsible bidder for the project), for a deductive change order after undergoing a value engineering process which is not inconsistent with the revised budget for the 2013 Street Improvement Program, City Project No. C-3072. BACKGROUND Project Description The 2013 Street Improvement Program is a component of the Measure A funded annual street improvement program. This project is intended to repair seventeen street segments with moderate to severely distressed pavement. The majority of the streets included in this project will be resurfaced by applying an asphalt rubber cape seal that is composed of a two layer system of asphalt rubber chip seal with a slurry seal surfacing. This resurfacing treatment was utilized extensively and successfully in 2009 as a critical element of El Cerrito’s Accelerated Pavement Resurfacing Program. The other two street segments are planned to be rehabilitated by removing and replacing the entire existing asphalt concrete pavement, typically called an asphalt concrete inlay. Below is a list of the various project street segments and their planned treatment: Asphalt Rubber Cape Seal Streets Bay Tree Lane Carquinez Avenue – Barrett to Lagunitas Cutting Blvd – Arlington to Junction Ivy Court Jordan Avenue – Nason to Alta Punta Julian Drive ---PAGE BREAK--- Agenda Item No.5(D) Page 2 Julian Court Lawrence Court Leneve Place Potrero Avenue – Arlington to Douglas Regency Court Scott Street Tamalpais Court Yuba Street – North City Limits to Zara Waldo Avenue – Pomona to Ashbury Asphalt Concrete Inlay Streets Edwards Avenue – Barrett to Poinsett Knott Avenue – San Pablo to Key In addition, 20 new curb ramps are planned to be constructed along these street segments. Also, 25 existing curb ramps are planned to be retrofitted with new truncated domes in order to comply with current ADA requirements. The project was advertised for bid in the West County Times on July 16 and 22, 2013. Notices were mailed directly to all contractors on our bidders list and several plan rooms. ANALYSIS Three bids were received on August 6, 2013 with the following results: Name Location Base Bid Alternates Total Bid VSS International West Sacramento $ 683,869.00 113,918.00 797,787.00 Intermountain Slurry Seal French Camp $ 675,797.01 145,082.99 820,880.00 Ghilotti Bros. San Rafael $ 847,178.54 146,886.24 994,064.78 Engineer’s Estimate $ 566,581.05 109,068.50 675,649.55 The bid documents stipulated that the low bidder was to be determined by the Total Bid (Base Bid plus Alternates 1 – The low bidder is VSS International (contractor’s license #293727, Class A, B, and C-12) with a bid approximately 18 percent above the Engineer’s Estimate of $675,649 which places its bid outside the project budget. As with the previous project biddings, staff has considered various options: 1. Reject all bids, redesign the project, and go out to bid again. With prices rising, staff does not recommend this option as it would take longer and expose the City to even higher prices. ---PAGE BREAK--- Agenda Item No.S(D) 2. Award the project and rely on the value engineering process to reduce the total project costs through deductive change orders. Staff is recommending the value engineering through a deductive change order approach. Staff has worked with the designer on several value engineering options to lower the project costs, including re-programming one or more of the street segments to the next Fiscal Year's Annual Street Maintenance Program. Staff believes there is a strong likelihood that deductive change orders can be negotiated successfully with the low bidder to bring the project within the existing budget. Because we are still in the competitive bidding process, the City cannot negotiate with any bidder. Therefore, we cannot know the actual value of a deductive change. Staff has conservatively estimated that approximately $175,000 can be deducted from the low bid through elimination of additive bid items, value engineering changes, and deductions that would bring the project within budget. FINANCIAL CONSIDERATIONS This project is funded through a $354,000 State-Local Partnership Program {SLPP) grant with matching and additional funds of $479,000 provided by Measure A Street Improvement Fund. The total project budget is $833,000 as shown below. Design $ 77,000 Construction $ 595,000 Contingency $ 59,500 Inspection, Testing & Admin $ 101,500 TOTAL $ 833,000 Scott Hanin, City Manager Attachments: 1. Accompanying Resolution Page 3 ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 1 RESOLUTION 2013–XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO APPROVING PLANS FOR THE 2013 STREET IMPROVEMENT PROGRAM PROJECT; AND AUTHORIZING THE CITY MANAGER TO AWARD A CONTRACT TO VSS INTERNATIONAL, INC IN AN AMOUNT TO BE DETERMINED AFTER UNDERGOING A VALUE ENGINEERING PROCESS FOR THE 2013 STREET IMPROVEMENT PROGRAM PROJECT, CONTRACT NO. C-3072 WHEREAS, City Council previously authorized bids for this project as part of the Capital Improvement Program; and WHEREAS, the project was advertised for bids on July 16 and 22, 2013 and three bids were received on August 6, 2013; and WHEREAS, the lowest bidder was VSS International, Inc. whose total bid, in the amount of $797,787.00, was 18 percent above the Engineer’s Estimate, exceeding the projects fundable budget; and WHEREAS, staff intends to pursue value engineering options to reduce project costs without jeopardizing any of the critical elements of the project or the intent of the original state grant application; and WHEREAS, the current funding for this project is provided through State-Local Partnership Program (SLPP) grant funds, and Measure A Street Improvement Funds; and WHEREAS, the City has the authority to authorize the City Manager to award the contract for this project pursuant to the established common-law doctrine articulated in the case of Graydon v. Pasadena Redevelopment Agency (1980) 104 Cal.App.3d 631. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of El Cerrito approves the following: 1) Approves plans for the 2013 Street Improvement Program Project, City Project No. C-3072; and 2) Authorizes the City Manager to award a contract, contingent on successful negotiations with VSS International, Inc (the lowest responsible bidder for the project), for a deductive change order after undergoing a value engineering process which is not inconsistent with the revised budget for the 2013 Street Improvement Program Project, City Project No. C-3072. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon passage and adoption. I CERTIFY that at a regular meeting on August 20, 2013 the City Council of the City of El Cerrito passed this Resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 1 IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on August XX, 2013. Cheryl Morse, City Clerk APPROVED: Gregory B. Lyman, Mayor