Department of Public Works. Bureau of Engineering Bureau of Contract Administration Joint Report No. 1. February 8, 2017 CD No. 11

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1 Department of Public Works Bureau of Engineering Joint Report No. 1 February 8, 2017 CD No. 11 REQUEST TO AWARD A CONTRACT FOR THE HYPERION TREATMENT PLANT (HTP) ONE-MILE OUTFALL REPAIR (CIP 2437) RE-BID - WORK ORDER NO. SZH11770 RECOMMENDATIONS 1. Declare Curtin Maritime, Corp. (Curtin), first low bidder after the Local Business Preference (LBP) is applied, to be non-responsive, as discussed in this report. 2. Declare TechCom International, Corp. (TechCom), second low bidder after the LBP is applied, to be the lowest responsive, responsible bidder, and award them a contract for this project for $5,465, Authorize the President or two members of the Board of Public Works (Board) to execute the contract after approval as to form has been obtained from the City Attorney. TRANSMITTALS 1. Summary of bids received on October 19, Copy of the letter dated November 8, 2016, from the Office of Contract Compliance (OCC) to Martin Curtin, Curtin Maritime Corporation, P.O. Box 2531, Long Beach, CA Copy of the letter dated November 10, 2016, from Mr. Steven Chew, Vice President, Operations, Curtin Maritime Corporation, to the (BCA). DISCUSSION Background The work to be performed includes mobilization; furnishing all materials, equipment, and tools; transportation; and the performance of necessary labor for the rehabilitation of the HTP One-Mile Outfall Repair. The work consists of: Placement of rock ballast scour protection along a portion of the One-Mile Outfall, perform concrete repairs to voids found on several locations of the outfall concrete pipe encasement and at two of the outfall s pylons near the offshore end of the encasement. Clean heavy marine growth from voids to be repaired, form and place concrete, and fill voids for repair. Remove marine growth and debris that has plugged a gas release vent located on top of the south diffuser leg end structure of the Five-Mile Outfall pipe. Meet special condition requirements including provision of Marine Wildlife Monitoring and Contingency Plan, Pre-construction Marine Biological Survey and Report, Anchoring Plan, Spill Response

2 Joint Report No. 1 Page 2 Plan, Critical Operations and Curtailment Plan, Post-Project Marine Biological Survey and Report, Pre-construction Caulerpa Survey in accordance with the Caulerpa Control Protocol, Pre-construction Eelgrass Survey in accordance with the California Eelgrass Mitigation Policy, US Coast Guard Notifications, Post-project implementation memorandum, and Water Quality Monitoring Plan. The contract duration is 180 calendar days. Aerial Photo of the Hyperion One-Mile Outfall The project has been reviewed for environmental considerations and was determined to be categorically exempt pursuant to the provisions of the California Environmental Quality Act (CEQA) of 1970 under Article III of the City s CEQA Guidelines. Bid Review The three bids received (Transmittal No. 1) compared with the City Engineer s estimate of $5,750,000 are: Business Inclusion Program (BIP) Codes: MBE = Minority Business Enterprise WBE = Women Business Enterprise SBE = Small Business Enterprise LBE = Local Business Enterprise EBE = Emerging Business Enterprise DVBE = Disabled Veteran Business Enterprise OBE = Other Business Enterprise

3 Department of Public Works Bureau of Engineering Joint Report No. 1 February 8, 2017 Page 3 Bid No. Contractor Name Bid Amount % High/Low % Pledged Low Bid 2 nd Bid 3 rd Bid TechCom (WBE, SBE, EBE) Manson Construction Co. (Manson) (OBE) Curtin (SBE, LBE) $5,465,000 $5,717,500 $5,723, % Low 0.57% Low 0.46% Low MBE WBE SBE 0.00% 0.00% 9.80% EBE DVBE OBE 9.27% 0.00% 47.55% MBE WBE SBE 0.00% 0.00% 0.00% EBE DVBE OBE 0.00% 0.00% 28.52% MBE WBE SBE 0.00% 0.00% 3.05% EBE DVBE OBE 2.52% 0.54% 10.05% Based on the range of bids submitted for this project, staff believes that these bids are reasonable. The contract may be awarded to either one of these bidders subject to verification of all other bidding requirements. LBP Program City Ordinance No adopted the LBP Program. This Program is designed to increase local employment and expenditures in the local private sector. Bidders that qualify as an LBE may be granted an 8 percent reduction of their bid amount solely for bid evaluation purposes. Additionally, all non-lbe bidders may be granted a 1 percent reduction, up to a maximum of 5 percent, of their bid amount for bid evaluation purposes, for every 10 percent of their bid that is to be performed by an LBE subcontractor. For this project, the BCA verified that the apparent first and second low bidders, TechCom and Manson, respectively, are not certified LBEs and that the apparent third low bidder, Curtin, is a certified LBE. Staff calculated the bids as follows: Prime Contractor Certification Bid Amount LBP Percentage LBP Adjusted Bid Amount Bid No. After LBP TechCom Non-LBE $5,465,000 2% $5,355, Manson Non-LBE $5,717,500 2% $5,603, Curtin LBE $5,723,804 8% $5,265,

4 Joint Report No. 1 Page 4 Based on these findings, Curtin becomes the apparent first low bidder, for bid evaluation purposes, after the LBP Percentage is applied. BIP On January 12, 2011, the Mayor issued Executive Directive No. 14 which created the BIP. This program provides MBE, WBE, SBE, EBE, DVBE, and OBE firms an equal opportunity to compete for and participate in City contracts. Additionally, the BIP requires bidders to perform and document a BIP Outreach via the internet utilizing the Los Angeles Business Assistance Virtual Network service. This project was advertised with anticipated participation levels of 4 percent MBE, 2 percent WBE, 25 percent SBE, 8 percent EBE, and 3 percent DVBE. This project was also advertised with the Board s Mandatory Subcontracting Minimum (MSM) requirement of 20 percent. The Bidders MSM percentages were calculated after subtracting the fixed cost items of $350,000 from their total bid amount. The OCC, based on a review of the submitted documents, reported the following: 1. Curtin, the first low bidder after the LBP is applied, pledged an MSM amount of percent which did not meet the required percentage of 20 percent set for this project. In a letter, dated November 8, 2016 (Transmittal No. 2), the OCC notified Curtin that the OCC would be recommending that their bid be deemed non-responsive for failing to meet the MSM Requirement set for this project. Subsequently, the OCC notified Curtin that they also failed to pass their BIP Outreach by failing to demonstrate a negotiation in good faith. Communication Received While Curtin did not respond to the failed BIP Outreach notification, Curtin did respond to the OCC notification of their failure to meet the MSM requirement. In a letter dated November 10, 2016 (Transmittal No. 3), Mr. Steven Chew, Vice President, Operations, Curtin, acknowledged that due to a clerical error, the contract value amount for one bidlisted subcontractor, Global Diving and Salvage, Inc. (Global) was not listed on page 1-6 of their bid proposal. However, Curtin stated that the BCA should not declare their bid unresponsive due to the clerical error because Curtin properly submitted two other documents to the Board that indicated Global s contract dollar value. Therefore, Mr. Chew claims that Curtin is in compliance with the MSM requirement. Staff Response According to the Page 1-6 of the Bid Proposal, Failure to list subcontractors and subcontracting amounts on pages 1-6 through 1-8 with the bid sufficient to meet or exceed the MSM may cause the bid to be rejected by the Board as non-responsive. The dollar values for Global listed on the BIP Summary Sheet and Escrow Documents, as well as on the subbid submitted as part of the BIP Outreach do not match.

5 Department of Public Works Bureau of Engineering Joint Report No. 1 February 8, 2017 Page 5 Furthermore, these documents cannot be used as substitutes for listing the dollar amounts on pages 1-6 through 1-8. In view of the above findings, the OCC recommends that Curtin be found to be non-responsive for failure of their BIP Outreach and for failure to meet the MSM requirement. 2. TechCom, the second low bidder after the LBP is applied, complied with the BIP Outreach requirements of the bid. TechCom pledged participation levels of 0 percent MBE, 0 percent WBE, 9.80 percent SBE, 9.27 percent EBE, 0 percent DVBE, percent OBE, and complied with the MSM requirement by pledging a subcontractor participation level of percent. In view of the above findings, TechCom is the lowest responsive, responsible bidder after the LBP Percentage is applied. TechCom pledged the following subcontractor utilization: MBE/WBE/ SBE/EBE/ DVBE/OBE Gender/ Ethnicity % of Bid Subcontractors Dollar Amount MBC Applied Environmental Sciences SBE, EBE 9.27% $ 506,595 George L. Throop Company SBE 0.53% $ 28,800 American Marine Corporation 1 OBE 9.67% $ 528,240 Connolly-Pacific Co. 1,2 OBE 11.95% $ 653,340 Pacific Tugboat Services OBE 25.93% $1,417,059 Note: Subcontractors may be certified in multiple certification categories; therefore, per the requirements of Executive Directive 14, the dollar amounts were credited toward multiple pledged participation categories. 1 Certified LBE 2 This firm is both a manufacturer and a supplier; therefore, their bid-listed dollar amount of $788,700 was credited at 100 percent for the items that they intend to manufacture, and at 60 percent for the items that they intend to supply. In view of the above findings, TechCom becomes the lowest responsive, responsible bidder.

6 Joint Report No. 1 Page 6 Compliance with the City s Non-Discrimination Policies TechCom has complied with the Affirmative Action, Non-Discrimination/Equal Employment Practices Provisions, Equal Benefits Ordinance, and Slavery Disclosure Ordinance requirements of the bid. First Time Bidder TechCom has no record of having worked on any previous contracts awarded by the Board within the last five years. The OCC has checked with various State agencies and none of these agencies reported any labor compliance problems on file concerning the contractor. The Inspector of Public Works has conducted a First Time Bidder investigation of references provided by the contractor and did not find any evidence of violations of statutes, regulations, ordinances, or wrong doing by the contractor. The report was submitted to the Board on December 13, Contractor Performance Evaluation In accordance with Article 13, Chapter 1, Division 10, of the City of Los Angeles Administrative Code (L.A.A.C.), the Project Manager and the City Inspector for this construction contract shall submit Contractor Performance Evaluation Reports to the BCA upon completion of this contract. Peak Hour Construction and Right-of-Way Obstruction Regulations All contractors must comply with the requirements specified in the Los Angeles Municipal Code Section related to peak hour traffic restrictions, unless an exemption from the Peak Traffic Hours Prohibition is approved. Contractor Responsibility Ordinance All contractors participating in this program are subject to compliance with the requirements specified in the City of Los Angeles Contractor Responsibility Ordinance No (Article 14, Chapter 1, Division 10, L.A.A.C.). Failure to comply with all the requirements specified in the Ordinance may render this bidder s contract subject to termination pursuant to the conditions expressed therein. Enhanced Electrical Safety Policy If the estimated value of the electrical work for this project is $100,000 or more, the electrical work will be performed and inspected under the conditions of the most current, amended Board s Enhanced Electrical Safety Policy. Bid Bond Extension Techcom and Curtin were both requested to extend their Bid Bonds which expired on January 17, Both contractors have agreed to extend their Bid Bonds until February 17, 2017.

7 Department of Public Works Bureau of Engineering Joint Report No. 1 February 8, 2017 Page 7 Conclusion In view of the above findings, staff recommends that the Board declare Curtin, first low bidder after the LBP is applied, to be non-responsive; declare TechCom, second low bidder after the LBP is applied, to be the lowest responsive, responsible bidder; and award TechCom the contract for this project. Program Review Committee (PRC) Approval The PRC approved a total budget of $6,037,500, including contingency, for this project on June 28, STATUS OF FINANCING There is no impact to the General Fund. The total funding for this project is not-to-exceed $5,738,250. No funding is required in the current fiscal year. However, funds and appropriations for future fiscal years are not yet identified and existing appropriations may change based on available cash balances. Therefore, Funds and Appropriations, once determined by the Director of Sanitation or designee, will be reviewed and certified by the Director of the Office of Accounting (OOA) or designee, as to the status and availability of funding. The contract contains a Financial Liability Clause which states that the City s liability under this contract shall only be to the extent of the present City appropriation to fund the contract. However, if the City shall appropriate funds for any succeeding years, the City s liability shall be extended to the extent of such appropriation, subject to the terms and conditions of the contract. The following funding has been verified and approved by the Director of the OOA, subject to the conditions described above: Fund No.* Appropriation Unit No. Budget Fiscal Year Contract Contingencies Total TBD WCIP BUDGET SZH /2018 $4,304,762 $215,238 $4,520,000 TBD WCIP BUDGET SZH11770 FUTURE $1,160,238 $ 58,012 $1,218,250 Total $5,465,000 $273,250 $5,738,250 *To be determined (TBD) by the Director of the Bureau of Sanitation or appointed designee.

8 Joint Report No. l Page 8 ( MJS EBO RMK KRR CLS ) Report reviewed by: BOE (ADM and EED) and BOS (FMD) Report prepared by: Project Award and Control Division Respectfully submitted, 4~Cu~ Gary Lee Moore, PE, ENV SP City Engineer Bureau of Engine Edick B. Ohanian, PE Division Engineer Phone No. (213) Compliance Review performed and approved by: Hannah Choi, Program Manager Office of Contract Compliance Statement ~slo F~nds Vvu---4 proved by: G v Victoria A. SantiagaJ DirectoF Office of Accounting Fund Ref. No Funding for Fiscal Year Date: Future Funding TBD I,. I 2fV 1 I 7 EBO/SZ/ PAC.gva Questions regarding this report may be referred to: Sean Zahedi, PE, Project Manager Phone No. (310) Sean.Zahedi@lacity.org