SR-6-R (14)
505-007-
6-1f
OCT 9 1990
GS:SES:DB
Council Meeting: October 9, 1990
Santa Monica, California
TO:
Mayor and City Council
FROM:
City staff
SUBJECT:
Recommendation to Award a
Margate construction, Inc.
Treatment Plant Expansion
construction Contract to
for the Arcadia Water
INTRODUCTION
This report requests that the city Council reject the low bid due
to a significant omission and award a contract for the expansion of
the Arcadia Water Treatment Plant to Margate Construction, Inc.,
the next low bidder, in the amount of $2,629,600.
BACKGROUND
During the FY 1985-86 and 1989-90 budget processes, the City
council appropr1ated funds in the total amount of $2,184,000 for
expansion of the Arcadia Water Treatment Plant located in the City
of Los Angeles.
The plant treats City well water and then blends the water with
water purchased from the Metropolitan Water Distr1ct (MWD). The
present treatment capacity of the plant is 6 million gallons per
day. The plant expansion will add 4 million gallons per day of
treatment capacity for City well water. This additional treatment
capacity will allow for increased use of well water and will reduce
the purchase of and reliance on MWD's increasingly scarce imported
water.
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OCT 9 1990
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The expansion of the plant will include an aeration treatment
process. This process will enable the City to reactivate wells in
the Santa Monica sub-basin which were closed when the city
determined that the water had higher than acceptable levels of
trichloroethylene (TeE). The process will use aerators to remove
TCE to below the EPA acceptable limits.
The City has received
approval from the Air Quality Management District for the aeration
operation. As a result, the city will have the ability to optimize
the use of City well water in order to reduce reliance on the
purchase of more expensive MWD water. The anticipated increased
pumping from the Santa Monica sub-basin will not jeopardize the
safe-yield of the basin.
A Notice Inviting Bids was published on July 24 and 25, 1990, in
The Outlook and in four construction journals. Bid documents were
also issued to 34 contractors and 14 construction advertising
services, including 6 DBE contracting associations.
Four bids were received on August 20, 1990, by the city Clerk. The
bids are as follows:
Pascal & Ludwig Engineers
Margate Construction, Inc.
Scott Co.
Park Construction Co.
$2,213,000
2,629,600
2,710,520
2,722,222
City Engineer's Estlmate
2,000,000
The bids received exceeded both the city Engineer's estimate for
the project and the monies available to fund the work. Immediately
after the bid opening, the low bidder requested that his bid be
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withdrawn on the basis that the bid contained a $250,000 omission
error. staff reviewed the blds and determined that the low bid
does contain a significant error and it would be in the eity's best
interest to relieve the bidder of any further responsibility.
Despite the fact that the bids exceeded the City Engineer's
estimate, staff believes, from their review, that the bids are
valid and not grossly inflated. This conclusion is validated by
the fact that the 3 remaining bids are within $100,000 or 3% of
each other. The eity Engineer's estimate was prepared by an
outside consultant and is based on a project that has been evolving
over the past 5 years.
The project could be constructed in 2 phases to eliminate the need
to seek immediate additional funding for the project. However,
staff advises against this option for the following reasons:
1. Delaying this portion of the project would result in future
higher costs due to on-going inflation.
2. The additional work would be constructed on a new building by,
in all probability, a different contractor. Determining
liability, if problems occur, could be a major problem.
3. The Phase I scope of the project would be decreased through
elimination of the expansion of the water softening system.
Under certain circumstances, this would result in reducing
water treatment to 6 milllon gallons a day and increase
reliance on imported MWD water.
BUDGET/FINANeIAL IMPACT
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Funds Required
Contract
$2,629,600
contingencies
394,000
TOTAL
$3,024,000
Funds for this project in the amount of $2,184,000 are available in
eIP account numbers:
25-760-671-22486-8927-99l28
$1,834,000
25-760-671-29490-8927-99204
$350,000
Funds in the amount of $840,000 must be appropriated from the Water
Fund Reserves to CIP account number 25-760-671-22486-8927-99l28 to
fund this project.
RECOMMENDATION
It is recommended that the city council:
1. Reject the low bid due to a significant omission in the
bid received;
2. Appropriate funds in the amount of $840,000 from the
Water Fund Reserves to CIP account number 25-760-671-
22486-8927-99128;
3. Award a construction contract to Margate eonstruction,
Inc., the next low bidder, in the amount of $2,629,600;
and
4. Authorize the Acting City Engineer to issue any necessary
change orders to complete additional work in conformance
with the Administrative Instruction on Change orders.
Prepared by:
stan Scholl, Director of General services
Dave Britton, Acting city Engineer
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