SR-850-005-01 (16)
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City Council Meeting: March 26, 2002 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT:Approval of Design-Build Contract for the Main Library Project;
Modification of a Professional Services Agreement for the Design and
Development of the Main Library Expansion Project; and Lease of Trailers
to be used as a Temporary Main Library
Introduction
This report recommends that the City Council find that it is in the interest of the City to
reject all bids received and authorize the City Manager to negotiate and execute a
modified design-build contract with Morley Builders for the Main Library Expansion
Project in an amount not to exceed $4,244,630 and approve a contingency of $424,463;
modify the professional services agreement with the project architects Moore Ruble
Yudell Architects to design and engineer the expansion of subterranean public parking
in an amount not to exceed $333,000 and approve a contingency of $45,000; and
authorize the City Manager to negotiate and execute a lease agreement with General
Electric Capital Corporation for the lease of trailers for use as a temporary Main Library
in an amount not to exceed $750,000, should that be necessary.
Background
On December 18, 2001, Council approved the conceptual plan for the Main Library
Expansion Project and authorized staff to proceed with schematic design (Council also
directed staff to return with periodic reviews of the design as it develops, which staff
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intends to do in the Summer). Several actions now need to occur to further develop the
project and secure temporary facilities for the Main Library.
Discussion
It was originally contemplated that the Main Library project would be implemented
using a traditional design-bid-build approach, wherein the owner warrants to the
contractor that the drawings and specifications are complete and free from error. If
errors are later identified, the cost associated with the resolution of such errors is the
sole responsibility of the City via change orders. Typically the construction schedule is
lengthened by the time required to resolve errors. According to construction industry
experts it is not uncommon with design-bid-build projects to experience construction
contract cost increases of at least 10 percent and the project construction scheduled is
almost always lengthened.
In an effort to limit unanticipated costs, expedite the construction schedule and to build
a cohesive project team this project will be implemented using a modified design-build
approach.
Under the modified design-build approach, the design-builder will warrant to the City
that it will produce design documents that are complete and free from error. In addition,
this approach allows the City to seek a guarantee on the construction costs (a
Guaranteed Maximum Price contract or GMP), wherein the City will know the
construction costs before it finally commits to the construction of the project. This is
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because the design-builder will be estimating the construction costs as the design is
evolving.
Also inherent in this approach are savings created by certainty of timing of the project.
Because in design-build, design and construction are overlapped, and because bidding
periods and redesign are eliminated, total design and construction of the project can be
more accurately determined and reduced. The design-builder can begin
materials/equipment procurement and construction work often begins before the
construction documents are fully completed. The resulting time savings typically
translates into lower costs and a more predictable completion of construction.
The Main Library project will benefit further from the modified design-build approach
because the design-builder will include on its team the architect selected by the City,
MRY Architects. The City contract with MRY Architects will not be assigned to the
design-builder until a Guaranteed Maximum Price contract, that includes a schedule of
performance, has been executed and the final design of the Main Library has been
approved.
Therefore, the modified design-build approach is in the best interest of the City
economically because it shifts the risk of design errors and ultimately the constructability
of the project to the design-builder, the City can obtain a guarantee on the construction
costs and completion schedule of the project, and the quality of design is preserved
because the City has selected the architect for the project, whose contract will not be
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assign to the design-builder until the final design of the Main Library has been
approved,
Staff recommends entering a two-phased agreement with the design-builder in a total
amount for the two phases not to exceed $4,244,630, consisting of:
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Phase One - Pre-construction services, which would allow design-builder
involvement with the project team during development of schematic design and
prior to the establishment of a guaranteed maximum price contract.
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Phase Two ? This phase includes design development, construction documents;
and construction services.
During the pre-construction phase, the design-builder would provide services such as
cost estimating, value engineering, constructability review, and assisting in the
development of a construction schedule. Upon completion of the schematic design
phase, staff will return to Council requesting authorization of a Guaranteed Maximum
Price for the project and activation of the second phase of the design-builder?s
agreement for services. Compliance with CEQA and further approval of the project,
including review by City Council, Planning Commission, Architectural Review Board,
and Coastal Commission, if necessary, will be a condition precedent to the payment of
construction fees.
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Selection of Design-Builder
On September 19, 2001, a Request for Qualifications for design/build services was
prepared and distributed to eighteen firms. On October 17, 2001, the City received
responses from seven firms, which were evaluated by a Project Team including
representatives from the City Manager?s Office, Library, Planning and Community
Development, Environmental and Public Works Management, and the Library Board.
Four firms were short-listed by the Project Team. Each of the short-listed firms was
issued a Supplemental Questionnaire and was asked to participate in an interview.
As a result of this process, staff recommends that the City Council find that the best
interest of the City would be served by rejection of all bids in accordance with Santa
Monica Municipal Code Section 2.24.071(d)(5); waive bidding procedures pursuant to
Section 2.24.071(e) by making a finding that the goods or services can be purchased
more economically in the open market; and authorize the City Manager to negotiate and
execute a modified design-build agreement with Morley Builders. The cost of Morley?s
proposal is within 8.95% of the average of the four short-listed firms.
The Project Team unanimously recommends Morley Builders be selected for this
project on the basis of the City?s best bidder criteria, as set forth in Santa Monica
Municipal Code Section 2.24.072, as follows:
1. Morley Builders has submitted a competitive price for fees related to pre-
construction services, and construction fees of the general contractor.
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2. Morley Builders team is of the highest quality. Morley Builders has extensive
experience and is an industry leader in construction.
3. Morley Builders has an excellent track record in the development of projects.
4. Morley Builders has proven methods for completing projects in a timely manner.
5. Morley Builders has strong financial resources to complete the project.
6. Morley Builders have a reputation for strong character and integrity in the
development of their projects; and
7. Morley Builders has presented an experienced project development and
construction management team that will be critical if the project is approved and
moves forward with construction.
Morley Builders? qualifications and previous project experience, including construction of
the Sherman Fairchild Library of Engineering and Applied Science at the California
Institute of Technology in Pasadena, UCLA?s Powell Library; experience in design-build
projects at Cedars Sinai Medical Center in Los Angeles; and participation in projects
with significant sustainable design components such as Holly Street Village in
Pasadena demonstrates their ability and expertise in the various aspects necessary for
the successful completion of the Library. Staff contacted three references which all
reported that their work was excellent. The California State Contractors License Board
verified that the license is current, active, and in good standing. Staff also contacted the
Center for Contract Compliance and found Morley capable of handling labor compliance
issues.
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Design Contract Enhancement
On January 23, 2001, the City Council authorized the award of a professional services
agreement to Moore Ruble Yudell Architects for the design of the Main Library
Expansion and Renovation Project. On September 25, 2001, the City Council approved
a revised approach to the Main Library Expansion Project, which involved the
replacement of the existing building with a new structure. This action allowed the project
to better address the issue of underground public parking; providing the ability for
increased capacity in a more affordable and efficient manner.
At a special public meeting of the City Council and the Library Board on November 13,
2001, Moore Ruble Yudell presented initial conceptual plans for the library, including
concepts for the expanded underground parking. This plan was further developed for
Council presentation on December 18, 2001. The concept plan identified parking for the
Library at approximately 32 surface parking and 145 subterranean spaces. The
remaining 437 underground spaces provided on three levels, are designated as public
parking. The design of the additional public parking was not included as part of the
scope of work in Moore Ruble Yudell?s original Agreement.
Temporary Facility
The Main Library expansion necessitates identification of temporary facilities to serve
the public during construction. Staff has investigated various options including
occupying alternate City owned locations, leasing temporary space, and the installation
of a temporary library structure. The undertaking proved challenging because there is
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not ample, or conveniently located City owned space available to adequately serve the
public?s library needs and lease space within the City of Santa Monica is costly, with
more moderately priced space being located in areas that are not easily accessible to
the public. If adequate land space can be identified, the leasing of temporary trailer
buildings may best suit the needs of the Library and the public.
The City of Cerritos is currently completing construction of their new library. During the
course of construction, they have been housed in approximately 20,000 square feet of
trailer buildings. The City of Cerritos will be occupying their new facility by April of 2002,
which would make the temporary library space available for City of Santa Monica?s use.
In order to ensure that the trailers are available to the City should a location be
identified, it will be necessary to move quickly. Therefore, staff recommends that the
City Council authorize the City Manager to negotiate and execute and agreement with
General Electric Capital Corporation at the appropriate juncture.
Budget/Financial Impact
FUNDS REQUIRED
Funds required for Design-Build Services for the Main Library Expansion Project will be
divided into two phases; Phase I ? Pre-Construction Services and Phase II ?
Construction Services:
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Cost Contingency Total
Phase I ? Pre-Construction Services $162,655 $16,266 $178,921
Phase II ? Construction Services $4,081,975 $408,197 $4,490,172
Phase I funding would be funded in the current fiscal year, and Phase II would begin in
fiscal year 2002-2003.
Funds required for modification to the Moore Ruble Yudell agreement for additional
architectural and engineering services to provide increased underground parking:
Architectural and Engineering Services $333,000
Contingency $ 45,000
TOTAL $378,000
Funds required for a lease with General Electric Capital Corporation for trailers for a
temporary library:
Lease Total $750,000
Total funds in the amount of $1,306,921 for completion of Phase 1 ? Pre-Construction,
the Moore Ruble Yudell modification and General Electric Capital lease are available in
account CO1049102.589000, Library Expansion and Renovation. Funds for Phase II ?
Construction Services will be budgeted in the fiscal year 2002-2003 Capital
Improvement Program.
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Recommendations
Staff recommends that the City Council:
1. Reject all bids in accordance with Santa Monica Municipal Code Section
2.24.071(d)(5) and waive competitive bidding in accordance with Santa
Monica Municipal Code Section 2.24.071(e)(1).
2. Authorize the City Manager to negotiate and execute an agreement with
Morley Builders in an amount not to exceed $4,244,630, and approve a
contingency of $424,463, with contract language reflecting yearly funding
contingencies as set forth above, for pre-construction and construction
services for the Main Library Expansion project;
3. Authorize the City Manager to modify a professional services agreement with
Moore Ruble Yudell Architects in an amount not to exceed $333,000, and
approve a contingency in the amount of $45,000 for architecture and
engineering of expanded subterranean parking for the Main Library
Expansion Project;
4. Authorize the City Manager to negotiate and execute an agreement with
General Electric Capital Corporation in the amount of $750,000 for the lease
of trailers for use as a temporary library; and
5. Authorize the City Engineer to authorize any necessary change orders to
complete additional work within budget authority.
Prepared by: Gordon Anderson, Assistant City Manager
Craig Perkins, Director of Environmental and Public Works Management
Anthony Antich, P.E., City Engineer
Lauren "M" Friedman, Senior Architect
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