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SR-850-005-01 (16) EPWM: CC: AA: RDB: SG; F:\DATA\SPFILES\sp1771\ccpkg.doc 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 1 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 2 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 3 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: ? 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. ? 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. 4 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. 5 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. 6 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 7 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: 8 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. 9 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 10