SR-309-000 (14)
f:\atty\muni\strpts\moxSMPool
City Council Meeting 7-10-01 Santa Monica, California
TO: Mayor and Councilmembers
Chairperson and Redevelopment Agency
FROM: City Staff
SUBJECT:Resolution Authorizing Waiver of Bidding Requirements for Award of a
Construction Contract; Agreement with the Surety Bonding Company on
the Performance Bond for the Santa Monica Pool Phase II Improvements
Project; Construction Contract with Swinerton Builders; Contract with
Twining Laboratories for Inspection and Materials Testing Services; and
Modifications to Contract Numbers 7591 (CCS), 7633 (CCS) and
6772 (CCS) for Construction Management, Inspector of Record and
Architectural Services
INTRODUCTION
This report recommends that the City Council waive bidding requirements for the award of
a construction contract to Swinerton Builders to complete the Santa Monica Pool Phase II
Improvements Project. This report also recommends that the City Council authorize the
City Manager to negotiate and execute contracts and contract modifications as follows: (i)
a contract with the surety bonding company, National Fire Insurance Company of Hartford
for payment on the performance bond issued on the Project; (ii) a construction contract
with Swinerton Builders to complete the Project; (iii) a contract with Twining Laboratories
for inspection and materials testing services; (iv) a modification to Contract No. 7591
(CCS) with DMR Team for additional construction management services; (v) a modification
to Contract No. 7633(CCS) with Max Tehrani for additional Inspector of Record services;
and
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(vi) a modification to Contract No.6772 with Killefer, Flammang Purtill Architects for
additional architectural services on the Project. This report further recommends that the
Redevelopment Agency authorize the Executive Director to execute the construction
contract with Swinerton Builders.
BACKGROUND
In 1998, the City Council approved plans for the Municipal Pool Complex located on the
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Santa Monica College campus adjacent to Parking Structure C and 16 Street. The
construction was divided into two phases. Phase I, consisting of excavation and utility
relocation was completed in September 2000. On April 11, 2000, Council awarded
Contract Number 7697 (CCS) for construction of Phase II-Pool, Building and Site
improvements to Vahdani Construction Co., Inc. in the amount of $5,299,777 (with an
approved contingency fund of $423,982) following a competitive bid process. $1 million of
this amount is provided by the Redevelopment Agency.
Work commenced on June 5, 2000. The original completion date of March 31, 2001 was
extended to July 10, 2001 due to unforseen site conditions and wetter than usual weather.
In January 2001, the City began to receive stop notice claims from subcontractors who had
provided labor and materials on the project but asserted they had not been paid by
Vahdani. On March 28, 2001, the City served a Notice of Default on Vahdani, who failed
to cure any of the defaults within the cure period allowed under the construction contract.
Therefore, on April 3, 2001, the City sent notice to the bonding company seeking to invoke
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the performance bond issued on the project and requesting assurances of timely
completion of the Project.
In response, the bonding company inspected the work completed to date and solicited
bids on the open market from qualified contractors who have experience in completing
projects in default. The bonding company received three bids, ranging from $6.568 million
to $6.87 million to complete the project. These bids differed in total days required to
complete the work. The best bid was submitted by Swinerton Builders (Swinerton) at
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$6.85 million, with a very quick mobilization time (10-14 days) and completion time of 6
months which is several months shorter than the other bidders. The bonding company has
tendered Swinertons bid to City, and the City may accept the bid for completion of the
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project and enter into a construction contract with Swinerton. Swinerton would be required
to carry its own performance bond and labor and materials bond to cover the remaining
work on the Project.
DISCUSSION
Staff recommends that the City Council waive competitive bidding and authorize the City
Manager to enter into a construction contract for completion of Phase II of the Municipal
Pool project with Swinerton Builders. Upon execution of a contract between City and
Swinerton, the bonding company will pay the City the sum of $3,484,824.87, which
represents the difference between the remaining contract balance funds of $3,365,175.13
held by the City, and Swinertons bid of $6,850,000. This payment by the bonding
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company will be paid within 30 days of execution of the agreement with the bonding
company for the settlement of the Citys claims under the performance bond. The bonding
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company will make an additional payment of $180,000 for liquidated damages covering
delay on the project. The bonding company has agreed to maintain a reduced performance
bond in the amount of $200,000 through the completion of the project as a contingency to
cover claims for latent defects in the original contractors work. The bonding company will
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remain responsible for claims filed by subcontractors prior to the date of Vahdanis
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default. These subcontractor claims will be discharged pursuant to the bonding companys
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payment bond (labor and materials), and the bonding company will indemnify, defend and
hold harmless the City from any such claims.
Staff recommends that the City expedite completion of this project to avert economic
losses, reduce risks to the public health, safety and welfare, and assure that the project is
fully operational and open to the public for the 2002 summer season. The delays in
completion of this project have resulted in the loss of use of an essential community
recreational facility for the 2001 summer and school year. Construction costs continue to
increase for each day the project is delayed. The existing project site, containing open
excavations and unfinished improvements, is difficult to completely secure from trespass
and vandalism. This poses risks to the public health, welfare and safety. Swinerton could
commence work by the end of July or earlier if the City waives public bidding procedures.
The waiver requires a 2/3 affirmative vote with findings that the waiver is allowed pursuant
to the provisions of Santa Monica Municipal Code Section 2.24.071 (e). Attached to this
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staff report is a resolution authorizing the waiver of bids based on Section 2.24.071 (e) (1),
the goods or services can be purchased more economically on the open market and
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Section 2.24.071(e)(3)...the public health, welfare or safety would be jeopardized if the
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bidding procedures were followed.
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The costs for project completion have risen due to the inherent difficulty of taking over a
partially completed project. The potential for problems in the quality and accuracy of the
work-in-place, despite analysis of the project site, cause contractors to build into their bids
those contingencies. The cost of construction inflates with each passing day, as well.
However, Swinerton Builders is a firm of long-standing and excellent repute. They have
previously performed successfully in completing projects for the bonding company. They
have also worked effectively with the projects architect (Killefer Flammang Purtill) on other
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projects.
The construction management, Inspector of Record and architectural services are time-
dependent and the time extension required to complete the Project due to Vahdanis
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default is six months. Additional compensation will be required to continue these services.
DMR Team, Construction Management - Contract No. 7591 (CCS)
(Original Contract Amount including contingency: $377,000)
Additional construction management services: $125,000
Contingency: 12,500
Additional Funds required for Contract No. 7591(CCS): $137,500
Max Tehrani, Inspector of Record - Contract No. 7633 (CCS)
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(Original Contract Amount including contingency: $103,400)
Additional Inspector of Record services $ 64,500
Contingency: 6,450
Additional Funds required for Contract No. 7633(CCS): $ 70,950
Killefer Flammang Purtill, Architects - Contract No. 6772 (CCS)
(Original Contract Amount: $490,000)
Additional architectural services: $ 39,000
Additional Funds required for Contract No. 6772 (CCS): $ 39,000
Twinings Laboratories has been providing inspection and materials testing services on this
project through a purchase order, pursuant to a competitively selected process. To
maintain consistency and continuity of these services through completion of the project, the
following funds are requested for the additional consultant services:
Twining Laboratories, Inspection and Materials Testing
New contract for inspection and materials testing: $144,098
Contingency: 14,409
$158,507
TOTAL FUNDS FOR ADDITIONAL CONSULTANT SERVICES: $405,957
Budget/Financial Impact
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To implement these project recommendations, the following budget/financial actions are
necessary:
1) Increase appropriation at Capital Improvement Account Number C01066402 by
$3,890,782 ($3,484,824.87 to complete the project plus $405,957 in additional consultant
costs);
2) Increase revenue budget at Revenue Account Number 01224.407270 by $3,664,825
($3,484,824.87 payment from the bonding company under the performance bond to
complete the project plus $180,000 payment of liquidated damages);
3) To finance the remaining $225,957, approve the reallocation of FEMA GAP Project
savings in the Disaster Recovery Fund, as shown below, to this project:
E13110000 (GAP DSR #98362 underrun) $ 22,666
E13109000 (GAP DSR #91953 underrun) $ 44,849
E13101000 (GAP DSR #13496 underrun) $158,442
$225,957
$225,957 to be reallocated to Account Number E13106001.
Recommendations
It is recommended that the City Council:
1. Adopt the attached resolution authorizing the waiver of public bidding requirements;
2. Authorize the City Manager to negotiate and execute the following contracts and
contract modifications:
a) A contract with the bonding company, National Fire Insurance Company of
Hartford, for tender of Swinerton as completion contractor, payment to complete the
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remaining work and payment of liquidated damages;
b) A construction contract with Swinerton Builders for completion of the
project;
c) A contract with Twining Laboratories for inspection and materials testing
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services in the amount of $144,098.00 plus contingency of $14,409
d) A modification to Contract No. 7591 (CCS) with DMR Team for additional
construction management services in the amount of $125,000 plus contingency of
$12,500.
e) A modification to Contract No. 7633 (CCS) with Max Tehrani for additional
Inspector of Record services in the amount of $64,500 plus contingency of $6,450; f)
A modification to Contract No. 6772 (CCS) with Killefer Flammang Purtill Architects for
additional architectural services in the amount of $39,000;
3. Approve the budget/financial actions set forth above.
4. Authorize the City Engineer to issue any necessary change orders to complete
additional work in conformance with the Administrative Instructions on change orders.
It is recommended that the Redevelopment Agency:
1. Authorize its Executive Director to execute the construction contract with Swinerton
Builders.
Prepared by: Craig Perkins, Director EPWM
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Tony Antich, City Engineer
Barbara Stinchfield, CCS Admin.
Marsha Jones Moutrie, City Attorney
Linda Moxon, Deputy City Attorney
ATTACHMENT: Resolution Authorizing Waiver of Bidding
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