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SR-09-23-1980-11ASanta Monica, California To: Mayor and City Council M SEP 9 '980 September 3, 1980 /IA SEP 2 3 1980 From: City Staff Subject: Award of Contract for Construction of Arcadia Reservoir Roof Introduction This report describes the bids received and recommends the award of a contract to the lowest and best bidder. Background Arcadia Reservoir was built in 1924 with reinforced concrete walls and a wood roof. The wood roof is now deteriorated and has become a health and safety hazard. The California State Department of Health has requested, in its yearly survey, the repair of this reservoir. This contract includes replacing the existing wood roof with a wood substructure and an aluminum roof, sealing the reservoir, repairing the gutter around the reservoir and replacing an effluent line. The bids were received on August 20, 1980, for the construction of the subject project. Nine Bids were received as follows: Harman B. J. Gladd Construction Co . .................. $463,576.40* Lang - Miller Construction ............................. $483,750.00 Cushman Contracting Corporation ...................... $504,526.00 Equinox - Malibu ...... ............................... $516,720.00 Joseph W. Eubanks, General Building Contractor ....... $517,448.50* Merco Construction Engineers, Inc . ................... $520,565.00 Kruse Construction Company ........................... $524,950.00 Ecco Contractors, Inc . ............................... $526,450.00 Gerstenberger Corp . ... ............................... $589,215.04* *Corrected Amount It Several of the proposals contained various errors which could render them SEP 2 3 informal and invalid if the City Council chooses to make such a determination. ee� SEP'9 i� To: Mayor and City Council -2 September 3, 1980 These errors included failure to show the unit or lump prices in words, interlineations, mathematical errors in extensions and totals, failure to apply a corporate seal to the proposal, omission of title of party signing the proposal, failure to include a statement of qualifications listing previous projects completed, and not using the form of bidders bond contained in the bidding package. Informalities relating to the proposal submitted by the low bidder, Harman B. J. Gladd Construction Company, included failure to show unit and lump sum prices in words, mathematical errors in extensions and total amount of bid, and not using the form of bidder's bond contained in the bidding package. This bidder also failed to submit a list of structures constructed with shot -crete equipment proposed to be used on this project. The contractor has subsequently submitted this list. The Contractor's qualifications have been reviewed and have been found to be acceptable. The low bidder holds a valid license to perform the work to be done from the State Contractors' License Board. The informalities in the low bid have been reviewed with the City Attorney's office. The City Attorney's office concurs in the opinion that all the informalities in the low bid can be waived in accordance with Article A -16 of the Advertisement for Bids and by the Specifications. Funds for this project were appropriated in past fiscal years and were lost at the end of those years. The funds required to be appropriated for this project are $463,576.40 plus 15 percent for contingencies or a total of $533,112.86. To: Mayor and City Council -3- September 3, 1980 Recommendation It is recommended that Council appropriate $533,112.86 from the Water Depreciation fund, waive the informalities in the bid by Harman B. J. Gladd Construction Company, and authorize the City Manager to sign a contract with Harman B. G. Gladd Construction Company in the amount of $463,576.40 for the construction of the Arcadia Roof and appurtenances. Prepared by: Stan Scholl Ed Lash II I LM ME 1, 1231 South La Cienega Boulevard Los Angeles, California September 12, 1980 City Council City of Santa Monica 1685 Main Street Santa Monica, California 90291 A etd, 265956 SEP 2 J IZ)uU P U B L I C WO+�](R�Kc.yS AND COMMERCIAL In 9 :1 (213) 652- 0022 -5 655 - 9212 -3 G� t� F,h Via° ilr8a (;a +• i,i lt� Re: Agenda Item 11 G - Recommendation for Appropriation of $533,112.86 and Authorization to Award and Execute a Contract to Harman B. J. Gladd Construction Company in the Amount of $463,576.40 for Construction of Arcadia Reservoir Roof Dear Members of the Council: Our company submitted the low bid to perform the con- struction work on the Arcadia Reservoir. Our bid was over $20,000.00 lower than the bid of the second low bidder, who, I understand, is protesting the award of the contract to our company on the grounds that we made certain technical errors in filling out our bid. In considering this matter, I believe the council should keep in mind the purpose behind the law requiring competitive bidding for public works contracts. The purpose is to obtain a competent contractor to perform the work at the lowest possible price, not to see who can submit the lowest bid without any errors. Errors in bids are common, and almost are an inevitable result of the competitive bidding process. In preparing a bid for a public works project, a prime contractor will obtain in- itial quotes from material suppliers for the construction ma- terial required for the work. In most cases he also will obtain initial quotes from subcontractors who are particularly qualified to perform certain items of work on the project. As the time approaches for submission of the prime contractor's bid to the public agency, the prime contractor invariably will receive last minute telephone calls from most, if not all, of the material suppliers and subcontractors from whom he has obtained quotes, advising him that they will reduce their price if he will use their material or services. In some cases, this price cutting process literally takes place minutes before the deadline for submission of the prime contractor's bid. This last minute price cutting causes the prime contractor to adjust and re- calculate his bid. As may be imagined, the conditions existing in a prime contractor's office just prior to submission of his bid are chaotic and mistakes are often made, but it is the CA Lori II A SEP 2 3 1980 City Council -2- 9/12/80 free exercise of this competitive process which insures that the public agency will obtain the lowest price possible for the work. The council need look no further than the bids sub- mitted on this project for proof of the fact that minor, tech- nical errors are the rule rather than the exception in com- petitive bidding. A majority of the bids submitted on this project contained a certain amount of minor errors in form. That non - material errors may occur in preparing and sub- mitting a bid is well recognized, and, thus, public agencies are vested with full authority to waive any such irregularities. Of course, material mistakes or errors (i.e., those affecting the amount of the bid for the work) are a different story. If, for example, the prime contractor mistakenly includes two dif- ferent prices for doing the work, such an error clearly would invalidate the bid. But where the error is non - material, the irregularity can and should be waived by the public agency. The second low bidder claims that the council should award the contract to him because his bid did not contain any errors. Such a position is to place form over substance. Sup- pose, for example, that Lang- Miller was not the second low bidder on this project, but rather that their total bid was $1,000,000 and that their bid was the eighth lowest. Suppose further that the first seven bidders all had technical, non - material errors in their bids. Would the council be forced to award the job to the eighth low bidder at more than twice the price of the low bid? Of course not. Such action would not only be contrary to common sense, it would be a violation of state law which requires that public contracts be awarded to the lowest responsible bidder. Here, the council has the full legal authority to waive the non - material errors contained in our company's bid. By doing so, the council will save the city over $20,000. To award the contract to the second low bidder simply because their bid contained no errors in form would not only be an abuse of the discretion vested in the council, but it would be an unwarranted gift of public funds. We respectfully request the council to award the con- tract to our company. Very truly yours, HARMAN B._J- GLADD CONSTRUCTION CO. By rm September 12, 1980 City Council City of Santa Monica 1685 Main Street Santa Monica, California 90291 Re: Agenda Item 11 G - Recommendation for Appropriation of $533,112.86 and Authorization to Award and Execute a Contract to Harman B. J. Gladd Construction Company in the Amount of $463,576.40 for Construction of Arcadia Reservoir Roof Dear Members of the Council: Our company submitted the low bid to perform the con- struction work on the Arcadia Reservoir. Our bid was over $20,000.00 lower than the bid of the second low bidder, who, I understand, is protesting the award of the contract to our company on the grounds that we made certain technical errors in filling out our bid. In considering this matter, I believe the council should keep in mind the purpose behind the law requiring competitive bidding for public: works contracts. The purpose is to obtain a competent contractor to perform the work at the lowest possible price, not to see who can submit the lowest bid without any errors. Errors in bids are common, and almost are an inevitable result of the competitive bidding process. In preparing a bid for a public works project, a prime contractor will obtain in- itial quotes from material suppliers for the construction ma- terial required for the work. In most cases he also will obtain initial quotes from subcontractors who are particularly qualified to perform certain items of work on the project. As the time approaches for submission of the prime contractor's bid to the public agency, the prime contractor invariably will receive last minute telephone calls from most, if not all, of the material suppliers and subcontractors from whom he has obtained quotes, advising him that they will reduce their price if he will use their material or services. In some cases, this price cutting process literally takes place minutes before the deadline for submission of the prime contractor's bid. This last minute price cutting causes the prime contractor to adjust and re- calculate his bid. As may be imagined, the conditions existing in a prime contractor's office just prior to submission of his bid are chaotic and mistakes are often made, but it is the Dfl��ifl� fl. J. GCflDD CO�SI�IJCI 0� CO. COMMERCIAL CONTRACTORS 1231 South La Cienega Boulevard Los Angeles, California 90035 (213) 652 - 0022 -5 655 - 9212 -3 September 12, 1980 City Council City of Santa Monica 1685 Main Street Santa Monica, California 90291 Re: Agenda Item 11 G - Recommendation for Appropriation of $533,112.86 and Authorization to Award and Execute a Contract to Harman B. J. Gladd Construction Company in the Amount of $463,576.40 for Construction of Arcadia Reservoir Roof Dear Members of the Council: Our company submitted the low bid to perform the con- struction work on the Arcadia Reservoir. Our bid was over $20,000.00 lower than the bid of the second low bidder, who, I understand, is protesting the award of the contract to our company on the grounds that we made certain technical errors in filling out our bid. In considering this matter, I believe the council should keep in mind the purpose behind the law requiring competitive bidding for public: works contracts. The purpose is to obtain a competent contractor to perform the work at the lowest possible price, not to see who can submit the lowest bid without any errors. Errors in bids are common, and almost are an inevitable result of the competitive bidding process. In preparing a bid for a public works project, a prime contractor will obtain in- itial quotes from material suppliers for the construction ma- terial required for the work. In most cases he also will obtain initial quotes from subcontractors who are particularly qualified to perform certain items of work on the project. As the time approaches for submission of the prime contractor's bid to the public agency, the prime contractor invariably will receive last minute telephone calls from most, if not all, of the material suppliers and subcontractors from whom he has obtained quotes, advising him that they will reduce their price if he will use their material or services. In some cases, this price cutting process literally takes place minutes before the deadline for submission of the prime contractor's bid. This last minute price cutting causes the prime contractor to adjust and re- calculate his bid. As may be imagined, the conditions existing in a prime contractor's office just prior to submission of his bid are chaotic and mistakes are often made, but it is the City Council -2- 9/12/80 free exercise of this competitive process which insures that the public agency will obtain the lowest price possible for the work. The council need look no further than the bids sub- mitted on this project for proof of the fact that minor, tech- nical errors are the rule rather than the exception in com- petitive bidding. A majority of the bids submitted on this project contained a certain amount of minor errors in form. That non - material errors may occur in preparing and sub- mitting a bid is well recognized, and, thus, public agencies are vested with full authority to waive any such irregularities. Of course, material mistakes or errors (i.e., those affecting the amount of the bid for the work) are a different story. If, for example, the prime contractor mistakenly includes two dif- ferent prices for doing the work, such an error clearly would invalidate the bid. But where the error is non - material, the irregularity can and should be waived by the public agency. The second low bidder claims that the council should award the contract to him because his bid did not contain any errors. Such a position is to place form over substance. Sup- pose, for example, that Lang - Miller was not the second low bidder on this project, but rather that their total bid was $1,000,000 and that their bid was the eighth lowest. Suppose further that the first seven bidders all had technical, non - material errors in their bids. Would the council be forced to award the job to the eighth low bidder at more than twice the price of the low bid? of course not. Such action would not only be contrary to common sense, it would be a violation of state law which requires that public contracts be awarded to the lowest responsible bidder. Here, the council has the full legal authority to waive the non - material errors contained in our company's bid. By doing so, the council will save the city over $20,000. To award the contract to the second low bidder simply because their bid contained no errors in form would not only be an abuse of the discretion vested in the council, but it would be an unwarranted gift of public funds. We respectfully request the council to award the con- tract to our company. Very truly yours, HARMAN B._J_- -GLADD CONSTRUCTION CO. C _.i / By �x- / GENE HARMAN rm / " �Ifl fl� fl. J. GCflDD tR ItiON CO. COMME CIAL CONTRACTORS 1231 South La Cienega Boulevard Los Angeles, California 90035 (213) 652 - 0022 -5 655- 9212 -3 September 12, 1980 City Council City of Santa Monica 1685 Main Street Santa Monica, California 90291 Re: Agenda Item 11 G - Recommendation for Appropriation of $533,112.86 and Authorization to Award and Execute a Contract to Harman B. J. Gladd Construction Company in the Amount of $463,576.40 for Construction of Arcadia Reservoir Roof Dear Members of the Council: Our company submitted the low bid to perform the con- struction work on the Arcadia Reservoir. Our bid was over $20,000.00 lower than the bid of the second low bidder, who, I understand, is protesting the award of the contract to our company on the grounds that we made certain technical errors in filling out our bid. In considering this matter, I believe the council should keep in mind the purpose behind the law requiring competitive bidding for public works contracts. The purpose is to obtain a competent contractor to perform the work at the lowest possible price, not to see who can submit the lowest bid without any errors. Errors in bids are common, and almost are an inevitable result of the competitive bidding process. In preparing a bid for a public works project, a prime contractor will obtain in- itial quotes from material suppliers for the construction ma- terial required for the work. In most cases he also will obtain initial quotes from subcontractors who are particularly qualified to perform certain items of work on the project. As the time approaches for submission of the prime contractor's bid to the public agency, the prime contractor invariably will receive last minute telephone calls from most, if not all, of the material suppliers and subcontractors from whom he has obtained quotes, advising him that they will reduce their price if he will use their material or services. In some cases, this price cutting process literally takes place minutes before the deadline for submission of the prime contractor's bid. This last minute price cutting causes the prime contractor to adjust and re- calculate his bid. As may be imagined, the conditions existing in a prime contractor's office just prior to submission of his bid are chaotic and mistakes are often made, but it is the City Council -2- 9/12/80 free exercise of this competitive process which insures that the public agency will obtain the lowest price possible for the work. The council need look no further than the bids sub- mitted on this project for proof of the fact that minor, tech- nical errors are the rule rather than the exception in com- petitive bidding. A majority of the bids submitted on this project contained a certain amount of minor errors in form. That non - material errors may occur in preparing and sub- mitting a bid is well recognized, and, thus, public agencies are vested with full authority to waive any such irregularities. Of course, material mistakes or errors (i.e., those affecting the amount of the bid for the work) are a different story. If, for example, the prime contractor mistakenly includes two dif- ferent prices for doing the work, such an error clearly would invalidate the bid. But where the error is non - material, the irregularity can and should be waived by the public agency. The second low bidder claims that the council should award the contract to him because his bid did not contain any errors. Such a position is to place form over substance. Sup- pose, for example, that Lang - Miller was not the second low bidder on this project, but rather that their total bid was $1,000,000 and that their bid was the eighth lowest. Suppose further that the first seven bidders all had technical, non - material errors in their bids. Would the council be forced to award the job to the eighth low bidder at more than twice the price of the low bid? Of course not. Such action would not only be contrary to common sense, it would be a violation of state law which requires that public contracts be awarded to the lowest responsible bidder. Here, the council has the full legal authority to waive the non - material errors contained in our company's bid. By doing so, the council will save the city over $20,000. To award the contract to the second low bidder simply because their bid contained no errors in form would not only be an abuse of the discretion vested in the council, but it would be an unwarranted gift of public funds. We respectfully request the council to award the con- tract to our company. Very truly yours, HARMAN B.__J - GLADD CONSTRUCTION CO. By Z GENE HARMAN rm G' R M fl. J. GCflDD tR t ON CO. COMMERCIAL CONTRACTORS 1231 South La Cienega Boulevard Los Angeles, California 90035 (213) 652 - 0022 -5 655- 9212 -3 T R A N S M I T T A L R E C O R D TO: City Counsil City of Santa Monica 1685 Main Street Santa Monica, California 90291 Attn: Clerk of the Board TRANSMITTED HEREWITH PLEASE FIND: DATE September 16, 1980 JOB NO. JOB NAME Arcadia Reservoir Contract Award YOUR JOB OR CONTRACT NO. The enclosed sets are for each board member which you are kindly requested to distribute them individually to each member. It is imperative that this information be available to them prior to the board meeting of September 23, 1980. Thank you for your detailed attention to the above. cc: Woodside /Kubota & Assiciates, Inc. Mr. Stanley Scholl, Director General Services FOR YOUR *A=XT&X= FOR YOUR FILE DATE APPROVED DATE RETURNED XX Yours very truly, HARMAN B. J. GLADD CONSTRUCTION CO. DATE DISTRIBUTED BY: Gene Harman 11-4 Agenda Item 11 -A: Presented for consideration was a recommendation f an appropriation and authorization to award and execute a contract to Harmon B. G. Gladd Construction Company for construction of the Arcad Reservoir roof (tabled at meeting of September 10, 1980). The staff' report was presented. Mayor Pro Tempore Yannatta Goldway moved to remove this item from the table for consideration Z111--1 time. Second' by Councilmember Rhoden. The motion was approved as follows: Council Vote: Unanimously approved 6 -0 Absent: Councilmember van den Steenhoven Discussion was held. Councilmember Jennings moved to approve the staff recommendation, i.e., authorizing the appropriation of $533,112.86> from the Water Depreciation fund, waiving the informalities in the bid by Harman B. J. Gladd Construction Company, and authorizing the City Manager to sign Contract No. 3557(CCS) with the Harman B. G. Gladd Construction Company in the amount of $463,576.40 for construction oft Arcadia Reservoir Roof and appurtenances, with the addition that not on does the City waive the informalities, but the contractor must also wai any claim arising out of such irregularities or informalities. Second by Councilmember Scott. The motion was approved by the following vote: Council Vote I Affirmative Negative Absent: Councilmembers Yannatta Jennings, Rhoden, Scott Mayor Bambrick Steenhoven Councilmember Reed Councilmember van den Goldway, and MINUTES OF CITY COUNCIL MEETING September 24, 1980 ve