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SR 09-13-2016 3D Ci ty Council Report City Council Meeting : September 13, 2016 Agenda Item: 3.D 1 of 5 To: Mayor and City Council From: Susan Cline, Director , Public Works, Water Resources Subject: Award Contractual Services Agreement for Water/Wastewater Equipment Welding Services Recommended Action Staff recommends that the City Council: 1. Award Bid #425 3 to Paul's Welding, a California -based company, for water and w astewater equipment welding and metal fabrication services; and 2. Authorize the City Manager to negotiate and execute an agreement with Paul's Welding in an amount not to exceed $530,000 over a five -year period , including increases based on S tate prevailing wage rate adjustments, with future year funding contingent on Council budget approval. Executive Summary The City contracts for welding and metal equipment fabrication services in order to pr operly maintain its water and wastewater distribution systems, facilities and vehicles. Fabrication and repairs are needed for various equipment including storm drain screens, maintenance hole covers, vault lids/frames/covers, bypass brackets/stands, wate r meter covers, trench plates and tools. In July 2016, the City solicited bids for such services. After reviewing the one bid received, staff recommends Paul's Welding to provide welding services for a total not to exceed amount of $530,000 over a five - y ear period. Due to the amount of welding and specialized metal fabrication required, contractor services are required. Therefore, the recommended actions are consistent with the Council -approved Policy for Hiring Contracted or As -Needed Staff for Non -Pro fessional Services and meet the criteria for space requirements, capital/equipment requirements, risk , and workforce flexibility. Background Prior to 2013, welding services were informally bid. On July 23, 2013, Council awarded Paul’s Welding a 3 -year bla nket purchase order valued at $240,000, per Attachment A. 2 of 5 Discussion The City owns and maintains water and wastewater equipment and facilities located throughout Santa Monica and West Los Angeles. Welding and metal fabrication services are required to install new equipment and repair existing items such as storm drain catch basin screens, maintenance hole covers, vault lids/frames/covers, bypass brackets/stands , and water meter covers. Custom fabrication is required in many instances due to the variety of sizes of meters and associated covers/screens within Santa Monica's inventory. Welding may be needed on various maintenance vehicles such as trailers, lifts , and portable pump equipment along with welding in the field to facilitate trench plate instal lation and removal for work involving excavation such as water/wastewater main or valve repairs and replacements. Confined space and short notice/after -hours work may occasionally be required. Method of Service On January 13, 2015, Council adopted a Poli cy for Hiring Contracted or As -Needed Staff for Non -Professional Services (Attachment C ). This policy includes criteria under which contracting for a public service is appropriate. Staff has reviewed the service needs, and recommends providing welding se rvices through a contractor due to the following criteria:  Capital / Equipment Requirements – H iring staff would require procurement of a welding truck and assorted equipment such as acetylene torches, compressed gas tanks and other welding supplies and sa fety gear. In addition, s pace would need to be identified for welding, storage , and parking. The current City Yards location, where Water/Wastewater operations are housed, is already at capacity. It would be difficult to add additional parking and work space at this location without incurring significant additional expenses .  Specialized/Technical Expertise - Service requires technical or specialized expertise that City staff could not or does not provide, and is outside of core services mission of the de partment.  Risk - S ome welding of water and wastewater equipment may take place in the field , potentially in confined spaces and subterranean locations.  Workforce Flexibility – Demand for w elding may be intermittent or unpredictable . There are high volume needs at times , with approximately 50 welding/metal fabrication jobs per year, but frequently two or three weeks may go by at a time with no work required. 3 of 5 Vendor Selection On July 6, 2016, the City published a Notice Inviting Bids to provide welding and metal fabrication services in accordance with City specifications. The bid was posted on the City's on -line bidding site, and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions. 122 vendors were notified and 11 vendors downloaded the bid. One bid was received and publicly opened on July 21, 2016 per Attachment B . The bid was evaluated based on the criteria in SMMC 2.24.072, including price, previous experience, capacity and skill, ability to deliver, quality of product, and compliance with City specifications and scope of work. Procurement conducted additional outreach to vendors who downloaded the bid to see why they did not submit a bid; one vendor indicated the scope of services did not fit its business model and the others did not respond . The required welding work is both specialized and localized which reduced the number of bids submitted. And although staff bid the work, this could have easily been viewed as a sole source procuremen t given the work and conditions. Paul's Welding, a Santa Monica -based sole proprietorship, has performed welding services satisfactorily for Water Resources and other City divisions since 1999. Paul's Welding is able to fabricate custom -sized storm drain screens and vault lids and perform other welding work to specifications quickly and efficiently with little direction from Water Resources staff due to experience gained over the past 16+ years. Based in Santa Monica, Paul's Welding can respond promptly to emergency and other short - notice welding jobs. Paul's Welding also bid the minimum prevailing wage rate for the Operating Engineer Group 6/Welder job classification (straight time total hourly rate of $67.72). Staff verified that the Welding (C60) con tractor's license for Paul's Welding is current, active and in good standing. Based on these criteria, Paul's Welding is recommended as the best bidder to provide welding services for water/wastewater facilities, equipment , and vehicles. Alternatives If the City were to provide welding services using in -house staff, staff estimates that Year 1 costs would be $61 ,8 32 higher , assuming an estimated $100,000 in contract expenditures in Year 1. The higher cost is largely due to the need to purchase a welding 4 of 5 t ruck, welding equipment , tools , and safety . To bring the service in -house, a 1 .0 FTE Welder Fabricator would be needed along with significant training on water/wastewater equipment welding specifications. Over the five -year agreement period , lower City s taffing costs slightly offset the higher up -front costs associated with completing the work in -house , for a total estimated cost increase of $54 ,9 42 over the five -year period for the in -house option . Perhaps more significant than a ddition al cost s associ ated with hiring in -house are risk and the existing space constraints. Currently Water/Wastewater staff do not have a space to perform welding operations at the City Yards location. Space would need to be identified if a Welder Fabricator were hired in -hou se , and the City Yards facility is currently at capacity . In addition, risk is closely related to specialized and technical expertise. If staff was to be hired, some of the welding of water and Wastewater equipment may take place in confined and subterrane an locations that pose greater risks to the City. By engaging an outside party specialized in this service or activity, the City transfers or spreads risk to the other party specifically set up to manage that risk. Should the City opt to hire a Welder Fa bricator for water and wastewater facilities and equipment, the agreement with Paul's Welding could be reduced in value and/or term. Financial Impacts and Budget Actions The agreement to be awarded to Paul's Welding is for an amount not to exceed $530,000 . Funds of $100,000 are available in the FY 2016 -17 budget in the Public Works Department. The agreement will be charged to the following accounts. Future year funding is contingent on Council budget approval. Account Number Amount 25671.555010 $ 80,000 31661.555010 $ 20,000 TOTAL $100,000 5 of 5 Prepared By: Kevin Nagata, Senior Administrative Analyst Approved Forwarded to Council Attachments: A. July 23, 2013 Staff Repor t B. Bid #4253 Results - Welding & Metal Fabrication Services C. Staff Report - Contract and As -Needed Staff Review Report - 1/13/2015 - Item 8 - C ATTACHMENT A ‐ BID RESULTS 1 PLEASE INDICATE YOUR HOURLY BILLABLE RATE (REGULAR HOURS): 2 PLEASE INDICATE YOUR OT/ AFTER ‐ HOURS HOURLY BILLABLE RATE: 3 PLEASE INDICATE THE DAYS AND TIMES OF THE WEEK TO WHICH THE AFTER ‐ HOURS RATE WOULD APPLY: 4LABOR CLOCK BEGINS UPON: 5LABOR CLOCK ENDS UPON: 6 PLEASE INDICATE THE % DISCOUNT/ MARK ‐UP ON MATERIALS: 7PLEASE INDICATE YOUR MINIMUM CALL ‐OUT CHARGE: 8 PLEASE DESCRIBE ANY ADDITIONAL FEES & CHARGES NOT COVERED ABOVE: Local Vendor Preference 1 HOW MANY YEARS OF EXPERIENCE DOES YOUR FIRM HAVE PERFORMING WELDING / METAL FABRICATION SERVICES IN SOUTHERN CALIFORNIA 2 PLEASE LIST YOUR CALIFORNIA STATE CONTRACTORS LICENSE NUMBER AND INDICATE THE TYPES OF LICENSE YOUR FIRM POSSESSES (C60 WELDING REQUIRED): # 1012908TYPES: C60 3DOES YOUR FIRM PROVIDE 24/7 SERVICES? 4 IF YOUR FIRM PROVIDES 24/7 SERVICES, PLEASE INDICATE YOUR AFTER HOURS PHONE NUMBER: 5 PLEASE CONFIRM YOUR FIRM'S ABILITY TO BE ON ‐SITE AT A SANTA MONICA / WEST LOS ANGELES LOCATION AFTER YES1 HOUR 6 HOW MANY WELDERS / TRUCKS CAN YOUR FIRM DEPLOY TO THE SANTA MONICA / WEST LOS ANGELES AREA SIMULTANEOUSLY? 7 HAS YOUR FIRM PREVIOIUSLY PERFORMED PREVAILING WAGE WORK IN CALIFORNIA AND SUBMITTED ELECTRONIC CERTIFIED PAYROLL RECORDS TO THE DEPARTMENT OF INDUSTRIAL RELATIONS SINCE JANUARY 1, 2015? PERIOD 5 (FOURTH ANNUAL RENEWAL OPTION): INCREASE HOURLY RATE TO FOLLOW STATE PREVAILING WAGE PERIOD 4 (THIRD ANNUAL RENEWAL OPTION): INCREASE HOURLY RATE TO FOLLOW STATE PREVAILING WAGE PERIOD 3 (SECOND ANNUAL RENEWAL OPTION): INCREASE HOURLY RATE TO FOLLOW STATE PREVAILING WAGE PERIOD 2 (FIRST ANNUAL RENEWAL OPTION):INCREASE HOURLY RATE TO FOLLOW STATE PREVAILING WAGE RENEWAL OPTIONS:RESPONSE NO 1 WELDER, 1 TRUCK YES 25+ YEARS GENERAL QUESTIONSRESPONSE 310 ‐428 ‐5366 1.50% MATERIALS IF NEEDED $150.00 MONDAY ‐ SATURDAY AFTER 5 PM SUNDAY AND HOLIDAYS RATE IS $110.45 PER HOUR $89.09 PER HOUR ARRIVAL AT CUSTOMER LOCATION DEPARTURE FROM CUSTOMER LOCATION 0% BID #: 4253 BID CLOSE DATE: 7/21/16 PAUL'S WELDING $67.72 PER HOUR PRICING ‐AS NEEDED PAINTING SERVICES PREVAILING WAGE REQUIRED BID TITLE: PROVIDE WELDING & METAL FABRICATION SERVICES FOR WATER/WASTEWATER AS REQUIRED SANTA MONICA, CALIFORNIA PAGE 1 OF 1 Reference: Contract No. 10361 (CCS)