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MOTION ADOPTING THE SPECIFICATIONS, AND AWARDING A SUPPLY CONTRACT TO GEORGE REED, INC. FOR THE PURCHASE OF HOT MIX ASPHALT, PROJECT NO. O&M-16-004
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion that adopts the specifications for the Purchase of Hot Mix Asphalt, Project No. O&M-16-004, and authorizes the City Manager to execute a Supply Contract in the amount of $725,490 to the lowest responsive bidder, George Reed, Inc., of Modesto, CA.
It is further recommended that the motion authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
The subject contract is for the supply of hot mix asphalt concrete for use by Public Works Department’s Operations and Maintenance Division staff through December 31, 2016. On September 24, 2015, two bids were received for the Purchase of Hot Mix Asphalt, Project No. O&M-16-004. Staff recommends awarding the contract to the lowest responsive bidder, George Reed, Inc., of Modesto, CA, in the amount of $725,490. The contract will be funded from the Fiscal Year (FY) 2015-16 Street Maintenance operations budget, which includes one-time Mission Critical General Funds.
DISCUSSION
Background
The Public Works Department’s Operations and Maintenance crews use hot mix asphalt concrete for miscellaneous activities, such as street base failure repairs, general street pothole repairs, temporary sidewalk repair, and street preparation for resurfacing projects. The City typically issues an annual contract for the supply of hot mix asphalt concrete in order to obtain a secure price for the year and to realize the benefit of a large volume purchase. The Supply Contract is for supply of the asphalt only and does not include delivery. Trucking of the asphalt is undertaken either by City trucks or by a trucking service contracted separately by the City.
Projected reductions in Gas Tax revenues and competing priorities for Measure K Maintenance funds were expected to result in a serious reduction in asphalt purchases and corresponding repair work in FY 2015-16. Accordingly, Council authorized an additional $500,000 of one-time Mission Critical funding from the General Fund for pavement repair. The additional funds allocated this fiscal year will allow City crews to complete more than double the amount of street repairs that would have been possible with the traditional funding sources. These repairs are primarily: 1) grinding and repaving of large areas of failed pavement on major streets, and 2) excavation and replacement of severely distressed pavement and underlying base materials at isolated locations on residential streets. These repairs improve the ride and safety of the roadway, and slow the rate of deterioration of the overall pavement structure. Staff estimate that the additional funding will allow for 20 large grind and pave projects (as opposed to less than 10 with traditional funding), and 40 residential excavate and repair projects (as opposed to approximately 15 with traditional funding).
Present Situation
The Purchase of Hot Mix Asphalt, Project No. O&M-16-004, was advertised on September 10, 2015. The purchase will supply the following products:
• 11,500 tons of Type ‘A’ 3/4” aggregate hot mix asphalt
• 1,000 tons of Type ‘A’ 1/2” aggregate hot mix asphalt
• 750 tons of Type ‘B’ 3/8” aggregate hot mix asphalt
These quantities are estimates of the amount of material to be purchased by the City through December 31, 2016. The total contract value is calculated using the tonnage quantities multiplied by the unit prices provided by the bidders. The actual amount paid to the supplier will be dependent on the actual amount of asphalt concrete purchased, up to a maximum of the contract value plus approved change orders.
On September 24, 2015, two bids were opened with the following results:
|
Company Name and Locations of Main Office and Asphalt Plant |
Bid Amount |
Local Business Preference within County (2%) |
Asphalt Plant Haul Distance to Central Stockton (miles) |
Trucking Cost ($0.23 x Haul Distance x Asphalt Quantity) |
Adjusted Bid Amount |
|
George Reed, Inc. Main Office: Modesto, CA Asphalt Plant: Clements, CA |
$725,490 |
($14,509.80) |
26.5 |
$80,758.75 |
$791,738.95 |
|
Granite Construction Co. Main Office: Watsonville, CA Asphalt Plant: French Camp, CA |
$856,405 |
($17,128.10) |
9.9 |
$30,170.25 |
$869,447.15 |
|
Engineer’s Estimate |
$790,500 |
|
|
|
|
Since the City pays the cost to truck the asphalt concrete from the asphalt plant to the construction site, the bid documents include a trucking cost allowance that is calculated by multiplying the trucking cost per ton per mile ($0.23) by the total tonnage in the contract, which is estimated to be 13,250 tons. This trucking cost allowance is added to the total bid price to determine a total cost to the City.
The Local Business Preference Ordinance (Stockton Municipal Code section 3.68.090) applies to this contract, which provides two percent preference on bidders who have a physical business location within the boundaries of San Joaquin County, and five percent preference on bidders who have a physical business location within the boundaries of Stockton. Bid preference was given to both bidders as their asphalt plants are located within San Joaquin County limits.
The bid submitted by George Reed, Inc. has the lowest total cost to the City. George Reed, Inc.’s bid was regular in all respects. Application of the Local Business Preference does not affect the bid, as both bidders received the same preference. Staff recommends awarding a Supply Contract for the Purchase of Hot Mix Asphalt, Project No. O&M-16-004, to the lowest responsible bidder, George Reed, Inc., in the amount of $725,490 (Attachment A).
The Supply Contract contains a provision that will allow for adjustment of the unit prices if there are significant changes to the California Statewide Crude Oil Price Index as determined by the California Department of Transportation.
FINANCIAL SUMMARY
The Supply Contract with George Reed, Inc. for the Purchase of Hot Mix Asphalt, Project No. O&M-16-004 is proposed to be funded from existing budgets as follows:
|
ACCOUNT |
AMOUNT |
|
030-3062-540 (Gas Tax) |
$85,490 |
|
082-3062-640 (Measure K Maintenance) |
$140,000 |
|
010-3062-540 (General Fund One-Time funding) |
$500,000 |
|
Total |
$725,490 |
The Street Maintenance operating budget is funded by the State’s Gas Tax augmented by Measure K Maintenance funds. The approved FY 2015-16 General Fund Annual Budget also appropriated $500,000 of one-time Mission Critical funding to provide additional pavement repairs. Street maintenance repairs involve expenditures for asphalt purchases, contracted services for trucking and grinding, and staff costs. The General Fund budget is being used entirely for asphalt purchase. Gas Tax and Measure K Maintenance accounts will fund the other pavement repair costs.
No new appropriations are required. The recommended motion will authorize the City Manager to execute a Supply Contract for the Purchase of Hot Mix Asphalt, Project No. O&M-16-004, and to undertake any other financial actions that are necessary and appropriate to carry out the purpose and intent of the motion.
Attachment A - Supply Contract with George Reed, Inc.