title
REJECT ALL BIDS FOR THE NAVY DRIVE SANITARY SEWER REHABILITATION
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to reject all bids received for construction of the Navy Drive Sanitary Sewer Rehabilitation (Project No. M15003) pursuant to Stockton Municipal Code section 3.68.160(B).
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
The Municipal Utilities Department (MUD) implemented a Condition Assessment Program for the City’s sewer infrastructure comprised of Closed Circuit Televised Video (CCTV) inspection, pipe cleaning, and engineering evaluation. This program generates a prioritized list of replacement and/or rehabilitation projects for inclusion in the City’s Capital Improvement Program (CIP). A large diameter pipe segment along Navy Drive was identified for replacement by the Condition Assessment Program, and the project (Attachment A) was included in the FY 2015-16 CIP.
On April 27, 2017, the City received one bid for this project. The low bid received was from SAK Construction, LLC in the amount of $5,585,463. This bid is 16.3 percent higher than the engineer’s estimate, and there are insufficient funds to award the project. Because the proposed costs were too high, staff interviewed contractors to evaluate cost reduction opportunities and determine if the bid specifications unnecessarily reduced competition. Stockton Municipal Code (SMC) section 3.68.160(B) provides that the City Council shall award a contract to the lowest and best regular responsible bidder, or reject all bids. It has been determined that rejecting the current bids and readvertising the project with revised specifications and additional outreach could possibly result in a more favorable outcome. It is recommended that Council approve a motion to reject all the bids received.
DISCUSSION
Background
The MUD implemented a Condition Assessment Program for the City’s sewer infrastructure comprised of CCTV inspection, pipe cleaning, and engineering evaluation. This program generates a prioritized list of sewer replacement and/or rehabilitation projects for inclusion in the City’s CIP. The MUD’s Condition Assessment Program identified 1,967 linear feet of 24-inch, 1,849 linear feet of 30-inch, and 3,907 linear feet of 48-inch sewer line along Navy Drive between Interstate 5 and Fresno Avenue for replacement. The project (Attachment A - Vicinity Map) was included in the FY 2015-16 CIP.
Present Situation
The project was advertised on March 9, 2017. On April 27, 2017, one bid was received with the following result:
|
COMPANY NAME |
BID AMOUNT |
|
SAK Construction, LLC (O’Fallon, Missouri) |
$5,585,463 |
|
Engineer’s Estimate |
$4,803,884 |
SAK Construction, LLC, the apparent low bidder, submitted a bid in the amount of $5,585,463, which is 16.3 percent over the engineer’s estimate. There are insufficient funds to support awarding the project. SMC section 3.68.160(B) provides that the City Council shall award a contract to the lowest and best regular responsible bidder, or reject all bids. Staff recommends Council approve a motion to reject all bids received and to rebid the project.
This project involves specialty pipeline work, and there is a limited number of contractors who normally bid this kind of work. Staff surveyed SAK Construction, LLC as well as contractors who did not bid the project to determine the reasons for the higher bid results and lack of bidders. Contractors indicated timing was an issue due to conflicts with other projects at the time of bidding. Contractors also suggested that more information on soil characteristics and groundwater tables would help reduce risks and costs. The project specifications will be revised before rebidding to incorporate these suggestions as appropriate. Staff will perform additional outreach to increase the number of bidders and competition.
FINANCIAL SUMMARY
The recommended action has no financial impact. There is sufficient funding in CIP - Wastewater/Sanitary Sewer Deficiency Improvements (Account No. 437-7787-670) for the rebidding process.
Attachment A - Vicinity Map