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APPROVE MOTION TO AWARD A SUPPLY CONTRACT TO GRANITE CONSTRUCTION CO. FOR THE PURCHASE OF HOT MIX ASPHALT
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Approve the specifications for the Purchase of Hot Mix Asphalt, Project No. OM-18-088.
2. Award a Supply Contract in the amount of $4,348,500 to the responsive bidder, Granite Construction Co., of French Camp, CA.
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 subject contract is for the supply of hot mix asphalt concrete for use by Public Works Department’s Operations and Maintenance Division through December 31, 2022. On March 15, 2018, two bids were received for the Purchase of Hot Mix Asphalt, Project No. OM-18-088. Staff recommends awarding the Supply Contract to the lowest responsive bidder, Granite Construction Co., of French Camp, CA, in the amount of $4,348,500 (Attachment A). The Supply Contract will be funded from Public Works Operating Budgets over the next five years.
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 to obtain a secure price for the year and to realize the benefit of a large volume purchase. The Supply Contract is to provide 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.
Present Situation
The Purchase of Hot Mix Asphalt, Project No. OM-18-088, was advertised on March 1, 2018. The base bid is for a three-year contract to December 31, 2020, with an additive bid alternate for material purchase for an additional two calendar years.
The purchase will supply the following products annually:
• 13,000 tons of Type ‘A’ 3/4” aggregate hot mix asphalt
• 1,000 tons of Type ‘A’ 1/2” aggregate hot mix asphalt
• 1,000 tons of Type ‘A’ 3/8” aggregate hot mix asphalt
These quantities are estimates of the amount of material to be purchased by the City yearly. 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 March 15, 2018, two bids were opened (Attachment B), and Granite Construction Co. is the apparent low bidder. 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. With the two bidders operating their hot mix asphalt plants within San Joaquin County, application of the bid preference had no effect on the final bid outcome.
Since the City pays the cost to truck the hot mix asphalt from the plant to the construction sites, the bid documents included a trucking cost allowance that is calculated by multiplying the trucking cost per ton per mile, at $0.22, by the total tonnage in the contract, which is estimated to be 6,500 tons. This trucking cost allowance is added to the total base bid price to determine a total cost to the City. This total cost to the City, plus application of the Local Business Preference Ordinance is the basis of award of the contract.
Granite Construction Co.’s bid was regular in all respects. The costs for the additive bid alternate for material purchase for an additional two calendar years was reasonable. Staff recommends awarding a Supply Contract for the Purchase of Hot Mix Asphalt, Project No. OM-18-088, to the responsible bidder, Granite Construction Co., in the total amount of $4,348,500 (Attachment A). The Supply Contract contains a provision that will allow for adjustment of the unit prices by contract change order if substantiated by significant changes in published market indicators for the industry, certified raw material cost data, and the California Statewide Crude Oil Price Index as determined by the State of California.
FINANCIAL SUMMARY
The term of the Supply Contract with Granite Construction Co. for the Purchase of Hot Mix Asphalt, Project No. OM-18-088 is proposed to be funded over several fiscal years (Attachment C).
Funding is available for expenditures in the current one-year term of the contract. The contract will be funded from Public Works Department’s Operating Budget. There is sufficient funding in the Public Works Streets Operating Budget (030-3062-540) to cover the FY 2017-18 contract amount of $854,700. Funding for the remaining years of the contract will be contingent on future annual budget appropriations.
There is no impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended action.
Attachment A - Supply Contract with Granite Construction Co.
Attachment B - Bid Opening Results
Attachment C - Funding Breakdown Over Contract Term