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Home My WebLink About05 - Slurry Seal Program — Award of Contract No. 7893-1 (Project No. 21R04) - CorrespondenceReceived After Agenda Printed March 9, 2021 Item No. 5 From: Rieff, Kim Sent: Monday, March 08, 20212:11 PM To: Mulvey, Jennifer Subject: FW: Consent Agenda Item XV.5. Slurry Seal 3/9/21 Attachments: OCR AAS Slurry Article 3-7-21.pdf From: Charles Klobe <cklobe@icloud.com> Sent: Monday, March 08, 20212:08 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Consent Agenda Item XV.5. Slurry Seal 3/9/21 [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Good day Mr. Mayor and Members of the City Council, I see that the low bid is 23% higher than the Engineer's estimate of $850,000. 1 note that many construction costs have skyrocketed during COVID-19. I also note that the constriction industry has been working non-stop during this time as they were deemed essential. Many price increases don't seem to make sense during these times. I am aware of the controversy surrounding the low bidder as amplified by the attached article from the Orange County Register. Since this bid was so much higher than expected why not reject all bids, modify the scope, and rebid a different project? Perhaps enough time will pass to shed some light on the accusations and the city can save some money by modifying the project. Is this a "must have" or "like to have" project at this time? A rebid project could still allow the work to be completed in the summer. Thank you for your service, Charles Klobe NEWS • Investigative Yorba Linda issues $642,000 contract to company accused of fraudulent activity Fontana -based American Asphalt South has been targeted by the city of San Diego for plying one of its employees with gifts to buy influence The Yorba Linda City Council has awarded a $642,000 paving contract to a company facing scrutiny in San diego Jessica Terrell, Orange County Register/SCNG) By SCOTT SCHWEBKE I sschwebke@scng.com I Orange County Register PUBLISHED: March 7, 2021 at 7:00 a.m. I UPDATED: March 8, 2021 at 9:48 a.m. The Yorba Linda City Council has awarded a $642,287 contract to a company facing a possible permanent work ban in San Diego for allegedly showering a city employee with gifts to inflate project prices and receive payment for faulty and uncompleted work. Council members last week accepted American Asphalt South's bid for a slurry seal project after concurring with a staff report that contends San Diego's complaint to the state Office of Administrative Hearings contains unproven allegations. The complaint seeks to permanently disqualify Fontana -based AAS from any municipal contracts in San Diego. A video conference is set to begin June 21. Officials with AAS did not return phone calls and emails seeking comments regarding the complaint Attorneys for the company contend San Diego's disbarment complaint is rife with "distortions and inaccuracies." "While the city attorneys deserve credit for originality and creativity, their grand conspiracy was cut out of whole cloth and lacks evidence," the company's lawyers said in court documents. "The city's cherry -picked quotes from emails are taken out of context and its allegations are flat wrong." Low bidder AAS was the lowest bidder for the Yorba Linda project, beating out five other competitors. A protest regarding the selection of AAS filed by La Habra -based Doug Martin Contracting Co., the second lowest bidder at $722,746, was rejected by the City Council. "If American Asphalt South has been dealing inappropriately with the city of San Diego, I don't know how many other agencies there are where they may have done the same thing," Doug Martin, owner of Doug Martin Contracting, said Friday. "They are $80,000 less than me (for the Yorba Linda project). It is not possible for them to do a job like that and come out consistently with that much money in their pocket" Martin's company also has been undercut by AAS for contracts in Newport Beach, Palm Springs, Palm Desert, Hemet, Lake Forest, and Coronado. San Diego's complaint San Diego's complaint to the state's details alleged improprieties by AAS spanning more than a decade and involving various slurry seal projects, which preserve and extend the life of asphalt street surfaces. AAS has received tens of millions of dollars in city work since 2015 — a total of $65 million according to the company, and $72.4 million in an accounting the city provided to The San Diego Union -Tribune. The complaint alleges AAS plied a municipal worker — identified only as "Employee A," who no longer works for the city — with various gifts in a successful bid to bilk San Diego taxpayers. "American Asphalt South sought to buy favor from and influence Employee A — and did so successfully," the complaint says. Attorneys for AAS have said the company's actions have been misinterpreted. Golf outings, trips, TV Outlining its case, San Diego officials noted that on April 13, 2012, AAS Operations Manager Tim Griffin allegedly sent an email to the employee's private Gmail account with an invitation to a golf tournament the following month at Eagle Crest Golf Club in Escondido. The company ultimately purchased a "platinum package," which included an entry fee of $450 for four golfers, San Diego officials said. Shortly before the tournament, Employee A sent an email to Lyle Stone, an AAS corporate officer, stating, "You're damn lucky you've got Tim on your side. I was going to put that valley slurryjob back out to bid and Tim convinced me to option it to you guys. He's a tough negotiator," according to the complaint. The employee also received subsequent invitations through 2016 to attend other golf tournaments paid for by AAS, court documents indicate. Additionally, on May 28, 2013, the employee sent an email to Stone to explain he had won a TV in an AAS -sponsored raffle, according to the complaint "No joke. Keep it quiet," the worker allegedly wrote. "I was joking with Tim (Griffin) after the raffle that you guys should have just signed the TV over to me instead of giving those people false hope." ; AAS also allegedly paid more than $500 for Employee A to attend a Dec. 20, 2014, football game in Oakland, which included a flight, hotel accommodations and tickets to the game. "This gift, in itself, exceeded permissible thresholds and thus violated the law," the complaint says. Taxpayers defrauded San Diego officials contend American Asphalt's various gifts to the employee had their intended effect. Over the course of several years, the worker and AAS regularly conspired to unlawfully increase contract prices, secure payment for defective work, manipulated bids and flouted bidding laws, according to the complaint. In one glaring example, after receiving an email from Griffin, Employee A allegedly agreed in July 2014 to "bump up" certain items proposed by AAS, doubling the price for traffic control from $40,000 to $80,000 and stating the company could obtain additional bump -ups in project change orders. "Check out the bonus I'm giving you guys in bid items 12, 13, & 15!" the employee allegedly responded. "PARTY! Make sure you guys get yourself a little something special." Newsroom Guidelines News Tips Contact Us Report an Error OThe Trust Project Coronavirus Update Stay up to date on the latest coronavirus coverage in your area, right in your inbox Enter your email to sign up SIGN UP Tags: fraud, Investigative Reporting, SoCal Watchdog, top stories ivdb, Top Stories OCR, top stories sun today. SPONSORED COP - 9 Strange Things Millionaires Do With Their Money, But Most of Us Have Never Tried o By The Penny Hoarder 0 These are simple money moves any normal, non -millionaire person can make Scott Schwebke I Investigative Reporter Scott Schwebke is an investigative reporter for the Orange County Register and the Southern California News Group. A native of Fort Lauderdale, Fla., he was previously a breaking news and multimedia reporter for the Ogden, Utah, Standard -Examiner. Scott has also worked at newspapers in Utah, Colorado, North Carolina and Virginia covering everything from methamphetamine trafficking cops to hurricanes. He has also accompanied police on undercover drug buys and also provided an award winning, eyewitness account of the execution of a North Carolina death row inmate. Scott was part of the OC Register's investigative team that in 2017 produced the year-long, award winning Rehab Riviera series, examining problems in Southern California's drug rehabilitation industry. He also teamed up with reporter Joe Nelson in 2019 on Bad Apples, an