HomeMy WebLinkAbout14 - Concrete Replacement Program (Project No. 23R06) — Reject All Bids for Contract No. 8921-1Q �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
November 29, 2022
Agenda Item No. 14
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David A. Webb, Public Works Director - 949-644-3311,
dawebb@newportbeachca.gov
PREPARED BY: Andy Tran, Senior Civil Engineer, atran@newportbeachca.gov
PHONE: 949-644-3315
TITLE: Concrete Replacement Program (Project No. 23R06) — Reject All
Bids for Contract No. 8921-1
ABSTRACT:
The City of Newport Beach (City) recently advertised the Concrete Replacement Program
project and received 10 bids. After a review of the apparent low bidder's unit bid prices,
staff determined the bid was unbalanced. Staff recommends that the City Council reject
all bids and direct staff to re -advertise the project.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Reject all bids received for Contract No. 8921-1 and direct staff to return all bidders
bonds; and
c) Direct staff to re -advertise the Concrete Replacement Program project for
construction.
DISCUSSION:
This year's Concrete Replacement Program will replace deteriorated concrete sidewalks,
driveways, curbs and gutters, and access ramps south of East Coast Highway within the
Irvine Terrace and Corona del Mar Village neighborhoods, as well as along Bayside Drive
and Harbor Island Drive. This project also includes widening areas of existing concrete
sidewalk at Ensign Intermediate School and Corona del Mar High School.
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Concrete Replacement Program (Project No. 23R06) —
Reject All Bids for Contract No. 8921-1
November 29, 2022
Page 2
At 10 a.m. on October 19, 2022, the City Clerk opened and read the bids for this project:
BIDDER
TOTAL BID AMOUNT
Low
NR Development, Inc.
$ 1,141,500.56
2nd
Gri olla & Sons Const. Co., Inc.
$ 1,148,460.00
3rd
Stance Construction Company
$ 1,186,202.85
4th
3SIXTY INNOVATION INC.
$ 1,195,080.00
5th
Aster Construction Services
$ 1,196,200.00
6th
CT&T Concrete Paving, Inc.
$ 1,248,870.00
7th
Gentry General Engineering, Inc.
$ 1,266,912.50
8th
S&H Civilworks*
$ 1,287,400.00
9th
Kalban, Inc.
$ 1,484,670.00
10th
Nationwide Contracting Services, Inc.
$ 1,832,550.00
*Non -responsive bidder. Contractor failed to submit the original bid bond to the City Clerk
prior to bid opening.
The City received 10 bids for this project. The low bid, submitted by NR Development,
Inc. (NR Development), was 5.3 percent below the Engineer's Estimate of $1,205,000.00.
A review of NR Development's bid showed several bid prices were substantially below
the bid prices submitted by the nine other bidders and the Engineer's Estimate. Most
notably, the unit bid prices, which include material and labor, for curb and gutter and
concrete access ramp were significantly lower than the costs for material alone. Some
bid prices were substantially over the Engineer's Estimate.The unbalanced nature of the
overall bid raised concern.
Furthermore, the second lowest bidder, Grigolla & Sons Construction Co., Inc.
(Grigolla & Sons) submitted a formal bid protest on October 31, 2022, which also cited
NR Development's bid as being materially unbalanced. NR Development provided a
response to Grigolla's bid protest letter on November 7, 2022. Both letters are attached.
Based on the potential issues and concerns of bids received, staff recommends rejecting
all bids and re -advertising this contract in December 2022. Staff will be modifying the
project specification to more clearly define critical requirements, such as reviewing the
project site before bidding, identifying the required arborist, and clearly requiring that all
cost must be provided in individual bid items or the bid may be deemed non-reponsive.
FISCAL IMPACT:
The estimated cost to re -advertise this contract is negligible. The adopted Capital
Improvement Program budget includes sufficient funding for this contract.
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Concrete Replacement Program (Project No. 23R06) —
Reject All Bids for Contract No. 8921-1
November 29, 2022
Page 3
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Location Map
Attachment B — Protest Letter from 2nd Low Bidder (Grigolla & Sons)
Attachment C — Response Letter from Low Bidder (NR Development)
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ATTACHMENT A
JOHN WAYNE
AIRPORT
NOT TO SCALE
CONCRETE
REPLACEMENT PROGRAM
LOCATION MAP
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
C-8921-1 1 11 /29/22
ATTACHMENT B
Grigolla & Sons Construction Co., Inc.
627 West Allen Avenue
San Dimas, CA 9r773
Tel# (9a9) 447-8530 - Fax# (909) 447 8547 License No. 514132
October 31, 2022
City of Newport Beach
Public Works Department
100 Civic Center Drive
Newport Beach, CA 92660
Re: Concrete Replacement Program, Contract No. 8921-1
Dear Public Works Department,
Pursuant to California Public Contract Code, bidder Grigolla & Sons hereby issues its
formal protest regarding the "Concrete Replacement Program Contract No. 8921-1". We note
that the bidding documents are silent as to procedures and deadlines for bid protests, and
therefore Grigolla & Sons submits this protest pursuant to the Public Contract Code. We
understand that the City has not issued a Notice of Award or Notice to Proceed with this
solicitation and therefore this protest is timely.
The apparent low bidder NR Development Inc. has several apparent discrepancies on his bid
which we believe to be reasonable grounds for the bid to be dismissed as non -responsive. It is
our opinion in completing several projects of this scope that the apparent low bidder NR
Development Inc lacks the skill necessary to complete this project. Grigolla & Sons request is
made humbly in the best interest of the City of Newport Beach to receive a qualified contractor
in this scope of work. The city should consider the below discrepancies to deem them non-
responsive.
1. The successful Bidder is required to have a ISA Certified arborist per section 6-1.1 of the
contract documents. The trees in this project require very specific experience and
qualified personnel which we do not believe this contractor is capable of providing to the
city of Newport Beach.
2. The Bidder did not list any subcontractors for the tree removals who is experienced in
this field and familiar with the city's requirements. The Subcontractor Listing Law
requires all bidders to list any subcontractors whose value of work exceeds'/z of 1
percent. It does not appear that the Bidder has done that.
3. The Bidder appears to have a materially unbalanced bid proposal; specifically on two
items. The items are the material imbalances of No.6 Remove & construct Type "A"
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concrete curb & gutter at a unit cost of $16.38. This is way below the cost of material
and labor costs.
4. The second material imbalance is No.10 Remove & construct concrete access ramp at
$92.43. This is extremely below materials and labor cost.
Grigolla & Sons hereby protests the Low Bidder's bid as being both non -responsive and the
Bidder as being non -responsible on the above -referenced grounds.
Please do not hesitate to contact me at 909-447-8530 or david(&grigollaandsons.com if you have
any further questions. T
Best Regards,
avr Grigolla
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ATTACHMENT C
FELDMAN & ASSOCIATES, INC.
ATTORNEYS AT LAW
11030 SANTA MONICA BOULEVARD
SUITE 109
Los ANGELES, CALIFORNIA 90025
(310) 312-5401
FACSIMILE (310) 312-5409
November 7, 2022
Via E-mail Only
Michael J. Sinacori, PE
Assistant City Engineer
City of Newport Beach
Public Works Department
100 Civic Center Drive
Newport Beach, CA 92660
Msinacori(d),NewportB eachCA. gov
Subject: NR Development / Newport Beach
Concrete Replacement Program 8921-1
Response to Bid Protest
Dear Mr. Sinacori:
This law firm represents NR Development ("NR"), the lowest responsive and responsible
bidder for the Concrete Replacement Program Project for the City of Newport Beach
("Newport"). NR is in receipt of your email regarding the bid protest made by Grigolla & Sons
("Grigolla").
The protest is without merit and should be rejected for the following reasons:
1. NR is the lowest responsive and responsible bidder and should be awarded the
contract.
2. NR included all costs to remove and construct the Type A concrete curb per item 6.
3. NR included all costs to remove and construct the concrete access ramp in item 10.
4. NR is not required to list a subcontractor for the surveying work because a surveyor is
not a licensed subcontractor and the scope of work is less than half of one percent.
5. NR is prepared to perform the root trimming for the cost indicated in its bid.
I. THE LAW ON BID PROTEST
Before addressing the three issues you raised in your email, an understanding of the law on
bid protests is important.
California law mandates that a public entity must competitively bid public works contracts
and award the contract to the lowest responsible bidder that submits a responsive bid. MCM
Construction, Inc. v. City and County of San Francisco (1998) 66 Cal.AppAth 359, 368. These
requirements are strictly enforced to protect taxpayers by inviting competition, which helps
"guard against favoritism, improvidence, extravagance, fraud and corruption," Domar Electric,
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Inc. v. City of Los Angeles (1994) 9 Cal. 4th 161, 173. These public interests are what is
important. Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.AppAth 897, 908-909.
Allowing the disappointed bidder to invalidate the lowest bid on technical violations in hopes of
securing the contract at a higher price frustrates these public interests rather than upholding
them. Id.
So, first we need to remember that when looking at bid protests, if the bid is responsive, and
promises to do what the City requested, then that is the end of the inquiry.
When there is a Bid Protest, a public entity such as Newport is limited in what it can look at.
As indicated above, the test for responsiveness focuses on the four corners of the bid documents
and does not consider information or details outside of the bid and the bid documents. Great
West Contractors, 187 Cal.App.4th at 1453-54. This is important and worth repeating because
arguments raised by Grigolla and your email ask Newport to look beyond NR's bid documents.
This is not permitted by the law of the State of California, and invitations to do so should be
declined by Newport.
It is established under California law that bids which substantially conform to a public
agency's request but contain some error or irregularity may be accepted if the error does not
affect the amount of the bid or gives the applicant an advantage that other bidders did not have.
Bay Cities Paving & Grading, Inc. v. City of San Leandro (2014) 223 Cal.App.4th 1181, 1198-
1199. Therefore, bids must be evaluated from a practical, rather than hypothetical, standpoint,
giving due consideration to the public interest being served. Ghilotti at 908-909; MCM at 370.
These public interests are getting the best price and avoiding favoritism and corruption. Domar
at 173.
Even if there was a minor error, which there is not, Newport must award to the lowest bidder
and avoid even the appearance of favoritism and corruption. It is understood that a conversation
took place between NR and Newport where it was mentioned that Newport has thirty years of
experience working with Grigolla. Newport's acceptance of such an untimely bid protest from
Grigolla, as well as the questions raised in emails going beyond the bid documents, gives the
appearance of an extreme bias.
Grigolla is a disgruntled bidder whose bid is higher than NR. Grigolla asks Newport to
ignore the public interest of contracting with the lowest bidder and instead wants Newport to
waste public funds.
In evaluating the responsiveness of a bid, it is "well established that a bid which substantially
conforms to a call for bids may, though it is not strictly responsive, be accepted if the variance
cannot have affected the amount of the bid or given the bidder an advantage or benefit not
allowed other bidders or, in other words, if the variance is inconsequential." Emphasis added,
Valley Crest Landscape, Inc., v. City Council (1996) 41 Cal.AppAth 1432, 14401-41 citing
Konica Business Machines U.S.A., Inc. v. Regents of University of California (1988) 206
Cal.App.3d 449,454 quoting 47 Ops.Cal.Atty.Gen. (1966) 129, 130-31. A variance in a bid,
therefore, will only be considered material if it (1) could have affected the total sum of the bid or
(2) provided a bidder with a competitive advantage. Otherwise, the variance is inconsequential
and waivable.
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II. BACKGROUND ON NR
When evaluating the bid of NR, it would be nice if you knew NR's background information.
NR possesses the following five CSLB licenses: A, B, C13, C27, and C36. Grigolla only has an
A license, and the largest project completed is $368,534.00 according to the Technical Ability
and Experience References page of their bid. NR is a self -performing contractor and possesses
the necessary qualifications and project experience to complete this work. The City of Newport's
visits to two notable NR jobsites confirm this, showing completed work upwards of $26,000,000
consisting of mostly concrete, and engineering related work. If there were any questions as to
how NR can perform work for less than its competitors who have to use subcontractors, it is
because NR has the qualifications, workforce, and experience to self -perform much of the work.
III. NR PROVIDED A BID FOR TYPE A CONCRETE CURB (LINE -ITEM NO. 6)
While the law does not allow Newport to look at outside information, and alleged oral
statements after the bid opening, NR is willing to confidentially share the following information
with you.
The recitation of the oral conversation is incorrect. The bid of NR for item 6, contrary to the
statement in your email, does contain ALL costs for that bid item. This price is based on the
actual cost to perform the work. If awarded the project, NR will perform this work for the price
indicated.
IV. NR PROVIDED A BID FOR THE ACCESS RAMP (LINE -ITEM NO. 10)
While the law does not allow Newport to look at outside information, and alleged oral
statements after the bid opening, NR is willing to again confidentially share the following
information with you.
The recitation of the oral conversation is incorrect. The bid of NR for item 10, contrary to the
statement in your email, does contain ALL costs for that bid item. This price is based on the
actual cost to perform the work. If awarded the project, NR will perform this work for the price
indicated.
V. NR WILL PROVIDE SURVEYING
As mentioned above, while the law does not allow Newport to look at outside information,
and alleged oral statements after the bid opening, NR is willing to confidentially share the
following information with you.
You note that NR did not list a subcontractor holding a contractor's license to perform
surveying work. This is correct for two reasons. First, a surveyor is not licensed by the
Contractors State License Board. So a surveyor could never be a subcontractor and is not
required to be listed.
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Second, even if a surveyor was licensed by the Contractors State License Board, NR was not
required to list its surveyor because the total value of the very limited surveying work is less than
one-half of one -percent. Public Contracts Code §4104 only requires the listing of subcontractors
in excess of one-half of one -percent. NR performs the survey in house with its own survey crew.
The surveyor confirms the monument points and markers. That is why the cost of the actual
surveyor is less than one-half of one -percent.
Lastly, the Owner's estimate for this portion of work was listed at $25,000 per the bid
summary C-8921-2. Grigolla bid this particular line item at $7,000. NR's bid was $29,250.00 for
the surveyor and the self -performed work combined. Given the differences in price the Owner
should have concerns about Grigolla being able to provide an accurate survey for this project.
VI. THE BID DOCUMENTS DO NOT REQUIRE THE LISTING OF AN ISA
CERTIFIED ARBORIST
Section 6-1.1 mentions that the contractor's certified arborist shall provide a tree assessment
prior to pruning. This is a consultant and not a subcontractor performing any manual labor. The
work does not consist of more than one-half of one percent of the contract. Therefore, listing of
this type of consultant is not necessary. If awarded the project, NR will provide a certified
arborist's tree assessment prior to pruning as required.
VII. NR PROVIDED A BID FOR TREE ROOT REMOVAL AND NR WILL
PERFORM THE TREE REMOVAL
While the law does not allow Newport to look at outside information, and alleged oral
statements after the bid opening, NR is willing again to confidentially share the following
information with you.
The recitation of the oral conversation is incorrect. The bid of NR for item 14, contrary to the
statement in your email, does contain ALL costs for that bid item.
Further, there was no mandatory job walk for this Project. Presumably, Newport did not
believe this was needed, otherwise it would have included in the bid instructions. So, trying to
impose such a requirement after bid opening is not proper. NR bid the project based on the
information supplied by Newport, which was to bid a unit price breakdown demonstrating
quantities. Newport provided overhead plan views omitting grade points, which operate very
similar to a google earth rendering of a certain area.
Lastly, Grigolla claims that NR does not possess the specific experience or personnel to
perform the tree removal. Please note NR possesses both an A, and C-27 landscaping license to
perform this work. Greenbook specifications (which govern this project) section 3-2 requires the
contractor to perform 50% of the contract price unless a specific item is mentioned. Here, the
contract does not specify the use of a specialized service or licensure to engage in tree removal.
Rather, it requires an arborist to perform a survey prior to contractor removal, and NR's self -
performed work for this project exceeds the 50% requirement. If awarded the Project, NR will
self -perform the tree removal work.
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VIII. CONCLUSION
For the above reasons, Newport Beach should reject the late bid protest made by Grigolla and
award the contract to NR as the lowest responsive and responsible bidder. Newport's
representatives have previously confirmed that NR is currently in compliance with the project's
insurance requirements per their email to NR dated November 2, 2022, the same day Newport
notified NR that Grigolla submitted a bid protest. NR is experienced and well -qualified to
perform the work in the bid. Newport will get a great contractor, and save money in the process
that can be spent on other city improvements or activities.
In addition, NR requests the following:
I . That this letter serves as a protest against the award of the above contract to
anyone other than NR.
2. Mailed notice of all meetings of the awarding authority at which any issues
pertaining to the award to the contract are on the agenda for meeting pursuant to
Gov. Code § 54954.1
3. That NR be informed by telephone or fax or email as soon as any staff reports or
recommendations concerning any issues pertaining to the award of the contract
are available to the public, so that we can immediately inspect those reports or
recommendations.
4. The ability to address the awarding authority before or during consideration of
any issues pertaining to the award of the contract pursuant to Gov. Code §
54954.3(a).
Thank you for your prompt attention to this matter. If you have any questions, please
direct them, as well as any communication with this office, to the undersigned.
Very truly yours,
David J. Sire, Jr.
for FELDMAN & ASSOCIATES, INC.
Cc: Mark Feldman, Esq.; NR Development; ATran@newportbeachca.gov
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