HomeMy WebLinkAboutC-3385 - Newport Center Fire Station No. 3 Mechanical Upgrade and Restroom Addition0
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RECORDI1t61'b E�ST6 BY AND
WHEN RECORDED RETURN TO:
City Clerk 02 DEC -5 A 9 26
City of Newport Beach
3300 Ne BeuA,v G
NE , Clr? .
Recorded in Official Records, County of Orange
Darlene Bloom, Clerk- Recorder
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200200102620410:23am 11115102
200 80 N12 1
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6103"
NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN that the City of Newport Beach, 3300 Newport Boulevard,
Newport Beach, California, 92663, as Owner, and LTG Construction of Laguna Niguel,
California, as Contractor, entered into a Contract on September 25, 2001. Said Contract
set forth certain improvements, as follows:
Newport Center Fire Station No. 3 Mechanical Upgrade and Restroom Addition (C -3385)
Work on said Contract was completed on September 30, 2002, and was found to be
acceptable on October 22, 2002, by the City Council. Title to said property is vested in
the Owner, and the Surety for said Contract is American Motorists Insurance Company.
VERIFICATION
I certify, under penalty of perjury, that the foregoing is true and correct to the best of my
knowledge. �j
Executed on (('G Y-✓ at Newport Beach, California.
City Clerk
CIl�( OF NEWPORT BEACH
October 23, 2002
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658-8915
(949) 644 -3005
Orange County Recorder
P. O. Box 238
Santa Ana, CA 92702
RE: Notice of Completion for Newport Center Fire Station No. 3
Mechanical Upgrade and Restroom Addition (C -3385)
Please record the enclosed document and return them to the City Clerk's Office.
Thank you.
Sincerely,
LaVonne M. Harkless, CMC /AAE
City Clerk
Enclosure
3300 Newport Boulevard, Newport Beach
0
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City Clerk
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663
'Exempt from recording fees
pursuant to Government Code Section 6103"
NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN that the City of Newport Beach, 3300 Newport Boulevard,
Newport Beach, California, 92663, as Owner, and LTG Construction of Laguna Niguel,
California, as Contractor, entered into a Contract on September 25, 2001. Said Contract
set forth certain improvements, as follows:
Newport Center Fire Station No. 3 Mechanical Upgrade and Restroom Addition (C -3385)
Work on said Contract was completed on September 30, 2002, and was found to be
acceptable on October 22, 2002, by the City Council. Title to said property is vested in
the Owner, and the Surety for said Contract is American Motorists Insurance Company.
Beach
VERIFICATION
I certify, under penalty of perjury, that the foregoing is true and correct to the best of my
knowledge.
Executed on (OCZ ,- C at Newport Beach, California.
/l /rM�M fir. //
C � 3355
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CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
AGENDA ITEM NO.
October 22, 2002
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Public Works Department
R. Gunther, Construction Engineer
949 -644 -3311
rgunther@city.newport-beach.ca.us
SUBJECT: NEWPORT CENTER FIRE STATION NO.3 MECHANICAL UPGRADE
AND RESTROOM ADDITION, CONTRACT NO. 3385 — COMPLETION
AND ACCEPTANCE
RECOMMENDATIONS:
1. Accept the work.
2. Authorize the City Clerk to file a Notice of Completion.
OCT ? Y 'Z'002
3. Authorize the City Clerk to release the Labor and Materials bond 35 days after the
Notice of Completion has been recorded in accordance with applicable portions of
the Civil Code.
4. Release the Faithful Performance Bond one year after Council acceptance.
DISCUSSION:
On September 25, 2001, the City Council authorized the award of the Newport Center
Fire Station No. 3 Mechanical Upgrade and Restroom Addition contract to GK
Construction, Inc. (GK). The work started in October 2001. Within a few weeks it
became clear that GK was unable to provide the proper original endorsements to
support their insurance documents. Work was then stopped to allow time for GK to
fulfill their insurance requirements, which GK failed to do. During December 2001, GK
was declared in default of their contract. Staff worked with the City Attorney's office to
enable takeover of the project by the bonding company. Lou Jones and Associates
(LJA), bonding agent for American Motorists Insurance Company, obtained bids from
two companies to complete the work. LTG Construction was subsequently hired to
complete the work. LTG began working on the project in May 2002 and completed the
remainder of the work.
SUBJECT: NEWPORT C R FIRE STATION NO.3 MECHANICAL UPGRAD,D RESTROOM ADDITION,
CONTRACT N 385 - COMPLETION AND ACCEPTANCE
October 22, 2002
Page 2
The contract provided for:
• Replacement and relocation of HVAC units and associated electrical equipment
and ductwork
Installation of a new HVAC zone control system
• Conversion of a portion of a second floor mechanical room into a women's
restroom, including new HVAC, electrical and plumbing
• Replacement of certain floor and ceiling tile areas
• Repainting of certain living areas
The HVAC upgrade provided heating and cooling improvements to the old system. In
addition, the upgrade provided for the removal of diesel exhaust and kitchen fumes
from the facility. The contract has now been completed to the satisfaction of the Public
Works Department. A summary of the contract cost is as follows:
Original bid amount: $224,900.00
Actual amount of bid items constructed: 224,900.00
Total amount of change orders: 4,662.00
Final contract cost: $229,562.00
The final overall construction cost including change orders was 2.07 percent over the
original bid amount.
Two change orders were issued for the project. They were as follows:
1. A change order in the amount of $1,660.00 provided for the modification of a
kitchen exhaust louver and installation of an exterior roof ladder.
2. A change order in the amount of $3,002.00 provided for the installation of 2
air grills, 4 supply grills, 10 supply dampers, and glass installation in the
women's restroom.
The original scheduled completion date was February 28, 2002. Due to the default of
the original contractor, the completion date was extended to September 30, 2002. All
work was completed by the revised completion date.
Environmental Review: This project was exempt from CEQA under the Class 1
categorical exemption, minor alterations to existing facilities.
Funding Availability: Funds for the project were expended in the following account:
Description
Fire Station Modifications
Prepared by:
- "/-?, ': � -c wt
R. Gunther
Construction Engineer
Account No. Amount
7271- C2320527 $229,562
Submitted by:
of Public Works
Brown, Leilani •
From: Rooks, Shari
Sent: Tuesday, October 22, 2002 9:27 AM
To: Masters, Rob; Gunther, Robert
Cc: Brown, Leilani; Oyler, Shauna
Subject: G.K. Construction
Rob & Gunther,
I looked everywhere - including the City Attorney's office and could not find a copy of the Labor
and Materials and Faithful Performance Bonds, Leilani doesn't have any bonds to return, so she is
simply going to consider the file inactive after the Council Meeting tonight.
Rob may need to contact Susi at the Surety to let her know the City will not be returning any bonds
(despite the fact that our Council Memo has the standard wording that says we will)....
I gave Leilani copies of the takeover agreement with the surety for her file, since she never got a
copy of the GK Contract.
Shari
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
November 30, 2001
3300 NEWPORT BLVD.
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(949) 644 -3311
Essam Mostafa VIA FACSIMILE
G.K. Construction, Inc. 714 - 446 -0414
3616 Garnet Avenue
Rosamond, CA 93560
Subject: Newport Center Fire Station #3 Mechanical Upgrade and Restroom
Addition, Contract No. 3385
Insurance Documents
Dear Mr. Mostafa:
The C;ty has informed your firm several times, including in our letter of November 20,
2001, that proper insurance documentation has not been provided to the City. As of this
date the original insurance certificate endorsements still have not been delivered to the
City
Gl< construction is required to comply with the contract agreement (copy attached),
which includes the requirement of the contractor to, "furnish City with certificates of
insurance and with original endorsements effecting coverage required by this contract."
The original document endorsements must be received in our office by 3 p.m. on
Wednesday Dec 5. If they are not received by the City by that time, the City will
stop work on the project, and take necessary action to have the work completed
either by the City or another contractor.
Sincerely,
Bill Patapoff, P.E.
City Engineer
By:
R. Gunther, P.E.
Construction Engineer
cc: American Motorists Insurance Company
Steve Badum, Public Works Director
Rich Middlebrough, Fire Department
Rob Masters, Sr. Public Works Inspector
Robin Clauson, Assistant City Attorney
F:WSERS \PBW \Shared \Contracts \F1' 01- 021Newport Center Firc Station No. 3 C- 3385 \1nsur letter- Nov 29 o0c
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nt By: GK Construction
inc-; • 661 256 1259;
Nov -2701 11:124Ltt; = e 212
G
K
Construction
Inc.
E -mail cssamno,ptw.com
November 26, 2001
Bill Patapoff, RE.
CITY OF NEWPORT BEACH
3300 Newport Boulevard
Newport Beach, CA. 92658
1259
Subject Newport Center Fire Station #3 Mechanical Upgrade and Restroom
Addition, Contract No. 3385
ABANDONMENT OF PROJECT/ INSURANCE DOCUMENTATION LETTER
Dear Mr. Patapoff:
G K Construction, Inc. received your letter dated November 20, 2001 regarding project
abandonment, unfortunately we disagree with the entire contents of your letter based upon the
following fads:
A. Contract No. 3385 performance time is 65 consecutive working days, which
commence on October 16, 2001 and therefore contract completion time Is January 22, 2002
8. G K Construction, Inc, submitted 18 RFI's to your office which will result to
approximately 4 change orders and to date your office did not issue any notice to proceed or
requested a proposal from G K Construction, Inc. Furthermore those change orders as submitted
to your office clearly indicated that additional time requirements to the contract completion time
will accrue. G K Construction, Inc. estimate at least 30 additional working days added to the
contract completion time.
C. The proper insurance documentafion has been submitted to your office and
unfortunately we have received several conflicting feedback from your office regarding the
endorsement. This conflicting information changes based upon the person who's handing this
matter at the time. We hope that a final and clear endorsement language will be provided in
writing from your office- that will not conflict with the contract requirement- so we can resolve this
matter as soon as possible.
Finally as I the undersigned stated during the pre- construction meeting that G K Construction,
Inc. is committed to complete this project as soon as possible with the least inconvenience to the
fire station occupant. It is very clear that City of Newport Beach must handle this project in an
objective manner to achieve the same result.
If any question arises, or I may further elaborate on any of the above, please feel free to contact
me.
Essam fa
-� eL C'
� Y>
CC. Jahn Holtman S Assodated Law 07Lce
American Motorist Bono Company
Rich M„ ddlebrough, Fire Department
Steve Barium. Public Works Director
EIM insurance Company
Neil DoGarmo, Project Manager
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
Memorandum
October'27, 2001
To: Steve Badum, Public Works Director
Lauren Farley, Risk Manager
Robin Clauson, City Attorney
Bill Patapoff, City Engineer
Lloyd Dalton, Project Engineer
Robert Gunther, Field Engineer
Lois Thompson, Administrative Manager
Dennis Lockart, Fire Department
From: Shauna Oyler, Public Works Administrative Assistant
Subject: G.K. CONSTRUCTION - NEWPORT CENTER FIRE STATION NO. 3
MECHANICAL UPGRADE AND RESTROOM ADDITION INSURANCE
DOCUMENTS
This construction project was awared by City Council on September 25'h. G.K.
Construction started working on the project only to be shut -down by the Public Works
Inspector on Monday, October 9th, because the insurance documents had not been
received and approved by the City. G.K. Construction has been one of the most
difficult contractors I have ever worked with in trying to obtain these documents for
approval by the City's Insurance Broker, CalSurance.
Because of various conversations and faxed documents received from G.K.
Construction, I feel there may be something that is not quite right with this contractor,
not to mention that he has definitely not met the City's timeline in submitting his
insurance. He has had various excuses on top of acting like he does not understand
what is required. He has brought up the fact that the County of Los Angeles, whom he
has done work for, does not require what the City of Newport Beach requires.
Lauren Farley talked to Essam Mostafa, President of G.K. Construction, on Friday and
will be working directly with him during this next week to secure the required insurance
documents. Should you have any questions, please talk with her.
See attached faxed documents faxed to G.K. Construction Saturday morning, October
27, 2001.
•�i.t, j
0
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
P.O. BOX 1768
NEWPORT BEACH, CA 92658 -8915
L
FAX COVER SHEET
DATE: z .2 ery0 >/
COMPANY: fC T K
ATTENTI
O
SUBJECT
FAX NUMBER: e! 60 /- °7-5z - 1,2s-I,:;
N OF. / V65 FAFdf.
FAXED BY .-0
PHONE NUMBER: (949) 644 -3311 ' FAX NUMBER: (949) 644 -3318
NUMBER OF PAGES INCLUDING COVER SHEET.,
COMMENTS:
Please Notify Sender If Transmission Is Incomplete.
0
0
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
Memorandum
October 27, 2001
TO: G.K. Construction
From: Shauna Oyler, Public Works Administrative Assistant
Subject: NEWPORT CENTER FIRE STATION NO. 3 MECHANICAL UPGRADE AND
RESTROOM ADDITION INSURANCE DOCUMENTS
Included in this fax transmission are copies of the following documents:
• Letter dated September 26, 2001, transmitting contract documents to G.K. Construction
specifying the need for G.K. Construction to furnish original certificates of insurance with
original endorsements in accordance with all of Section G. INSURANCE of the contract.
This letter also states that all certificates and endorsements must be received and approved
by the City prior to commencement of work. Please note these original insurance
certificates and endorsements should have been returned to the City of Newport Beach within
10 working days upon receipt of the letter
• Contract executed and returned to the City of Newport Beach by G.K. Construction which
includes insurance requirements under Section G. INSURANCE
• Copy of G.K. Insurance Certificates as received by the City of Newport Beach
• Sample endorsements that include the additional insured and the primary and non-
contributory wording to be used by G.K. Construction only as a reference in obtaining their
own certified certificates and endorsements from their insurance companies
Please transmit certified Original Insurance Certificates for Workers' Compensation (which includes
the Waiver of Subrogation clause), General Liability (which includes the additional insured and the
primary and non - contributory wording), and Automobile Liability (which includes the additional
insured and the primary and non - contributory wording), to the attention of:
Lauren Farley
Risk Manager
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663
Lauren Farley may be reached at (949) 644 -3302 should you need additional clarification.
Thank you for your immediate attention in securing and transmitting these documents.
Xc_ Steve Badum, Public Works Director
Lauren Farley, Risk Manager
Robin Clauson, City Attorney
Bill Patapoff, City Engineer
Lloyd Dalton, Project Engineer
Robert Gunther, Field Engineer
Lois Thompson, Administrative Manager
Dennis Lockart, Fire Department
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
3300 NEWPORT BLVD.
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8913
(949) 644 -3311
September 26, 2001
G.K. Construction, Inc.
3616 Garnet Avenue
Rosamond, CA 93560
IY �cK
Subject: Newport Center Fire Station No. 3 Mechanical Upgrade and Restroom
Addition — Contract No. 3385
Gentlemen:
On September 25, 2001, the City Council of the City of Newport Beach awarded the
above referenced contract to your firm.
Enclosed are four copies of the Contract Documents. Please execute each of the
following documents:
Contract
Labor and Materials Payment Bond
Faithful Performance Bond
Please note that the enclosed Contract Documents are the only forms acceptable to the
City for this purpose.
In addition, the contract provisions require you to furnish original certificates of
insurance and original endorsements in accordance with all of Sections G.
INSURANCE- An individual authorized by the insurer to bind coverage on Its behalf
must execute these documents. All certificates and endorsements must be received
and approved by the City prior to the commencement of the work. Please return as a
complete package all four copies of the completed contract documents with the
insurance certificates and endorsements included in each copy.
Upon execution by the, City of Newport Beach of all documents, the distribution will then
be (1 ) City Clerk, (2) Project File, (3) Contractor, and (4) Bonding Company
0
All of the executed documents referenced above must be returned within ten (10)
working days of receipt of mailing, as follows:
Administrative Coordinator
Public Works Department
City of Newport Beach
3300 Newport Boulevard
P. O. Box 1768
Newport Beach, CA 92659 -1768
Enclosures
FROM m • FRk NO. : 0 apr. 15 2000 04:31RM P2
ACORD_ CERTIFICATE OF
LIABILITY
INSURANCE
10/10 01
TODUCER E.I.M INSURANCE MARKETING
13301 SAN ANTONIO DR
P_O. BOX 1558
06/15, O1
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
ALTER THE COVERAGE AFFORDED SY THE POLICIFS BELOW.
INSURERA'.
INSURERS AFFORDING COVERAGE
INDIAN HARBOR INSURANCE CO
NORWALK , CA 90650
wsuaED ESSAM MOSTAFA
GK CONSTRUCTION
S 1000000
INSURERB:
PROGRESSIVE IRBVRAHCE__CO
INSURER C:
........ _
3616 GARNET AVE
PERSONAL &ADVINJURY
-
ROSAMOND , CA 93560
INSURER E:
f 7000000
yTHE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING
ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR
MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBF,D HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH
POLICIES, AGGREGATE UMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. . . ..-
POLC_._
POLICY SAIRATID
4MR3 INSR TYPE OF INSUACE POUOr NUMBER DATE DATE
—06/15/02
IIEL X
DENERA- LIABILITY
X COMMERCNLOENERALUADUTY
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DESCRIPTION Of OPERATIONS / oO TIONSNEHICLESIGXCLUSIONS ADDED BY ENDORSEMENT /SPECIAL PaMMONS
CONSTRUCTION RENOVATION FOR 3300 NEWPORT BLV NEWPORT BEACH , CA 92658
* 1998 CHEVY SILVRADO VIN # 1GCEC19R9WR106780
* 1989 CHEVY P/U VIN N 1GCFC241(9K7211141
CITY OF NEWPORT BEACH
THE CITY,ITS OFFICERS, AGENTS,
OFFICIALS,&RPLOYLES AND
VOLUNTEERS.
3300 NP.WPORT BZv
25-S(7197)
SHO V LD ANYOF THE ABOVE DESCRIBED POLICIES eECANCEIIED BEFORETHE EVPIRATION
DATE THEREOF. THE ISSUI NO INSUPER WLLL1I001F TO MAIL 30 DAYS WRITT EN
NOTICE TO THE CERTIFICATE HOLDER NAMED TO T HE I.En. B+I -��° `°M " 'L
1998
Sent•By: G K Construction Inc.; 661 291 6266; Oct-24;,6L 12:41PM; Page 2/2
Ah
OCT.Z4.Z001 11132AM STATE COMP INS Ix,. SS4 P.1i1
STATE P.O. BOX 420807, SAN FRANCISCO. CA 94142 -0807
Oomperm3ATION
I N3 V RAN CG
FUND GERTIFICATE OF WORKERS' COMPENSATION INSURANCE
OCTOBER 24, 2001 041 -01 UNIT OOOasOo
POLICY NUMBER! 11-02
CERTIFICATE EXPIRES:
CITY OF NCWPORT BEACH
3300 NEWPORT" BLVD
NEWPORT BEACH CA 92658
L
This is to certify that we have Issued a valid WC rkers' Compense[lan Insurance policy in a form approved by the Celffornia
Insurance Commissioner to the employer named below for the policy period indicated.
TN6 policy is not subject to cancellation by the Fund except upon Ian days' advance written notice to the employer.
We will also give you TEN days' advance notice Should this policy be cancelled prior in its normal axplration.
This certificate of Insuranoe Is not an Insurance policy and does not amend, extend or Sher the coverage afforded by the
policies listed herein. Notwithstanding any requirement. term, or condition of any contract or other document with
respect to which this certificate of insurance may be issued or may peRain, the Insurance afforded by the policies
described herein is subject 10 all the terms, exclusions and condhions of such policies.
<LJ�> IZ� PES NTATIV � 041e9CENT
EMPLOYER'S LIABILITY LIMIT INCLtIDING DEFENSE COSTS: $1,000,000 PE,R'000URRENCE.
ENDEIR99MENT #42570 ENTITLED WAIVER OF SUBROGATION EFFECTIVE
10/24/01 IS ATTACHED TO AND FORPIS A PART OF THIS�POLICY.
THIRD PAP.TY NAME: CITY OF N£WP06T BEACH
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EMPLOYER
OX CONSSTFUCTION INC
7616 CARNET AVE
ROSAMOND CA 93560
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PAGE 8
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
NEWPORT CENTER FIRE STATION NO. 3 MECHANICAL UPGRADE
AND RESTROOM ADDITION
CONTRACT NO. 3385
CONTRACT
THIS AGREEMENT, entered into this 25th day of September, 2001, by and between the CITY
OF NEWPORT BEACH, hereinafter "City," and G.K. Construction, Inc., hereinafter
"Contractor," is made with reference to the following facts:
WHEREAS, City has advertised for bids for the following described public work:
NEWPORT CENTER FIRE STATION NO. 3 MECHANICAL
UPGRADE AND RESTROOM ADDITION
Project Description
3385
Contract No.
WHEREAS, Contractor has been determined by City to be the lowest responsible bidder and
Contractor's bid, and the compensation set forth in this Contract, is based upon Contractor's
careful examination of all Contract documents, plans and specifications.
NOW, THEREFORE, City and Contractor agree as follows
A. CONTRACT DOCUMENTS The complete Contract for the Project includes all of the
following documents: Notice Inviting Bids, Instructions to Bidders, Proposal, Bidder's
Bond, Non - Collusion Affidavit, Faithful Performance Bond, Labor and Materials Payment
Bond, Permits, General Conditions, Standard Special Provisions and Standard Drawings,
Plans and Special Provisions for Contract No. 3385, Standard Specifications for Public
Works Construction (current adopted edition and all supplements) and this Agreement,
and all modifications and amendments thereto (collectively the "Contract Documents').
The Contract Documents comprise the sole agreement between the parties as to the
subject matter therein. Any representations or agreements not specifically contained in
the Contract Documents are null and void. Any amendments must be made in writing,
and signed by both parties in the manner specified in the Contract Documents.
B. SCOPE OF WORK Contractor shall perform everything required to be performed, and
shall provide and furnish all the labor, materials, necessary tools, expendable equipment
and all utility and transportation services required for the Project:
All of the work to be performed and materials to be furnished shall be in strict accordance
with the provisions of the Contract Documents. Contractor is required to perform all
activities, at no extra cost to City which are reasonably inferable from the Contract
Documents as being necessary to produce the intended results.
0
1.
PAGE 9
C. COMPENSATION As full compensation for the performance and completion of the
Project as required by the Contract Documents, City shall pay to Contractor and
Contractor accepts as full payment the sum of two hundred twenty -four thousand, nine
hundred and 00/100 Dollars ($224,900.00).
This compensation includes:
(1) Any loss or damage arising from the nature of the work,
(2) Any loss or damage arising from any unforeseen difficulties or obstructions in the
performance of the work,
(3) Any expense incurred as a result of any suspension or discontinuance of the work, but
excludes any loss resulting from earthquakes of a magnitude in excess of 3.5 on the
Richter Scale and tidal waves, and which loss or expense occurs prior to acceptance
of the work by City.
D. NOTICE OF CLAIMS Unless a shorter time is specified elsewhere in this Contract, before
making its final request for payment under the Contract Documents, Contractor shall
submit to City, in writing, all claims for compensation under or arising out of this Contract.
Contractor's acceptance of the final payment shall constitute a waiver of all claims for
compensation under or arising out of this Contract except those previously made in writing
and identified by Contractor in writing as unsettled at the time of its final request for
payment.
E. WRITTEN NOTICE Any written notice required to be given under the Contract
Documents shall be performed by depositing the same in the U.S. Mail, postage prepaid,
directed to the address of Contractor and to City, addressed as follows:
CITY G.K. Construction, Inc.
City of Newport Beach
Public Works Department
3300 Newport Boulevard
Newport Beach, CA 92663
Attention: Lloyd Dalton
(949) 644 -3328
F. LABOR CODE 3700 LIABILITY INSURANCE
hereby certifies:
3616 Garnet Avenue
Rosamond, CA 93560
(661) 256 -9698
Contractor, by executing this Contract,
"I am aware of the provisions of Section 3700 of the Labor Code which requires every
employer to be insured against liability for Workers' Compensation or undertake self -
insurance in accordance with the provisions of the Code, and I will comply with such
provisions before commencing the performance of the work of this Contract."
G. INSURANCE Insurance is to be placed with insurers with a Best's rating of no less
than A:VII and insurers must be a California Admitted Insurance Company.
Contractor shall furnish City with certificates of insurance and with original
endorsements effecting coverage required by this Contract. The certificates and
endorsements for each insurance policy are to be signed by a person authorized by that
0
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PAGE 10
insurer to bind coverage on its behalf. All certificates and endorsements are to be
received and approved by City before work commences. City reserves the right to
require complete, certified copies of all required insurance policies, at any time.
Contractor shall procure and maintain for the duration of the contract insurance against
claims for injuries to persons or damages to property which may arise from or in
connection with the performance of the work hereunder by Contractor, his agents,
representatives, employees or subcontractors. The cost of such insurance shall be
included in Contractor's bid.
1. Minimum Scope of Insurance
Coverage shall be at least as broad as:
a) Insurance Services Office Commercial General Liability coverage "occurrence"
form number CG 0001 (Edition 11/85) or Insurance Services Office form number
GL 0002 (Edition 1/73) covering Comprehensive General Liability and Insurance
Services Office form number GL 0404 covering Broad Form Comprehensive
General Liability.
b) Insurance Services Office Business Auto Coverage form number CA 0001 0187
covering Automobile Liability, code 1 "any auto" and endorsement CA 0029 1288
Changes in Business Auto and Truckers Coverage forms - Insured Contract.
c) Workers' Compensation insurance as required by the Labor Code of the State of
California and Employers Liability insurance.
2. Minimum Limits of Insurance
Coverage limits shall be no less than:
a) General Liability: $1,000,000.00 combined single limit per occurrence for bodily
injury, personal injury and property damage. If Commercial Liability Insurance or
other form with a general aggregate limit is used, either the general aggregate
limit shall apply separately to this project/location or the general aggregate limit
shall be twice the required occurrence limit.
b) Automobile Liability: $1,000,000.00 combined single limit per accident for bodily
injury and property damage.
c) Workers' Compensation and Employers Liability: Workers' compensation limits
as required by the Labor Code of the State of California and Employers Liability.
3. Deductibles and Self- Insured Retentions
Any deductibles or self- insured retentions must be declared to and approved by City.
At the option of City, either: the insurer shall reduce or eliminate such deductibles or
self - insured retentions as respects City, its officers, officials, employees and
volunteers; or Contractor shall procure a bond guaranteeing payment of losses and
related investigations, claim administration and defense expenses.
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PAGE 11
4. Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
a) General Liability and Automobile Liability Coverages
City, its officers, officials, employees and volunteers are to be covered as
additional insureds as respects: liability arising out of activities performed by
or on behalf of Contractor, including the insured's general supervision of
Contractor; products and completed operations of Contractor; premises
owned, occupied or used by Contractor; or automobiles owned, leased, hired
or borrowed by Contractor. The coverage shall contain no special limitations
on the scope of protection afforded to City, its officers, officials, employees or
volunteers.
ii. Contractor's insurance coverage shall be primary insurance and /or primary
source of recovery as respects City, its officers, officials, employees and
volunteers. Any insurance or self- insurance maintained by City, its officers,
officials, employees and volunteers shall be excess of the Contractor's
insurance and shall not contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officers, officials, employees and volunteers.
iv. Contractor's insurance shall apply separately to each insured against whom
claim is made or suit is brought, except with respect to the limits of the
insurer's liability.
v. The insurance afforded by the policy for contractual liability shall include
liability assumed by contractor under the indemnification /hold harmless
provision contained in this Contract.
b) Workers' Compensation and Employers Liability Coverage
The insurer shall agree to waive all rights of subrogation against City, its officers,
officials, employees and volunteers for losses arising from work performed by
Contractor for City.
c) All Coverages
Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled, rescinded by either
party, reduced in coverage or in limits except after thirty (30) days' prior
written notice by certified mail, return receipt requested, has been given to
City.
5. Acts of God
Pursuant to Public Contract Code Section 7105, Contractor shall not be responsible for
the repairing and restoring damage to Work, when damage is determined to have
been proximately caused by an Act of God, in excess of 5 percent of the Contract
amount provided that the Work damaged is built in accordance with the plans and
specifications.
0 •
PAGE 12
6. Right to Stop Work for Non - Compliance
City shall have the right to offer the Contractor to stop Work under this Agreement
and /or withhold any payments) which become due to Contractor hereunder until
Contractor demonstrates compliance with the requirements of this article.
H. RESPONSIBILITY FOR DAMAGES OR INJURY
City and all officers, employees and representatives thereof shall not be responsible in
any manner: for any loss or damages that may happen to the Work or any part
thereof; for any loss or damage to any of the materials or other things used or
employed in performing the Work, for injury to or death of any person either workers or
the public; or for damage to property from any cause arising from the construction of
the work by Contractor, or its subcontractors, or its workers, or anyone employed by it.
2. Contractor shall be responsible for any liability imposed by law and for injuries to or
death of any person or damage to property resulting from defects, obstructions or from
any cause arising from Contractor's work on the Project, or the work of any
subcontractor or supplier selected by the Contractor.
Contractor shall indemnify, hold harmless, and defend City, its officers and employees
from and against (1) any and all loss, damages, liability, claims, allegations of liability,
suits, costs and expenses for damages of any nature whatsoever, including, but not
limited to, bodily injury, death, personal injury, property damages, or any other claims
arising from any and all acts or omissions of Contractor, its employees, agents or
subcontractors in the performance of services or work conducted or performed
pursuant to this Contract; (2) use of improper materials in construction of the Work; or,
(3) any and all claims asserted by Contractor's subcontractors or suppliers on the
project, and shall include reasonable attorneys' fees and all other costs incurred in
defending any such claim. Contractor shall not be required to indemnify City from the
sole or active negligence or willful misconduct of City, its officers or employees.
4. To the extent authorized by law, as much of the money due Contractor under and by
virtue of the Contract as shall be considered necessary by City may be retained by it
until disposition has been made of such suits or claims for damages as aforesaid.
5. Nothing in this article, nor any other portion of the Contract Documents shall be
construed as authorizing any award of attorneys' fees in any action to enforce the
terms of this Contract, except to the extent provided for in H.3, above.
6. The rights and obligations set forth in this Article shall survive the termination of this
Contract.
EFFECT OF CONTRACTOR'S EXECUTION Execution of this Contract and all other
Contract Documents by Contractor is a representation that Contractor has visited the
Project Site has become familiar with the local conditions under which the work is to be
performed, and has correlated all relevant observations with the requirements of the
Contract Documents.
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PAGE 13
J. CONFLICT If there is a conflict between provisions of this Contract and any other
Contract Document, the provisions of this Contract shall prevail.
K. WAIVER A waiver by City or any term, covenant, or condition in the Contract
Documents shall not be deemed to be a waiver of any subsequent breach of the same or
any other term, covenant or condition.
IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed the day
and year first written above.
ATTEST:
CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF NEWPORT BEACH
A Municipal Corporation
L�
Mayor Garold B. Adams
G.K. Construction, Inc.
By: .
Authori 04�Sji u re and Title
POLICY NUMBER , /COMMERCIAL GEN &L LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - OWNERS, LESSEES OR
CONTRACTORS (FORM B)
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person or Organization:
CITY OF NEWPORT BEACH, ITS OFFICERS, OFFICIALS, EMPLOYEES, AND VOLUNTEERS
3300 NEWPORT BLVD.
NEWPORT BEACH, CA. 92658 -8915
(11 no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable
to this endorsement.)
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule but
only with respect to liability arising out of your ongoing operations performed for that insured.
xPRIMARY WORDING:
IT IS FURTHER AGREED THAT SUCH INSURANCE IS AFFORDED BY
ADDITIONAL INSURED (S) SHOWN ABOVE SHALL BE PRIMARY 1
CLAIMS. LOSS OR LIABILITYARISING OUT OFTHE OPERATIONS PI
OCCUPANCY, MAINTENANCE, OR USE OFTHE PREMISES 13Y TH P
MAINTAINED BY THE ADDITIONAL INSURED (S) SHALL 13E 4x
2
t
S B9 ;Y FOR THE BENEFIT OF'I Ii F.
\NC'.E. BUT ONLY AS RESPECTS TU ANY
L NAMED INSURED OR FROM
ED INSURED AND ANY INSURANCE
t I B UCO RY.
CG 20 10 10 93 Copyright Insurance Services Office, Inc., 1984
10;01;01 tt9: J9 FAX 0
POLICY #.
• zo:
COMMERCIAL AUTO
CA 20 48 02 99
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
DESIGNATED INSURED
This endorsement modifies insurance provided under the following
BUSINESS AUTO COVERAGE FORM
GARAGE COVERAGE FORM
MOTOR CARRIER COVERAGE FORM
TRUCKERS COVERAGE FORM
r
�I
i
With respect to coverage provided by this endorsement, the provisions of the Co "rage Form apply unless modified
by this endorsement-
This endorsement identifies person(s) or organization(s) who are, "i isu ds" under the Who is An Insured Provi-
sion of the Coverage Form. This endorsement does not alter,, cover �ge ided in the Coverage Form.
This endorsement changes the policy effective on the inception Sate of the policy unless another date is indicated
below.
Endorsement
Named Insured:
SCHEDULE
Name of Person(s) or Organization(s):
y /In,
City of Newport Beach, tts elected officials, officers and employees
Re: Construction Management Services for Balboa Village Project
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations
as applicable to the endorsement.)
Each person or organization shown in the Schedule is an 'insured` for Liability Coverage, but only to the extent
that person or organization qualifies as an "insured" unde, the Who is An Insured Provision contained in Section
If of th e Gove2ge Font. -- - - -- -- -- --
i
Subject to all other terms and provisions of the policy, such insurance as provided by this endorsement shaA be
/deemed primary, but only with respect to work performed by or for the named insured in connection. with the j
r above described contract Any other insurance maintained by the Additional Insured(s) shall be excess and non-
/ contributory. /
CA 20 48 02 99 Copyright, Insurance Services O`'ce. Inc . 1998 Page t of t
—IND. XMT JOURNAL— * * * * * * * * *x * * * * ** DATE OCT -27 -2091 * * * ** TIME 99 -03
DATEITIME
JOURNAL No.
COMM. RESULT
PAGE(S)
DURATION
FILE No.
MODE
DESTINATION
P,ECEIUED ID
RESOLUTION
OCT -27 -2001 88 59
19
OK
0141014
00:04 :01
249
MEMORY TRANSMISSION
916612561259
1 661 256 1259
STD
—CITY OF NEWPORTBEACH —
***** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** —CITY OF NEWPORT — * * * ** — 949 644 3318— * * * * * * * **
• •-� �LE
City of Newport Beach
Public Works Department
MEMO
To: Susi Vigus
Nicoloff & Associates, Inc.
2931 Jarvis Street, Suite B
San Diego, CA 92106
From: R. Gunther (, 4�
Public Works
January 2, 2002
Subject: Newport Center Fire Station #3 Mechanical Upgrade Contract
Project Assessment
The City has cancelled our contract with G.K. Construction, Inc. for any work at the fire
station. Attached is a copy of the letter of notification to them for your information.
We are in the process of obtaining another contractor to complete the work on the project.
In order for this new contractor to give us a proper bid to do the work an assessment of
the work completed needs to be performed. Per our conversation, the City would like to
have Nicoloff & Associates prepare this evaluation. It is understood that this evaluation
work is outside of the contracted work with your firm and will be billed as a "Time and
Materials" charge at established contract rates. Please provide an estimated not to exceed
budget to perform this evaluation and bring it with you to our meeting on site Thursday,
January 3`d
Please prepare this evaluation as soon as possible. We would like to include in this
evaluation the following sections:
a. Remaining work to be completed list;
b. Materials and equipment delivered;
c. Materials and equipment still needed;
d. Possible unknowns in work;
e. Rough cost estimate to complete the project;
f. Include a rough marked up set of plans with 'remaining work"
Cc: Rob Masters
Project File
0 0
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
3300 NEWPORT BLVD.
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(949) 644 -3311
December 18, 2001
Essam Mostafa
G.K. Construction, Inc
LAC, 16 Garnet Avenue
Rosamond, CA 93560
VIA FACSIMILE
714- 446 -0414
Subject: Newport Center Fire Station #3 Mechanical Upgrade and Restroom
Addition, Contract No. 3385
Dear Mir. Mostafa:
The. subject contract between the City and GK Construction was cancelled in our letter
to you on December 6, 2001. This letter confirms that your conirac;t is cancelled. Any
communication that you wish to have with the City must be through the City Attorney's
office.
Sincerely,
Bill Patapoff, P.E.
City Engineer /j�/�
By: �.«r 1'9'
.Ccz
R. Gunther, P.E.
Construction Engineer
cc: Susan West Neff, Lou Jones & Associates
Steve Badum, Public Works Director
Rich Middlebrough, Fire Department
Rob Masters, Sr. Public Works Inspector
Robin Clauson, Assistant City Attorney
Lois Thompson. Administrative Manager
F'•.USc ^n S'P(3lN1ShAn sf,riviiragg :.Fy 07- i! ?•:N 4:r vif� ;;rnier Fir: $iaLnn No 2
I ��- ;'iii`,.I),={.:u1' •;S1rir :'. i!.r
0
CITY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
3300 NEWPORT BLVD.
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(949) 644 -3311
December 18, 2001
Susan M. West Neff
Lou Jones & Associates
7470 Figueroa St.
Los Angeles, Ca. 900041
VIA FACSIMILE
323 -341 -5412
Subject: Newport Center Fire Station #3 Mechanical Upgrade and Restroom
Addition, Contract No. 3385
Dear Ms. `Nest Neff,
In response to your letter of December 11, 2001, the City's letter of December 6, 2001,
to GK Construction (GK) declared the contractor in default on the project due to their
repeated failure to submit the proper insurance documents. Specifically, they failed to
comply with the requirement of Section G of the Contract Agreement, "Insurance,'
including paragraph one, which states "Contractor shall furnish City with certificates of
nsurance and with original endorsements effecting coverage required by this Contract."
Your letter of December 14, 2001, states that on Wednesday, December 12, 2001 GK's
insurance broker over - nighted a purported "original" auto policy endorsement to the City
which complies with the contract requirement and that EIM has made arrangements for
a new policy to meet all contract requirements. Based on this, you requested that the
City contact GK in order that the project move forward without delay. We have not
contacted GK, and we do not plan to contact them because GK Construction
defaulted on the contract when they failed to meet the deadline of 3 p.m.
December 5, 2001 for submittal of original document endorsements. Submittals
of any documents at this time are too late. They remain in default. Nothing was
received by overnight mail from EIM last week, although Essam Mostafa of GK
Construction did personally bring by copies of incorrect endorsements on Friday,
December 14, 2001. Their insurance company is not registered with the state as
required, nor do they have an A rating as required. Aside from this, we also have had
concerns regarding their failure to submit prevailing wage documentation and the
possible use of subcontractors on the project, when no subcontractors were listed in
their bid.
The City has no intention to change their position on this matter. We have already
invested funds in the last few days to make emergency roofing, plumbing, electrical and
concrete repairs at the fire station in order to weatherproof the building and to make the
building safe until another contractor can be hired to complete the work. These costs
will need to be covered in our arrangements for re- contracting the work.
F 11, SF 1 IRV)r'Jiti irCdlt'•),ttr.t,aS = , 0 1 -11. "S AS;;) )rt I.rnlOr Fug Sldtion No .J C-338,).SL!Mt., r7r 1 riry.
0 0
The City Construction Engineer met with an alternate contractor on Friday, December
14, 2001, to review the remaining work to be done and to procure a bid for completion
of the work. It would be very difficult to analyze exactly what work has been done and
what work has not been done, and to incorporate that into a bid document. It would
also be difficult to receive comparable and equivalent bids in such a situation.
Because of this, over the next few weeks we plan to work with only one potential
alternate contractor, to see if we can reach a reasonable and economical plan for
completion of the work. If we are not able to do this, we will then need to consider how
to re -bid the unfinished work.
Please call R. Gunther at 949 - 644 -3325, in order to discuss any arrangements that
need to be made with the Surety.
Sincerely,
Bill Patapoff, P.E.
City Engineer
By: C
R. Gunther, P.E.
Construction Engineer
cc: Steve Badum, Public Works Director
Rich Middlebrough, Fire Department
Rob Masters, Sr. Public Works Inspector
Robin Clauson, Assistant City Attorney
Lois Thompson, Administrative Manager
Lloyd Dalton, Project Engineer
F USERS \PBVV1ShAred'+Contracts \F1' 01.02 \Newport Center Fire Sls llon No. 3 C- :Q85�Surely 1 -o1rx Ldo';
0
C/TY OF NEWPORT BEACH
PUBLIC WORKS DEPARTMENT
P.O. BOX 1768
NEWPORT BEACH, CA 92658 -8915
11
FAX COVER SHEET
DATE: 2 Z FAX NUMBER:�� ,19)523- 369/
COMPANY. N1 t?D —zfl "ge,�SOC' `
ATTENTION OF: S Q 5 / V/ (;L)s
SUBJECT:
FROM: �(�g T- �
PHONE NUMBER: (714) 644 -3311
NUMBER OF PAGES INCLUDING COVER SHEET.
COMMENTS:
-7�cllce A-�s D /sGU55 &D.
FAXED BY:.
FAX NUMBER: (714) 644 -3318
Please Notify Sender if Transmission Is Incomplete.
•
MEMORANDUM
DATE: May 1, 2002
TO: Distribution List
FROM: Mary Locey, Department Assistant
SUBJECT: TAKEOVER AGREEMENT
City of Newport Beach
Public Works Department
Attached is a copy of the executed Takeover Agreement for the Newport Center Fire Station
No. 3 C -3385. The new contractor for the completion of the project is LTG Construction
(LTG). Rob Masters will be coordinating with LTG to start work as soon as possible.
DISTRIBUTION LIST
Dan Ohl, Deputy City Attorney
Rich Middlebrough, Fire Department
Bill Patapoff, City Engineer
R. Gunther, Construction Engineer
Rob Masters, Senior Public Works Inspector
f; \users \pbvAshared\masters \memo master.doc
TAKEOVER AGREEMENT
THIS AGREEMENT, made and entered into this ' ,H 41 day of April, 2002, by
and between the City of Newport Beach (hereinafter "Obligee "), and American Motorists
Insurance Company (hereinafter "Surety").
WITNESSETH:
WHEREAS, Obligee entered into a construction contract with G.K. Construction,
Inc. for construction of Newport Center Fire Station No. 3, Mechanical Upgrade and
Restroom Addition, Contract No. 3385.
WHEREAS, Surety and G.K. Construction, Inc. (hereinafter "Principal "),
executed in favor of Obligee, Performance Bond number 3SM 991 228 00 in connection
with said construction contract; and
WHEREAS, Principal under the terms of said contract has defaulted in the
prosecution of said described work, the Obligee has terminated Principal from the project
and Obligee has sought performance of the remaining work required under the contract
from Surety; and
WHEREAS, Surety in accordance with the conditions of said Performance Bond
has determined to complete the project; and
WHEREAS, this agreement is being made and entered into between Obligee and
Surety for the purpose of facilitating completion of said work required by said
construction contract in accordance with all of the terms and conditions thereof, except as
amended or modified hereinafter, and upon the express conditions the Obligee will pay
Surety in a manner provided in said construction contract as provided hereinafter.
NOW, THEREFORE, in consideration of the mutual covenants and agreements,
the parties hereto do contract and agree as follows:
1. Surety will arrange for completion of the work required by said
construction contract in accordance with the terms and conditions of said construction
contract, except as may have been previously modified by change order and hereinafter
modified. Obligee agrees and promises to pay Surety within thirty (30) days after
Surety's invoice is received and Obligee has certified that the work has progressed as
indicated. Obligee will not unreasonably delay or withhold such certification. Final
retention will be paid to Surety thirty-five (35) days after issuance of the Obligee's final
certification for payment or Obligee's recordation of a Notice of Completion, whichever
shall occur first. All payments shall be made as follows:
1
i •
Payable to: AMERICAN MOTORISTS INSURANCE COMPANY
Sent to: Susan D. Neff
Lou Jones & Associates
7470 N. Figueroa
P.O. Box 41375
Los Angeles, California 90041
2. It is agreed and understood that the completion of the work under said
contract shall be performed by LTG Construction of Laguna Niguel, California.
3. It is understood and agreed that the Completion Contractor will commence
work no later than May 1, 2002 and will complete the project within 45 working days,
subject to any appropriate extensions of time and other basis for increased performance
time resulting from weather conditions, or otherwise as set forth in said contract or
granted by change order. At the present, Obligee agrees to extend the time for
completion of said work to and including July 3, 2001
4. It is further understood and agreed that Surety, by entering into this
agreement, is not acting as a contractor but merely in its capacity as Performance Bond
Surety; and that no rights under this contract, or otherwise, shall inure to the benefit of
any third party except as otherwise expressly provided by law. It is understood that this
agreement is for the sole benefit of and shall inure only to the benefit of Obligee.
5. Obligee agrees that the unpaid balance of said construction contract is in
the amount of $130,939.94. Surety agrees to finance the difference between LTG
Construction's proposal ($169,250.00) and the remaining balance ($130,940.00).
Obligee may have received stop notice claims and may be withholding according to
California law an additional 125% against monies earned or to be earned on this contract.
Obligee will accept from Surety Release of Stop Notice Bonds and will thereupon release
to Surety any contract funds so held.
6. All payments made by this Surety relating to the completion of this project
less amounts paid to Surety by Obligee shall be credited against the penal limit of the
Performance and Payment Bonds executed by the Surety. The Surety shall not be
obligated to expend funds in excess of the penal amounts of said Bond or Bonds.
7. Obligee agrees to assist and cooperate with the Surety in pursuing a claim
against principal's liability carrier with regard to repair of water damage at the project.
8. This agreement shall be governed by the laws of the State of California.
7
IN WITNESS WHEREOF, the parties have executed this agreement for
themselves, their heirs, executors, successors, administrators and assigns on the day and
date first above written.
CITY OF NEWPORT BEACH
AMERICAN MOTORISTS INSURANCE COMPANY
C
3
11
Susan D. Neff, Senior Surety Counsel
(Kemper.
Insurance Companies
August 29, 2002
Rob Masters
City of Newport Beach
Department of Public Works
3300 Newport Boulevard
Newport Beach, California 92663
SEP - 4 2002
ATTORNEY'S OFFICE
Re: American Motorists Insurance Company
Bond Number : 3SM 991 228 00
Principal : GK Construction, Inc.
Project : Restroom and Mechanical upgrade to Newport Fire Station #3
Dear Mr. Masters:
This letter is sent to follow -up our conversation at the last regular progress meeting on
August 21, 2002. At your suggestion, on behalf of American Motorists Insurance Company,
this shall constitute my written request that the City of Newport Beach waive the imposition of
liquidated damages on the above - referenced project.
As you know, from the first notice to the surety of GK Construction's default, we have
made every effort to Assist in resolving the problems between the City and the contractor.
When that proved impossible (principally due to GK Construction's failure to obtain the
contractually required insurance), the surety worked diligently with the City's Public Works
Department to enter into takeover and completion contracts. The surety has also been readily
available to make quick decisions and has participated on a weekly basis in the progress
meetings at the job site. Quite frankly, the surety could not have done anything differently that
would have caused the project to be completed earlier.
All of the above was accomplished in the face of repeated threats by GK Construction
and its attorney to stop the project and force the City to let GK Construction complete it.
When GK Construction sought a temporary restraining order, the surety provided both a
declaration and an in court appearance to assist in defeating the TRO.
After all payment applications and retentions have been disbursed, AMICO will have a
loss of approximately $50,000.00. Based on a preliminary asset search, it appears doubtful
that the surety will recover its loss from the contractor. In fact, we will likely incur further
losses if GK follows through with its threat to sue the surety in that we will be required to hire
outside counsel to defend it.
SURETY CLAIMS
(323) 257 -8291
(323) 257 -9473 Fax
7470 North Figueroa St.
Post Office Box 41375
Los Angeles, CA 90041
E
Rob Masters
City of Newport Beach
Department of Public Works
August 29, 2002
Page Two
0
As such, imposing liquidated damages on the project will only further injure the surety,
which took all actions available for the timely completion of the project. It would be unjust to
do so, especially since it will have no negative impact on GK Construction.
Based on the above, we respectfully request that the liquidated damages on the project
be waived. Please inform me on the City's decision once it has been made.
Should you have any questions or comments, please contact me at your convenience.
Sincerely,
LOU JONES & ASSOCIATES
A KEMPER COMPANY
/;) mp-�
Susan D. Neff
Senior Surety Counsel
SDN: as
Cc: Dan Ohl- City of Newport Beach, City Attorneys Office
MW
l�f 1
September 25, 2001
CITY COUNCIL AGENDA
ITEM NO. 15
TO: Mayor and Members of the City Council
FROM: Public Works Department
SUBJECT: NEWPORT CENTER FIRE STATION NO. 3 MECHANICAL UPGRADE AND
RESTROOM ADDITION — CONTRACT NO. 3385
RECOMMENDATIONS:
1. Approve the plans and specifications
2. Dismiss the protest of Construct 1 One Corp. as unsubstantiated. APPROVED
3, Award Contract No. 3385 to GK Construction, Inc., for the Total Bid Price of $224,900,
and authorize the Mayor and the City Clerk to execute the contract.
4. Establish an amount of $20,100 to cover the cost of testing and unforeseen work.
5. Authorize a Budget Amendment appropriating $23,631 from General Fund reserves in
Account No. 7271- C2320527.
DISCUSSION:
At 11:00 A.M on September 11, 2001, the City Clerk opened and read the following bids for
this project:
BIDDER TOTAL BID AMOUNT
Low GK Construction Inc. $224,900
2 Construct 1 One, Corp. 243,777
3 State Wide Const. Management Inc. 282,415
4 Watermark Development, Inc. 398,900
The low total bid amount is 9.7% above the Engineer's Estimate of $205,000. The low
bidder, GK Construction Inc., possesses a General Building Contractor "B" license, but has
not performed previous contract work for the City. A check with their references and the
Contractors State License Board indicates that GK has satisfactorily completed similar
public building projects for other Southern California agencies and has no pending actions
detrimental to their contractors' license.
The second low bidder, Construct 1 One, Corp., has protested award to GK Construction
(see attached letter). Construct 1 One alleges that GK is not competent to perform the
heating - ventilation -air conditioning, plumbing and tile portions of the work. Inasmuch as
staff has no evidence to show that GK is competent to perform this work, by virtue of their
Contractor "B" license GK is nonetheless qualified as a contractor to perform the work.
Accordingly, staff recommends that the unsubstantiated protest be dismissed and that
award be made to GK without prejudice.
. MI. —
awn
Rue € � =-
2632 Walnut Ave. • Suite C • Tustin CA 92780 • Tel 714 259 -5400 • Accounting Fax 714 259 -5406 • Bid Fax 714 259 -5406
September 11, 2001
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92653
Attention: Lloyd Dalton
nFr� rr_'�i
MM 120
aw
RE: Contract No. 3385 Newport Center Fire Station No. 3 Mechanical Upgrade and Restroom Addition.
Dear Mr. Dalton
Please consider this Construct 1 One Corp's Official Protest letter for the award of Contract No. 3385.
Newport Center Fire Station No 3 Mechanical Upgrade and Restroom Addition.
Construct 1 One Corp is protesting the bid of GK Construction. the apparent low bidder on the above -
mentioned project. Our reasons for this protest are that we feel they failed to comply with the bid
documents. The bid form page clearly states that the Contractor must list "all subcontractors who will
perform in excess of one -half of one percent of the Contractor's total bid. If a subcontractor is not listed.
the Contractor represents that he /she is fully qualified to and will be responsible for performing that
portion of work."
GK Construction failed to list any subcontractors at all. Therefore they are stating they will do all the work
themselves and that they are qualified to do so. We contend that neither is the case. GK Construction only
possesses a B (General Building Contractor) and it C -10 (Electrical) license. Obviously a significant portion
of this project involves HVAC. a trade for which GK Construction has no license. Because of the large
scope of HVAC work involved in this project Construct I One Corp, would like to see credible evidence
that GK Construction is competent to perform it.
GK Construction also failed to list either a plumber or a tile contractor. Construct 1 One Corp. contends
that the scopes of work for these trades are well in excess of I/Z %. Therefore they will also have to do all
of this work. Again they do not have a license for either trade and we question their competency to perform
the work.
For these reasons we believe that the owner should hold GK Construction as non - responsive and reject
their bid. Therefore we feel that Construct I One Corp. is the lowest responsible bidder and should he
awarded the contract for this project. After reviewing the above. please feel free to contact me with any
further questions you might have.
Thank You for Your consideration.
Construct 1 One Corp
Brian Hundley
President
• INSTITUTIONAL • DEFENSE
Sent By: GK Construction inc.; • 661 256 1259;
G K Construction Inc.
September 17, 2001
W. Lloyd Delton
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92658
RE: Contract No. 3385, Newport Center Fire Station No. 3.
Dear Mr. Dalton
Sep -17-Q1 9:27AM; Page 2/2
3616 Gamet Ave. Rosamond, CA 93560
Phone (661) 256 -9698 Fax (661) 256 -1259
Reference to the above - mentioned project; please be advised that G K Construction Inc. have
received and reviewed a letter of protest from Construct 1 One Corp's. After careful review of
said letter GKCI concluded the following:
1- Construct 1 feel that GKCI failed to comply with the bid documents. Please be advised
that GKCI intend to perform all work in the above - mentioned contract by in house labor force.
Furthermore GKCI posses the required license classification for this project.
2- Construct 1 lacks the knowledge that GKCI bids Federal Construction Contracts,
which do not requires any license classification. 'those projects are completed on or before
contract tune and within budget amount. Also GKC1 currently have two L.A. County contracts
and we elected to subcontract the electrical trades on both projects.
3- Construct I assumes that GKCI failed again to list a plumbing or tile contractor. In my
opinion Construct 1 do not have the means to obtain in house labor force to perform this type of
work nor have the knowledge of what GKCI capable of providing.
4- In my opinion GKCI ability to bid competitively in the construction market is
contributed solely by maintaining various trades to bid and perform work in house.
Finally while I cannot discusses how GKCI conduct its business or management style 1
can say that I have over eight years of construction experience with the U. S. Anny Corps of
Engineers as a Project Manager/ Contracting Officer in the Stateside and oversees additional to
fourteen years with 416'h Engineering Command Presidio, San Francisco. Mr. Neil Degarmo has
over 35 years of experience in construction with privet and public work. I think this knowledge
will enable GKCI to perform this project satisfactory to the City of Newport Beach expectation.
I look forward to serve your construction needs.
Should you have any questions, please feel free to contact me.
Respect
Es`;am esident
Sty of Newport Beach
BUDGET AMENDMENT
2001 -02
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates
X Increase Expenditure Appropriations
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
from additional estimated revenues
X from unappropriated fund balance
EXPLANATION:
NO. BA- 009
AMOUNT: 523,631.00
Increase in Budgetary Fund Balance
AND X Decrease in Budgetary Fund Balance
No effect on Budgetary Fund Balance
This budget amendment is requested to provide for the following:
To increase expenditure appropriations for the Newport Center Fire Station Mechanical Upgrade and
Restroom Addition, Contract No. 3385.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account
010 3605
REVENUE ESTIMATES P60 1)
Fund /Division Account
EXPENDITURE APPROPRIATIONS (3603)
Description
General Fund Balance
Description
Signed:
Signed:
Signed:
C
Services Director
Manager
City Council Approval: City Clerk
Amount
Debit Credit
$23,631.00
' Automatic
$23,631.00
Date
Q
ate
Date
Description
Division
Number
7271 Building Excise Tax Fund
Account
Number
C2320527 Fire Station Modification
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Signed:
Signed:
Signed:
C
Services Director
Manager
City Council Approval: City Clerk
Amount
Debit Credit
$23,631.00
' Automatic
$23,631.00
Date
Q
ate
Date
(ey of Newport Beach
BUDGET AMENDMENT
2001 -02
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates
X Increase Expenditure Appropriations
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
from additional estimated revenues
X from unappropriated fund balance
EXPLANATION:
NO. BA- 009
AMOUNT: $z3,e3f.00
Increase in Budgetary Fund Balance
AND X Decrease in Budgetary Fund Balance
No effect on Budgetary Fund Balance
r 1
SEP%5_
APPROVED
This budget amendment is requested to provide for the following:
To increase expenditure appropriations for the Newport Center Fire Station Mechanical Upgrade and
Restroom Addition. Contract No. 3385.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account
010 3605
REVENUE ESTIMATES (3601)
Fund /Division Account
D(PENDITUREAPPROPRIAT/ONS (3603)
Division
Account
Division
Account
Division
Account
Division
Account
Division
Account
Signed:
Signed:
Signed:
Description
General Fund Balance
Description
Description
Number 7271 Building Excise Tax Fund
Number C2320527 Fire Station Modification
Number
Number
Number
Number
Number
Number
Number
Number
c
City Council Approval: City Clerk
Amount
Debit Credit
$23,631.00
$23,631.00
Date
ate
Date
0 0
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(949) 644 -3005
November 13, 2001
Construct 1 One, Corp.
2832 Walnut Avenue, Unit C
Tustin, CA 92780
Gentlemen:
Thank you for your courtesy in submitting a bid for the Newport Center Fire Station
No. 3 Mechanical Upgrade and Restroom Addition (Contract No. 3385) in the City of
Newport Beach.
Enclosed is the Bid Bond which accompanied your proposal for the above mentioned
project. Your cooperation in working with us on this matter is greatly appreciated, and
we hope that you will accept future opportunities to bid on projects of a similiar nature.
Enclosure
Sincerely,
LaVonne M. Harkless, CMC /AAE
City Clerk
3300 Newport Boulevard, Newport Beach
0 0
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(949) 644 -3005
November 13, 2001
State Wide Construction Management, Inc.
26012 Marguerite Parkway, #H -130
Mission Viejo, CA 92692
Gentlemen:
Thank you for your courtesy in submitting a bid for the Newport Center Fire Station
No. 3 Mechanical Upgrade and Restroom Addition (Contract No. 3385) in the City of
Newport Beach.
Enclosed is the Bid Bond which accompanied your proposal for the above mentioned
project. Your cooperation in working with us on this matter is greatly appreciated, and
we hope that you will accept future opportunities to bid on projects of a similiar nature.
Enclosure
Sincerely,
LaVonne M. Harkless, CMC /AAE
City Clerk
3300 Newport Boulevard, Newport Beach
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