HomeMy WebLinkAbout05/07/1991, 3 - WASTEWATER MANAGEMENT PLAN IMPLEMENTATION, UNIT 3 WASTEWATER TREATMENT PLANT IMPROVEMENTS PROJECT - CITY PLAN NO. R-28S, STATE REVOLVING FUND (SRF) LOAN NO. C-06-4031-130, AWARD OF CONSTRUCTION CONTRACT. IIIN��yllll�lllllll�l III MEETING DATE:
tl �`II� CiV7 of San Llys OBISpO Ma 7 1991
COUNCIL AGENDA REPORT MEM NUMBER:
FROM: William T. Hetland J� Prepared By: John E. Moss
Utilities Director Wastewater Division Manage
SUBJECT:
Wastewater Management Plan Implementation, Unit 3 Wastewater
Treatment Plant Improvements Project - City Plan No. R-28S,
State Revolving Fund (SRF) Loan No. C-06-4031-130, Award of
Construction Contract.
CAO RECOMMENDATION:
Adopt a resolution awarding the contract for construction of
the Unit 3 Wastewater Treatment Plant Improvements - City
Plan No. R-28S - to the second low bidder, Raweah
Construction, in the amount of $13,091,807, and reject
the bid of Alder Construction, the low bidder, as non-
responsive. Award to be made contingent upon receipt of
Approval To Award (ATA) from the State Water Resources
Control Board (SWRCB) Division of Loans and Grants (DLG) .
REPORT IN BRIEF:
On August 7, 1990 Council approved plans and specifications
and authorized staff to solicit bids for the above mentioned
project. Bids were received on November 7, 1990 and
subsequently rejected on January 15, 1991 due to the
contractor's non-compliance with the bid specifications
relating to minority and women owned business (MBE/WBE)
procurement.
The project was re-advertised on January 19, 1991 and bids
were opened on February 21, 1991. Review of the bid
documents again revealed complications with the bid
submitted by Alder Construction, the low bidder. Again, the
requirements relating to MBE/WBE procurement were not -
satisfied and an additional violation of section 4104 of the
Public Contracts Code relating to the listing of
subcontractors was noted.
After numerous submittals and amendments by Alder
Construction, and extensive review by City Utilities and
Attorneys staff, it has become evident that there are
numerous irregularities which can not be waived by the City.
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���n�►����IIIII�IIp� I�Ulll city of San tins OBISpo
COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
A protest to the award of the contract to Alder Construction
has been filed by the second low bidder, Kaweah
Construction. The protest is based on some of the same
irregularities identified by staff. Review of the bid
documents and related submittals provided by Kaweah
Construction shows that they have fully complied with the
requirements for MBE/WBE procurement and have submitted a
responsive bid that will not require any waivers by the
City.
The State Water Resources Control Board has informed the
City that they can not provide the City with an approval to
award (ATA) document until the issue of the protest is
resolved. They have provided a preliminary review of the
City's submittal for this project and have indicated the ATA
will be provided upon resolution of the protest. The State
has also indicated the City -may award the contract as long
as award is made contingent upon receipt of the ATA
document. Staff is therefore recommending that the project
be awarded to Kaweah Construction and the bid of Alder
construction be rejected as non-responsive. This action
will in turn, resolve the protest. In addition, staff is
recommending that this award be made contingent upon receipt
of the ATA from the State. It is necessary to proceed with
award of the contract and provision of the notice to proceed
as soon as possible in order to avoid violation of the
consent decree between the City and the Regional Water
Quality Control Board.
Total cost of the project is $13,091,807. This project cost
is $281, 193 less than that of the first bidding. Including
a 5% contingency the project cost will be $13,746, 397.
Approved State low interest loan funding for this project is
$13,026,807. An additional $2, 235, 079 in State low interest
loan funding will be provided as an allowance for design and
administration of the project, making the total amount of
the low interest loan $15,261,886.
In view of the irregularities noted with the bid of Alder
construction and the time constraints resulting from the
consent decree, staff can not recommend any viable
alternatives to the recommended action.
2 � r
city of San LUIS OBISPO
COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
DISCUSSION:
1. Background:
On August 7, 1990, Council approved plans and specifications
and authorized staff to solicit bids for the above mentioned
project. Bids were received and opened on November 7, 1990.
Detailed review of the bids revealed significant non-
compliance on the part of the contractors with the State and
Federal requirements for Minority and Women Business
Enterprise (MBE/WBE) procurement as detailed in the Clean
Water Grants (CWG) Bulletin No. 113-A.
Based on the above review, staff recommended to Council
rejection of all bids and to re-advertise the project. On
January 15, 1991, Council approved staff's recommendation
and the project was re-advertised on January 19, 1991. A
pre-bid conference was held on February 5, 1991 to explain
the MBE/WBE requirements to the contractors in detail in
order to avoid recurrence of the problems encountered in the
first bidding.
Bids were received and opened for the second bidding of this
project on February 21, 1991. Two bids were received.
Alder Construction provided the low bid of $12, 612,147 and
Kaweah Construction provided the second low bid of
$13,091,807. Both bids received were below the low bid of
the first bidding ($13,373,000) by $760,853 and $281, 193
respectively.
2. Chronology
A brief chronology of events relating to Alder
Construction's bid and subsequent submittals leading to
staff's recommendation to reject Alder Construction as non-
responsive is as follows:
Feb. 21, 1991 - Bids received. MBE/WBE information form
(Attachment 1-B) - Listed Burke
Construction; Not all MBE/WBE's were
listed; Incomplete information provided.
Feb. 25, 1991 - Positive effort submittal. Listed
MBE/WBE's intending to use (not
including Burke) ; List of bid amounts of
subcontractors (Burke 2nd low to Alder) .
3 � r
�►�n�►�u►(uIIIII�IIi� Il�Ill city of San tins OBispo
COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
Mar. 12, 1991 - Amended Attachment 1-B submittal.
Listed Burke for two (2) items of work;
Listed American Coatings for painting
(not low bid, but MBE) .
Mar. 16, 1991 - 2nd amended Attachment 1-B submitted.
Did not include all MBE/WBEs who were
low bidders, just included the three (3)
who were listed on the original 1-B plus
Santa Maria Electric.
Mar.19, 1991 - Submittal regarding subcontractor's bid
dates.
Apr. 17, 1991 - Staff mailed approval to award (ATA) to
State without any amended 1-B.
Apr. 18, 1991 - 8:00 am, 3rd amended 1-B submitted,
predated to Feb. 21, 1991. (Includes
Burke)
Apr. 18, 1991 - 10:00 am, corrected signature page of 1-
B submitted with pre-date whited out and
date corrected.
Apr. 18, 1991 - 11: 00 am, Staff FAX'd corrected amended
1-B to State.
Apr. 18, 1991 - 2:00 pm, Staff discovers Burke was
listed on the 3rd amended 1-B but not
listed on the subcontractor listing.
3. MBE/WBE Irregularities in Alder's Bid
Review of the bid documents received in the second bidding
again revealed an apparent non-compliance with the MBE/WBE
procurement requirements on the part of the low bidder,
Alder. Construction. Significant effort was expended working
with the low bid contractor, Alder Construction, in an
effort to demonstrate and verify that all of the
requirements as detailed in the CWG Bulletin No. 113-A had
been completed in a proper and timely fashion. In
attempting to obtain the necessary verification, it has
become evident that there are numerous irregularities, many
of which can not be waived by the City.
4 -�
��►n�i��i�I�IIIIIIIIIII►��ui����IIU city of san Luis oBispo
Nii% COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
Included as attachment 1 to this report is an evaluation of
Alder Construction's MBE/WBE positive effort submittal
completed by Kaweah Construction in preparation of a formal
protest of award. Staff has reviewed this document and feel
that most of the points made do have merit. Those items in
this evaluation which are most significant and which the
City has questionable ability to waive are identified as
follows: Item(s) A. 1. , B.4. , B.5. , B.71 B.9. 1 C.2 . , C.4. ,
and C.6. .
4. Subcontractor Listing Violation in Alder's Bid
Additional review of the bid documents also identified a
significant problem with the listing of subcontractors. The
prime contractor is required under Public Contracts Code
section 4104 to list all subcontractors to be utilized on
the job if the cost of their participation is greater than
1/2 of 1% of the total project value. As part of its
original bid, Alder listed Burke Construction on the MBE/WBE
participation form 4700-5, attachment 1-B, as a
subcontractor with a total participation of approximately 1%
of the project value, yet neglected to include Burke on the
official list of subcontractors. Failure to list Burke on
the subcontractor listing form is a direct violation of the
subcontractor listing law, Public Contracts Code Section
4104.
S. Protest and Response Summary
Kaweah Construction has filed a letter of protest to the
award of the contract to Alder construction based on Alder's
failure to submit a completed form 4700-5 (MBE/WBE summary
information form) and failure to meet the MBE participation
goal. The letter of protest is included as attachment 2.
Staff review of the documents does show the form 4700-5,
attachment 1-B, submitted by Alder construction was not
properly completed. It is clearly stated in the
specifications that this form must be submitted with the bid
and all positive effort steps must be completed, and that
failure to do so will cause the bid to be rejected as non-
responsive. This point was further emphasized at the pre-
bid conference and in a letter mailed to all planholders on
February 5,, 1991. This letter is included as attachment 3.
Alder Construction has had an opportunity to respond to
Kaweah's protest. However, they have failed to adequately
substantiate compliance with the MBE/WBE procurement
5 3 ��
��� i�i►i�IIIiIIIIII��'�ui►����N city of San tuts OBISp0
i COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
requirements without requiring an unacceptable number of
waivers on the part of the City. A protest appeal and a
letter of response from Alder's attorney is included as
attachment 4 to this report.
Review of the documentation submitted by Kaweah Construction
shows that they have fully complied with the requirements of
the CWG Bulletin No. 113-A in MBE/WBE procurement and have
submitted a responsive bid that will not require any waivers
by the City. Staff is therefore recommending at this time
that Council reject the low bid of Alder Construction as
non-responsive and award the contract for construction of
the Unit 3 Wastewater Treatment Plant Improvements to the
next low responsive/responsible bidder,. Kaweah Construction.
This recommendation is being made prior to receipt of the
Approval to Award (ATA) from the State Water Resources
Control Board. Because of the protest filed by Kaweah
Construction and the irregularities surrounding the award of
this bid, the State is requiring that the City resolve the
protest and the issue of award prior to their providing the
ATA. The State has completed a preliminary review by of the
documents submitted by the City based on this recommendation
and have indicated that the documents are in order and the
ATA will be provided upon the City's resolution of the
protest. Staff is therefore recommending that this award be
made contingent upon receipt of the ATA from the State.
FISCAL IMPACT:
The City has obtained approval for State low interest loan
funding for this project. The interest rate is
approximately 3.5%. Based on previous cost projections, on
May 8, 1990, Council approved an annual rate increase of
$2.00 per month for a single family residence over a four
year period and a revenue program sufficient to cover the
debt service of the wastewater management plan projects and
other operating and CIP program expenses. This project was
identified and approved in the 1989-91 Financial Plan and
Approved 1989-90 Budget, page E-7, Wastewater Treatment
Plant Improvements, at a total estimated cost of
$25,364,000. The required improvements are to be completed
in two phases, Unit 3 and Unit 4. This project is the first
phase, Unit 3.
Of the $13,091,807 bid for this project, $13, 026,807 of the
work was found to be eligible for SRF loan funding and
6 3 -lv
mH�►��►1(ulllllhllp ���pl city of San WIS OBISpo
COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
$65,000 was identified as ineligible. The ineligible items
include the difference in cost of 22 million gallon per day
(mgd) influent pumps versus 12 mgd pumps ($45, 000) , a 54
inch influent pipe versus a 48 inch pipe ($5,000) , and new
paving around the three existing anaerobic digesters
($15,000) . The first two items were ineligible as the State
will only fund pumping and flow capacity needs for a maximum
12 year expansion. The pumps and influent pipe were
designed to facilitate plant expansion, as identified in the
wastewater management plan, to the year 2015. It was
determined that the 12 mgd pumps and the 48 inch influent
pipe would be sufficient to accommodate a 12 year expansion.
However, staff feels it would not be cost effective to
install the smaller pumps and influent pipe only to have to
replace them with larger units in 12 years. The state
denied funding for paving around the existing anaerobic
digesters as it was previously funded in the Unit 1
expansion in 1983 .
A detailed cost breakdown for the project is as follows:
Total SRF Eligible Project . . . . . . . . . . . . . $13, 026,807
Total Ineligible . . . . . . . .. S 65. 000
TOTAL CONSTRUCTION COST . . . . . . . . . . . . . . . . $13,091,807
Contingency @ 5$ • S 654 .590
TOTAL INCLUDING CONTINGENCY . . . . . . . . . . . . $13,746, 397
SRF Approved Funding:
Eligible Construction Cost . . . . . . . . $13 , 0261807
Design and Administration . . . . . . . . . S 2, 235. 079
LOAN TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $15,2611886
Funding for the debt service and ineligible project costs is
from the sewer fund.
CONCURRENCES:
The City Attorneys Office has been closely involved in the
review and evaluation of the documents related to this issue
and concur with the recommendations herein.
ALTERNATIVES:
Council may direct staff to proceed with award of the
contract to the low bidder, Alder Construction. Due to the
fact that Alder Construction has failed to fully comply with
1'111i11111111lll111011 11 city of San LUIS OBISpo
COUNCIL AGENDA REPORT
Unit 3 WWTP Improvements, Award
Meeting of May 7, 1991
the requirements of the CWG bulletin no. 113-A and Public
Contracts Code Section 4104, the City's certification of the
contractor's compliance with these requirements to the State
may place the low interest loan funds to be used for this
project in jeopardy. Therefore, this alternative is not
recommended.
Council may also direct staff to reject all bids and re-
advertise the project. This project has already been re-
bid once. The Consent Decree between the City and the State
Regional Water Quality Control Board requires the City
provide Notice to Proceed for this project no later than May
16, 1991 or pay stipulated penalties. Given this is already
a re-bid of the project, the extremely tight time
constraints of the consent decree, and that the second low
bid is below the low bid of the first bidding and has been
determined to be a responsible and responsible bid, this
alternative is not recommended.
CAO RECOMMENDATION:
Adopt a resolution awarding the contract for construction of
the Unit 3 Wastewater Treatment Plant Improvements - City
Plan No. R-28S - to the second low bidder, Kaweah
Construction, in the amount of $13,091,807, and rejecting
the bid of Alder Construction, the low bidder, as non-
responsive. Award to be made contingent upon receipt of
Approval To Award (ATA) from the State Water Resources
Control Board (SWRCB) Division of Loans and Grants (DLG) .
Attachments:
1. Alder's Submittal Evaluation, by Kaweah
2. Kaweah's Protest Letter
3. City's MBE/WBE Requirements letter
4. Protest Appeal and Alder's Response to Protest Issues
8 3 - g
RESOLUTION NO. (1991 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
REJECTING THE LOW BID OF ALDER CONSTRUCTION FOR THE AWARD
OF CONTRACT FOR THE UNIT 3 WASTEWATER TREATMENT PLANT
IMPROVEMENTS, CITY PLAN NO. R-28S, AS NON-RESPONSIVE AND
AWARDING THE CONTRACT TO THE NEXT LOW RESPONSIVE/RESPONSIBLE
BIDDER, KAWEAH CONSTRUCTION.
WHEREAS, on February 21, 1991 the City received and opened
bids for the construction of the Unit 3 Wastewater Treatment
Plant Improvements project, City Plan No. R-28S, and
WHEREAS, staff has reviewed the documents submitted with the
bid and subsequent submittals for compliance with the bid
specifications, and
WHEREAS, the low bidder, Alder Construction, has failed to
fully comply with the requirements of section 00590 of the
specifications and subsequent addenda relating to the Clean Water
Grants Bulletin 113-A for procurement of minority and women owned
business participation, and
WHEREAS, the low bidder, Alder Construction, has failed to
fully comply with the requirements outlined in section 4104 of
the Public Contracts Code for listing of subcontractors, and
WHEREAS, the second low bidder, Kaweah Construction, has
complied with the requirements of the bid specifications and has
been determined to be a responsive/responsible bidder, and
WHEREAS, the State Water Resources Control Board requires
the City to resolve the protest to the award of this contract
prior to granting Approval To Award.
NOW, THEREFORE, BE IT RESOLVED, the City Council for the
City of San Luis Obispo does hereby reject the low bid of Alder
Construction as non-responsive, and awards the contract for
construction of the Unit 3 Wastewater Treatment Plant
Improvements, City Plan No. R-28S, to the next low responsive/
responsible bidder, Kaweah Construction, in the amount of
$13 , 091,807.
BE IT FURTHER RESOLVED THAT, award of this contract is
contingent upon receipt of the Approval To Award document from
the State of California Water Resources Control Board.
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
3 -5
Resolution no. tn§i Series,) -_
ABSENT.
the foregoing resolution was adopted this _ _ day of -
1991: -
Mayor Ron Dunn
Attest:
Pam Voges, City Clerk
ATTACEl+tENT 1
ATTACffi+IENT 1
(Review of Alder's POS'itive Effort Steps
Submitted by Raweah;)
MEMO
TO: Al Perini
FROM: Will Lyles
DATE: 4/18/91
RE: San Luis Obispo WWTP
SUBJECT: Alder' s Positive Effort Documentation
A. Revised Attachment 1-B
1 . Original Attachment 1-B must be used for submission with
State Water Quality Control Board ( Section 590 , Attach-
ment B) . Alder may not substitute a new Attachment 1-B .
B . February 26 , 1991 Letter
1 . Alder ' s advertisement in the Dodge Construction News -
Green Sheet was on Tuesday, February 19 , 1991, two days
prior to the bid.
- Positive Effort Step #2 requires notification " . . . at
least seven ( 7 ) working days prior to the bid. "
2 . Alder advertised in the Intermountain Constructor on
February 18 , 1991 , three ( 3 ) days prior to the bid.
- Positive Effort Step #2 requires notification " . . . at
least seven ( 7 ) working days prior to the bid. "
- An advertisement in a Utah publication cannot be
considered relevant to this project.
3 . Alder' s direct mail by the Small Business Exchange was
made on February 19 , 1991 , two ( 2 ) days prior to the bid.
- Positive Effort Step #2 requires notification " . . . at
least seven ( 7 ) working days prior to the bid. "
- These advertisements were not sent out certified mail
as required by Positive Effort Step #2 .
3- 13
January 18 , 1991 Memo (Alder' s Positive Effo� c Documentation)
4 . Alder contacted the Small Business Administration and the
Santa Barbara Minority Business Center on February 15 ,
1991 , five ( 5 ) working days prior to the bid.
- Alder failed to comply with Positive Effort Step #1
which requires the SBA and the OMBE assistance centers
be contacted " . . . at least five ( 5 ) working days prior
to the need for referrals" .
- Alder failed to comply with Positive Effort Step #5
which requires the contractor to make use of the SBA
and the OMBE assistance centers.
5 . We are not able to determine who Karen Jones represents
or when she was contacted. Attachment 4 appears to be
dated February 20 , 1991 , one ( 1 ) day prior to the bid.
- Positive Effort Step #2 requires notification " . . . at
least seven ( 7 ) working days prior to the bid. "
6 . Alder sent out certified letters soliciting Minority
Bids .
- Alder has failed to document, as required by Positive
Effort Step #2 :
a. " . . that invitations were sent to at least
three MBE/WBE contractors/suppliers for each
item of work referred by the MBE/WBE assistance
center. "
b. of . . that the invitations must adequately
specify the item( s) for which sub-bids were
requested. " Alder ' s letter is generic
including many items not pertinent to the
specific subcontractor/supplier.
7 . Alder failed to include R. Burke on their list of
proposed subcontractors . R. Burke was shown on their
original 1-B. R. Burke' s Self-Certification was not
included.
8 . Alder did not list Simmons Masonry on their proposed list
of subcontractors. Simmons ' s Self-Certification was not
included.
9 . Alder did not recognize Santa Maria Electric as a
minority firm, nor did they list Santa Maria Electric on
their proposed list of subcontractors. Santa Maria
Electric' s Self-Certification was not included.
3 - Iq
January 18 , 1991 MeiL._ (Alder' s Positive Effc,_,. Documentation)
10 . Alder did not offer a comparison of garage door quotes .
11 . Attachment 10 was a regular mailing not in compliance
with Positive Effort Step #2 .
In summary, Alder' s February 26 , 1991 , letter demonstrates
their failure to comply with Positive Effort Steps #1 and #5 .
In addition, Alder clearly failed to provide documentation of
compliance with Positive Effort Steps #2 , #3 and #4 .
C. March 11/12 , 1991 Letters
1 . Alder' s March 11/12 , 1991 letters were not received
by the city . . . within ten working days following
bid opening . . . " as required by Attachment #1 ,
require-ment B-1 .
2 . Positive Effort Step #1
a. Alder' s contact with the SBA and OMBE on
February 15 , 1991 was too late to comply with
Positive Effort Step #1 .
b. Page 13 of Brown & Caldwell ' s December 21 , 1991
evaluation of Alder's first bid states that
Alder did not contact the Office of Minority
Business Enterprises on October 24 , 1990 and
also questions whether Alder ever contacted the
Santa Barbara Minority Business Development
Agency or the Small Business Administration.
( see Attachment #1 )
c. Alder would not have received a Cal-Trans list
from the Santa Barbara Minority Business
Development Agency.
d. Alder' s October contacts with the various
agencies were not for the February 21 bid.
Additional information from these agencies was
available for the February bid, hopwever this
information was not obtained by Alder in time
to be used.
3 . Positive Effort Step #2
a. The October 26 mailing was not relevant to the
February 21 bid, these letters were not sent
certified and do not conform with Positive
Effort Step #2 requirements.
3- (S
January 18 , 1991 Memo (Alder' s Positive EffoLc Documentation)
b. Certified mailing dated February 8 , 1991 , does
not show that letter were sent " . . . to at
least three . . . MBE/WBE contractors/suppliers
for each item of work referred by the MBE/WBE
center. The invitations did not " . . . specify
the item( s) for which the sub-bid was
requested. " Many of the letters were not
received in time to meet the 7 day requirement.
c. The telephone contacts made by Alder were not
in response to the assistance centers, are
poorly logged, do not show an adequate positive
effort. Many calls were made after February 13
and do not meet the 7-day requirement.
d. Alder' s advertisements were not placed 7 days
prior to the bid.
e. The Small Business Exchange was not hired 7
days prior to the bid.
4 . Positive Effort Step #5
a. Alder did not obtain available assistance from
the Small Business Administration and the
Office of Minority Business Enterprise at an
early enough date to comply with Positive
Effort Step #5 . ( see Positive Effort Step #1
above)
5 . Alder ' s attachment #7 list of DBE, MBE and WBE firms with
which they intend to contract does not include R. Burke,
a firm listed on their attachment 1-B form.
The percentages listed by Alder are irrelevant as most of
these firms were not included on attachment 1-B.
6 . With regard to attachment #8 , switching listed subcon-
tractors is a violation of state law. Therefore, Alder
may not:
1 ) switch American Coatings for Baily
2 ) switch R. Burke for Whitaker Engr.
7 . Alder cannot be allowed to amend the specification as
suggested by attachment 9 prior to the award.
8 . Alder' s March 11/12 letters did not include the list of
all sub-bids received as required by Positive Effort
Step #2 .
January 18 , 1991 Mems- (Alder' s Positive Effo�,. Documentation)
In summary, Alder' s March 11/12 letter shows that Alder
has failed to comply with Positive Effort Steps #1 , #2
and #5 and failed to submit Positive Effort Documentation
within 10 days of the bid.
3- � 1
ATTACM(ENT 2'
c� KAWEaa--7
CONSTRUCTION CO.
GENERAL ENGINEERING CONTRACTORS
POST OFFICE BOX 7780.FRESNO.CALIFORNIA 93747 REPLY TO: SACRAMENTO DIVISION
PHONE (209)252.9492 . FAX (209)252.7377
P.O.BOX 28057.SACRAMENTO.CALIF.95828
CALIFORNIA CONTRACTOR'S N0. 13088$ PHONE IS 16)739.6830. FAX (9161739.631 9
February 25, 1991
City of San Luis Obispo
Dept. Of Public Works
955 Morro Street
.San Luis Obispo, CA 93401
Attention: Mr. John Moss
Reference: Project No. R-28-S: San Luis Obispo Wastewater
Treatment Plant Unit 3 Improvements
Dear Mr. Moss:
Reference is made to the opening of bids on February 21, 1991 with
respect to the rebidding of the above project. /
Upon review of the bid submitted by Alder Construction Company with
our attorneys, we herewith notify your office that Kaweah
Construction Co. protests any contract award to Alder on the
grounds that its bid is incomplete, incorrect, inconsistent and in
direct contravention of the specific instructions issued by your
office under date of February 05, 1991 with regard to the necessity
for accurate completion of Attachment 1-B (Form 4700-5) .
Attachment 1-B as submitted by Alder Construction Company is
incomplete and clearly states an "MBE Participation Goal" well
below the 19.2 percent minimum requirement called for in the
contract and emphasized in your letter of February 05, 1991 to all
planholders.
we have been advised that Alder filed a protest with your office in
connection with Kaweah' s original bid of November 7, 1991 on this
project which was predicated on alleged errors and omissions in the
Attachment 1-B form submitted by Kaweah at that time. We can only
assume that such protest by Alder was relied upon as the basis for
the rejection of Kaweah' s original bid by your office and accord-
ingly, will expect the same standard to be applied to Alder
Construction Company.
Please contact our Sacramento office if you have any questions.
Very truly yours,
Albert Perini
President
AJP/sc 3 I
ATTACHMENT 3
Of cI�r $An WIS OBISPO
25 Prado Road • San Luis bbispo, CA 93401
February 5, 1991
Planholders
Unit 3 Wastewater Treatment Plant Improvements
City Plan No. R-28S
SUBJECT: MBE/WBE PROCUREMENT ASSISTANCE
To whom it may concern:
A pre-bid conference for the above mentioned project was held on
February 5, 1991 at 1:00 pm. The conference was primarily held
to clarify the requirements of the Clean Water Grants Bulletin
No. 113A as contained in section 00590 of the project documents
and Addenda No. 3.
In order to assist all -potential bidders on this project the City
is making available to all planholders a copy of the information
which was presented at the conference. This information is not
to be considered a part of the project documents and is merely
being presented to assist contractors in understanding the .
minimum requirements for compliance with the MBE/WBE
requirements.
Attached you will find a description of the MBE/WBE requirements
highlighting issues of concern and/or needing clarification.
Also attached is a listing of Minority Business Development
Centers currently holding plans and specifications for this
project. It is the hope of the City that this information will
assist you in complying with the MBE/WBE requirements.
In addition you should also note that meeting the goals
established for MBE/WBE participation does not relieve the
contractor from required full compliance with each of the
positive effort steps.
If you have any questions regarding this information please don't
hesitate to call me at (805) 549-7220.
Since ly-
John E. Moss
Wastewater Division Manager
c: Mr. Dick Wasser, SWRCB
Mr. Azee Malik, Brown and Caldwell Engineers
Mr. Bob Dancoisne, Brown and Caldwell Engineers
3- �l
d
MBE/WBE REQUIREMENTS
1. GOALS - Are the :same as those listed in the project
documents as MBE/WBE Historical Averages in Attachment 3 of
Addenda 3. MBE = 19.2 WBE = 3
Also please note that the attachments of section 00590 in
the project documents need to be replaced with those
contained in Addenda 13.
2. FORMS - Attachment 1B (Form 4700-5) as found in Addenda 13
must be submitted with the Bid. Please be sure
this form is completed accurately and signed.
Attachment 1C - MBE/WBE Self Certification Form -
may be submitted within 10 days of the bid
opening. The City is requesting that this form be
submitted with the Bid if at all possible. Note -
one form per MBE/WBE to. be utilized.
Also please note the definitions of MBE/WBE's etc.
as defined in Attachment 1 of Attachment A of
Addenda 3. Please insure that all listed
MBE/WBE's conform to these definitions.
3. SBA AND MBDC •CONTACTS AND PHONE NUMBERS - Please note the
telephone number change for the SBA as shown in Addenda 01.
A listing of MBDC's to whom Plans and Specifications have
been sent will be available to contractors after the
meeting.
4. POSITIVE EFFORT STEPS - All positive effort steps must be
taken prior to bid opening. The number of days prior for
each step is specified in Attachment 1 of Attachment A of
Addenda 13.
- All positive efforts must be fully documented. Please
maintain telephone logs of all contacts made pertaining to
these provisions. In addition please note that all mailings
to MBE/WBE's must be done by certified mail. "Unanswered
phone calls and regular mail will not be considered adequate
positive effort".
- The City will request the low bid contractor to provide a
narrative description of the positive efforts made in
obtaining MBE/WBE participation. This narrative should be
in sufficient detail and be supported by sufficient
documentation so as to allow verification of the
contractor's positive efforts. Detail is requested on each
of the 5 positive effort steps. The city would also like to
request that this information be submitted with the bid if
4 at all possible.
r Page 2
5. POSITIVE EFFORT STEP DETAIL -
1. Include qualified MBE/WBE businesses on solicitation
lists.
- Advertisements must specifically solicit MBE/WBE
participation.
Contractors must be able to document contact with the
SBA and OMBE assistance centers. If the assistance
centers cannot provide you with a list of qualified
MBE/WBE subcontractors, request a letter of explanation
as to why. Please be sure to make initial contact with
these assistance centers by telephone, as required
under item 5 of the requirements. Follow-up contact by
mail is recommended.
2. Assure that MBE/WBE businesses are solicited whenever
they are potential sources.
- Invitations to MBE/WBE's must be made at least 7 days
prior to need of a bid response.
At least 3 or all if less than 3 MBE/WBE's referred
F must be contacted for each item of work to be sub-bid.
Invitations must specify the items of work for which
sub-bids are being requested. This includes
advertisements.
- All requests for sub-bids must also require each
party to a sub-agreement to follow the 5 positive
effort steps in obtaining MBE/wBE participation if
second tier subcontracting is done.
- Contractors will be required to provide a listing of
all sub-bidders for each item of work that MBE/WBE's
were solicited. This list shall include the dollar ($)
amounts of all sub-bids received.
3. Divide the total requirements of the project into small
tasks or quantities to permit maximum participation of
MBE/WBE businesses.
- Contractors will be required to provide documentation
that they gave consideration to doing this. If it can
not be done, the contractor must provide documentation
as to why.
4. Establish delivery schedules which will encourage
MBE/WBE participation.
l
3 '23
J
Page 3
- Again, provide documentation that consideration was
given to this item and if not done, document why it
could not be done.
5. Use the services and assistance of the SBA and the OMBE
as appropriate.
- Document contact with both offices. Note telephone
number change of the SBA as included in Addenda 01.
Listing of MBDC's currently holding Unit 3 Plans and
Specifications is available.
- If contact is not made with these offices the bidder
must provide documentation as to why, as well as
explain what MBE/WBE lists were used. Alternate
MBE/WBE lists used must be applicable to this project.
Solicitation of firms obviously not interested in
performing work in this area is not acceptable positive
effort, e.g. using a list from a previous out of state
project.
In closing, please note Attachment 2 of Attachment A in Addenda
03, Grantee Minority Business Enterprise/Woman Business
Enterprise Certification form. Insure that the City will be able
to complete this form and certify that the contractor has
complied with each of the positive effort steps indicated on this
form.
�II�II
II
city of sAn lugs 06iispo,,
25 Prado Road • San Luis Obispo, CA 93401
LISTING OF MINORITY BUSINESS DEVELOPMENT CENTERS
CURRENTLY HOLDING PLANS AND SPECIFICATIONS
FOR UNIT 3 WASTEWATER TREATMENT PLANT IMPROVEMENTS.
Mr. Grant Thornton
San Jose Minority Business Development Center
150 Alameda Blvd.
P.O. Box 6779
San Jose, CA 95150 Ph.# (408) 275-9000
Santa Barbara Minority Business Development Center
Fontaine, Quintanilla and Associates
4141 State Street, Suite B-4
Santa barbara, CA 93110 Ph.# (805) 964-1136
Mr. John F. Inglehart
Minority Business Development Agency
U. S. Department of Commerce
221 Main Street, Room 1280
C San Francisco, CA 94105 Ph.# (415) 744-3001
Minority Business Development Agency
U.S. Department of Commerce
977 North Broadway, Suite 201
Los Angeles, CA 90012 Ph.#'s (213) 894-7157/7158/7159
Mr. Manuel Lerma
Bakersfield Minority Business Development Center
NEDA - San Joaquin Valley, Inc.
218 South H Street, Suite 103
Bakersfield, CA 93304 Ph.# (805) 837-0291
Mr. Steven Johnson
Fresno Minority Business Development Center
NEDA - San Joaquin Valley, Inc.
2010 North Fine, Suite 103
Fresno, CA 93727 Ph.# (209) 252-7551
Mr. Cleveland O.Neal
Los Angeles Minority Business Development Center II
Business Development Center of Southern California
3807 Wilshire Blvd. , Suite 700
Los Angeles, CA 90010 Ph.# (213) 380-9471
MBDC's
Page 2
Mr. Victor F. Fontaine
Oxnard Minority Business Development Center
Fontaine, Quintanilla and Associates
451 West 5Th Street
Oxnard, CA 93030 Ph.# (805) 483-1123
C .
i
ATTACEMENT 4
PROTEST APPEAL Letter, Alder Eng. 8c Const. Mar 26, 1991
Page 1
ALDER ENGINEERING CONSTRUCTION COMPANY
3939 SOUTH 500 WEST
SALT LAKE CITY, UTAH 84123
801/266-8856
March 26, 1991
CITY OF SAN LUIS OBISPO
P. 0. BOX 81009 990 PALM STREET
SAN LUIS OBISPO, CA 93401
Attention: JOHN MOSS
We submitted a Proposal, February 21, 1991 for the
Construction of Unit 3, Wastewater. Treatment Plant
Improvements. This letter is in response to a telephone
conversation between John Moss and Bill Herodes, of our
office, Thursday, March 21, 19919 stating that the City of
San Luis Obispo is planning to reject our bid as
non-responsive. If a protest was filed, I am requesting a
Protest Appeal, in our behalf, be initiated as provide in
the specifications.
We made a responsive, responsible, and low bid at bid
time. Our bid included the all of the forms, in the
SECTION 00300 BID, SECTION 00310 BIDDING SCHEDULE, SECTION
00410 BID GUARANTY BOND, SECTION 00421 NONDISCRIMINATION
IN EMPLOYMENT, SECTION 00422 BIDDER'S MANPOWER ESTIMATE,
SECTION 00423 CERTIFICATION OF BIDDER'S EXPERIENCE AND
QUALIFICATIONS, SECTION 00430 PROPOSED SUBCONTRACTORS,
SECTION 00450 MANUFACTURERS AND SUPPLIERS MAJOR EQUIPMENT
AND MATERIAL ITEMS, SECTION 00460 NONCOLLUSION DECLARATION
TO BE SUBMITTED WITH BID, required by the contract
specifications. All of these forms were filled out as
required. These forms were found in the front of the
specifications in the vicinity of the INVITATION TO BID
and the INSTRUCTIONS TO BIDDERS. We also filled out the
MINORITY BUSINESS ENTERPRISE/WOMEN BUSINESS ENTERPRISE
INFORMATION, Form No. 4700-59 Attachment 1-B. This form
stated -that "FAILURE TO SUBMIT THIS FORM WITH BID WILL
CAUSE THE BID TO BE REJECTED AS NONRESPONSIVE" . We did
submit this form with our bid. This form was found in
SECTION 005890 CONTRACT PROVISIONS OF THE STATE WATER
RESOURCES CONTROL BOARD (SWRCB) . . . . . . .IN CALIFORNIA.
You have in prior conversations with our office,
informally made reference to a protest of our bid and
bidding procedures having been filed by Kaweah
Construction Company. As of this date we have not been
formally advised, in writing, of such a protest. �(7
PROTEST APPEAL Letter, Alder Eng. & Const. Mar 26, 1991
Page 2
Before any action can be taken against us based on
this protest we should be advised in writing that the
Protest exists. We should be given a specified time . to
file a Protest Appeal in accordance with Specification
documents SECTION 00585: PROCUREMENT REGULATIONS FOR
FEDERALLY ASSISTED (EPA) CONSTRUCTION PROJECTS (40 CFR
PART 339 MARCH 28, 1983) . REFER TO FEDERAL REGISTER/VOL.48,
NO. 60/ Monday, March 28, 1983/Rules and Regulations,
Subpart G - Protests. Sub paragraph 33.1115 Protest
Appeal. -
(a) A party with a financial interest which is
adversely affected by the recipient's decision on the
initial protest may file a "protest appeal" with the award
office.
(b) A "protest appeal" is a written complaint filed
with the award official regarding the recipient's
determination of a protest.
THE CITY OF SAN LUIS OBISPO has requested information
from us regarding our bid since the date of the bid
opening. We have answered these request assuming that you
were attempting to qualify our bid so that you could award
the contract to us. In doing this you would save the city
of SAN LUIS OBISPO the amount of $4799000.009 which is
the difference between Alder's low bid and the bid of
Keweah Construction. Our previous experience is that
municipal Owners are required by law, and desire. to
accept the lowest responsible bid. The information we
have supplied you in response to your request shows that
our BID was responsive to the intent of the bidding
documents. It seems to me that it is the City of San Luis '
Obispo goal and desire to reject our bid, regardless of
the additional cost to the city. It also seems that the
object of your requests for information has been to see if
we ;can possibly prove that we have complied with every
letter of the bid documents in order to prevent our bid
from being rejected.
The bid documents provide a means to adjust the
Participation of MINORITY BUSINESS ENTERPRISE/WOMEN
BUSINESS ENTERPRISE firms. SECTION 00100 INSTRUCTIONS TO
BIDDERS, 1.09 AWARD A CONTRACT, B. PRE-AWARD ACTIONS:
para 3. EPA CONFERENCE: states "The apparent low bidder,
therefore, shall be prepared to attend a meeting that will
be scheduled by the Environmental Protection Agency after
PROTEST APPEAL Fetter, Alder Eng. & Const. Mar 26, 1991
Page 3
the opening of bids, but before award, he will be
requested to specify what affirmative action he has taken
or proposes to take to assure- equal employment opportunity
on the project. Until a determination has been made by
the Environmental Protection Agency that a satisfactory
compliance position exists on the part of the prospective
contractor, and the determination has been concurred in by
the Department of Labor, Office for Equal Opportunity,
award of the contract will not be authorized. "
Further, SECTION 00590 CONTRACT PROVISIONS OF THE
STATE WATER RESOURCES CONTROL BOARD (SWRCB) . . . . . IN
CALIFORNIA, states in the CLEAR WATER GRANT PROGRAM
BULLETIN 113A, ATTACE29M #1, page -5-, item B. Other
Requirements, underlined for emphasis, paragraph 4. If
additional MBE/WBE subcontracts become necessary after the
award of the prime contract, Attachment 1-B must be
provided to the owner/grantee by the Prime Contractor with
in ten (10) working days following the award of each new
subcontract.
This provision provides a means for the Prime Contractor
to increase the MBE/WBE participation in the project as
required. This part of the contract documents control the
bidding process with equal authority to all others cited.
needPlease let me know if there is anything further you
.
4Sincer y,
illiam R. Barton
Vice President
Copy to:
1. " Bob Dancoisne
Brown & Caldwell, Engineers
2. Mullen, Sullaivan & Newton, Attorneys
LTR120
3 - 3a
ANDRE,✓RE, A PROFESSIONAL LAW CORPORATION
MORRIS PETER R.ANDRE-MetM)
& BUTTERY MICHAEL.1.MORRIS
iAMEs C.BLRTERY
- DENNIS A LAW
J.TODD MBLOLLA
P.TERENCE SCHUBERT
SCOTT W.WALL
MARY E M••r ISTER
7366 Pa_r_Street
April 8, 1991 Post Office Bos Tdo
San Luis Obispo
Catifomia 9340&Z 6
Telephone 8MI5434M
Jeffrey Jorgenson, Esq. HAND DELIVERED Fax NnmberW51543-=
City Attorney APRIL 9, 1991
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
RE: ALDER CONSTRUCTION COMPANY/WASTE WATER TREATMENT PLANT
IMPROVEMENTS
Dear Mr. Jorgenson:
As you know, this firm represents Alder Construction Company
("Alder") . The purpose of this letter is to provide you with
Alder' s initial response to the written protest of Kaweah
Construction Company ("Kaweah") , filed on February 25, 1991, after
Alder was determined to be the lowest bidder by at least
$479 , 000 . 00 on the Unit 3 Waste Water Treatment Plant improvements
proposed by the City of San Luis Obispo (the "City") as Project No.
R-28-S (the "Project") .
All parties involved in this matter are familiar with the
events leading to the second bid on the Project. We will therefore
avoid a detailed analysis of the facts surrounding the initial bid
on the Project. There are two facts, however, arising from Alder' s
initial bid on the Project that directly relate to Kaweah' s protest
filed in connection with our client' s bid of February 21, 1991.
First, Alder made an extensive solicitation of qualified MBE/WBE
contractors and suppliers for its initial bid on the Project.
Alder did a direct mailing to over four hundred fifty (450)
subcontractors and suppliers, Alder did a separate, certified
mailing to over eighty (80) pre-qualified MBE/WBE contractors and
suppliers obtained from the Santa Barbara Minority Business Center,
and Alder retained Small Business Exchange of San Francisco to do
a direct mailing to specific MBE/WBE contractors and suppliers who
would have the potential to participate in the Project. Second,
with respect to the first bid on the Project, contrary to Kaweah's
letter of February 25 , 1991, our client did not file a protest
against Kaweah's original bid on the Project.
' A pmFESMONAL LAW CORPORATION
ANDU
MORRIS
& BLTTTII2Y
Jeffrey Jorgenson, Esq.
April 8, 1991
Page two
With these facts as background, the remainder of this letter
will direct itself to the unqualified conclusion that Alder was
both a responsible and responsive low bidder on the Project on
February 21, 1991. This conclusion can be reached after analyzing
Alder's actions leading up to its second Project bid, and the law
applicable to these actions. We will therefore segregate our
comments, whenever possible, between a factual analysis and legal
analysis of Alder' s actions surrounding the second bid on the
Project.
We recognize that there has been a series of letters between
the City and our client since the bid opening on February 21, 1991.
There have also been several telephone conversations between John
Moss and Bill Barton, the Executive Vice President of Alder. All
of the information we present to you in this letter is
substantiated by these prior communications, the bid documents
submitted by our client on February 21, 1991, and the pre-bid
activities of Alder. This letter will summarize this information
for you and provide an objective legal analysis of the issues
raised by Kaweah.
1. FACTUAL BACKGROUND.
All parties agree that Alder is certainly a responsible bidder
on the Project. We are aware of no protests by Kaweah or any other
interested party that Alder is anything but a responsible
contractor, as defined in Section 33 . 220 of the U.S . Environmental
Protection Agency ("EPA") Procurement Policy set forth in 48 CFR
33 . 220 and in the California Public Contract Code. We will
therefore limit our comments to the issue of whether or not Alder
is a "responsive" low bidder on the Project, as this term is
defined under the Project bid documents, and applicable California
and federal laws.
Kaweah has protested the low bid of Alder on the basis that
our client did not properly conform to the positive effort
requirements for MBE/WBE project contractors and suppliers under
Section 00590 of the State Water Resources Control Board ("SWRCB")
Contract Provisions for the Utilization of Minority Business
Enterprise ("MBE") and Women Business Enterprise ("WBE") on Clean _
Water Grant Construction Contracts in California, as issued in
Addendum No. 3 to the Project bid documents. As you know, the
SWRCB guidelines are intended to reconcile the standards of EPA
grants, as set forth in 48 CFR Section 33 .240, et seq. , with the
"good faith effort" standards of California Public Contract Code
Section 2000. We will demonstrate how our client has met all of
3 -3Z
ANDRE,LRE, A PRCFESSiONAL LACY CORPORATION
MORRIS
& BUTTERY
Jeffrey Jorgenson, Esq.
April 8, 1991
Page three
these standards as a responsive bidder.
Kaweah also suggests that Alder' s bid of February 21, 1991
should be rejected as non-responsive because is does' not meet the
Project' s MBE participation goal of 19.2%. First, please note that
our client' s bid of February 21, 1991 clearly meets and exceeds the
City' s WBE participation goal and the only issue is the MBE
participation goal. Second, while it is true that the original
Attachment 1-B (Form 4700-5) submitted by our client with the bid
documents of February 21, 1991 does not meet the City's stated MBE
percentage goal, we must remember that this fact alone is
irrelevant with respect to whether or not Alder is a responsive
bidder. The stated MBE participation goal of the City is in fact
a coal, not a requirement that, if not met, makes a low bidder
automatically non-responsive. Indeed, as we will demonstrate, the
bid submitted by Alder on February 21, 1991 was responsive and the
good faith efforts of Alder to solicit MBE/WBE participation in the
Project more than exceeds the actions necessary for the City to
find Alder to be a responsive low bidder.
The primary means for the City to assure the fact that our
client is a responsive low bidder is to verify positive effort
documentation, as established by the SWRCB MBE/WBE guidelines. To
summarize these guidelines, there are five (5) requirements for
positive effort documentation, and seven (7) additional
requirements to verify good faith efforts to achieve maximum
MBE/WBE participation. To conform to the five (5) requirements for
positive documentation, a responsive low bidder must take actions
prior to bid opening to assure that minority and women businesses
are used whenever possible. These five (5) requirements are:
(1) Including qualified MBE/WBE businesses on
solicitation lists;
(2) Assuring that MBE/WBE businesses are solicited in a
timely fashion whenever they are potential sources for bids;
(3) Dividing total contract requirements, whenever
economically feasible, into smaller tasks or quantities to permit
maximum participation of MBE/WBE businesses;
(4) Establishing delivery schedules for a project that
will encourage MBE/WBE participation; and
(5) Utilizing of the services and assistance of the
Small Business Administration and the Office of Minority Business
Enterprise of the U.S. Department of Commerce.
The seven (7) additional requirements of the SWRCB guidelines
are:
, 3 3
A PROFES�iONAL LAW CbRPORATION
ANDRE,
MORRIS
& BUTTERY
Jeffrey Jorgenson, Esq.
April 8, 1991
Page four
(1) A requirement that an apparent successful low bidder
submit documentation showing all required positive efforts were
made, prior to- bid opening;
(2) An explanation of why any low MBE or WBE sub-bidder
was rejected or considered as non-responsive;
(3) Completion of MBE/WBE self_certification forms
(Attachment 1-C) for all qualified MBE/WBE sub-bidders ;
(4) Timely completion of amendments to Attachment 1-B,
to the extent that additional MBE/WBE subcontracts are involved;
(5) Deviations from a bidder's Attachment 1-B shall not
result in a reduction of MBE/WBE participation without the City's
prior approval;
(6) Limitations on MBE/WBE brokerage arrangements
counting towards MBE/WBE goals; and
(7) A requirement that an apparent low bidder meet all
five (5) positive effort steps to maximize MBE/WBE participation.
Alder' s pre-bid activities in anticipation of its successful
low bid an February 21, 1991 meet all of the requirements of the
SWRCB guidelines applied to the Project. We will address each
requirement individually.
1. Including qualified MBE/WBE businesses on
solicitation lists. All qualified MBE/WBE business were included
on the solicitation lists of Alder utilized for its bid of February
21, 1991. Mr. Moss' Memorandum of March 1, 1991 focuses on the
fact that Alder contacted the Santa Barbara Minority Business
Development Center ("MBDC") four (4) working days prior to February
21, 1991; not five (5) working days prior to February 21, 1991, as
required by the SWRCB guidelines. Mr. Moss ' comments do not
recognize, however, the fact that Alder had already contacted the
Santa Barbara MBDC in connection with its project bid in November,
1990, and had obtained a complete solicitation list at that time.
The call to the Santa Barbara MBDC on February 15, 1991, was placed
to obtain any updates to the solicitation list previously supplied
to Alder. As Mr. Barton indicated to Mr. Moss in his
correspondence of February 26, 1991, Karen Jones, of the Santa
Barbara MBDC, informed Mr. Barton on February 15, 1991 that the
MBE/WBE solicitation list previously supplied in anticipation of
the November Project bid was current and no updates were necessary.
Indeed, the list supplied to Alder by Ms. Jones on February 20,
1991 is more restrictive than the list previously received by Alder
well in advance of the November 71 1990 bids. Alder exercised
positive effort in connection with this requirement.
3 -3�
,�}�m��i a PROFESSIONAL LeW CORPORATION
A V REI _
MORRIS
& BUTTERY
Jeffrey Jorgenson, Esq.
April 8, 1991
Page five
2 . Assuring that MBE WBE businesses are solicited in a
timely fashion whenever they are otential sources forbids. This
requirement seems to have caused considerable confusion between
Alder and the City in the City's attempts to confirm Alder' s
positive effort documentation. We apologize for any confusion that
we have caused. We hope that the summary of the following facts,
previously supplied to the City in correspondence from Mr. Barton,
will serve to eliminate any prior confusion and confirm that we
meet this second positive effort requirement.
The requirement states that a bidder must document that
it has provided bid solicitations to qualified MBE/WBE bidders at
least seven (7) working days prior to the bid response date.
Further, the documentation must evidence a "real desire for
positive response" and provides the example of sending certified
letters with return receipts requested. Mr. Moss' Memorandum of
March 1, 1991 makes reference to the fact that Alder placed two (2)
distinct advertisements in construction newspapers, soliciting
Project MBE/WBE participants on February 18 , 1991 and February 19 ,
1991, respectively. Mr. Moss notes that these advertisements were
not made seven (7) working days prior to the bid response date and
therefore these efforts should not satisfy the solicitation
requirements. He is correct. Mr. Moss' Memorandumalso notes y that
Alder contracted for an MBE/WBE mailing to be p 1991
Small Business Exchange in anticipation of the February 21,
bid. This mailing was not done by the Small Business Exchange
until February 19 , 1991 and therefore should also be deemed non-
responsive. Mr. Moss is also correct. In fact,
the Small Business
Exchange "was contacted by Alder well in advance of the seven (7)
day requirement, but the Small Business Exchange failed to conduct
the mailing until February 20 , 1991. It is regrettable that Alder
could not control the actions ofthe Small Business Exchange in
this instance, even though they were specifically aware of the
SWRCB requirements placed upon Alder.
Alder' s MBE/WBE positive solicitation efforts listed
above do fall short of the specific guidelines of the SWRCB. This
limited analysis, however, does not take into account the most
significant actions of Alder in anticipation of the February
21,
1991 project bid. First, and most importantly, on February 11,
1991, well in advance of the seven 7 workin da re irement of
the SWRCB guidelines, Alder did a Project bid solicitation mailing
by certified mail, with return receipts requested, to all certified
MBE/WBE contractors and suppliers provided by the Santa Barbara
MBDC in October, 1990. As previously indicated, this list was
still in effect in February, 1991. As indicated, over eighty (80)
� �35
SA V J.J
1RE, A PROFE55TONAL LAa� PO
CORRATTON
LMORRIS
& BUTTERY
Jeffrey Jorgenson, Esq.
April 8, 1991
Page six
qualified MBE/WBE participants were expressly solicited.
Documentation of this solicitation was included as Attachment No.
5 in Mr. Barton's letter to Mr. Moss of February 26, 1991. Second,
on February 8 , 1991, Alder mailed bid solicitations to over 450
qualified subcontractors and suppliers throughout the Western
United States. Some of these contractors and suppliers are
qualified MBE/WBE bidders.
To summarize, not only did Alder make a timely
solicitation of qualified MBE/WBE contractors and suppliers, but
Alder took the additional steps to further solicit qualified
MBE/WBE participants by doing a separate mailing to over 450
subcontractors and suppliers, contracting with the Small Business
Exchange for an additional MBE/WBE mailing, and by placing two (2)
separate advertisements in trade publications. We challenge any
bidder to exceed these positive efforts towards soliciting
qualified MBE/WBE participants in the Project.
3 . Dividing total contract recuirements, whenever
economically feasible into smaller tasks or quantities to permit
maximum participation of MBE/WBE businesses. As indicated by Mr.
Moss ' Memorandum of March 1, 1991, the solicitations made by Alder
to qualified MBE/WBE participants did in fact break out the total
work in the Project to allow for maximum MBE/WBE participation.
Indeed, Alder' s solicitation letter of February 7, 1991, previously
forwarded to Mr. Moss as Attachment No. 5 to Mr. Barton' s letter of
February 26, 1991, listed no less than 32 separate bid categories
and invited responsible bidders to bid in any number of categories.
4 . Establishing delivery schedules for a prosect that
will encourage MBE/WBE participation. Once again, as agreed by Mr.
Moss in his Memorandum of March 1, 1991, Alder has clearly met this
requirement. A review of Alder's solicitation letter of February
7 , 1991 clearly indicates our client' s intent to allow for full
participation by MBE/WBE businesses, with no limitation on project
schedules that would inhibit participation by qualified MBE/WBE
businesses.
5 . Utilization of the services and assistance of the
Small Business Administration and the Office of Minority Business
Enterprise of the U.S. Department of Commerce. Once again, there
can be no question that Alder has met this positive effort
requirement. As outlined above,' contact was made with the Santa
Barbara MBDC on February 15, 1991. Prior contact was made in
October, 1990, regarding Alder's first bid on the Project. Unlike
other specified requirements of the SWRCB guidelines, this
3 -3c�
A PROFESSIONAL LAW CORPORATION
REI
MORRIS
& BUTTERY
Jeffrey Jorgenson, Esq.
April S. 1991
Page seven
requirement does not have a specified time constraint, contrary to
the analysis made by Mr. Moss in his Memorandum of March 1, 1991.
Even if the referenced five (5) working day time constraint were
applied, recognition of the prior contacts of Alder with the Santa
Barbara MBDC clearly meet any standard that might be applied.
Documentation of these efforts was provided to the City in Mr.
Barton' s letters of February 26, 1991, and March 12, 1991.
In addition to meeting all of the required positive effort
criteria of the SWRCB guidelines, Alder's bid met all of the seven
(7) additional SWRCB criteria prior to the second bid opening on
February 21, 1991.
1. A re uirement t oarent successful low bidder
submit documentation showing all re ired positive efforts were
made prior to bid opening. Extensive documentation has been
submitted to the City in response to its original solicitation of
February 23 , 1991. We believe Alder' s bid documents and its
letters of February 26, 1991, March 11, 1991 and March 12 , 1991
supply the City with Alder' s positive pre-bid opening efforts
towards MBE/WBE solicitation. These responses were provided in a
timely fashion and were meant to respond to the questions put to
Alder by the City. Admittedly, some confusion has arisen in
connection with Alder's responses and it is for this reason that we
are attempting to summarize our responses in this letter.
2 . Why any low MBE or WBE sub-bidder was refected or
considered as non-responsive. Our client' s letter of February 26,
1991 goes into extensive detail on all MBE/WBE bids received in
connection with the second bid on the Project. As indicated, no
low MBE or WBE sub-bidder was rejected by Alder as being non-
responsible and/or non-responsive.
3 . Completion of MBE/WBE self-certification forms
(Attachment 1 C) for all qualified MBE/WBE sub- )idders. To our
knowledge, all required self-certification forms (Attachment 1-C)
from Alder' s proposed MBE/WBE participants in the Project have been
provided to the City.
4. Timely completion of amendments to Attachment 1-B to
the extent that additional MBE WBE subcontracts are involved.
Alder has in fact provided the City with an amended Attachment 1-B,
in conformance with this requirement. As more fully detailed
below, this amendment to Alder's Attachment 1-B was required once
Alder learned that Santa Maria Electric Company was in fact a
qualified MBE subcontractor. This requirement was met in a timely
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April 8, 1991
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fashion.
5. Any deviation from a bidder's Attachment 1-B shall
not result in a reduction of MBE/WBE participation without the
City' s prior approval. No reduction of MBE/WBE participation in
the Project is proposed by Alder.
6 . A limitation on MBE/WBE brokerage arrangements
counting towards MBE/WBE goals. No brokerage arrangements were
utilized by Alder in soliciting MBE/WBE participation for the
Project.
7. A requirement that an apparent low bidder perform all
five (5) positive effort steps to maximize MBE/WBE participation.
As clearly shown, Alder did in fact conform to all five (5)
positive effort requirements of the SWRCB guidelines implemented
for the Project. Alder was the low bidder for the Project by at
least $479 , 000 . 00 and all of Alder' s actions prior to the bid
opening date indicate that it was in fact a responsive bidder.
Not only did Alder seek to conform its actions to the SWRCB
guidelines, but Alder required each of its proposed subcontractors
and suppliers to conform to these requirements as well. As
previously indicated to the City, Alder's February 7, 1991
solicitation letter to MBE/WBE participants specifically requires
that all bids be in conformance with the bid documents of the City
and therefore requires full compliance with the SWRCB MBE/WBE
participation goals. Further, all telephone inquiries of Alder
from potential MBE/WBE participants were given a detailed
description of the MBE/WBE requirements set forth by the City for
the Project.
Based on the foregoing facts, we do not see how Kaweah can
objectively contend that Alder is a non-responsive bidder on the
Project. Alder in fact conformed to every requirement of the
stated SWRCB guidelines.
The only other issue raised by Kaweah in its written protest
focuses on the percent of MBE participation in the Project proposed
by Alder, relative to the 19.2% MBE goal set forth by the City.
First, it must be recognized that an MBE participation goal is only
an objective, not a requirement to make a bidder responsive. If a
bidder falls short of the MBE participation goal, as Alder did, one
must look to the low bidder's positive effort requirements to
certify the bid as responsive. If the City does this in the case
of Alder's low bid, there can be no question that the contract
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April 8, 1991
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should be awarded to our client.
Alder does not dispute the fact that its original Attachment
1-B (Form 4700-5) submitted with its bid on February 21, 1991 was
in some ways incomplete. This fact is due to the time pressures
associated with the bid process (directly related to the receipt of
last-minute bids from subcontractors) and the receipt of incomplete
information from MBE/WBE sub-bidders.
The original Attachment 1-B (Form 4700-5) submitted by Alder
lists Vista Steel as a WBE participant, R. Burke Company as a WBE
participant and Bolanos Landscaping as an MBE participant.
Elsewhere in the bid documents originally submitted to the City on
February 21, 1991, Alder documents its intention to issue the
electrical subcontract on the Project to Santa Maria Steel Company.
Only after the bid opening date did Alder learn that Santa Maria
Electric Company is in fact a qualified MBE subcontractor. Upon
learning this, Alder contacted the City and submitted an amended
Attachment 1-B, in compliance with the SWRCB guidelines. The
inclusion of Santa Maria Steel Company as a qualified MBE
subcontractor brings Alder' s MBE participation percentage to 15. 8%
of the total bid.
Alder' s amended Attachment 1-B also included Simmons Masonry,
Field Lining Services, American Coatings, and North Bay Garage
Doors as additional proposed MBE subcontracts that Alder would
award if declared the low, responsive bidder, and these additional
MBE subcontracts would be awarded at no additional cost to the
City. All of these proposed additional bids were received by Alder
prior to February 21, 1991 and documentation has been supplied to
the City to substantiate this in Mr. Barton' s letters of March 11
and 12 , 1991.
If the City only considers Bolanos Landscaping Company and
Santa Maria Electric Company as the MBE participants for use by
Alder, Alder' s bid contains a significant (15.8%) MBE participation
percentage. This percentage, in combination with the documented
positive solicitation efforts of Alder, provide a clear basis for
the determination that Alder was a responsive bidder.
An objective analysis of the facts associated with Alder' s low
bid shows our client to be a responsive bidder, who is well
qualified and eager to construct quality waste water treatment
facilities for the City. All of the required SWRCB MBE/WBE
guidelines were met or exceeded. At a minimum, Alder' s MBE
participation percentage is 15.8% of its low bid. Further, in an
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April 8, 1991
Page ten
effort to maximize MBE participation, Alder is prepared to award
subcontracts to additional MBE sub-bidders (for bids received prior
to February 21, 1991) , even though these sub-bidders were not low
bidders, at no additional cost to the City, but a significant
additional expense to Alder. We see no way in which our positive
efforts towards maximum MBE/WBE participation in the Project could
be greater.
2 . LEGAL ANALYSIS .
The conclusion that Alder is the lowest responsible and
responsive bidder for the Project is also directly supported by the
law applicable to the issues raised by Kaweah's protest.
Under California Public Contract Code Section 20162, the City
is required to let the contract for the Project to the lowest
responsible bidder. Regarding the contract currently under
consideration, Alder is clearly a responsible bidder, since there
is no question that Alder is capable of performing the work set
forth in the contract.
Under Public Contract Code ("PCC") Section 2000, the City is
permitted to require that the Project be awarded to the lowest
responsible bidder who meets certain criteria related to
participation in the contract process by Minority Business
Enterprises (MBE) and Women Business Enterprises (WBE) . Under PCC
Section 2000 (a) and the SWRCB guidelines, the City required that
Alder either meet the 19.2% minority participation goal, or make a
good faith effort to comply with that goal by taking various
actions to solicit MBE and WBE participation. As the facts and
information provided above clearly demonstrate, Alder gave MBEs and
WBEs numerous opportunities to bid on the Project. In response to
the efforts taken by Alder, 15. 8% of the contract price bid by
Alder was to be performed by MBE subcontractors. While Alder did
not meet the 19 . 2% goal established by the City, Alder clearly made
a good faith and positive effort, in accordance with the
established criteria, to comply with the goals set forth by the
City.
In its protest letter to the City of February 25, 1991, Kaweah
claims that Alder's bid should be rejected because of its failure
to reach the 19.2% goal set for the Project. However, neither PCC
Section 2000, the SWRCB guidelines, nor the applicable EPA
guidelines require strict compliance with this goal. Under PCC
Section 2000, the legislature seeks to balance the requirement that
a government bid be let to the lowest responsible bidder with the
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April 8, 1991
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social goal of involving minority and women business entities in
the public contracts arena.. Clearly, under PCC Section 2000 (a) (2) ,
a bid cannot be deemed non-responsive for its failure to meet the
goals set forth by the local agency; rather, a good faith effort to
achieve the stated goals is deemed sufficient. This concept of a
"good faith effort" is mirrored by the "positive effort" criteria
of the SWRCB guidelines outlined above, and were directly met by
Alder in its pro-bid activities
C Kaweah has also taken issue with Alder' s admitted failure to
include certain information, such as the addresses and phone
numbers of subcontractors and related information, on Attachment
1-B. In essence, Kaweah claims that Alder' s bid contains an
"irregularity" , in that certain information is not set forth where
indicated on Alder's Attachment 1-B.
In considering this basis for Kaweah' s protest, it is
important to note that all of the relevant information requested by
the City pursuant to its bid form was provided by Alder on or
before the bid opening on February 21, 1991. Certain information,
such as addresses and phone numbers, may have been omitted from
Attachment 1-B, but this information was clearly provided in other
parts of the bid documents. Therefore, the irregularity complained
of by Kaweah was merely the failure to provide certain information
on Attachment 1-B that had been provided to the City at other
places in the bid documents.
In support of its position, Kaweah cites the following legal
authorities, all from jurisdictions outside of California:
Bolander & Sons v City of Minneapolis, 438 N.W. 2d 735 (Minn-APP.
1989) ; Leo Michuda & Son v Metropolitan San itaT-y District of
Greater Chicago, 422 N.E. 2d 1078 (I11.App. 1981) , Northeast
Construction Company v. Romney, 485 Fed.2d 752 (D.C.Cir. 1973) ;
Rossetti Contracting Co v. Brennan, 508 Fed.2d 1039 (7th Cir.
1975) . Kaweah also cites the Konica case discussed in detail
below. These cases can be readily distinguished from the legal and
factual issues currently under consideration.
In Bolander, the court found a bid non-responsive under
Minnesota law for its failure to meet a contractual clause that
required that a specified percentage of the work be performed by a
WBE. In the Project, while an MBE/WBE goal is indicated, Alder' s
good faith effort to comply is deemed sufficient under PC_ Section
2000 (a) (2) and the SWRCB guidelines. In fact, the requirement that
a specific portion of a project be reserved solely for performance
by a minority enterprise was found unconstitutional in Associated
General Contractors v. San Francisco, Fed.2d 922 (9th Cir. 1987)
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April 8, 1991
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(cert. denied in 449 U.S. 1061) .
Similarly, in the Michuda, Romney and Rossetti cases, the
contractual scheme differed significantly from the Project, where
the demonstration of good faith efforts to solicit minority
participation is equivalent to meeting a hiring goal. In each of
those cases, the low bidder also failed to designate minority sub-
contractors, but instead "pledged" to meet the contractual goals.
It is significant that Alder's bid contains and identifies specific
MBE/WBE subcontractors, and as the detailed factual presentation
provided above indicates, extensive good faith efforts were made in
conformance with PCC Section 2000 (a) (2) and the SWRCB guidelines.
Moreover, in each of these cases the contract at issue contained
language vastly different from the Project documents.
It is also important to note that Alder filed an amended
Attachment 1-B following its discovery that Santa Maria Electric
Company is a MBE subcontractor. This amended Attachment 1-B is
completed in full.
The City clearly has the ability to waive irregularities
contained in the bid. The bid documents, at page 00020-3 , clearly
reserve this right to the City. "The owner also reserves the right
to waive any informalities in any bid and to delete certain items
listed in the bid as set forth therein. " Moreover, California law
is clearly in accordance with the City's right to waive such an
irregularity. "If there is an irregularity or clerical error in
the bid which does not materially affect the proposal, the awarding
official may waive the omission or variance. In determining
whether an irregularity is of a substantial nature, the question is
whether it affords the bidder an advantage over other bidders and
effects one or more of the elements that were contemplated or
considered in reaching a price figure so that the result effects
the amount of the bid. " Gibbs & Hunt, California Construction Law,
(9th ed. ) , page 31 (emphasis supplied) . Further, an opinion by the
California Attorney General has summarized the relevant principles
in this area:
"A basic rule of competitive bidding is that
bids must conform to specifications, and that
if a bid does not so conform, it may not be
accepted. However, it is further well
established that a bid which substantially
conforms to a call for bids may. though is not
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April 8 , 1991
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strictly responsive be accepted if the
variance could not have affected the amount of
the bid or coven a bidder an advantage or
benefit not allowed other bidders or in other
words if the variance is inconseQuential. . .
' it is inconceivable that inconsequential
departures will not appear . . . , but if the
unit in toto, proposed to be erected,
generally conforms to the city' s needs and
will substantially perform the service, which
the city requires, non-conformity between plan
and bid does not exist. "'
47 Ops. Cal.Atty. Gen. 129 , 130-131 (1966) ,
quoting Dougherty v. Folk . (1941) 46 N.E. 2d
307 , 311 (other citations omitted, emphasis
supplied. )
As stated in Cyr v. White (1947) 83 Cal.App.2d. 22, 27, "the
object of statutes requiring municipal contracts to be awarded on
the basis of competitive bidding is to prohibit waste of the public
money, corruption and favoritism. " None of these factors or
considerations are present in the situation presently before the
City. The failure of Alder to supply the information contained in
other portions of the bid on Attachment 1-B does not impact any
element related to figuring the price of the contract, and did not
provide Alder an advantage over other bidders. In such a case, an
irregularity of form may be corrected or disregarded. 10
McQuilliri, Law of Municipal Corporations, Section 29.68 (3d. 1981) .
Is the omission of addresses and phone numbers on one (1)
form, when found elsewhere in Alder' s bid, worth $479, 000 . 00?
In Menefee v County of Fresno (1985) 163 Ca1.App. 3d 1175 , the
California Court of Appeal affirmed the Fresno County' s decision to
waive the lowest bidder' s failure to sign the appropriate line on
the bid form, which signature was required by language in the bid
documents. In analyzing this issue, the Court noted that there was
no express declaration in the bid that stated that an unsigned bid
would be rejected. Although the bid form itself contained .
mandatory language requiring the missing signature. The Court
found that "this mandatory language controls the bidder, not the
Board of Supervisors. It requires a bidder to sign his bid, but
does not control the Board's discretion to waive the requirement. "
Menefee at page 1180.
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Jeffrey Jorgenson, Esq.
April 8, 1991
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The same contractual language that was analyzed by the Menefee
court is found in the Project bid documents. Under Section 1. 04
A.4 . , at page 00100.3, the bidding and contract requirements state
that "bids which contain omissions, erasures, or irregularities of
any kind may be rejected", while at Section 1.04 D. , at page 00100-
5 , the Project bid documents read, " (f]ailure to list
subcontractors may render a bid non-responsive and may be grounds
for rejection of the bid. " simply put, the Project bid documents
do not contain an unequivocal declaration that irregular bids shall
be rejected, and the City clearly has retained the discretion to
waive minor irregularities, as we have here.
The Menefee Court further noted that, under Williams v. Bergin
(1900) 129 Cal. 461, a waiver should not be allowed "if the
irregularity would give the bidder an unfair advantage by allowing
him to withdraw his bid without forfeiting his bid bond . . . . If
such relief is not available (the low bidder] did not have an
unfair advantage because its bid was unsigned, so the County should
be able to waive the signature requirement. " Id. at 1180-1. Based
upon this analysis, the Appellate Court found that the failure to
sign the bid was not material, that the County did not abuse its
discretion in waiving this minor irregularity, and the contract was
properly awarded to the low bidder.
Similarly, in the present situation, Alder's bid bound it to
perform the work set forth in the contract, and its failure to
provide information present on Attachment 1-B, which was presented
at other places in the bid documents, did not give Alder an unfair
advantage over other bidders. Alder' s actions would not have
permitted it to withdraw its bid without forfeiting its bid bond,
nor did it in any way affect the work that is to be completed under
the contract, the materials to be used in performing that work, or
the price to be paid for the work to be completed. In conclusion,
in the present case, as in the Menefee decision, the City has the
power to waive a minor irregularity, and the Project award to Alder
as the lowest responsible and responsive bidder.
Kaweah cites Konica Business Machines v Regents of University
of California (1988) 206 Cal.App. 3d 449 as authority for the
rejection of Alder's bid as non-responsive. A review of this
decision indicates that Kaweah's position is not well taken. In
Konica, the contract required an award "to the lowest responsible
bidder meeting specifications, or else reject all bids. " (Konica
at page 453-4, emphasis supplied. ) The reference to "specifi-
cations" concerned copy machine performance standards, and the
contract required that the copiers produce a certain volume of
ANDRE, A rR FES SSIONIAL Cffiy CORMUMN
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Jeffrey Jorgenson, Esq.
April 8, 1991
Page fifteen
copies per minute. The low bidder's response failed to meet these
technical specifications, and evidence was presented to the court
which indicated that a machine that could meet these specifications
quoted in the contract would cost substantially more than the
machines that were to be used by the lowest bidder. The court
therefore found that the low bidder, by deviating from the
specifications, obtained a competitive advantage over other bidders
which was directly related to the price of the contract, and that
the bid was therefore deemed non-responsive. Relying upon the
Attorney General ' s opinion cited above, the Court found that the
deviation in the Konica contract was substantial, since it clearly
affected the amount of the bid. These facts are inapplicable here.
Alder' s bid meets all specifications and we have shown Alder' s
extensive efforts to meet all bid solicitation criteria.
It is clearly permissible for the City to waive the minor
irregularity complained of by Kaweah, and the courts are bound to
uphold the City' s discretionary decision, absent a finding of abuse
of discretion. As stated in Diablo Beacon Printing & Publishing
Company v City of Concord (1964) 229 Cal.App. 2d 505, 508 :
"In determining whether to accept a bid for a
public contract, public officers as a rule
perform not merely ministerial functions, but
duties of a judicial or discretionary nature,
and the courts, in the absence of fraud or an
abuse of discretion; will not ordinarily
interfere, so long as the officers comply with
the controlling constitutional or legislative
provisions. "
The San Luis Obispo city Council clearly is within its powers
to waive the minor omission complained of, and as the Diablo Beacon
case indicates, the courts will give the Council's decision great
weight, if called upon to review this decision.
It is in the best interests of the City, especially in light
of the $479 , 000. 00 disparity between the amount of the Alder bid
and the second lowest bidder, for the City to grant the Project to
Alder. This will ensure that the Project is completed by a
responsible contractor, who was completely responsive to the SWRCB
and MBE/WBE guidelines and used extensive positive efforts to
solicit MBE/WBE Project participation under these guidelines.
NDANDRE,
E, ayg FUc;10NAL LAW OORPOCATfON_
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Jeffrey Jorgenson, Esq.
April S . 1991
Page sixteen
We will make ourselves available to. you and any other interest
City officials to answer any questions or address any comments
concerning our client's position. Thank you for your time.
You s ve trul ,
r
J. Todd Mirolla
JTM:cb
cc: Bruce Alder, Alder Construction Company
Bill Barton, Alder Construction Company
Cindy Clemens, Esq.
John Moss
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