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HomeMy WebLinkAbout10/22/1996, 3 - WATER RECLAMATION FACILITY, BELT FILTER PRESS, SPECIFICATION NO. 96-96. RESOLUTION OF DISPUTE BETWEEN PRIME CONTRACTOR AND SUB-CONTRACTOR. council ";C; �� j agenda Report W=M=bw C I T Y OF SAN LUIS O B I S P O FROM: Michael D. McCluskey, Public Works Director Prepared By: John Rawles, Civil Enginee� SUBJECT: Water Reclamation Facility, Belt Filter Press, Specification No. 96-96. Resolution of Dispute Between Prime Contractor and Sub-Contractor. CAO RECOMNIDVIDATTON 1. Take testimony of both the prime contractor (Total-Western, Inc.) and the sub-contractor (Eagle Enterprises), and; 2. By motion action either permit or disallow the prime contractor to substitute another contractor. DISCUSSION On July 23, 1996 after proper bidding notice, the City Council awarded a contract to Total- Western, Inc. to relocate the belt filter press at the City's water reclamation facility. The Prime Contractor, Total-Western, Inc., has asked that they be allowed to substitute another sub-contractor for Eagle Enterprises, the sub-contractor listed on the original bid proposal that was listed to construct a building. The prime contractor indicated that the request for substitution of Eagle Enterprises was based on the sub-contractor's inability to perform work in accordance with the contractual agreement between the two parties. The point of contention between the two parties is the issue of down payment of money for materials prior to beginning construction. The prime contractor maintains that the original agreement provided that the sub-contractor provide the materials needed to perform the work. To buttress this claim, the prime contractor has submitted a letter (Attachment #1) that forms the basis of their argument that the sub-contractor had agreed to provide the material needed to perform the work. The sub-contractor assumed that the prime contractor would pay a deposit for the materials needed to perform the work prior to bringing the materials on this jobsite. The sub-contractor maintains that this is a normal procedure for this profession as described in his letter (Attachment #6) of October 4, 1996. The sub-contractor maintains that he will perform the work , if the prime contractor provides a down payment for the materials. Council Agenda Report- WRF Contractor Dispute Page 2 The City's specifications on this project do not allow for early payment of materials, and payment is only made for work in progress. Thus the issue of down payment is strictly between the prime contractor and its subcontractor. Staff is unaware of what the "norm" is in the industry in terms of down payments for materials but has contacted a few firms in the area who have had a mixed response to what the "norm" is, due to the intricacies of the steel construction trade. Some contractors are primarily "erectors", in which case all materials are provided by the prime contractor or owner. Some companies provide erection and materials only, while others provide engineering as well as erection and materials. One area contractor has stated that an initial down payment for materials is not what he would expect as the "nonan"; however, any type of arrangement is possible due to the variable nature of job complexity, materials of construction, and relationship between prime and sub- contractor. Another contractor has stated that it is reasonable and normal to expect a 10% deposit for startup purposes from the prime contractor. At this time staff is unaware of just what the amount of deposit has been requested by the sub-contractor. Section No. 4107.a.7 of the Public Contracts Code requires that the awarding authority, the San Luis Obispo City Council in this case, conduct a meeting with both parties to resolve the issue. The required meeting protocol is to allow all involved parties to discuss the issues before the City Council. City Council's decision will either allow the substitution by the prime contractor or uphold the sub-contractor's request to be allowed to perform under the terms of the contract. Regardless of Council's decision, the prime contractor must complete the project on time and within budget. However, failure of the Council to reach a decision could give the prime contractor reason to demand a time extension to the project by the amount of time needed until a decision is reached. The Utilities Department personnel have stated that the project must be completed no later than December 18, 1996 (120 calendar days from the project's Notice to Proceed). The project completion date is currently December 18, 1996. FISCAL EMPACI' There should be no fiscal impact due to the Council's decision. However there could be "time of completion" impacts, as mentioned above, if no decision is made. Additionally should this project be delayed beyond the project completion date, the City may be negatively impacted by the costs to dispose of the sludge that is produced by the reclamation process. If the City is able to collect liquidated damages, the monies collected may not cover the costs expended to pay for sludge disposal. Council Agenda Report- WRF Contractor Dispute Page 3 ATTAC>Elr ENTS Attached are letters of correspondence from the interested parties as well as a copy from the Public Contracts Code. Attachment 1: Eagle.Enterprises, dated July 2,. 1996 Attachment 2: Total-Western, Inc., dated August 22, 1996 Attachment 3: Total-Western, Inc., dated September 12, 1996 Attachment 4: .Eagle Enterprises, dated September 23, 1996 Attachment 5: Public Contracts Code, Section 4107 Attachment 6: Eagle Enterprises, dated October 4, 1996 Eagle Enterprises and Total=Western, Inc: have been contacted by phone, mail, and by fax to provide any additional information to support their, positions in this matter. To date, no additional supporting documentation has been received. c �mS 3=3 J .-0= = 13-193. :17 F?u•6 r [ [FT TO 5397374 lt_ P.O1 GENEPAI&STEEL CiWSMUC77LW RESIDENrZ 4L*C6ihMERCML*REMODEL 400 wens Drive ( ;;rA32•g?1 Bakersfield,CA 93307 Randy Scrivner July 2, 1996 Tot, Services, Ire PO Rax 9429 2811 FrcriWale Avenue Bakersfield, CA 93389 Phone (905) 599-520u FAX (805) 589-7874 F, ik 9 -9"702-TOTAL Rr—: Eonh.,,, is Fpwjiply situ erect a nrc:enzneepr+ed a!e-0 beHais¢ Eagle EntcTNrises weer to furnish ali labor, material for the project yon have requested and outlined below. I. Building Data: a 107' X 50'X 20' = 5,350 SQ Ft pre-engineered steel building. b. Enclosed 36' X 50' X 20' = 1,850 SQ Ft pre-engineered steel building. c. Oper roof only, 50' X 57' = 2.850 SQ Ft. d. Galvanized roof and colored v*l1_ panel. e. Twenty (25) roof Live load and 80 MUPH nand load. f. One Hunched (10t1; roof live load over Control Room. g. Two (2� 4'X 3' ► "md ws. b. Ora (1) 5' X T Doabie Door. :. Two (2) 3' X T Walk Doors. j. One (1) 12' X 18' Door (12" X 12" Ope.ing for future Mono Rail.) k. Twenty Four (24)gage sheets. L Pre-engineered plan. ExViLL. V�: 1. Any and 01 cost of building permits and inspections fees. 2. Any and ali other pIms associated with the project. 3. Any excessive grading. AN of the above fo TOTP.L P.D1 -, �i4cH�9�'/vr �,L/.. J� Central California Region 2811 Fruitvale Avenue, 93308-5907 ox 9249,Jtal - Western, Inc■ PO BBakersfield, California (805) 589-5200/FAX (805) 589-7874 General Contractor License#smwo August 22, 1996 Eagle Enterprises 400 Watts Drive Bakersfield, CA 93307 Attn: Mr. Willie Strong Subject: Pre-Fabricated Metal Building Sub-Contract San Luis Obispo, Wastewater Treatment Plant, Belt Filter Press Relocation Total-Western .Job No. 815 Dear Mr. Strong: We have been awarded the contract for the above-mentioned project and have been issued the notice to proceed dated Tuesday, August 20, 1996. We request thatyou make arrangements to meet us as soon as possible to process and enter into a sub-contract for the prefabricated metal building on the project. This is in accordance with Eagle' s quotation to us, dated July 2, 1996, in the amount of Please call .Brad Hudiburg at 589-5200 at your earliest convenience. Respectfully submitted, Brad Hudiburg, P.E. Senior Project Manager cc: Dean Churchwell Randy Scrivner RBH eagle0l.let . Paramount, Califomia • Bakersfield, Califomia • Richmond, California • Portland, Oregon • Mt. Vernon,Washington�� Central Caldomia Region 2811 Fruitvale Avenue,93308-5907 P.O. Box 9249,93389-9249 - Western, Inco Bakersfield,California (805) 589-5200/ FAX(805) 589-7874 General Contra=License#506020 September 12, 1996 RECEIVED SEP 1 6 1996 Eiv�,llvtcr;a..._ CITY OF SAN LUIS OBISPO City of San Luis Obispo Public Works Department 955 Morro Street San Luis Obispo, CA 93401 Attn: Mr. Richard Fisher, Field Engineering Assistant Subject: Subcontractor Substitution San Luis Obispo, Wastewater Treatment Plant, Belt Filter Press Relocation Project Dear Rich: We respectfully request a change in our sub-contractor who will provide and install the Pre-Fabricated Metal Building on the subject project. Our Bid Proposal on this project included Eagle Enterprises as the named Subcontractor for the subject work. Eagle has declined tontnorAstheir theirbid proposalato ustdid not demanding a down payore include this, we are not able to enter into an agreement with Eagle and therefore are making this request. We requested Eagle by letter dated August 22, 1996, to enter into a subcontract in accordance with their proposal dated July 2, 1996, see attached. Although they stated in a telephonea conversation on August 26, 1996 that they would provide response letter, to date they have not done so. This is the second weoaretawaitingtwordVfromTulare County for us this problem Public Eagle. Currently, y Counsel' s recommenof1thetTularew Works Dept . on their Count . substitution of Eagle. We will forward a copy Verbally, County letter to the City of San Luis upon receipt. y, Tulare County Public Works staff has indicated that upon review of Eagles bid commendetheesubstituti nebesallowed1County even without a Counsel will ree letter of non-objection from Eagle. As the ongoing negotiations with Eagle have spent considerable time and the formal process of subcontractor substitution will take time as well. Please be advised at this time we are unable to determine what impact this change will have on our sWhedile. At such time when this information is available to us, as well advise the City in writing as to the extent of the delay, Paramount, California • Bakersfield, California • Richmond, California • Portland, Oregon • Mt.Vernon,.Washington ATrACKMvir 3 Mr. Rich Fisher City of San Luis Obispo September 12, 1996 Page 2 as any extra costs Total-Western, our Sub-contractors and/or suppliers may incur. This notification is given in accordance with the Sections 00710- PART 6, PROGRESS AND COMPLETI General Conditions of the Contract Documents. Respectfully submitted, Brad Hudiburg, P•E- Senior Project Manager cc: Dean Churchwell Randy Scrivner Eagle Enterprises RBH subcchg.let Tota-Westem. Inc. �� xECEaVED _ SEP 2 71996 EAGLE ENTERPRISES � ENGINEEMNG DIVISI0w GENERAL & STEEL CONSTRUCTION CITY OF SAN W 45 < RESIDENTIAL*COMMERCIAL*REMODEL 400 Watts Drive (805)'832.9716 Bakersfield,CA 93307 September 23, 1996 City of San Luis Obispo 995 Morro Street San Luis Obispo, CA 93401 Attention: Wayne A. Peterson, City Engineer Richard Fisher, Field Engineering Assistant Dear Sir, As per letter dated September 19, 1996, Eagle Enterprises will honor bid given to Total Western Engineering. Eagle Enterprises has no problems in honoring the bid as given. We have a problem with no deposit given on supplies to be bought for the San Luis Obispo Wastewater Treatment Plant Belt Filter Press Relocation, Specification No. 96-96. Eagle Enterprises has no other conditions to doing the bid for this contract besides a down payment on our acceptance of the contract. Sincerely, Willie E. Strong Manager § 4107 CT,CODE PUBLIC,CONTRACT CODE coon of streets or wa includin for the construction streets or ten ousand °liars conttactor s total bid or in the case of bids or offers rune contractors total in access of one of 1 t of brid ata. .:. contractor under this act -The prime i ($10,000),whichever �e k. � be done by each sub d by the prise contractor in his or ;whi(b) The portion of thw subcontractor for each portion as is define contractor shall list my one 1 ) her bid. pnaended by Stats 988, C. erzin8.these (Added.by Stats l98 a.195, § '�•1• '. : Historical and Statutory Notes -'ia the Co as it a contractors and subcon- pobl-u Contact .. Y- lead insO em ,. .. .:.. .. of fair competition ol,nes, _. ; facto die ms to . �an ad to loss of wages P o fid.. . 1 .��le . d it the end of solid (a), and o er e. g 4102, by Stats on rnserte 4104. former$' aftebr bidd"" pro oris relating to bids- in�B for Derivation: Gov.C. former $ amended by Scats. or enacted by Stats 1943,a 134$ 4102.amen amended by _ constructionI of sheets § 4104 end stats. Section 1 of Statafinds e.1578,p��' § 1; that the practices of hid shop- 1945,c 1380.$2,ren��1971, c- -rhe 376, '- the'Leg slanu? finds to ion with the construct°n .. .Stats 1963 a 2125 $ ping and bid peddling of toblic imp to often result 1971,a 1584.$ 1• alteration,and reparr��and rlonanshi th the detri- : . 1, $ 1. in P°07 qugity the public•of the full ben �% a efits Sta meet of the public,de... ....:.. listing bcon pride n hat subcontractors. :..::.,.ion • e contract e t � tractors by • or of re4uirem . ter. g 4105. Circumvention by pram violation eat under another contractor sublet; r of the spm. who will a prim the device f another shall contract° o r who b as listing on Circumvention by a Banff . or her subcontractors,by rime contract e n with the Section 4104 for him or her to list has majority of the work covered b=to the penalties set forth of material and who wID in tura sublet portions eonstitutia>terdth�subject that pie costo fair competition be considered a Violation of this rhaP rte' employees, and in Sections 4110 and 4111. . (Added by Stats,1986,C.195, Historical and Statutory Notes - Derivation: Gov.C. former $ 4105, added by Stats- 1963.e.2125,§ 6. y ce by prime �+� •.•- , c or specification of more than one subcontractor; performance ` Failure to specify 4106. :r .• P more than one contractor. ..... `,•�ysy�. ctor rime contractor s ` table,which: If a prime contractor fails to speafy a subcoatraotmed ander the contract in excess of one half of 1 s - es that he or she is fully qualified to subcontractor for the same portion of work;h b rune contractor agrees that portion himself r, his or her a contractor's total bid,the p rime contractor shall perform percent of the prim and that the p, ;::•r. k.. perform that portion himself or herself, provided for in Sections 410, or ''L =} ":•r a contractor, or herself. a prime contractor subcontracts,except as Pr° th penalties named in be subject e ct = rime contractor t f`- If after award portion o the work the P 4109, any - . . Section 4111. 421.) :ir. •<;'«?•: (Added by Stats.1986,c.19q, § Notes - •'~ � Historical.and Statutory ^- ... . .§ to _ ...••,.,r.�.. ':. '.. § 103.form _ - - tiu ..,.dyb 4103, .. :.Denver n former 4 cad Y .. . . f Stats ted by.Stats.1943,a 134.§ ,,.. .. enac renumbered. $ 4106 grid amended by 1940,c. _ ren ... .'.:::.•.•:- c.2120,.$, . .. public work or hibitions or in the general § 4107: Prime,contractor whose.bid is accepted Pro m the originalbid. public work or rune contractor whose bid is accepted shaIl:lace of the'subcontnctor in provided in her bid or offer, No p a on as'subcontractor m P except as (a) Substitute anY.P� or its dull authorized officer,may, of the following an . ..y, erson as a subcontractor m any ori work or except that the awarding , leo rtunity to do so fails Section 4107.5.consent W the-substitution oFanother P or improvement vin had a reasonable pt a the general terms. e contractor. situations: contract, based upon (1) when the subcontractor listed in the bid after ha ' g asterisks • • " ed drawings or refuses t execute a written contract when that written of,the prime I are indicated.by undue deletions by * * * Additions or changes13 _ ^:rte: r-f •_�S'tj:.e'� 'T, •f �y T -oaf `:J<'i`�• - ., r!• 7. PUBLIC CONTRACT CODE p.,,6LIC CONTRACT CODE onditions,pland speafications for the project involved or the that subcontractor's written terms of ans gd ' esented.to the subcontractor by the prime contractor... t or insohent in the listed subcontractor becomes bankrupt erform or her subcontract, (a,,„nen the.listed subcontractor fails,or refuses p (4) When the ]fisted subcontractor fails or idoses to meet the bond requjrements,of the prime i contractor as set forth in Section 4108. or its duly authorized (5) When the prime contractor demonstrates to the awarding authority, i ifficer,subject to the further Provisions set forth in Section 41075,that the name of the subcontractor t oras listed as the result of an inadvertent clerical error..:.:- ...::is .(6) When.the listed subcontractor is not licensed pursuant to the Contactors License Law. (7) When the awarding authority,or its duly authorized officer,determines that the work performed by the listed subcontractor t substantially unsatisfactory and:not in substantial accordance with the plans and specifications,or that the subcontactor is substantially delaying or disrupting the p;ogr of the work. uest for the substitution the awarding authority,or its duly -for to approval of the prime contractor s req ; tthorized officer,shall give notice in writing to the listed subcontractor of the prime contactors rete substitute and of the reasons for the request The notice shall be served by certified oi'regu i tified all to the last known addresstof the hin which to submit written br. The jedctions to the substitution to the a r who has been so naardin9 fall have five working da' ; athority. Failure to file these written objections shall constitute the listed subcontractors consent to ie substitution: authority shall give notice in Writing of at least five If written objections are Sed, the awarding e prime contractor's orkdng days to the listed subcontractor of a hearing by the awarding authority on th equestfor,substitution. performed by (b) Permit any subcontract to be voluntarily assigned or transferred or allow it to be myone other than the original subcontractor listed in the original bid, without the consent of the authority, or its duly authorized officer. I iwarding i (c) pth�than in the performance of"change orders" causing changes h deviations from the prime ontrad sublet or subcontract any portion of the work in excess of one-half of 1 percent of the prime to a subcontractor. ontractoes total bid as to which his or her original bid did not designs (Added by Stats.1986, c. 195, § 421.) •- •� "' , � Historical and Statutory Notes ion: Gov,C. former § 4107, formerly § 4104, ` Stats.l9R, c, 2125, § 8; Stats•1969, a 332,'§ 1; Stats. . 1974,c.889,§ 1; Stats.1975,c.678, ena,..._oy Stats.1943,c 134,§ 4104,amended by Stals- Stats.1941, 17$3,§ L ' 1945, c 1380, § 4, renumbered § 4107 and amended by AESTLkW Electronic Research j See WESTLAW Electronic Research Guide following the Preface Notes of Decisions'.. alleged breach of duty under Subletting.and Subcontract- In general 1 ing Fair Practice Act (Gov.C. former § 4300 et seq.: �. Setoffs 3 repealed, see, now, Pub-CoaC. § 4100 et req-) absent " Substitution of subcontractors 2 allegation that substitution aas wrongful or unlawful or ' that permission.of agency to substitute was wrong of bs . unlawtul or absent allegation of any.factiPin�yt I. In general substitution ass unlawful or ttaoiigful and,._ Mese listing of a subcontractor's name by the prime . complaint alleged a statutory defense,-ie .that ?Bet's contractor in its bid to the public agency did not Beate a permitted substitution because of subcon�etov sfailuE ; contrail between subcontractor and prime contactor nor to sign subcontract Interior Systems, i did it Beate any other common-law right to maintain an. Webb Corp.:(1961) 175 CaLRpir. 301,.121 CAM 312. the prime contractor and "duty" created. - Prime contractor.faced with refusal by subcontrzetor to wasactionp against one under Subletting and Subcon- and work called was purely a statutory execute subcontract for certain underground Gov.C.l ' t. tracting Fair Practices Ail(Gov-C.former§ 410Det Intseq.; for in proposed project,.cress not required.by { . y repealed,see,now,Pub.Con.C.§ 4100 et seq.). former § 4107 (repealed; see,now,this section)to gwe ent S1-s-tem_%Ina v.Del E.Webb Corp.(1981)175 Ca]-RPtr: subcontractor notice of its request to city a ae�woork in i 301,121 CAU 312: agency for Permission to'perform undergroun. Substitution of subcontractors question itself and did not breach a.Statutory duty to2. for tractor a reasonable opporwnity to perform work WJ I Substituted subcontractor on government construction subcontractor by substituting itself after affording su con- project failed to state claim against prime contractor Additions or changes indicated by 14 erline; deletions by asterisks,_':'.:•' - fi :^'•�^.. .may S�"^i�� - '•��:aY^'„�+:�i�-:-v:C.7.vl°- ate,.. -�Lu. r. '��- .1�"Y..`' —..sir `^>`.. <::•_7:�. -. -- '+5:.' 't+r. —mow:}._. :.�._:•y- y ,_�-CsCa�-.:�:s^+s]...?••1:`.v •i^.1:Cy.y�.ltr`y��'f' est 7•r..J.....- .n J hut: _ +•F' .i:i<A ~-- .`,..4::Li..:\f:f.Ci:�.:". .-... ......� OCT-04-1996 12:01 FROM -.E ENT TO 7817198 P.02 CABLE ZN?=PB13]C1; GENERAL B STEEL CONSTRUCTION RES/DENTIAL*COMMERCIAL*REMODEL 400 Wafts Drive 80 832.9Ti 8 Bakersfield,CA 93307 October 4, 1996 City of San Luis Obispo Attention: John Rawles 995 Morro St San luis Obispo, CA 93401 Dear Mr. Rawles, This letter is in regards to the San Luis Obispo Wastewater Treatment Plant Belt Filter Press Relocation, Specification No. 96-96. Eagle Enterprises was requested to bid on this project as a Minority Sub-Contractor for Total Western. We were granted the bid and when we requested the monies needed for supplies, we were denied. This is a normal request that is asked and granted in our industry every day as being normal. Eagle Enterprises would like to honor the bid as given, with the only exception being a deposit for necessary supplies to complete the job. This is not asking an extraordinary amount or request. Eagle Enterprises has no other conditions to doing the bid for this contract, besides the deposit, on our acceptance of the contract If you have any further questions please call me at (805) 832-9716. Sincerely, /-7 Willie E. Strong Manager ejwr !o TOTAL P.02