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HomeMy WebLinkAbout03/21/2006, PH 7 - WATER REUSE PROJECT - CONSIDERATION OF PENALTY ASSESSMENT AGAINST PACIFIC MECHANICAL CORPORATION FO coun ((�cil r^ 12 ac En Vd R6 ORt P � m N.mbe.W,7 CITYY O•F SAN LUIS O B I S P O FROM: John Moss, Utilities Director Prepared By: Katie DiSimo ,Water Projects Manager 43) SUBJECT: WATER REUSE PROJECT — CONSIDERATION OF PENALTY ASSESSMENT AGAINST PACIFIC MECHANICAL CORPORATION FOR VIOLATION OF SUBCONTRACTOR LISTING LAW CAO RECOMMENDATION Assess a penalty in the amount of$6,801.44 against Pacific Mechanical Corporation, Inc. and deposit penalty in Water Reuse Project account.. DISCUSSION The Water Reuse Project (Specification #99124-90553) was bid in March 2003 with two parts; one for the Water Reclamation Facility (WRF) Improvements and one for the distribution pipelines. The combined total as bid was $10,465,476.50. The contractor for the WRF Improvements is Pacific Mechanical Corporation (PMC), and for the distribution pipelines was J. Fletcher Creamer& Sons (JFC). Construction began in August 2003 for both parts of the Water Reuse Project,with a contract project completion date of September 13, 2004. JFC completed its portion of the construction on-time. PMC has not completed its portion of the project yet, and is over 500 days late. Contractors bidding on public works are required pursuant to Section 4104(a) of the Public Contract Code to list in their bids all subcontractors performing more than one-half of one percent(0.5%) of the total base bid: Section 4104(a) (1) "The name and the location of the place of business of each subcontractor who will per work or labor or render service to the prime contractor in or about the construction of the work or improvement, or a subcontractor licensed by the State of California who, under subcontract to the prime contractor, specially fabricates and installs a portion of the work or improvement according to detailed drawings contained in the plans and specifications, in an amount in excess of one-half of I percent of the prime contractor's total bid or, in the case of bids or offers for the construction of streets or highways, including bridges, in excess of one-half of 1 percent of the prime contractor's total bid.or ten thousand dollars ($10,000), whichever is greater. " The statute further states that the contractor will perform with its own forces all work for which no subcontractor is listed, and prohibits contractors from later subcontracting work for which no subcontractor was listed at bid time absent "public necessity or emergency." 1 J Water Reuse Project-Consideration of Penalty Page 2 PMC listed five subcontractors. The work listed for the subcontractors was rebar, coating, electrical, landscaping, and metal framing and erection. No subcontractor was listed for forming and shoring, therefore pursuant to Public Contract Code section 4106, PMC represented that it would perform that portion of the work itself. During.the course of normal project administration in November 2005, City staff reviewed PMC's subcontracting on the project for compliance with minority and women owned business goals as part of State funding compliance. During this review, staff realized that PMC had used an unlisted subcontractor - Patent Construction Systems - to furnish and install the shoring and forming systems for the recycled water tank roof. This was not previously readily apparent, as PMC had not submitted Patent's certified payroll, a requirement of the Labor Code. The City immediately notified PMC of the problems in correspondence dated November 10, 2005 (see attachments for a full administrative record on this issue). The City requested a copy of the executed subcontract with Patent, and informed PMC of the City's investigation. PMC denied that it subcontracted the work contrary to the law but provided a copy of a contract with Patent dated September 22, 2003, executed November 16, 2004, for $68,014.35. The subcontract describes the work to be performed by Patent as follows: "Furnish any and all plant, labor, services, material, tools, equipment, supplies, transportation, utilities, and all other items and facilities necessary therefore as provided in the Contract Documents to furnish and install Shoring and Forming of the Reclaimed Water Storage Tank Roof Structure complete. In accordance with all project plans, specifications, and Addenda 1 and 2 specifically but not exclusively Specification Sections 03100. PMC's base bid was $5,440,948, and one-half of one percent of that base bid is $27,204.70. Patent clearly acted as a subcontractor to PMC on this project. PMC did not bring a request to have Patent perform work on the project to City staff or other agent(s) of the City at any time during this project. This subcontracting was never found to be a necessity or public emergency. PMC violated the Public Contract Code by engaging Patent after the bid date to perform work valued at more than one-half of one percent of PMC's base bid. Public Contract Code section 4110 provides the penalty for a general contractor that subcontracts work in violation of the law: "A prime contractor violating any of the provisions of this chapter violates his or her contract and the awarding authority may exercise the option in its own discretion of (1) canceling his or her contract or (2) assessing the prime contractor a penalty in an amount of not more than 10 percent of the amount of the subcontract involved, and this penalty shall be deposited in the fund out of which the prime contract is awarded. In any proceedings under this section the prime contractor shall be entitled to a public hearing and to five days' notice of the time and place thereof. " Water Reuse Project-Consideration of Penalty Page_3 Staff has notified PMC of its determination that FMC's subcontract with Patent violates the Public Contract Code and that the City Council will consider this matter at this meeting. Staff recommends a $6,801.44 penalty, 10% of the value of the subcontract between PMC and Patent. This penalty is appropriate given staff s time spent researching, documenting, and attempting to resolve this particular issue. The actions taken by staff and recommended here are appropriate, fair, and in accordance with the provisions of the contract and Public Contract Code. CONCURRENCES This issue has been reviewed by the City Attorney's office. The City Attorney concurs with the recommendation provided by staff. FISCAL IMPACT The penalty will have minimal fiscal impact to the City. The penalty will be used to compensate outside legal counsel for consultation on the issue and other associated City costs in reviewing the subcontracting violation. ALTERNATIVES Council may chose to reduce the penalty amount or waive the penalty. The 10% penalty represents the maximum allowed under the Subletting and Subcontracting Fair Practices Act. ATTACHMENTS 1. Subletting and Subcontracting Fair Practices Act 2. PMC's Contact Proposal pages a-c 3. Subcontract with Patent Construction Systems 4. Tetra Tech correspondence dated November 10,2005 5.. PMC correspondence dated November 16, 2005 6. City of SLO correspondence dated November 18, 2005 7. MHA correspondence dated January 24, 2006 8. Certified Payroll for Patent 9. Site Photos � =3 Attachment 1 California Laws: Public Contrac,\_ ode > Section 4100-4114 '-� Page 1 of 4 3i .r a.. } 'r around the cop tcl Home>Califomia Laws>Public Contract Code>Section 4100-4114 fCautionl CALIFORNIA PUBLIC CONTRACT CODE 4100.This chapter may be cited as the"Subletting and Subcontracting Fair Practices Act." 4101. The Legislature finds that the practices of bid shopping and bid peddling in connection with the. construction, alteration, and repair of public improvements often result in poor quality of material and workmanship to the detriment of the public, deprive the public of the full benefits of fair competition among prime contractors and subcontractors, and lead to insolvencies, loss of wages to employees, and other evils. 4103. Nothing in this chapter limits or diminishes any rights or remedies, either legal or equitable, which: (a) An original or substituted subcontractor may have against the prime contractor, his or her successors or assigns. (b)The state or any county, city, body politic, or public agency may have against the prime contractor, his or her successors or assigns, including the right to take over and complete the contract. 4104. Any officer, department, board or commission taking bids for the construction of any public work or improvement shall provide in the specifications prepared for the work or improvement or in the general conditions under which bids will be received for the doing of the work incident to the public work or improvement that any person making a bid or offer to perform the work, shall, in his or her bid or offer, set forth: (a) (1)The name and the location of the place of business of each subcontractor who will perform work or labor or render service to the prime contractor in or about the construction of the work or improvement, or a subcontractor licensed by the State of California who, under subcontract to the prime contractor, specially fabricates and installs a portion of the work or improvement according to detailed drawings contained in the plans and specifications, in an amount in excess of one-half of 1 percent of the prime contractors total bid or, in the case of bids or offers for the construction of streets or highways, including bridges,in excess of one-half of 1 percent of the prime contractors total bid or ten thousand dollars ($10,000), whichever is greater.. (2) (A)Subject to subparagraph (B), any information requested by the officer, department, board, or commission concerning any subcontractor who the prime:contractor is required to list under this subdivision, other than the subcontractors name and location of business, may be submitted by the prime contractor up to 24 hours after the deadline established by the officer, department, board, or commission for receipt of bids by prime contractors. (B)A state or local agency may implement subparagraph (A)at its option. (b)The portion of the work that will be done by each subcontractor under this act. The prime contractor shall list only one subcontractor foreach portion as is defined by the prime contractor in his or her bid. 4104.5. (a)The officer, department, board, or commission taking bids for construction of any public work or improvement shall specify in the bid invitation and public notice the place the bids of the prime contractors are to be received and the time by which they shall be received. The date and time shall be extended by no less than 72 hours if the officer,,department, board, or commission issues any material changes, additions, or deletions to the invitation later than 72 hours prior to the bid closing. Any bids received after the time specified in the notice or any extension due to material.changes shall be returned unopened: h"-//www nrnnnrlthPnanitnl r.nm1Pnr1P/rnrie html7cPr rrR,r nAPCPrrtinn—dl nn_dl l d zi4i�nn� Attachment 1 Cali fomia Laws: Public Contra, ode > Section 4100-4114 Page 2 of 4 (b)As used in this section, the term"material change"means a change with a substantial cost impact on the total bid as determined by the awarding agency. (c) As used in this section, the term"bid invitation"shall include any documents issued to prime,contractors that contain descriptions of the work to be bid or the content, form, or manner of submission of bids by bidders. 4105. Circumvention by a general contractor who bids as a prime contractor of the requirement under.Section 4104 for him or her to list his or her subcontractors, by the device of listing another contractor who will in turn sublet portions constituting the majority df the-work covered by the prime contract, shall be considered a violation of this chapter and shall subject that prime contractor to the penalties set forth in Sections 4110 and 4111. 4106. If a prime contractor fails to specify a subcontractor or if a prime contractor specifies more than one subcontractor for the same portion of work to be performed under the contract in excess of one-half of 1 percent of the prime contractors total bid, the prime contractor agrees that he or she is fully qualified to perform that portion himself or herself, and that the prime contractor shall perform that portion himself or herself. If after award of contract, the prime contractor subcontracts, except as provided for in Sections 4107 or 4109, any such portion of the work, the prime contractor shall be subject to the penalties named in Section 4111. 4107. A prime contractor whose bid is accepted may not: (a) Substitute a person as subcontractor in place of the.subcontractor Listed in the original bid, except that the awarding authority, or its duly authorized officer, may, except as otherwise provided in Section 4107.5, consent to the substitution of another person as a subcontractor`in any of the following situations: (1) When the subcontractor listed in the bid, after having had a reasonable opportunity to do so, fails or refuses to execute a written contract for the scope of work specified in the subcontractor's bid and at the price specified in the subcontractors bid, when that written contract, based upon the general terms,conditions, plans, and specifications for the project involved or the terms of that subcontractors written bid, is presented to the subcontractor by the prime contractor. (2)When the listed subcontractor becomes bankrupt or insolvent. (3) When the listed subcontractor fails or refuses to perform his or her.subcontract. (4) When the listed subcontractor fails or refuses to meet the bond requirements of the prime contractor as set forth in Section 4108. (5)When the prime contractor demonstrates to the awarding authority, or its duly authorized officer, subject to the further provisions set forth in Section 4107.5, that the name of the subcontractor was listed as the result of an inadvertent clerical error. (6) When the listed subcontractor is not licensed pursuant to the Contractors License Law. (7)When the awarding authority, or its duly authorized officer, determines that the work performed by the listed subcontractor is substantially unsatisfactory and not in substantial accordance with the plans and specifications, or that the subcontractor is substantially delaying or disrupting the progress of the work. (8)When the listed subcontractor is ineligible to work on a public works project pursuant to Section 1777.1 or 1777.7 of the Labor Code. (9)When the awarding authority determines that a listed subcontractor is not a responsible contractor. Prior to approval of the prime contractors request for the substitution, the awarding authority, or its duly authorized officer, shall give notice in writing to the listed subcontractor of the prime contractors request to substitute and of the reasons for the request. The notice shall be served by certified or registered mail to the Last known address of the subcontractor. The Listed subcontractor who has been so notified has five working days within which to submit written objections to the substitution to the awarding authority. Failure to file these written objections constitutes the listed subcontractors consent to the substitution. If written objections are filed, the awarding authority shall give notice in writing of at least five working days to the listed subcontractor of a hearing by the awarding authority on the prime contractors request for substitution. (b) Permit a subcontract to be voluntarily assigned or transferred or allow it to be performed by anyone other than the original subcontractor listed in the original bid, without the consent of the awarding authority, or its duly authorized officer. (c) Other than in the performance of"change orders"causing changes or deviations from the original contract, sublet or subcontract any portion of the work in excess of one-half of 1 percent of the prime contractors total bid as to which his or her original bid did not designate a subcontractor. httn•//�xnxnv omnnrltharanifnl rnm/rnAn/rnrlP htm l7cnno�rr R.rnAacart;nn—n i nn_n 1 1 n Attachment 1 Cali fomia Laws: Public Contrac ode> Section 4100-4114 Page 3 of 4 4107.2. No subcontractor listed by a prime contractor under Section 4104 as furnishing and installing carpeting, shall voluntarily sublet his or her subcontract with respect to any portion of the labor to be performed unless he or she specified the subcontractor in his or her bid for that subcontract to the prime contractor. 4107.5. The prime contractor as a condition to assert a claim of inadvertent clerical error in the listing of a subcontractor shall within two working days after the time of the prime bid opening by the awarding authority give written notice to the awarding authority and copies of that notice to both the subcontractor he or she claims to have listed in error and the intended subcontractor who had bid to the prime contractor prior to bid opening. Any listed subcontractor who has been notified by the prime contractor in accordance with this section as to an inadvertent clerical.error shall be allowed six working days from the time of the prime bid opening within which to submit to the awarding authority and to the prime contractor written objection to the prime contractor's claim of inadvertent clerical error. Failure of the listed subcontractor to file the written notice. within the six working days shall be primary evidence of his or her agreement that an inadvertent clerical error was made. The awarding authority shall, after a public hearing as provided in Section 4107 and in the absence of compelling reasons to the contrary, consent to the substitution of the intended subcontractor: (a) If (1)the prime contractor, (2)the subcontractor listed in error, and (3)the intended subcontractor each submit an affidavit to the awarding authority along with such additional evidence as the parties may wish to submit that an inadvertent clerical error was in fact made, provided that the affidavits from each of the three parties are filed within eight working days from the time of the prime bid opening, or (b) If the affidavits are filed by both the prime contractor and the intended subcontractor within the specified time but the subcontractor whom the prime contractor claims to have listed in error does not submit within six working days, to the awarding authority and to the prime contractor, written objection to the prime contractors claim of inadvertent clerical error as provided in this section. If the affidavits are filed by both the prime contractor and the intended subcontractor but the listed subcontractor has, within six working days from the time of the prime bid opening, submitted to the.awarding authority and to the prime contractor written objection to the prime contractors claim of inadvertent clerical error, the awarding authority shall investigate the claims of the parties and shall hold a public hearing as provided in Section 4107 to determine the validity of those claims. Any determination made shall be based on the facts contained in the declarations submitted under penalty of perjury by all three parties and supported by testimony under oath and subject to cross-examination. The awarding authority may, on its own motion or that of any other party, admit testimony of other contractors, any bid registries or depositories, or any other party in possession of facts which may have a bearing on the decision of the awarding authority. 4107.7. If a contractor who enters into a contract with a public entity for investigation, removal or remedial action, or disposal relative to the release or presence of a hazardous material or hazardous waste fails to pay a subcontractor registered as a hazardous waste hauler pursuant to Section 25163 of the Health and Safety Code within 10 days after the investigation, removal or remedial action, or disposal is completed, the subcontractor may serve a stop notice upon the public entity in accordance with Chapter 4 (commencing with Section 3179)of Title 15 of Part 4 of Division 3 of the Civil Code. 4108. (a) It shall be the responsibility of each subcontractor submitting bids to a prime contractor to be prepared to submit a faithful performance and payment bond or bonds if so requested by the prime contractor. (b) In the event any subcontractor submitting a bid to a prime contractor does not, upon the request of the prime contractor and at the expense of the prime contractor at the established charge or premium therefor, furnish to the prime contractor a bond or bonds issued by an admitted surety wherein the prime contractor shall be named the obligee, guaranteeing prompt and faithful performance of the subcontract and the payment of all claims for labor and materials furnished or used in and about the work to be done and performed under the subcontract, the prime contractor may reject the bid and make a substitution of another subcontractor subject to Section 4107. (c) (1)The bond or bonds may be required under this section only if the prime contractor in his or her written or published request for subbids clearly specifies the amount and requirements of the bond or bonds. (2) If the expense of the bond or bonds required under this section is to be borne by the subcontractor, that requirement shall also be specified in the prime contractors written or published request for subbids. (3) The prime contractors failure to specify bond requirements, in accordance with this subdivision, in the written or published request for subbids shall preclude the prime contractor from imposing bond requirements under this section. 4109. Subletting or subcontracting of any portion of the work in excess of one-half of 1 percent of the prime contractors total bid as to which no subcontractor was designated in the original bid shall only be permitted in Attn•//xxmn%, arnnnAtharanitnl rnmlrnAP/rnAa html9cor�rrR.rnAacartinn—arnn_Al 1 A z/o/17nnr, Attachment l California Laws: Public Contra 'ode > Section 4100-4114 Page 4 of 4 cases of public emergency or necessity, and then only after a finding reduced to writing as a public record of the awarding authority setting forth the facts constituting the emergency or necessity. 4110. A prime contractor violating any of the provisions of this chapter violates his or her contract and the awarding authority may exercise the option, in its own discretion, of (1)canceling his or her contract or(2) assessing the prime contractor a penalty in an amount of not more than 10 percent of the amount of the subcontract involved, and this penalty shalt be deposited in the fund out of which the prime contract is awarded. In any proceedings under this section the prime contractor shall be entitled to a public hearing and to five days' notice of the time and place thereof.. 4111. Violation of this chapter by a Licensee under Chapter 9 (commencing with Section 7000)of Division 3 of the Business and Professions Code constitutes grounds for disciplinary action by the Contractors State License Board, in addition to the penalties prescribed in Section 4110. 4112. The failure on the part of a contractor to comply with any provision of this chapter does not constitute a defense to the contractor in any action brought against the contractor by a subcontractor: 4113. As used in this chapter, the word"subcontractor"shall mean a contractor, within the meaning of the provisions of Chapter 9 (commencing with Section 7000)of Division 3 of the Business and Professions Code, who contracts directly with the prime contractor. 'Prime contractor"shall mean the contractor who contracts directly with the awarding authority. 4114. The county board of supervisors, when it is the awarding authority, may delegate its functions under Sections 4107 and 4110 to any officer designated by the board. The authorized officer shall make a written recommendation to the board of supervisors. The board of supervisors may adopt the recommendation without further notice or hearing, or may set the matter for a de novo hearing before the board. Important caution•AroundTheCapitol.com mirrors the information on Cahfomia laws available on the states public computer server. Laws change frequently,and thus what you see on the computer screen should not be relied upon as legal advice.To be certain,check in with a Lawyer.AroundTheCapitol.com is not liable for any misinformation that users obtain from using this site. 7 -7 hltn•/A"xnxr arnnndthrranitnl rnm/rnAr/rn,1r 1/1l_d11A 11/0/1)nnA Attachment Z • bt CONTRACT PROPOSAL TO THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA THE UNDERSIGNED, hereby agrees that he has carefully examined the location of the proposed work, that he has carefully examined the plans and specifications, and that he has carefully examined and read the accompanying instructions to bidders, and hereby proposes to furnish all of the materials and do all the work required to complete: WATER REUSE PROJECT WATER RECLAMATION FACILITY IMPROVEMENTS SPECIFICATION NO. 99124-90553 A in satisfactory working condition, in accordance with said plans, specifications, and the special provisions,for the prices set forth below: rrEM A: For construction of Water Reclamation Facility site improvements for Water Reuse Project, including landscape improvements, coagulant feed system, chlorination feed system, aqua ammonia chemical station, meter vault, chlorine contact tank, storage tank and pump station, motor control center, water utility extension, air gap manhole, nitrified effluent diversion box alterations, distributed process control systems, testing and commissioning, and all work necessary for a complete and operable Water Reclamation Facility. For the lump sum of$ r�-t�� ITEM B: Provision of the sheeting, shoring, bracing and other excavation supports required by the Labor Code of the State of California, the Construction Safety Orders,of the Division of Industrial Safety of the State of Califomla,-and the California Occupational Safety and Health Act of 1973. '.,,. I Y, itY � t• I ! � ' -' t�Y ,,.�{F',.+�y#t 1l'A p , ; .�. .,. C •ti.,h:iA.t or the lump sum of$ 3 Pin it .•'r 7J yLo'^r' 3 ^ 'r"sy c.L d.:24 �r '` .y �,rrs"�' V ?Tk��` G.nMlt1. r r ', ` '" �t• f,ry ew F Y `n.)S Y I r ,� •V 4 ,r'.'. l- if .� �; d v,Y,}l� ,. � x�,• w1}I ^a��((��F� Y, 1 }•r r'Fti ryK. .t• riliyr + v;rT b !•ttilLT�y.' ir du<l t{ '� •:� 71 It N'ST 1. 'v A�,y '� r�'S't}ya��GtJr of kj :TOTAL'CONTRACTPRICE `(sum of rteMo.� through'`B) �TTT ](� . P•, 15 .9 t1 t f r ni rym. Zr s 4V 5 -Fp(yt yqr-7]N Mr, Ytf i �L v 1 e{fi�r f {r't '"< n. •� � tW i .1 ^ ,{1i�y Ge+y�fj infl•htR^y�eF rY,�� G�%/ r�N� Jr (! 1.•r �_ r>� t r'.,/ y - r ,r` u-M-•1yt "7.7'1. 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By signing below, the bidder acknowledges and confirms that this proposal is based on the information contained in all contract documents, including the plans, specifications, special provisions, and addendum number(s) / d' �a . (Note: It is the contractor's responsibility to verify the number of addenda prior to the bid opening.) The undersigned further agrees that in case of default in executing the required contract, with necessary bands, within eight days, (not including Sat rdays' Sundays, and legal holidays), after having received a mailed notice that the contract is ready for signature, the proceeds of the check or bond accompanying his bid shall become the property of the City of San Luis Obispo. Licensed in accordance with an act providing for the registration of contractors,License No. /3g9o?D Expiration Date,�/47`._ dl. The above statement is made under penalty of perjury,and any bid not containing this information "shall be considered non-responsive and shall be rejected"by the Ci SIGNATURE OF BIDDER Steven Delledera (Print Name an r e of Bidder) Business Name(DBA): PACIFIC MECHANICAL CORP Owner/Legal Name: PACIFIC MECHANICAL CORP Indicate One: Sole-proprietor Partnership Corporation List Partners/Corporate Officers: Steven Delledera President Name Title Gar Bailey Vice President Name Title Pierre Bigras Iamsear.IJ&lazx Vice President uasugofpnD trol 1 'a 1✓ f'ACr3 YYr q�yr , n r S+ s L Name TiLIG ' k'2 ,. 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Attachment 3 Pacific Mechanical Corporation SUBCONTRACT 2501 Annalisa Drive,Concord,CA 94520 ter% Phone: (925)8274940 Fax: (925)827-0519 CA License No. 138920 * NV License No.6244 Page 1 of 2 TO: Patent Construction Systems JOB NO.: 262 8210 Berry Avenue, Suite 180 SUBCONTRACT NO.: 262-004 Sacramento, CA 95828 PHASE NO.: 03100 DATE: 9/22/2003 ATTN: Frank Towse LICENSE NO.: 225339 PHONE: (916) 381-6090 FAX: (916) 381-1344 SUBCONTRACT AGREEMENT THIS AGREEMENT,made and entered into on the date above set forth,by and between PACIFIC MECHANICAL CORPORATION,is CONTRACTOR and above named,as SUBCONTRACTOR,for the consideration heeinafter stated and upon the following stated terms and condititms: wnWESSETH,that The Owner,Architect.dare of general contract(Owners Can=with Contractor),project involved,location of project,work hereby undertaken by Subcontractor. amount to be paid to the Subcontractor,and time for aompletclion,are: a Owner. City of San Luis Obispo b Owners Architect: Brown&Caldwell c Date of General Coaeact: July 2003 d. Project: Water Reclamation Facility Improv e.Project Location: 35 Prado Road. San Luis Obispo,CA 93401 E Description of work undertaken by SUBCONTRACTOR Furnish any and an plant,labor.services,material.tools,equipment,supplies,transportation,uMUes and all other items and facMes necessary therefore as provided in the Contract Documents to fumish and install Shoring and Forming of the Reclaimed Water Storage Tank Roof Structure complete,in accordance with all project plats.specifications,and Addenda 1 and 2 Spect6oaliy but not exclusively Specification Sections 03100 clarifications: 1. Shoring labor includes erectiom dismantle.and freight of all Patent equipment 2 Forming labor Includes forming of exterior edges up to the edge of the top of the deck along with removal of forms. 3. Lumber package indWas lumber and plywood with accessories for forming 4- 20K Frames with acipstitteras as required are provided. S. Aluminum stringers are provided- 6 Aluminum)olds are provided for slab. Spacing is based on 314'plywood,supplied by Patera 7. Layout drawingsare provided by Patent. PE stemped drawings are provided. 8 Wood,plywood,stability Ues and mudsft are provided and Installer!by Patent. 9. Bid assumes structure sofd will be bell all at one lime. 10. Any provisions to the contrary notwithstanding.It is understood and agreed that Subcontractor shall be paid within 60 days of invoice date for an mnfomting work,materials,services,rentals,or other items billed Including authorized extra work or Change Orders. 11. The language of any Indemnity,defense or hold harmless provisions nolwlttedantfng,D Is understood and agreed that the Subcontractors obllgallons shall be limited to Subconlydclors sole negllgenee and proportionate share of joint or concurrent negligence. 12. Contractor to provide forklift andlar crane for unloading and loading of trucks at jobstle and locating equipment to erection and dismantling areas. 13 Final retention payment to be trade 30 days atter work Is completed and all equipment and related matelots associated with the work are dismantled and removed from the jtrbsite. Exclusions: 1. AD construction joints,bulkheads and water stops 2. All embeds,penetrations.and block outs. 3 Stair landing and treads. 4 Parapet walls mobs stem walls. 5. Reshores. Description Quantity Units Unit Price Amount 28 Days Rental for 20K Shoring and Components(including tax at 7.25%) 1.00 LS S420635 $4,206 35 Additional Calendar Days Rental(IF REQUIRED) 000 Days $140 07 So 00 Shoring Labor 1.00 31, Ls $ 955.0 $31,95500 So1TU Forming Labor 1.00 LS $9,000.00 $9,000.00 Exterior Edge Forms Labor 1.00 _ LS $7,500 00 $7,500.00 Lumber Package 1.00 LS $15.353.00 $15,353.00 n Attachment? �i.� Pacific Mechanical Corporation SUBCONTRACT if 2501 Annalisa Drive,Concord,CA 94520 Phone: (925)827-4940 Fax: (925)827-0519 Page 2 of 2 CA License No. 138920 $ NV License No.6244 TO: Patent Construction Systems JOB NO.: 262 8210 Berry Avenue, Suite 180 SUBCONTRACT NO.: 262-004 Sacramento, CA 95828 PHASE NO.: 03100 DATE: 9/22/2003 ATTN: Frank Towse LICENSE NO.: 225339 PHONE: (916) 381-6090 FAX: (916) 381-1344 g. iota]eompeantion of SUBCONTRACTOR(Subconuauor Price):. $68,014.35 h.Time specified for delivery of Subconmctofs material and camPletion of his work:. to cornp]y with PMCs Construction Schedule The foregoing and the continuation sheets if any anached together with the General Conditions set forth an the attached pager I through 4 rue hereby accepted. Subcontractor: Contractor: Patent�ConstrtoctioanSystems ✓77:disprJ Pad c l-C-oCJporatign V4 Signed. ( ]Suited: By: f By: Jon S Gud ohnsen, Project Manager Date: t t$' D Date: ( t ti License No.: oW,6-339 7_�a" Attachment 4 TETRA TECH, INC. November 10, 2005 Pacific Mechanical Corporation Jon Gudjohnsen P.O. Box 4041 Concord, Ca. 94524 Reference: Water Reuse Project Water Reclamation Facility Improvements—City of San Luis Obispo Subject: Subcontracting Dear Mr. Gudjohnsen: As part of the competitive bidding process for this job, all bidders were required to provide a list of subcontractors performing more than %percent (0.5%) of the total base bid pursuant to Section 4100 of the California Public Contracts Code "Subletting and Subcontracting Fair Practices Act". PMC provided five subcontractors as part of their bid proposal; Franklin Reinforcing, KnK Painting, P&J Electrical, Gale Landscaping, and Paramount Metal. Not listed were Patent and Garcia & Sons, Inc(Garcia)for forming and paving work, respectively. It has come to our attention that PMC intends to use Garcia for paving work related to this project. The schedule of values estimates the value of contract paving work to be $60,000. This amount exceeds 0.5% of the total base bid, and as such should have been listed in the subcontractors presented at bid time. Pursuant to Section 4106 of the Subletting and Subcontracting Fair Practices Act, "lf a prime contractor fails to specify a subcontractor or if a prime contractor specifies more than one subcontractor for the same portion of work to be performed under the contract in excess of one half of 1 percent of the prime contractor's total bid, the prime contractor agrees that he or she is fully qualified to perform that portion himself or herself, and that the prime contractor shall perform that portion himself or herself. If after award of contract, the prime contractor subcontracts, except as provided for in Sections 4107 or 4109, any such portion Of the work, the prime contractor shall be subject to the penalties named in Section 4111." Section 4107 deals with instances when the prime contractor has listed a subcontractor which cannot or may not perform the work; this does not apply in this instance as a subcontractor was not listed for paving or forming work. Section 4109 states "Subletting or subcontracting of any portion of the work in excess of one-half of 1 percent of the prime contractor's total bid as to which no subcontractor was designated in the original bid shall only be permitted in cases of public emergency or necessity, and then only after a finding reduced to writing as a public record of the awarding authority setting forth the facts constituting the emergency or necessity." 811 Palm Street,San Luis Obispo.CA 93401 Tel:805.542.9052 Fax:805.542.9254 www.tettatech.com Page 1 of 2 13 Attachment 4 TETRATECH, INC. You are hereby notified that the City does not consider this case to be a public emergency. As such, the provisions of Section 4106 apply without exception. Please proceed in accordance with the provisions of the Public Contract Code and the requirements of this project's contract documents. Pursuant to State Standard Specific9tions Section 8-1.01 Subcontracting, "Copies of the subcontracts shall be available to the Engineer upon written request," please provide copies by November 16, 2005 of the subcontract with Patent and Garcia including a breakdown of labor, materials, and equipment provided. Preliminary notices from Patent show the value to be approximately$550,000 in total value. If you have any questions I may be reached at 818-426-3410. Respectfully Submitted, D�1 David Thomas Construction Manager Cc: Mr. Richard Fisher, Ms. Katie DiSimone, Mr. John Moss, City of San Luis Obispo 811 Palm Street.San Luis Obispo:CA 93401 Tel:805.542.9052 Fax:805.542.9254 vAm.tetratech.corn Page 2 of 2 7�`/ Attachment 5 l � I , PACIFIC MECHANICAL CORPORATION GENERAL ENGINEERING CONTRACTORS Calif State Lie No 138920 * NV State Lie No 0006244 P.O. Box 4041, Concord, CA 94524 (925) 827-4940 FAX (925) 827-0519 November 16, 2005 Tetra Tech, Inc. Log No: 262-00122 811 Palm Street San Luis Obispo, CA 93401 Attention: David Thomas Fax: (805)7849081 Reference: Water Reuse Project Water Reclamation Facility Improvements City of San Luis Obispo Specification No. 99124-90553A Subject: Subcontracting Dear Mr. Thomas, We are in receipt of your November 10, 2005 correspondence regarding the above subject and offer you the following. The only executed work.in your complaint is an agreement with Patent for design services, rental services, and services to facilitate the work. PMC receives bids from Patent on many projects we bid. Patent in fact acts in many capacities for which they are not considered a subcontractor, typically there is no intent to use their services at bid time as a subcontractor_ Patent in fact did not specially fabricate or install any portion of the work or improvement according to detailed drawings contained in the plans and specifications for installation of permanent materials.Any misunderstanding with respect to their status at bid time is merely an over site or difference in definition. In accordance with State Standard Specification Section 8-1.01 and your written request,we have attached a copy of Patent's agreement We have not included a copy of our agreement with GF Garcia as the execution of the agreement has beenput on hold pending the City's response to our November 15, 2005 correspondence requesting the use of GF Garcia out of necessity. In the meantime, PMC is self performing the work so as not to delay the project. The spirit and intent of the code you have referenced in your letter is to stop the practice known as"bid shopping" after a bid is made to a public entity. PMC has not participated in nor has there been any complaint of"bid shopging"after the bid of this project.We therefore question if this is a standard practice for the City of San Luis Obispo, or if this an execution of the threat communicated November 10, 2005 as documented in our letter of the same date. If so I would caution that personal liability is created under the federal code for an abuse of authority which under the color of statute intends to injure PMC. Attachment 5 November 16, 2005 David Thomas Tetra Tech, Inc. Page 2 of 2 Therefore prior to any proceedings regarding this matter we request the City provide its standard written procedures for the review of subcontractors on awarded projects and all documentation of investigations and imposed fines on prior projects where the City has taken similar actions.We would require these at least two weeks prior to the five days notice of the public hearing we are entitled to. ;Very truly ours, on d' nsen r Manager Enclosures: Patent Subcontract cc: John.Moss Gary Howze 7_/6 Attachment 6 oSAn ull OBISPO 879 Morro Street• San Luis Obispo, CA 93401 November 18, 2005 Mr. Jon Gudjohnsen Pacific Mechanical Corporation P.O. Box 4041 Concord, CA 94524 Subject: City of San Luis Obispo Water Reuse Project,Patent Subcontract Dear Mr. Gudjohnsen, The City has received your submittal of Patent's subcontract agreement dated September 22, 2003 and your transmittal letter dated November 16, 2005. The scope of work described in the subcontract confirms that Patent was a subcontractor to PMC on this project. Patent "furnished any and all plant, labor, services, materials, tools, equipment, supplies, transportation, utilities, and all other items and facilities necessary therefore as provided in the Contract Documents to furnish and install Shoring and Forming of the Reclaimed Water Storage Tank Roof Structure complete" according to the language of the subcontract PMC signed with Patent. This scope of work constitutes subcontract work under Public Contract Code Section 4100 et seq. The fact that Patent's work may not have involved installation of "permanent materials" is irrelevant. The value of the work.Patent performed greatly exceeded 0.5%of PMC's total original bid. PMC did not list Patent as a subcontractor at bid time. When PMC executed a subcontract with Patent, after award of the contract and without notice to the City, PMC violated the Subletting and Subcontracting Fair Practices Act. The City discovered this violation in the course of typical project management activities. I regularly check the MBEJWBE subcontracting list and payments to make sure there were no improper substitutions of MBE/WBE subcontractors, as this could potentially jeopardize the City's state funding. During this review, I checked the original bid documents including the subcontractors list to verify the MBE/WBE compliance. This is when I noticed that Patent (and GF Garcia & Sons)was not on PMC's subcontractor lists. The City does not have an internal written procedure regarding subcontractor substitutions. We follow the statutory procedures. The City has complied with all appropriate Federal, State, and local laws in the bidding, awarding, and execution of this contract. The actions taken by the City and its representatives were part of standard and typical project management practices. I am unaware of any similar instances where a prime contractor violated the Subletting and 7-/ 7 OThe City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. OIJA Telecommunications Device for the Deaf(805)781-7410 Attachment 6 Response to Subcontracting letter Gated November 16, 2005 March 8,2006 Subcontracting Fair Practices Act while under contract with the City, so I am unable to provide. documentation on similar situations. We also note that the PMC subcontract with Patent dated September 22, 2003 which you have provided only covers work on the RWT Roof Structure and is for$68,014.35. The City received two Preliminary Notices from Patent; one for $520,000 and one for $30,000. If PMC had additional subcontracts with Patentor issued change orders for additional work, please provide the City with copies by November 28, 2005. If the September 22, 2003 subcontract is the only agreement PMC has with Patent,please confirm in writing by November 28,2005. Finally, the certified payroll submitted by PMC to date does not contain any of Patent's certified payroll information. In light of this deficiency and in accordance with Section 7-1.OIA(3) of the Standard Specifications and the Labor Code, the City is requesting a copy of certified payroll records for all workers on site. This request includes work performed by your employees, subcontractors and owner operators on the Project. Pursuant to Section 7-1.O1A(3c), PMC is to provide these records within 10 days of this written request. Failure to comply with this request may result in penalties as specified in the Labor Code. If you have any questions,please do not hesitate to call me at(805) 781-7239. Sincerely, atie DiSimone Water Projects Manager Cc: Mr. Richard.Fisher,Mr. John Moss, Mr. Jonathan Lowell, City of San Luis Obispo Mr. David Thomas, Tetra Tech Attachment 7 McDonough Holland&Allen Pc Attorneys at Law p E C_ E a cf--r Linda R.Beck 2006 Attorney at Law G Oakland Office CITY OF SAN LUIS OBISPO 510.273.8780 tel UTILITIES DEPT. 510.839.9104 fax (beck@mhalaw.com January 24,2006 VIA FACSIMME Jeffery H. Speich, Esq. Law Offices of Jeffery H. Speich 2026 Cliff Drive, Suite#168 Santa Barbara, CA 93109 Sacramento Re: Cit of San Luis Obispo - Water Reuse Project, Water Reclamation Facility 555 Capitol Mall y P 9th Floor Improvements Sacramento CA 95814.4692 tel 916.444.3900 Dear Mr.. Speich: toll free 800.403.3900 fax 916.444.8834 We are writing to bring some additional issues to your attention in connection with Oakland this project. The City is investigating apparent violations of the subcontractor listing 1901 Harrison Street 9th Floor laws by Pacific Mechanical. The City has received a Civil Wage and Penalty Oakland CA Assessment from the Division of Labor Standards Enforcement arising from alleged 94612-3501 tel 510.273.8780 violations of the prevailing wage laws. The City is also concerned about other tau arae 510.339.3034 fax 510.839.9104 apparent prevailing wage violations. Yuba c`e 422 Century Park Drive Subcontractor Listing Law Violation 0 Suite A Yuba City CA 29 Section 4107(c) of the Public.Contract Code prohibits a rime contractor from 95991-5729 ( ) P P lei 530.674.9761, subcontracting"any.portion of the work in excess of one-half of one percent of the fax 530.671.0990 prime contractor's total bid as to which his or her original bid did not designate a www.mhataw.com subcontractor." Pacific Mechanical did not lista subcontractor for shoring or forming in its bid. However, the City received two California Preliminary Notices from Patent Construction Systems ("Patent") stating that Patent would be providing an estimated$550,000 in labor, material,equipment and services for wall and column forming, aluminum joist, stringer, frames and beams to this project. Then the City observed Patent workers at the site erecting forming and shoring for the reclaimed water storage tank roof, but did not receive certified payroll reports from Patent. In November, 2005,the City informed Pacific Mechanical of its concern and asked the contractor to address this issue and provide a copy of any subcontract with Patent. Pacific Mechanical sent the City a subcontract under which Patent was to provide 882723v4 05036/0005 i/ Attachment 7 J McDonough Holland &Allen rc 1, Attomeys at Law Jeffrey H. Speich, Esq. January 24, 2006 Page 2 labor, material,equipment and services to "furnish and install Shoring and Forming of the Reclaimed Water Storage Tank Roof Structure" for a price of$68,014.35. This document established that Pacific Mechanical subcontracted work to Patent in clear violation of Public Contract Code Section 4107. The City is evaluating the appropriate penalty under Public Contract Code Section 4110. Prevailing Wage Issues The City received a Civil Wage and Penalty Assessment from the Division of Labor Standards Enforcement assessing approximately$45,000 in unpaid wages and penalties for violations by P&J Electric. Ordinarily, the City would be required to withhold this amount from payments to Pacific Mechanical until Pacific Mechanical or P&J satisfies this obligation. In doing so, however, the City will lose low-interest loan and grant funds from the State Revolving Fund'program. In this case, the DLSE has directed Pacific Mechanical to deposit the funds with the City. See attached email correspondence dated January 17, 2005, from the Deputy Labor Commissioner, Ms. Sherry Gentry, stating that it is"necessary for the Prime Contractor to submit those funds to the Awarding Body where they will keep it in a separate escrow account until such time as the Civil Wage &Penalty Assessment(CWPA)is no longer subject to judicial review- which means either a settlement has been reached, a hearing has been held, or a judgment is filed." The.City has not previously withheld these funds from PACIFIC MECHANICAL, and is awaiting PACIFIC MECHANICAL's compliance with the Department of Industrial Relations requirement. The City expects to receive these funds within seven days of the date of this letter. "If the City does not receive the funds, it will withhold them, as well as an amount sufficient to compensate the City any increased financing costs it incurs on account of the withholding. In addition to this situation, the certified payroll reports Patent provided(at the City's request following the observation that Patent had workers on the site) do not meet the statutory requirements, as worker hours are reported weekly, rather than daily. This issue is not a mere technicality, as the workers' entitlement to overtime rates is determined based on daily hours worked. The City is working with the Department of Industrial Relations to address these issues. The City is also concerned about prevailing wage compliance by PACIFIC MECHANICAL's second-tier subcontractors. The City requested certified payroll for all workers on the project, but did not receive second-tier subcontractors' records, such as for DJ Johnson and Hallett's Backhoe Service. The City understands that some certified payroll records were submitted to DLSe after the Department of 882723v4 0503UW05 6 (� Attachment 7 J' McDonough Holland & Allen Pc 1 Attorneys.at Law Jeffrey H. Speich,Esq. January 24, 2006 Page 3 Industrial Relations became involved, but the City still has not received records from all lower-tier subcontractors, including DJ Johnson. The City is investigating whether penalties are appropriate under the Labor Code. The City expects Pacific Mechanical to take a proactive role in ensuring that all subcontractors are complying with prevailing wage laws. Please advise us of Pacific Mechanical's plan for addressing these issues within seven days of the date of this letter. Very truly yours, ' Linda R. Beck LRB:dlp cc: Jonathan Lowell, City Attorney John E. Moss Katie DiSimone 882723v4 05036/0005 / r 1 Attachment 8 I� PACIFIC MECHANICAL CORPORATION GENERAL ENGINEERING CONTRACTORS CW.stub M.No 135M January 23, 2006 VIA GOLDENSTATE OVERNIGHT LABOR COMMISSIONER, STATE OF CALIFORNIA Department of Industrial Relations Division of Labor Standards Enforcement 5555 Cafifomia Avenue, Suite 200 Bakersfield, California 93309 Attention: Sherry Gentry, Deputy Labor Commissioner Re: Request for Certified Payroll Records Pending Case No. -010 Dear Ms. Gentry: In response to your Request for Certified Payroll Records, which we received on Tuesday, January 17, 2006, enclosed please find all daily certified payroll records to date for _�P?@tent.,Construcdon,Systerh� We are continuing to follow-up with DG Johnson Backhoe, and ,T as soon as we receive certified payroll for them, we will forward to you, as well. Thank you. Please give me a call with any questions and/or concerns. Sincerely, i i j el se R cepti nist-Secretary mdr r- E C E H E 71, Copy—FYI: Jon Gydjohnse Project Ma er(w/o enclosure) Enclosures zJusers/certpay.mdr/Labor Co issioner Request Letter JAti C I CITY U" P.O. Box 4041 • Concord,CA 94524 9 Tel: 925-827-4940 • Fax: 925-827-0519 • pmc@pmcorporation.com Attachment 8 JAN 2 3 20,25 Patent Construction Systems Harsco FAX TRANSMITTAL San Francisco#80 2575 Williams Street San Leandro, CA 94577 Telephone:(510)614-6630 Fax:(510)614-7093 dpuente(Pcshd.com January 20, 2006 Pacific Mechanical Corporation P.O.Box 4041 Concord, CA 94524 Attention: Michelle Reese Re: San Luis Obispo—Water Reuse Project Daily Certified Payroll Reports Attached are copies of our Certified Payroll for the above-mentioned project,with the hours noted on a daily basis. If you have any finther questions or problems regarding the Certified Payroll or anything else,please do not hesitate to give me a call. (510) 614-6630 ince el Desiree Puente Western District Billing Supervisor Patent Construction Systems Attachment 8 Patent Construction Systems Harsco FAX TRANSMITTAL San Francisco Branch#80 2575 Williams Street San Leandro,CA 94577 Telephone:(510)614.6630 Fax:(510)614.7093 www.dpuenteepeshd.com "FINAL" STATEMENT OF NONPERFORMANCE CUSTOMER: Pacific Mechanical Corp. PAYROLL#: 80-0403041 PROJECT San Luis Obispo WWTP NAME OF PRIlvIE/SUBCONTRACTOR: PATENT CONSTRUCTION SYSTEMS I DO HEREBY STATE THAT NO PERSONS WERE EMPLOYED ON THE CONSTRUCTION OF THE PROJECT: SLO Water Reclamation Improvements . NAME OF PROJECT 315 Pizado Road. San Luis Obispo. CA . ADDRESS OF PROJECT DURING THE PERIOD COMIVIENCINGON THE 41h DAY OF Juh 2005 AND ENDING ON THE 101h DAY OF July 2005 . 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O O p M O. O M O h. w « VUj F 1y m n m 'a m U m N • m f 6 N 6 n • m O O �p ZQi O V m b stq m pn q Y, S= Z 4F+ n Q p 4 m n O m O p S U.O. n S C w z 0 0 x n m F 4 N o N O F Y O n O ! O V1I/� b .1 O F Z O C } '-3 Artacttment 8 Patent Construction Systems Harsco FAX TRANSMITTAL San Francisco Branch#80 2575 Williams Street San Leandro,CA 94577 Telephone:(510)614.6630 Fax:(510)614.7093 www.dpuente(&Dcshd.com STATEMENT OF NON-PERFORMANCE CUSTOMER: Pacific Mechanical Corp. PAYROLL#: 80-0403041 PROJECT San Luis Obispo WWTP NAME OF PRIME/SUBCONTRACTOR: PATENT CONSTRUCTION SYSTEMS I DO HEREBY STATE THAT NO PERSONS WERE EMPLOYED ON THE CONSTRUCTION OF THE PROJECT: SLO Water Reclamation Improvements . NAME OF PRO ECT 315 Pizado Road,San Luis Obispo, CA__,. 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F N n W F 4 C y o y O F Y O n O O O y m .dpi• x 44F a o lzi m 2 o- Attachment 8 i i • z O N 9: s s z > Hv � s:w ow F \ tn (• oo O o D w Q o o W F O o Ad c °W C3 :3 oo Z w0 � � ui P.w w ly w y �^�• z A 0. c obi w d a off_ 3 O a O U w z E to O UQ w FWF W � ..: na,� W � A •a O F � w a GO ooW 0o � v y z " azzH c�7 r � 3 � d 5, 0 W y 0C) R1 u � E �a � � M V 7 � U U .. z Cw.7Pg, p aCd E z ° G o � WyVhO 4 o o 0 F Ocvo U 1 � awxO� X CIO t" Wa w 'oAo N wc0� W U 0 `" a e . v 4) Coo w ®= x � ❑ a � � �a z3 ¢ oo >, o •b >, >, �, o o` b u N u 9 b w w n M.0 co -. -y b G N t� o 0o u a [a�� ° o y viCr C O O u (OD WC y A O y0•, C3 o 04 Cz o Q d vOCl i V1 b 17 .+ O C o Co °v ,o may/ o M b �° w u ° A CIS NAW -- •v o 3 `n m v �, A � u �, ° � ° n � °: Cd Cz •� ea d Q Vi U 'L N eha u 00 O [� m A o.m O RO s. o ob -. y 0M i F 8S gib $ 3 Ste; 1-1 • b � FN U Z O ._ d� � yC O N O L u .O . C 7Cd u VAi o ~� Co, � F yy. y b '�'� U Vdi V ° ° ° }�y 3 0 o f R O Co °�' o O iY o ° a� w o 4 „ ° u E U on �n -0 g 0 ed d+ R O OCnn 00 a Cw= 0 E{ 't G 0 Co fl 0 o N s > F u a o > Y O zo .. o m o c a wa o b o - o ° o 0 ¢ 5 g cc 00 u N ,may q T iC .-� W u (A O N �, p V CL ... a) N a� c e E" u i F c� r- 964 Y Q ar y N u Z O b U a! .fl eta i° 7 N V o u H F ;L4v q m W y " V] CZ 0 to cn a a G c U m a m o G1 3 z v v O 3 O y ca " Q Cal k. L) °o o `o Q a ., o a Q 3 oa 3 oUQ � . .. Ca u •a .. o ¢� Attachment 8 Y b Z m o n 0 a 4 F o n n m m m o o� p 8 V m C O O {u.W N P m 6 N t N O ! N b m q 1 r Q Z n n U = pOp ! O m O K m? S F h 9C q If a u � Lzi ! P q b O n `= no O ! O V V • f b � n ! • : r O'� r N q m'E : n .• r m • 0 0 O fK� M.0 n n 6 qu a O O O O W W O �(Y. • p . O • O O am U wn 090ao N u 4 w n 6 } : o O o O O L M1 O m O F U O O U 4 0 0 O O 'O 0. O O O o O U b 2 m N m N 8-0 • 8 M1 D b Qi b F W O F w O F 4w O Z U 4 O N o t O O O O m O F Y N m « ; b 82 m" O N U P F P F b F w U O n U G m m N i O 6 S pOp s O F m mt sWX Z o Attachment 8 • N _ • N r N 't z rj P of F P N O Q C b 8 E- m O O N N 6 N � 4 � V 7 N O m N N N !+ O n G O F F S� � s r 4 r V M1 n 4 N • m • N r O O 2 � 4 F v 6• � N • b m O a 'C N ym • O O 0 0 4 6 O �n N n m E 4 N .. u rc 4 m m T� u N 0 • 0 0 • ¢ o 0 0 • 4'[J O i •y al UQ Si O n E�M1 o N n O o m 0 0 G 4 m m O o 0 pa E m C 2 4 O � N O_ ' 7 N 2 E ob 2 � m F 4 4 N O � •� N O F 0 n 0 0 O • N m �+ C O 2 N • 37 Attachment 8 Patent Construction Systems Harsco FAX TRANSMITTAL San Francisco Branch 980 2575 Williams Street San Leandro,CA 94577 Telephone:(510)614.6630 Fax-(510)614.7093 www.dpuente(&pcshd.com STATEMENT OF NON-PERFORMANCE CUSTOMER: Pacific Mechanical Corp. PAYROLL#: 80-0403041 PROJECT San Luis Obispo WWTP NAME OF PRIME/SUBCONTRACTOR: PATENT CONSTRUCTION SYSTEMS I DO HEREBY STATE THAT NO PERSONS WERE EMPLOYED ON THE CONSTRUCTION OF THE PROJECT: SLO Water Reclamation Improvements . NAME OF PROJECT 315.Pizado Road,San Luis Obispo, CA . ADDRESS OF PROJECT DURING THE PERIOD COMMENCING ON THE 10`h DAY OF January 2005 AND ENDING ON THE 151h DAY OF May 2005 . NAME: Scott McCaslin TITLE: Administrative Manager DATE: November 22,2005 Attachment 8 d c " L O U -A v m E s A y W ? O Q d C v. O •C) U W wo to o i° �r CL a f H a, W F F" 00 D y H o W tz W v y Z C SOW Q m 0 p ro cU : 00 > v W = c 5z0 O c o ay d C ¢ F o O ^ -0 bo y = x00z-- om � w � a a = � o Z U ¢ o W W w :a aV.r O V1 Q y. O z � wvs W Lis 03a� W cc m a O A �. OOZE C7 Do a co d cgo o o [L b O O" a d o c Cdcidv � O J dam w o o c a Q c " � $ c � 3g wo a � � a0 W -Z: > o o m � � x W w body w..9o °' _ 03 � c � Wo 3CZF ^ e >tn G W � WWF viO C,3 -W LU o N L' h y ' O Z o N o 0 r v O r. 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V °� 04 Q) A NNAy U is is. p' R. bq �t1,'U •O• ZU °� °> O r0. md oQn ca E u C. ¢ soyo b U ZG O � o°y um u u :cca ° °y u �. m ° m U W �' co p v O o 4 F q bCA 0. 0 o e °' H _ a o 3 o a 3 a� o U 'Q v = .c oo Attachment 8 Y n W 2 FF m O • m 4 4 ow 0 n o P 2'2 0. a r n m o m m �n i O n pgss� U m K O O p N r U> > r m a N N 1 f P y' 6 m N n r \ n Z N N u w m FO o 0 OV� F H Y e• �C a U U U N P Z U n P m � •e m. o W P OO f O , n O v v 'all f 0, N • . n O Q pTg1. o m o m • tl Z 4 m N 9 n • «m O O y O O H 6 O m' N 2 qm W G n n •• tl� • W 4F,( 6 , n , .� • o o e o 4 � N O O N O gUg w o 4 y N K r 4 W d .mr O i,o to g H o FTaj f W f• O �i' m 2 C.i o i pw2� ps oe 8�ea o s Z m O F w O F w O H O m a m >g� o ; U 3 4 O 2 W 0.•+2 O O O N a« O ro m 0 I' N CCrr W S pP e e N P F P F 6LL m F 4 W C 4 W }. m u O ❑ U ❑ 6 W N O F m 2 6 W . q s > OW Z O N W4q �Z U 0 4 w w f K qq o m v RG p[ om m 4 c pZF •+ N r V U u 2 2 O 6 a €VU O a O „ N 4 w E Attachment 8 q ' Y N S fC 4 4 O m Z S a a .J q 4 F f q O 2 Y F4 W • O o N u 90 m nC� � N•] q G' a N � 4 • V N O C y O w 4 � N N tl n ❑ tl � q i M n c� r m r • N N n ° F d 2 m Oq O w v a F v tl N� ❑ : u e 10 .i Y S n 4 a 0 0 0 0 ❑ 2 q O o N o b O tl n " E >• N U M4 o tl 4 V N • ¢r 6 N a O • a'O p Ela O pKp p vb h S UU ❑ f•<f•O '41 (C N ❑ O E N O S F N Z E a W F a a H O F N o f e 0 0 e C .N� O • OF .l ~ F : 6 tl 7�y/ Attachment 8 Patent Construction Systems Harsco FAX TRANSMITTAL San Francisco Branch#80 2575 Williams Street San Leandro,CA 94577 Telephone:(510)614.6630 Fax:(510)614.7093 www.d pue nte(al pcs h d.com STATEMENT OF NON-PERFORMANCE CUSTOMER: Pacific Mechanical Corp. PAYROLL#`: 80-0403041 PROJECT San Luis Obispo WWTP NAME OF PRIME/SUBCONTRACTOR: PATENT CONSTRUCTION SYSTEMS I DO HEREBY STATE THAT NO PERSONS WERE EMPLOYED ON THE CONSTRUCTION OF THE PROJECT: SLO Water Reclamation Improvements . NAME OF PROJECT 315 Pizado Road, San Luis Obispo, CA . ADDRESS OF PROJECT DURING THE PERIOD COMMENCING ON THE 27th DAY OF December 2004 AND ENDING ON THE 2nd DAY OF January 2005 . NAME: �f 1, ' Scott McCaslin TITLE: Administrative Manager DATE: November.22,2005 Attachment 8 fps 3 z0 O .NCa •� 'C d W ..] z fl iii vi Z oQUU F0rn H F"„ rn F 00 > o ¢ v y � Z p 0F. a � a U w re° oq ra R O a c�- u r. 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W a q u o •= a M �0 ti � ?+In 'c � ° o s o 0'0000.0 �.G � � � � a s o y 0 Co 0) �� y .!2 a —0. 2 u � ] O a C _ 'O Co fF/� `� .�.. e0a w k o v 0 a F 0) V) m o cd F u a o p 0 ° ¢ v ° A o 4 .a¢ o c v m v ^ d Z LL L7 U b �' M \0 m °: C c ° w c .. / di � u m v ayi Ca v� s qu S A a u a aci 8 ter, -- 3 w oq.gF °' yx a F- u A Co M 7-y3 Attachment 8 1 �r tl O 2 m P 2'S S 4 O P P O r�1'• m P • l � P Y rm+r q m O q O O p�qu P Z q 1 0 O r V � r rymr�.3 q e O Z P tl < N n C m F 4 m Y n Y OG M•2 r 'fjupM yy 2 4 P n i gni h � P 7 • �• m � m o M CJ 7.r P N f O • r p 0 (QO( ! q r m P • � o � o h } 0 0 tO S N tl O n O meFO O b h m C 0 n M m O pm•• r p O r O O S Z•••111 m �.�O n O ^ O IM rim U qn m$Nmg h 6 r}r� O 4 n 6 q W tl Z O i n 2 W u q m Umry¢o• Oo vJ �tl m \i-rn pmyT. ; thn0 m O h m O h •6�Fgjj r Y r q( r £ r P O O 3 b o z u ru � u 4 o w z Z O.O]O m O tl 0� r I q UU tl S o 0 q q O O O _ m q q V O tl r� Gm m t0 m O U G z 2 q m [p+ o• o m mrc 0 P O F m N r y � u Qi Z z o .�• >• tl V r I I 7~y� Attachment 8 , o x , m N ; m z3"< gX 2 6 a n F N o O 2 G c m m .. m R R O N V m m O O n U � rma N,] gmTd U , N O m i , r .O. 4 O p m\ q n n U m m 6 N • N p F O 2 , q m m NX n O m O O h d �quF4�j m N•Qi p � nmi rtttllll N a O n n a s� C n"C V 1 N i o s� �O 4 6 O O , O O m m m n e on m •+ O u 6 N ,. VV m N n u u4i Pi Zau p tm U XN O �n DOC 7 F N oX u O o S n m F 6 6 N O F N O F 'o 0 0 o q a mJ`,/ Attachment 8 Patent Construction Systems Harsco FAX TRANSMITTAL San Francisco Branch#60 2575 Williams Street San Leandro,CA 94577 Telephone:(510)614.6630 Fax:(510)614.7091 www.dpuenteapcshd.com. STATEMENT OF NON-PERFORMANCE CUSTOMER- Pacific Mechanical Corp. PAYROLL#: 80-0403641 PROJECT San Luis Obispo WWTP NAME OF.PREVIE/ SUBCONTRACTOR: PATENT CONSTRUCTION SYSTEMS I DO HEREBY STATE THAT NO PERSONS WERE EMPLOYED ON THE CONSTRUCTION OF THE PROJECT- SLO_Water Reclamation Improvements .. NAME OF PROJECT 315 P_izado Road, San Luis Obispo, _CA- ADDRESS A ADDRESS OF PROJECT DURING THE PERIOD COMMENCING ON THE 13`hDAY OF December 2004 AND ENDING ON THE - 19t' - DAY OF December. 2004 . NAME: / `CtLT.(/ .6G"�t ��C.c�•�. 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V N 4 ca d ❑ Q of p 4 C'4 p 0 H H CL o a y n �-� cn v) m a m a W p c 65 0 mo mo CL i4 z .o .. ..i O O y co �,„ Q,' cd '� O r.•i o o Ca3 03 u a3 o a 3 ai ou .T , 0 p v . ..� o ¢ Attachment 8 1 Fb ❑ °` m 2 n b ^ P 4 M1 ^ a n F T T � m 3 o ° s�� H N y P G m m 4 N N N r N r T o ❑ F 2 o m'y' r � N .T�. Z� N m V •y U ❑ F `� mb a m m 7 Y ~ Y Y ❑ p V P V M1 f •' r C° � b b b imp r m M K N p O tl N m N M1 E S M1 a 4 r 4 N M1 O i G d n p �. V ❑ � M1 � W 1 W W QO �Q u m w i 8 `g„ zo d = m ss � G. N O i fJl � U V 4 o .UZi O M1 b. P o M1 o 0 0 x fY ! ry Y IV P m..y q a U o 4 U ❑ � U C ❑ at .i o tl a rc pY om U o 4 N 4 �a U 2 a o a � m a _ u N S S S Attachment 8 b m Y w Z m ❑ � r m 4 6 O Z 2 d d a a a pF F r n O 2{� U � N 8 oY m m M o a O w 4 w.a P as d� 0 m a N �Oj N O a 1+ w < O w m r O m n w N 4 ry V P d n • w ♦ w � � O • a D F O a w O m Ow OC w O G � b n1 S .pyQl w� "��mjZy4+ a �4 001 � n ry N m x 4 6 ZT O O m N ry m u p 4. w �+ U a m w n p q 0 • o 0 • 0 P >.ry b ♦ K U' O • q Uflp•L O U�m = w � Q,F N �.♦ o pp •O•�� a �S n o�1i a . O o S U F ry N 2 O Z U p n S N w F - 4 a ti N O F w O F P O T O P O N a o N 7 I 1 I I 1 = K 11+7 ' 12/06/2004". � H r2;o6/2004 03/20/2006 16:58 FAX 9258275459 FMC tJuul RECEIVED RED FILE � MAR 2 0 2006 MEETING AGENDA PACIFIC MECHANICAL CORPORATION SLO CITY CLERK DATE4 - Ob ITEM #-2d-2--GENERAL ENGINEERING CONTRACTORS calla. State Lie. No. 138920 4 NV stale Lie..No. 0066244 P.O. Box 4041, Concord, CA 94524 (925) 827-4940 * FAX (925) 827-0519 f49Q6 t�o g-tC March 20, 2006 Q-COUNCIL E- CDD DIR iB CAO t FIN DIR r-1 ACAO TFIRE CHIEF City of San Luis Obispo -Z ATTORNEY ja PW DIR Log No: 252-00158 990 Palm Street 521 CLERK/ORIG 7e POLICE CHF San Luis Obispo, CA 93401-3249 El D PT HEADS ro REC DIR 0 je LITIL DIR Attention: Audrey Hooper 0 �'' 12 HR DIR Fax: (805)781-7109 K CAM Reference: Water Reuse Project �,cj-ee-,C Water Reclamation Facility Improvements City of San Luis Obispo Specification No. 99124-90553A Subject City Council Meeting March 21,2006 Penalty assessment against Pacific Mechanical Corporation Dear Ms. Hooper, I was provided the path.to obtain the Council Agenda Report on March 16, 2006. This letter is a rebuttal to that document and the recommendation by the CAO. Please consider this letter a submission for City Council consideration. The issue at hand here is not an issue of wrong doing but a.clerical mistake and conceptual difference of opinion. There is no complaint by any citizen or licensed contractor of the state against PMC.The CAO document is intent on painting avillainous picture of Pacific Mechanical Corporation (PMC). As proof that the City staff is misusing state statute and their positions as reprisal for a contract dispute I would use Council Agenda Report prepared by the CAO.The document is interesting not only for its skewed portr3yaI of fact but for its omission of facts. Under the sub heading DISCUSSION the opening paragraph describes two of the City's contracts. One contract is in no way similar to the other and has nothing to do with the issue at hand..It is used to draw a false comparison of one contractor against the other in support of its final conclusion that PMC is at fault for the delays to the uncompleted contract.This falsely portrayed conclusion,stated as fact, is also unrelated to the subcontracting issue.The paragraph mentions the project completion is over 500 days beyond originally scheduled completion but makes no mention of the reasons for delay_The paragraph is however demonstrative of the CAO staff intent In the second paragraph of page 2 the document states the City staff reviewed PMC's subcontracting on the project in November of 2005 for minority and women owned business goals. I question the veracity of this statement as it is my understanding that is and was part of a bid package review and award not a periodic process ongoing through the contract: In the third paragraph of page 2 the document intends to portray PMC as disingenuousness by misstating PMC's position and then disproving the misstated position. PMC's true position is that subcontracted work is normally related to installed components and we do not normally consider Patent a subcontractor as they did not specially fabricate or install any portion of the work or improvement The title and verbiage of the document used to bind obligation is not the. 03/20/2006 16:58 FAX 9258275459 PMC 0 002 r March 20, 2006 Audrey Hooper City of San Luis Obispo Page 2 of 2 determination of relationship. PMC uses the same kind of language to bind equipment suppliers. In fact except fora clerical miss-step much of Patents supplied value would have been set up under a rental contract Patent shared our conception of the relationship, attached is a log of notes from PMC's staff concerning conversations with Patent regarding certified payroll. On November 22 Patent Construction Systems sent a letter to the City stating their concept of the relationship. The letter was conspicuously left out of the package given to the board, it is attached herewith. In the fifth paragraph of page 2 the document states a conclusion about the relationship that is contrary to both Patent's and PMC's concept of the relationship. The Council Agenda Report gives no indication of the extremely contentious relationship between the CAO staff and PMC. The document has not advised the Council of the conflict of interest that exists due to this contentious relationship that could bring their actions, expenditures and recommendations with regard to the issue into question. I believe the CAO has set the City up as Accuser, Prosecutor, Judge, and Jury in an action at law which has no victim and in which it has a clear conflict of interest We maintain that the spM and intent of the Public Contract Code has not been violated and any perceived violation is technical in nature and being used as a blunt instrument in a contentious dispute. We believe were it not for the contractual dispute this issue would not even be before the City Council, if it were, the recommendation to the City Council by the CAO would be to waive penalties.We request that be the direction of the City Council. Very truly yours : l Gar ailey C.E.O. cc: City of S.LO. correspondence Enclosures: Patent Construction Systems letter 11/18/05 Memo to JG from MR 03/20/2006 16:58 FAX 9258275459 PMC 121003 Patent Construction Systems Hamco - 2575 Mams Sueat Sm Leandro.cn 94577 USA Telephone:510 614 66M F=510 614 6033 Web:vAvw peshd cram Dov � � 2p05 November 22, 2005 City of San Luis Obispo 879 Marsh Street San Luis Obispo, CA 93401 Attn: Ms. K. Disimone RE: San Luis Obispo WT? - Certified Payrolls Since we were only a supplier of services to PMC for forming work we did not realize we were required to provide certified payrolls for our work. We have included the requested certified payrolls for the time period beginning 11/22/04 and ending 713/05.with non-performance notice for weeks without employees on site. e 610Z�� Scott McCaslin Administrative Manger Harsco Corporw1an Aecasa 9mlf Group 03/20/2006 16:59 FAX 9258275459 PMC fa004 November 18,2005 —Phone Notes—Memo to Jon Gudjohnsen per his request Jon— Per your request,the following is a summation of'my last couple of phone calls re: certified payroll for the San Luis Obispo project: 11/18/05 Mid-afternoon Call to Patent Construction—Northern California Office I called.Patent Construction(510)614-6630. Receptionist referred me to "Liz"in their Seattle office (253) 373-0210. Liz was not in; I left an urgent message to call me. 11/21/05 10:32 a.m. Call to Patent Construction—Seattle Office I called Liz since I still had not heard from her. She told me, quote, "Unless the California office tells me we're a sub on a project, I don't know we are. Consequently, I won't do certified payroll for the project." She then referred me back to Scott McCaslim in their California office to find out what was going on. 11/21/05 10:45 a.in. Call to Patent Construction—Northern California Office I called and spoke to Scott McCaslim. He informed me he would create certified payroll `Yzom scratch" since he was under the impression that Patent was only a supplier. I told him it was imperative that the Owner receive his original payroll reports before the Thanksgiving holiday_ He told me he would start working on them"immediately", although he reiterated he was not aware they were a sub on this project. Per Jon, I called Scott back and had him prepare a letter stating his "impression"that he was not aware Patent was a sub. 11/21/05 10:50 a-m. Call to Scott McCaslim at Patent Construction—Northern California Office Jon called Patent and personally spoke to Scott McCashm explaining the letter we needed. Michelle Reese