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HomeMy WebLinkAbout01/15/1991, C-7 - UNIT 3 WASTEWATER TREATMENT PLANT IMPROVEMENTS-BID REJECTION-AUTHORIZTION TO REBIDL3 ^" " "i� ► ►�I{Illfl�� ►a����lll city of San tins OBISpo COUNCIL AGENDA REPORT e".-- MEETING DATE: Janua 15 1991 ITEM NUMB; FROM: William T. Hetlandl,. }f' Prepared By: John E. Moss Utilities Director Wastewater Division Manage 91 SUBJECT: Unit 3 Wastewater Treatment Plant Improvements - �� " Rejection - Authorization to Rebid. L ,. �f RECOMMENDATION: JAN 1 p 1991 By motion, reject all bids for the Unit 3 Wastewater WY CREAK Treatment Plant Improvements, City Plan No. R-28S,S*MIS OBISPO, CA authorize staff to rebid. On August 7, 1990, Council approved plans and specifications for the Unit 3 Wastewater Treatment Plant Improvements, City Plan No. R -28S, and authorized staff to solicit bids. Bids were received and opened for this project on November 7, 1990. The City's consulting engineers, Brown and Caldwell, has subsequently completed an in depth evaluation of the three (3) low bids to determine compliance with the various requirements for projects receiving State and Federal assistance. The City is proposing to utilize State low interest loans to fund the needed improvements and therefore is required to comply with the various requirements of the State and Federal governments. Review of the three low bids showed all three to have significant deficiencies in addressing the requirements of the Clean Water Grants Bulletin No. 113A related to minority and women business enterprise (MBE /WBE) development (a copy of the review report is attached). This bulletin identifies five (5) positive effort steps for obtaining MBE /WBE participation on the project, which must be followed by contractors bidding the project (a copy of Bulletin No. 113A is attached for review). It is the City's responsibility to review the MBE /WBE procurement documentation submitted by the contractor and certify the contractor's compliance with the requirements of Bulletin 113A to the State. The State in turn, cannot provide the City with approval to award the contract without the contractor's compliance certified by the City. Finally, should the City certify a contractor who has not complied with these requirements, the City may jeopardize it's low interest loan from the State. In addition to the above noted deficiencies, the second and third low bidders have filed letters of protest, should the City award to the low bidder. These protests are based on C."' r' '011IIIII1�1 1, 1 MY of san _ass OBISPO ONGe COUNCIL AGENDA REPORT Unit 3 WWTP Improvements January 15, 1991 Page 2 the same MBE /WBE deficiencies identified by the City's consultant, Brown and Caldwell. The low bidder in turn, has stated that they will protest award to another contractor as they feel they are the "lowest responsible bidder ". Based on review of the bids submitted by all three low bidders, staff would not recommend certifying any of them to the State. In order to protect the City's receipt of low interest loan monies from the State and to avoid the potential of costly and time consuming litigation from a protest, staff is recommending Council reject all bids and authorize staff to re -bid the project. CONCURRENCES: The City Attorney's office has been involved in the evaluation of the bid submittals and has reviewed the requirements of the State. The City Attorney concurs with the recommendation to reject all bids and re-bid the project. FISCAL IMPACT: The fiscal impacts of rejecting the bids and readvertising are primarily related to additional staff time required for advertisement and mailing documents, printing of project documents, and additional engineering services related to additional bidding and bid review assistance. The cost of printing the project documents will be covered by the sale of the documents to the contractors. Staff estimates the cost of the additional engineering services will not exceed $10,000 and may be covered under an existing agreement for special engineering services. Fiscal impacts related to the actual improvements project were previously identified in the August 7, 1990 Council Agenda Report. A copy of that report is attached for your review. The engineer's estimate for this project was $15,245,000, including engineering and administration. Bids were received ranging from a low of $13,373,000 to a high of $18,172,000. Staff does not anticipate a significant change in the bid amounts as a result of the re -bid since the cause for rejection of the bids was a matter of proper procedure not being followed by the contractors rather than a material defect in the bids which would cause a significant change in price. /01 V 0. . e 111141NI 1jl1111i city of San LUIS OBISpo COUNCIL AGENDA REPORT Unit 3 WWTP Improvements January 15, 1991 Page 3 ALTERNATIVES: 1. Direct staff to submit Approval to Award request to the State for one of the three low bidders. This alternative is not recommended as it may jeopardize the City's low interest loan from the State and will likely result in a protest being filed by the remaining low bidders. 2. Direct staff to continue evaluation of the remaining bids and recommend award to the lowest bidder found to be in full compliance with the MBE /WBE and other requirements. This alternative is not recommended as the cost difference between the bids becomes significant after the first three. The cost difference between the first three was approximately $250,000. The cost difference between low bid and the fourth lowest is approximately $700,000. By motion, reject all bids for the Unit 3 Wastewater Treatment Plant Improvements, City Plan No. R -28S, and authorize staff to rebid. Attachments: - Bid review report - CWG Bulletin No. 113A - Aug. 7, 1990 Council Agenda Report rebidcar.u3 �_3 BROWN AND CALDWELL c ENGI December 21, Hr. John Hoss City of San Luis Obispo Department of Public Works 955 Morro Street San Luis Obispo, CA 93401 5524.40 Subject: San Luis Obispo WWTP Improvements - Unit 3 Evaluation of the Three Lowest Bidder's MBE /WBE Positive Effort Documentation Dear Hr. Moss: As requested by the City of San Luis Obispo, I have evaluated the information submitted by Kaweah Construction Company, Herco Construction Engineers, Inc. and Alder Engineering and Construction Company to document the affirmative steps they have taken prior to bid opening to assure that MBE and WBE businesses were used whenever possible as sources of supplies and construction services. Hy evaluation is measured against a literal interpretation of the requirements set forth in Attachment No. 1 of the Contract Provisions of the State Water Resources Control Board (SWRCB), Division of Clean Water Grants (DCWG) Relative to the Utilization of Minority Business Enterprise (HBE) and Women Business Enterprise (WBE) on Clean Water Grant - Construction Contracts in California. Hy recommendation is based upon, what I- believe to be, a reasonable- assessment of the three lowest bidder's compliance with those requirements. EVALUATION OF FIVE AFFIRMATIVE STEPS 1. 'Including qualified HBE /WBE businesses on solicitation lists.' 6202 AVEMOA ENCINAS CAR:« -+..O. CSLIFORNIA 92009-0171 • (618) 438.8277 FAY ISi9! 438 8892 Evaluation December 21, 1990 Page 2 of 18 The bidder must document that it requested assistance from the Small Business Administration and the Office of Minority Business Enterprise MBE /WBE assistance centers and that this request for assistance was received by the MBE /WBE — - assistance centers at least five (5) working days prior to the need for referrals (see affirmative Step No. 5). - As part of my review, I retraced the steps outlined in Kaweah's letter to John Moss, dated November 13, 1990. The results of that effort is presented as follows: A. On December 4, 1990 I called the regional office of the Small Business Administration at (415) 744 -3001. I requested a list of HBE /WBE contractors. In response, I was asked where I lived. I replied that the project was located in San Luis Obispo. I was then referred to (213) 380 -9471, which is a firm called the Business Development Center of Southern California and is funded by the Minority Business Development Agency in Washington, D.C. (Dept. of Commerce). I spoke with Hr. Cleveland O'Neil. When I asked for a list of HBE /WBE firms, Hr. O'Neil explained that his group did not furnish lists of potential subcontrac- tors. However, if specific tasks were provided, Hr. O'Neil would relay them to his clients for their consideration. When I inquired if Kaweah had contacted them, Hr. O'Neil indicated that he would have his staff check and call me back. Later in the afternoon, a Hr. Humphrey Hontemayor did call me. He explained that because of the large volume of calls received, it was impossible to remember whether or not they had been contacted by Kaweah. From this, I deduced that telephone logs are not kept. Hr. Hontemayor explained that when a prime contractor called for qualified subcontractors the Business Development Center (BDC) did some screening by asking if the subcontractor had to be union or if a bond was required. After the necessary data had been obtained, the request for subcontractors was presented to its clients for consideration. He said it would be difficult for his Los Angeles contractors to be competitive on a project located in San Luis Obispo. He indicated that there were BDC's located much closer to our project, for example, in the Oxnard /Santa Barbara area. BROWN AND CALDWELL 6202 AVENUM ENCINAS CAF! BAC. CALWORNIA 92009 -OM -(619) 438-5277 FA):. (y1g) 438 -0892 7- Evaluation December 21, 1990 Page 3 of 18 Under these circumstances, I think it's fair to say that Raweah did contact the Small Business Administration. However, it probably would have been more effective to have contacted BDC's closer to the work. B. Next, I attempted to contact the Office of Minority Business Enterprise - U.S. Department of Commerce at the number listed in the Contract Documents, (415) 556 - 6734.- There was no answer. I then called San .Francisco information and was given (415) 744 -3001, which is the Small Business Administration number. Again, given these circumstances, Raweah should receive credit for having made an effort to comply with this requirement. C. As strongly recommended at the October pre -bid meeting by Hr. Dick Nasser (SWRCB), Raweah contacted the California Department of Transportation in Sacramento. Since the project is located in San Luis Obispo, it was directed to call Cal Trans in San Luis Obispo. On 12/04/901, I called the Cal Trans office in San Luis Obispo at (805) 549 -3111, spoke with Hs. Vivian Hendershot, and asked if she would send me a list of Cal Trans certified HBE /WBE contractors. She indicated that Cal Trans did not send out lists, that the SLO office -had only one copy, that it was approximately 2' thick, and contained certified contractors for the entire state. If I wanted to see the list I would have to go to the SLO office to look at it. Hs. Hendershot then referred me to NK Creative Enterprises at (213) 216 -1557. When I called (213) 216 -1557, I reached a Hr. Compton Williams who briefly explained that his firm did not give out lists of Cal Trans certified contractors. Further, that if I did not have a Cal Trans contract number that he could verify, all he could do for me was to confirm whether or not a specific contractor was Cal Trans certified. Hr. Compton was very pleasant and took the time to explain his contract limitations. If our project was a Cal Trans project NK Creative Enterprises would prepare lists of HBE /WBE sub - bidders for our contractors. BROWN AND CALDWELL .,- G GM AVENIDA Erne -•:,s CASLSBAD. CAUFORNIA MN"71 • (619) 1.' -: -ez. ; FAX: (s1s) 438 -68W Evaluation December 21, 1990 Page 4 of 18 Kaweah appears to have expended a reasonable good -faith effort to contact the Small Business Administration and the Office of Hinority Business Enterprise assistance centers. However, Kaweah has submitted no evidence of having obtained any material benefit from -tnat effort. 2. "Assure that HBE /WBE businesses are solicited'Wi,enever they are potential sources." 'The bidder must document that it has provided invitations to MBE /WBE bidders at least seven (7) working days prior to the need of a bid response. The bidder must document that invitations were sent to at least .three (3) (or all if less than three) HBE /WBE contractors /suppliers for each item of work referred by the HBE /WBE assistance center(s). The invitations must adequateJ.y specify the item(s) for which sub -bids were requested. The documentation of the bidder's effort to show positive efforts must indicate a real desire for a positive response; i.e., certified letter with return receipt requested or telephone call documentation. A regular letter or an unanswered telephone call is not adequate positive effort. The bidder must submit to the grantee documentation consisting of a list of all sub - bidders for each item of work that HBEs or WBEs were solicited including dollar amounts for both HBE /WBE and non - HBE /WBE sub - bidders.- Kaweah has submitted documentation of its advertisements requesting HBE /WBE /SBE quotes in the following publications: DAILY PACIFIC BUILDER - Did advertise 7- working days prior to bid day. - Ad did request quotations from HBE /DBE /WBE subcontractors. - The ad indicated that Bid Day was 11/01/90 allowing a very short time for subs to submit bids. DAILY CONSTRUCTION SERVICE - Did nn_i advertise for HBE /WBE quotations - The date of publication is shown to be 10/31/90, which is not 7- working days prior to the 11/07/90 Bid Date. BROWN AND CALDWELL -e. 6202 AW N.L IA E •<CGr:A£ CARL.SOAa CAUFORNw 9=9-0+'+ - 1619) 438 -8277 FAX: (6/9) 438.8892 Evaluation December 21, 1990 Page 5 of 18 DODGE GREEN SHEET - Did advertise 7- working days prior to Bid Day. - Ad did request quotations from MBE /WBE /DBE subcontractors. - The ad indicated that bids were due 11/01/90 allowing a very short time for subs to submit bids. SACRAMENTO BUILDER'S EXCHANGE - Did advertise 7- working days prior to Bid Day. - Ad did ant request quotations from HBE /WBE subs. - The ad indicated that bids were due 11/01/90 allowing a very short time for subs to submit bids. CONSTRUCTION DATA AND NEWS - Nothing submitted shows the above name on any of the advertisements. - An unidentifiable ad does show that Raweah advertised sub -bids from HBE /DBE /WBE /SBE subcontractors and suppliers. - The unidentified ad submitted shows no publication date. - The unidentified ad shows 11/01/90 as the date when bids are due. Raweah has stated that, on October 18, 1990 invitations were sent by regular mail to a list of HBE /WBE /SBE businesses gathered from the San Francisco /Oakland Minority Business Development Center. A. Raweah's form letter inviting sub -bids does net specify the item for which sub -bids are requested, as stipulated in the specific requirements for this step. B. Raweah, by sending its invitations by regular mail, has ant demonstrated an adequate positive effort according to the specific requirements for this step. C. The list of HBE /WBE /SBE businesses provided was for the EBHUD, Rheem Pumping Plant. All listed businesses are located in the San Francisco bay area and are more appropriate for the EBHUD project than for San Luis Obispo -Unit 3. Again, it probably would have been more effective to have solicited businesses located closer to the project. BROWN AND CALDWELL 5:':_AVFNIOACNC(NA8 CARLSBAD ,CAL(FORNIA?:npo {r1•(579)438 -8277 FAX:(519)436.6892 Evaluation December 21, 1990 Page 6 of 18 D. The list depicting a display of a random 40 out of 84 companies is of little use. Of the firms listed, only one (1) is located in the state of California. Host show addresses in the eastern half of the United Mates —We do not regard this as an appropriate positive effort. E. -I.. its letter to John Moss, dated November 13, 19901, Kaweah lists five (5) MBE /WBE /SBE firms that it contacted by telephone. For a project of this size, ,this effort appears to be meager at best. F. Kaweah has nat submitted to the grantee documentation consisting of a list of all sub - bidders for each item of work that HBEs or WBEs were solicited including dollar amounts for both MBE /WBE and non - MBE /WBE sub - bidders. There is no doubt that Kaweah Construction Co. has made an effort to comply with this requirement. However, as the prece.eding list of discrepancies indicates, its effort does not fully satisfy the requirements stipulated for Item No. 2 of the list of five positive affirmative effort steps. 3. "Divide total requirements, when economically feasible, into small tasks or quantities to permit maximum participation of HBE /WBE businesses.' Construction of wastewater facilities involves many different crafts. The San Luis Obispo -Unit 3 project is only moderate in size and, accordingly, the size of subcontracts for painting, reinforcing, landscaping and electrical, etc. will be some fraction of the modest bid price of $13 million. Accordingly, we believe this requirement for this project to be self - satisfying. 4. "Establish delivery schedules where the requirements of the work permit, which will encourage participation by small, minority, and women's businesses.' Contractor will be required to develop a detailed CPH Construction Schedule immediately after issuance of the Notice -to- Proceed. The activities on this schedule will, to some extent, be driven by the need to keep the existing plant elements functioning and on -line 24 hours per day during the construction period. This situation and the 25- BROWN AND CALDWELL a ",• f 620. AVENIDA ENONAS CAgLu6AD.CAUFO=!4!A 95 ^09 -0171 • 18191436.67717 FAX: (619) 438-E :. �2 • Evaluation December 21, 1990 Page 7 of 18 month project duration limit scheduling flexibility, but should still provide sufficient and reasonable time for MBE /WBE sub - bidders to perform. 5. 'The bidder must present documentation that contact was made with both the Small Business Administration and the Office .of Minority Business Enterprise.' As documented earlier, I have mimicked the steps Kaweah has taken to contact the offices listed above. The results I experienced were much the same as Kaweah's. I believe Kaweah has satisfied this requirement. SUMMARY: Brown and Caldwell's review of the three lowest bids as outlined in our letter dated 11/26/90, identified deficiencies in each of the contractor bid packages. None of the deficiencies were, in our opinion, at the time of bid opening, sufficiently severe to cause rejection of the bids by themselves. However, Kaweah's failure to submit the appropriate Form 4700 -5 and its further failure to provide most of the required information was regarded as a serious defect. During our subsequent review of Kaweah Construction Company's MBE /WBE positive effort documentation submitted subsequent to the bid opening, additional errors and defects were found. In our opinion, Kaweah's failure to fully comply with various HBE /WBE good -faith effort requirements in both its bid and in its positive effort documentation, constitutes a major deviation and exceeds the level of irregularity which an owner could prudently waive. EVALUATION OF FIVE AFFIRMATIVE STEPS 1. 'Including qualified HBE /WBE businesses on solicitation lists.' The bidder must document that it requested assistance from the Small Business Administration and the Office of Minority Business Enterprise MBE /WBE assistance centers and that this request for assistance was received by the HBE /WBE assistance centers at least five (5) working days prior to the need for referrals (see affirmative Step No. 5)_ BROWN AND CALDWELL 8202AVENIDAENCINAS CARL.SEtn•_:.LIFORNIA92009 .0171•(819)438.8277 FAX:(E19!Q8•EE92 R Evaluation December 2.1, 1990 Page 8 of 18 As part of my review, I retraced the steps outlined in Merco's letter to John Moss, dated November 28, 1990. In its letter, Herco indicated it had contacted the following associations on October 3 and 4, 1990. The following information was obtained as a result of retracing those contacts: NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS On December 17, 1990 I called the National Association of Women Business Owners and spoke with Hs. Bonnie Winter. She could find no record of having been contacted by Herco regarding the San Luis Obispo project. However, without a comprehensive telephone log, there is no evidence that the National Association of Women Business Owners was not contacted by Herco. WOMEN CONSTRUCTION OWNERS - EXECUTIVES I then called Women Construction Owners- Executives at (415) 568 -6174 and talked with Ed Sumrall. Hr. Sumrall could find no record of a Herco inquiry. ASSOCIATED GENERAL CONTRACTORS Next, I called the Associated General Contractors at (415) 568 -8839 and again reached Ed Sumrall. Hr. Sumrall had sent Herco a list of northern California HBE /WBE sources of assistance on October 3, 1990. MINORITY BUSINESS DEVELOPMENT CENTER Hy next calls were to the Minority Business Development Center (HBDC) affiliates; VEDA -San Joaquin Valley at (209) 252 -7551 (Hs. Maureen Barile); NEDA - Bakersfield at (805) 837 =0291 (Hs. Shirley Halverson), and NEDA- Sacramento at (916) 443 -0700 (Ms. Lawonda Alexander). Hs. Barile of the San Joaquin Valley office was able to confirm a Herco contact on October 10, 1990. Mrs. Alexander confirmed that her office had received an initial contact on October 2, 1990. Hr. Brian Kerfoot of the Sacramento office had transmitted.a list of MBE companies, sorted by discipline, and a note suggesting that Herco contact HBDCs in Los Angeles and Oxnard on October 4, 1990. All of the companies listed had northern California addresses. BROWN AND CA 6202 AVENIDA ENCINAS CAF�$cAD. CALIFORNIA 92009.0771 • (619)436-6277 FAXA6%) 438.8892 ,J ./r/ Evaluation December 21, 1.990 Page 9 of 18 It is obvious that Herco contacted several agencies, within the required time frame, to request assistance in locating HBE /WBE companies. In its documentation of Item S. Herco lists its telephone calls to the Small Business Administration at (415) 744 -3001 with a referral to'(213) 380 -9471, which is the telephone number for the Hinority Business Development Center in Los Angeles. Herco also documented its contact with the Office of-Hinority Business Enterprises and the referral to (213) 380 - 9.471, the Hinority Business Development Center in Los Angeles. In the documentation submitted, there was no evidence that Herco had contacted the California Department of Transportation. Again, given these circumstances, I believe Herco did make an honest effort to contact the designated agencies and business development centers to obtain lists of HBE /WBE companies. 2. 'Assure that HBE /WBE businesses are solicited whenever they are potential sources.' -The bidder must document that it has provided invitations to HBE /WBE bidders at least seven (7) working days prior to the need of a bid response. The bidder must document that invitations were sent to at least three (3) (or all, if less than three) HBE /WBE contractors /suppliers for each item of work referred by the HBE /WBE assistance center(s). The invitations must adequately specify the item(s) for which sub -bids were requested. The documentation of the bidder's effort to show positive efforts must indicate a real desire for a positive response; i.e., certified letter with return receipt requested or telephone call documentation. A regular letter or an unanswered telephone call is not adequate positive effort. The bidder must submit to the grantee documentation consisting of a list of all sub - bidders for each item of work that MBEs or WBEs were solicited including dollar amounts for both MBE /WBE and non - MBE /WBE sub - bidders.- BROWN AND CALDWELL 6202 AVENIDA ENCINA$ C ARLSBAD. CALIFORNIA 92009-OM • (619) 436.927' FA%: (6 +9) 436.6692 Evaluation December 21, 1990 Page 10 of 18 Herco has submitted documentation of its advertisements requesting HBE /WBE /DBE and SBE quotes in the following publications: SHALL BUSINESS E%ChARGE� - -" - Ad did request sub -bids from qualified HBE /DBE /WBE /LBL -subcontractors and suppliers. - The Ad that indicated bids were due 11/01/90 allowing a very short time for subs to submit bids. The date of publication is not shown. I contacted Rick Johnson at (415) 255 -6411 who was able to confirm that the advertisement was published in the October 4, 1990 issue only. DODGE GREEN SHEET - The Ad did request sub -bids from qualified HBE /WBE /DBE subcontractors and suppliers. - The Ad indicated that bids were due 11/01/90 allowing a very short time for subs to submit bids. - The date of publication was not shown. - I contacted Hs. Gail Brantly at (213) 720 -6168 who confirmed that the advertisement was published in the October 26, 1990 issue only. Herco has submitted documentation that on October 3, 1990 invitations to bid were sent to a list of HBE /WBE /SBE /DBE businesses. A. Merco's form post -card inviting sub -bids does nn* specify the item or trade for which sub -bids are requested, as stipulated in the specific requirements for this step. BROWN AND CALDWELL 8202AVENMAP: -INAS CARLSBAXCAUFORNIA92009- OM -(6' =; :38.8 7 FAX:(619)698 -8892 Evaluation December 21, 1990 Page it of 18 B. Herco sent its invitations by a form of regular mail known as business reply mail. While this does provide an opportunity for the recipient to reply at no cost., it does nothing to inform the sender that the -iuvitatr6n was received--by the addressee.- As certified letters with return receipts requested was not used to transmit its invitations to bid, Herco has not expended 4111 adequate positive effort. C. In its letter to John Hoss, dated November 28, 1990, Herco lists fifteen (15) MBE /WBE /SBE /DBE businesses contacted. Of these, only one was included on its 4700- S.form. Herco indicates a .08% MBE and a 4.79% WBE participation. The goal for San Luis Obispo County is 19.2% and 2 %0 respectively. D. Herco has net submitted to the grantee documentation consisting of a list of all sub - bidders for each item of work that MBEs or WBEs were solicited including dollar amounts for both MBE/WBE and non - HBE /WBE sub - bidders. Herco has also made an effort to satisfy this requirement. However, its effort does not comply with the requirements stipulated for Step No. 2 as the preceeding list of defects indicates. 3. "Divide total requirements, when economically feasible, into small tasks or quantities to permit maximum participation of HBE /WBE businesses." Herco has stated that it has broken the contract into thirty (30) sections or small portions and when replies to its invitations -to -bid were received, the prospective sub - bidders'were.informed of the small segments of the contract that were available to bid upon. A listing of the broken - down contract segments was included by Herco in its documentation package transmitted to the owner /grantee. Herco also states that when phone bids day, inquiries were made as to MBE/WBE form submitted with its documentation conversation with Hs. Sandra Townsend, this effort consists of asking whether was an MBE or a WBE. BROWN AND CALDWELL 6202 AVENIDA ENCI'. CASLE BAD. CALIFORNIA 92009.0177 • (619) 43' CZ 7 FAX: (619) 436 -8892 were received on bid - concerns. From the and my telephone it appears as though or not the sub - bidder Evaluation December 21, 1990 Page 12 of 18 Construction of wastewater facilities involves many different crafts. The San Luis Obispo -Unit 3 project is only moderate in size and, accordingly, the size of subcontracts for paint, reinforcing, landscaping and electrical, etc. will be some fraction of the modest bid price of $13 million. Accordingly, we believe this requirement for a project of this size to be self - satisfying. 4. 'Establish delivery schedules where the requirements of the work permit, which will encourage participation by small, minority, and women's businesses.' Contractor will be required to develop a detailed CPM Construction Schedule immediately after issuance of the Notice -to- Proceed. The activities on this schedule will, to some extent, be driven by the need to keep the existing plant elements functioning and on -line 24 hours per day during the construction period. This situation and the 25- month project duration limit scheduling flexibility, but should still provide sufficient and reasonable time for MBE /WBE sub - bidders to perform. 5. 'The bidder must present documentation that contact was made with both the Small Business Administration and the Office of Minority Business Enterprise.' As documented earlier, I have duplicated the steps Herco has taken to contact the offices listed above. The results I experienced were much the same as Herco's. I believe Herco has satisfied this requirement. SUMMARY: Our review of Herco Construction Engineers, Inc. MBE /WBE positive effort documentation submitted subsequent to the bid opening identified several defects. We found that Merco did contact the listed agencies and it did advertise for MBE /WBE participation within the time frames specified. However, in its execution of the requirements for Step No. 2, Herco failed to satisfy several of the specific stipulations outlined in the requirements for that activity. Additionally, the level of effort expended in the pursuit of qualified MBE /WBE businesses appears to be less than warranted to meet the stated goals for this project. The BROWN AND CALDWELL 6202 AVENIDA E n,_wFC CAfiL88AD. CALIFORNIA 92 0 0 9-0171 • 1f.•! 438 -6777 FA%: (6791 438.8892 Evaluation December 21, 1990 Page 13 of 18 combined MBE /KBE goal for San Luis Obispo County is 21.2 %. Herco's combined MBE /WBE participation, as shown on its 4700 -5 form, is 4.87%. Therefore, we believe that the Merco Construction Engineers, Inc. bid•for the San Luis Obispo -Unit 3 -- project is non- responsive. EVALUATION OF FIVE AFFIRMATIVE STEPS 1. °Including qualified MBE /WBE businesses on solicitation lists.' The bidder must document that it requested assistance from the Small Business Administration anal the Office of Minority Business Enterprise MBE /WBE assistance centers and that this request for assistance was received by the MBE /WBE assistance centers at least five (5) working days prior to the need for referrals (see affirmative Step Ho. 5). During my review, I attempted to confirm Alder's contact with the Small Business Administration and the Office of Minority Business Enterprise. I called the Small Business Administration at (415) 744 -3001 and spoke with Hs. Marsha Calhoun. She was unable to confirm that Alder had contacted that office as no telephone logs are kept. Hs. Calhoun referred me to their Santa Barbara office at (805) 964 -1136. Next, I called the Office of Minority Business Enterprise at its Santa Barbara branch at (805) 964 -1136. I talked with Hr. Greg Smith who also was unable to confirm contact by Alder. He indicated that if Alder had contacted that office and requested a list of MBE /WBE businesses, he would have taken Alder's name and address and sent the list to them. Notes in Alder's bid package indicate three (3) unsuccessful attempts to contact the Office of Minority Business Enterprise at the (415) 566 -6734 telephone number and the time and date of its call to the Small-Business Administration in San Francisco at (415) 744 -3001. BROWN: AND CALDWELL C�7•�� 6202 AVE'•"'. < ENVNAS CARLSBAD. CALIFORNIA 92009.0':+ • i619- t +p.8r7 FAX: (819) 438-8892 Evaluation December 21, 1990 Page 14 of 18 In its letter to John Moss, dated November 26, 1990, Alder states that it received a copy of the STATE OF CALIFORNIA, DEPT. OF TRANS., OFFICE OF CIVIL RIGHTS, DISADVANTAGED BUSINESS (DB) AND WOMEN BUSINESS ENTERPRISE (WBE) LIST, dated 10/10/90. Alder further states tinat-1t wets through the list and selected all of the DBE /WBE firms that indicated they performed work in the area of this project and that an invitation to bid was sent -LO this group of businesses. Alder had not initially provided documentation to support this claim. At my request, on December 19, 1990, Alder transmitted the telephone numbers of the potential sub - bidders selected from the Cal Trans list to which invitations to bid were mailed. Alder also provided a list of 570 potential subcontractors and suppliers to which its letter requesting bids and quotes on this project were sent. This list includes MBE /WBE businesses. The addresses of these potential sub - bidders were spread throughout the western United States, with more than 430 having California addresses and 64 of those located in the immediate San Luis Obispo area. In summary, Alder did contact the Small Business Administration and the Office of Minority Business Enterprise and obtained and used the State of California Department of Transportation, Office of Civil Rights, Disadvantaged Business (DB) and Women Business Enterprise (WBE) List to invite 30 sub - bidders to participate in the San Luis Obispo -Unit 3 project. Alder utilized its data- base listing of 570+ potential subcontractors and suppliers in its search for sub - bidders, as well as qualified MBE /WBE businesses. Further, Alder invited 46 MBE /WBE businesses to participate in this project through direct mail solicitation by the Small Business Exchange. Alder Engineering and Construction Co. has demonstrated that a significant good -faith effort was expended prior to bid opening to identify and include MBE /WBE businesses in its solicitation for sub -bids for this project. 2. 'Assure that MBE /WBE businesses are solicited whenever they are potential sources.' 'The bidder must document that it has provided invitations to MBE /WBE bidders at least seven (7) working days prior to the need of a bid response. BROWN AND CALDWELL {. 7'17 x.20 AVFN10A ENCINAS CARLSBAD. CALIFORNIi 9240E -0171 • (619) 438 -6277 FAX: (619) 438•e84: Evaluation December 21, 1990 Page 15 of 18 The bidder must document that invitations were sent to at least three (3) (or all, if less than three) MBE /WBE contractors /suppliers for each item of work referred by the MBE /WBE assistance center(s). The invitations must adequately specify Lae"ttem-rul -for which sub =bids were requested. The documentation of the bidder's effort to show positive efforts must indicate a real desire for a positive response; i.e., certikied letter with return receipt requested or telephone call documentation. A regular letter or an unanswered telephone call is not adequate positive effort. The bidder must submit to the grantee documentation con- sisting of a list of all sub - bidders for each item of work that MBEs or WBEs were solicited including dollar amounts for both MBE /WBE and non- MBE /WBE sub - bidders." Alder has submitted documentation of its advertisements requesting MBE /WBE /SBE quotes in the following publications: DAILY PACIFIC BUILDER - Did advertise 7- working days prior to bid day. - Ad did request quotations from MBE /DBE /WBE subcontractors. - The ad indicated that Bid Day was 11/01/90. However, the ad was published in the October 16, 1990 edition which allowed ample time for subs to submit bids. DODGE GREEN SHEET Did advertise 7- working days prior to Bid Day. Ad did request quotations from MBE /WBE /DBE subcontractors. - -The ad indicated that bids were due 11/01/90. However, the ad was published in the October 16, 1990 edition which allowed ample time for subs to submit bids. INTERMOUNTAIN CONTRACTOR - This advertisement is for quotations and sub -bids from MBE /DBE /WBE /SBE businesses for the Tucson, Arizona WWTP and is not germane to the San Luis Obispo -Unit 3 project.. BROWN AND CALDWELL e- '0)-/, 6202 AVENIDA ENCINAS CARLSM.CALIrCr,!JIA920%- 0171•(818)436.697 FAX:(619)438 -t%F_2 Evaluation December 21, 1990 Page 16 of 18 Alder has submitted documentation that on October 26, 1990 invitations requesting sub -bids and quotations were sent to DBE /WBE firms obtained from the Cal Trans list. On October 29, 1990, on behalf of Alder Engineering and Construction - '-Co:, thi! Small Business-Exchange mailed an advertisement soliciting MBE /DBE /WBE businesses for the Unit 3 project. The Small Business Exchange had inadvertently not included the ad in its October 25, 1990 publication. On September 25, 1990 Alder mailed its main solicitation for sub -bids to California businesses from its database list of potential subcontractors and suppliers. This is a general list that does include DBE /WBE businesses. A. Alder's form letter does specify the item or trade for which sub -bids are requested. B. Alder sent its invitations by regular mail. As certified letters with return receipts requested was not used to transmit its invitations to bid, Alder has. not expended adequate positive effort. C. In its bid Alder indicated its intent to have 3% MBE and 18% WBE participation. A check of the arithmetic shows these percentages to be 2.5% and 16.9 %, respectively. In its letter to John Moss dated, November 26, 1990, Alder indicates its intention to issue DBE /WBE contracts amounting to 19.5% DBE /WBE participation. D. Alder has nat submitted to the grantee documentation consisting of a list of all sub - bidders for each item of work that MBEs or WBEs were solicited including dollar amounts for both HBE /WBE and non -HBE /WBE sub - bidders. Alder.has.made a serious effort to comply with this requirement. Its effort does not fully comply with the requirements for Step No. 2 as the preceeding list of defects indicates. However, Alder has indicated its intention to award subcontracts to DBE /WBE businesses that closely approximates the combined HBE /WBE goals for San Luis Obispo County. BROWN AND CALDWELL elA /? 6202 AVENIDA ENCINAS CARL ^F qp, Ca.IrORNIA 92009-0171 • (819) 438.8277 FAY. (5191 4 38 -8e92 Evaluation December 21, 1990 Page 17 of 18 3. 'Divide total requirements, when economically feasible, into small tasks or quantities to permit maximum participation of MBE /WBE businesses.' — Construction of wastewater facilities involves many different crafts. The San Luis Obispo -Unit 3 project is only moderate in size and, accordingly, the size of subcontracts for painting, reinforcing, landscaping and electrical, etc. will be some fraction of the modest bid price of $13 million. Accordingly, we believe this requirement for this project to be self- satisfying. 4. 'Establish delivery schedules where the requirements of the work permit, which will encourage participation by small, minority, and women's businesses." Contractor will be required to develop a detailed CPH Construction Schedule immediately after issuance of the Notice -to- Proceed. The activities on this schedule will, to some extent, be driven by the need to keep the existing plant elements functioning and on -line 24 hours per day during the construction period. This situation and the 25- month project duration limit scheduling flexibility, but should still provide sufficient and reasonable time for MBE /WBE sub - bidders to perform. S. 'The bidder must present documentation that contact was made with both the Small Business Administration and the Office of Minority Business Enterprise.' As documented earlier, Alder did contact the Small Business Administration and the Office of minority Business Enterprise and was apparently the only one of the three (3) lowest bidders to obtain the Cal Trans list of certified MBE /WBE businesses. I believe Alder has satisfied this requirement. SUMMARY: Our review of Alder Engineering and Construction Company's MBE /WBE positive effort documentation submitted subsequent to bid opening also identified several defects. Alder did contact the required agencies within the specified time frame and was able to obtain a copy of the Cal Trans list of MBE /WBE businesses, BROWN AND CALDWELL 6202 AVEMDA ENCINAS c;- kLSFAD. CALIFORNIA MO-OM • (619) 439.9277 FA%:(6 0) 498.8892 ?•ao Evaluation December 21, 1990 Page 18-of 18 something neither of the other two lowest bidders were able to accomplish. In its pursuit of the requirements for Step No. 2, Alder also failed to comply with several of the specific stipulations for that activity. However, the level of effort it expended to contact qualified HBE /WBE businesses appears to be significantly greater than that of the other two lowest bidders._ Alder's combined HBE /WBE participation, as shown on its 4700 -5 form, is 19.4% (corrected from 21 %). The combined HBE /WBE goal for San Luis Obispo County is 21.2% RECOMMENDATION: Brown and Caldwell has reviewed the three lowest bids and the HBE /WBE positive effort documentation each of the three lowest bidders has submitted subsequent to the bid opening. Each of the bid packages contained deficiencies that were identified in our letter dated November 26; 1990. Each of the HBE /WBE positive effort documentation packages also contained defects that have been identified previously in this letter. If the narrowest interpretation of the requirements contained in Attachment #1 was administered, each of the three lowest bids could be declared non - responsive. In that case the contract would be rebid. However, the bid and HBE /WBE positive effort packages submitted by Alder Engineering and Construction Company contained the fewest defects and came closest to meeting the stated HBE /WBE goals (within 2 %). Accordingly, we believe that Alder has satisfied the intent of the Attachment #1 requirements, achieved satisfactory HBE /WBE participation and, subject to agreement by your attorney, should be awarded the San Luis Obispo Unit 3 WWTP.Improvements contract. Given that each of the three bid and documentation packages contained defects, a protest of any award of this contract to any of the three lowest bidders is likely. Consequently, we suggest you review this matter with your attorney prior to acting upon this recommendation. Very truly yours, BROWN AND CCALDW LL Robert J. Dancoisne Project Manager RJD:kr BROWN AND CALDWELL ` _ ? OCP/ 6202 AVENIDA ENCII.:F. C:F364D.CAUFORNIA 92009-0771 • (619) 43P•E2?7 FAX: (619) 438.9892 . _ 6Water Resources Control Board III E rJ�K+ ATTACHMENT B CLEAN WATER GRANT PROGRAM BULLETIN STATE WATER RESOURCES CONTROL BOARD Division of Clean Water Grants Jesse M. Diaz, Chief Manager. CLEAN WATER GRANT PROGRAM P.O. Box 100, Sacramento, California 95801 February 10, 1986 NO. 113A MINORITY BUSINESS ENTERPRISE /WOMEN'S BUSINESS ENTERPRISE (MBE/WBE) REQUIREMENTS FOR CONSTRUCTION CONTRACTS UNDER GRANTS AWARDED ON OR AFTER MAY 12, 1982 This Clean Water Grant Bulletin supersedes Bulletin No. 113 and transmits current State Water Resources Control Board Policy on the use of MBE/WBE's in the Clean Water Grant Program. This Policy is based on regulations set forth in the Code of Federal Regulations (40 CFR 33.240) dated May 12, 1982 (Interim - final rule) and March 28, 1983 (final rule) -refer to Attachment 1A. This Bulletin is applicable to all construction contracts exceeding $10,000 issued under grants awarded on or after May 12, 1982 where the construction contract is advertised after the date of this Bulletin. For construction contracts Issued under grants awarded prior to May 12, 1982, refer to Clean Water Grant Bulletin No. 77E. For grantees subject to the MBE/WBE policy in this Bulletin, the following procedures are to be followed: 1. Cooperate with the MBE/WBE assistance center(s) to increase MBE/WBE participation in this program. 2. Insert OCWG's 'MBE/WBE Construction Contract Provisions° (Attachment Nos. 1, 1A9 1B and 1C) in all construction contracts. Grantees may also utilize their own program for increased MBE/WBE participation. The grantees are encouraged to establish local goals provided they meet the minimum requirements of the EPA /DCWG program by requiring that all five affirmative steps be taken. 3. Submit the following items to OCWG with the request for Approval -to- Award (ATA) of the construction contract(s): a) The Grantee MBE/WBE Certification (Attachment No. 2) and upon request, additional documentation to support the contractor's positive effort. -2- b) The MBE/WBE Information Form No. 4700 -5 (Attachment No. 1 -8 that was submitted with the bid). This is in addition to the provisions of Government Code Section 4100, et. seq. of the State of California regarding designation of each subcontract in excess of one -half of one percent. c) The MBE/WBE Self.- Certification Form (Attachment No. 1 -C) must be submitted for each MBE /WBE firm listed on Form No. 4700 -5. The Prime Construction Contractor shall: 1. Comply with the requirements contained in this Bulletin, EPA Regulations, and if applicable, the grantee's MOE/WBE requirements. The prine contractor must make positive efforts prior*to bid opening as directed in Attachment No. 1. Positive Effort Requirements Attachment No. 1A (40 CFR 33.240) defines "positive effort ". The grantees and their prime construction contractors are encouraged to go beyond the required minimum effort to utilize MBE /WBE firms. Historical averages for MBE's have been developed over the last few years. These averages are shown for 12 geographical areas In Attachment 3. Grantees not achieving within 3 percent of the historical averiQe for MBE in their area and 2 percent for WBE participation will be required to submit documentation on positive effort discussed in the following paragrApils. This documentation will be thoroughly reviewed to assure that the grantee or his contractor has taken positive efforts in carrying out the five affirmative steps set forth in federal regulation 40 CFR 33.240. The Division may also require submittal of documentation of positive efforts in cases of protest or appeals.. The five affirmative steps and information required for documentation follows: 1. "Including qualified small, minority, and women's businesses on solicitation lists. The grantee must submit documentation that the successful bidder(s) requested assistance from both the Small Business Administration and the Office of Minority Business Enterprise assistance centers and that this request for assistance was received at least five (5) working days prior to the need for referrals (see affirmative Step No. 5), 2. "Assuring that small, minority, and women's husinesses are solicited, whenever they are potential sources." The grantee must submit documentation that the initial invitations to bidders were provided to MOE /WBE firms at least seven (7) working days prior to its need for a bid response. Also, documentation must be provided that invitations for bids were sent to at least three (3) (or all if less than three) MBE /WBE contractors /suppliers for-each item of work referred by the MBE/WBE assistance center. Requests for sub -bids must adequately specify the item(S) on which sub -bids are requested. L'•� -a3 -3- —e documentation of the selected bidder's efforts to receive a response from z mn/wSE f i rm must i ndi cate perf ormance j�,� oosi ti ve ef f ort, i - e I etters or -zlephone c?lls. An unanswered telephone call would not be considered adequate =sitive effort. Finally, the grantee must sutmit documentation consisting of a list of all sub-bids received for each item of work that MSE's or WBE's were solicitedo including the dollar amounts for both MBE/WBE and non-MBE/WBE sub-bidders. 3 "Dividing total requirements9 when economically feasible, into small tasks or quantities to permit maximum participation of small, minority and womengs businesses." The grantee must submit doc=entation which shows that the successful bidder(s) gave consideration to dividing �he contract into small proprietary portions (pavings electrical, landscaping, etc.). If this was not done, documentation must be submitted to explain why it could not be done. 4. uEst-2blishing delivery schedules where the requirements of the work pertrit, which will encourage participation by small, minority, and 9 won211 s businesses'." The grantee must submit docL-*ntation that the successful bidder(s) gave consideration to establishing a-project schedule which would allow MBE/WBE firms to bid the work as subcontractors or suppliers. If this was not done, document reasons why the project schedule ;e or portions thereof, cannot be modified so as to accomnodate in rested MBE/WBE firms. %s-.ng the services and assistance of the (11 Small Business Adrr-nistration, and (2) the office of Minority Business Enterprise of the J.S. Department of Commerces as appropriate." The grantee must submit documentation to show that the successful bidder(s) made contact with both of the above offices. If contact was made with neither, documentation must be submitted explaining why such contact was not made. MiE/WBE Assistance Centers The following MBE/WBE Assistance Centers are under contract with EPA and will provide assistance at no cost to grantees and construction contractors: SMALL BUSINESS ADMINISTRATION - Regional Office Attn: Pete Saugman, P.A. 450 Golden Gate Avenue San Francisco, CA 94102 Telephone No: (415) 556-1619 A 2-.J# -4- 2. OFFICE OF MINORITY BUSINESS ENTERPRISE - Department of Commerce - Regional Office Attn: Victor Casaus Enterprise Development Minority Business Development Agency San Francisco, CA 94102 Telephone No: (415) 556 -6734 Please contact the above office by telephone. Do not write. You will be given the location and phone number of the nearest inority Business Development Center, which is under contract to'the Regional Office. It will provide you with a listing of MBE /WBE firms. In addition, grantees are encouraged to urge the bidders at the prebid conference to procure supplies and services from labor surplus area firms. Responsibilities of Grantee The responsibility for assurance of compliance with the policy in this Bulletin rests upon the grantee through the certification process (Attachment No. 2). The grantee must stress the importance of this MBE/WBE program to all bidders at the prebid conference. The prebid conference must be held far enough in advance of the bid opening to allow all bidders to perform their affirmative steps. 1. The grantee must declare any bidder nonresponsive who fails to Perform, prior to bid opening, the affirmative steps listed in Attachmen*. No. 1. Summary To be eligible for continued grant funding, the grantee must assure compliance throughout the life of the construction contract(s) and apply sanctions if and when required. Failure to do so may lead to annulment, suspension or termination of the grant. If you have any questions regarding the procedures please contact th MBE E Unit at (916) 445 -3114. 'G Jesse M. D az, hief Divis on of Clean Water Grants Manaa r - Clean Water Grant Program ttachments listed in this Bulletin, d -; -'d' ATTACHMENT #1 CONTRACT PROVISIONS OF THE STATE WATER RESOURCES CONTROL BOARD (SWRCB) DIVISION OF CLEAN WATER GRANTS (DCWG) RELATIVE TO THE UTILIZATION OF MINORITY BUSINESS ENTERPRISE (MBE) AND WOMEN BUSINESS ENitRPRISE (WBE) ON CLEAN WATER GRANT CONSTRUCTION CONTRACTS IN CALIFORNIA This document and attachments shall be included by the owner /grantee as a contract provision for all construction contracts exceeding $10,000. Compliance with the requirements of this document and attachment satisfies the MBE /WBE requirements of the Environmental Protection Agency as published in the Federal Register, Volume 48, No. 60, March 28, 1983, and Volume 47, No. 92, May 12, 19A2. DEFINITIONS BONA FIDE MINORITY BUSINESS ENTERPRISE (MBE) MEANS: A minority business enterprise that has submitted a "Minority Business Enterprise /Women Business Enterprise Self- Certification" to, and been accepted as, a bona fide MBE by the owner /grantee. In addition the following requirements apply: 1. An independent business concern which is at least 51% owned and controlled by minority group member(s) (see definition of Minority Group Member). Ownership and control can be measured by: a. Responsibility for performance of contract work. b. Management responsibility C. At least 514. share of profits and risk. d. Other.data (such as voting rights) that may be related to ownership and /or control. ` 2. In cases where a firm is owned and controlled by a minority woman or women, the percentage may be credited towards MBE participation or as WBE participation, or alldcated, but may not be credited fully to both. BONA FIDE WOMEN BUSINESS ENTERPRISE (WBE) A women business enterprise that has submitted a "Minority Business Enterprise/Women Business Enterprise Self- Certification" to, and been accepted, as, a bona fide 'WBE by the owner /grantee. In addition, the following requirements apply: -2- 1. An independent business which is at least 511 owned by a woman or women who also control and operate it. a. Ownership. Determination of whether a business is at least 51% owned by a woman or women shall be made without regard to community property laws. For example, an otherwise qualified WEE which is 511 owned by a married woman in a community property state will not be disqualified because her husband has a 501 interest in her share. Similarly, a business which is 51% owned by anmarried man and 491 by an unmarried woman will not become a qualified WBE by virtue of his wife's 501 interest in his share of the business. b. Control and operation. "Control" means exercising the power to make policy decisions and "operate" means being actively involved in the day -to -day management of the business. JOINT VENTURE (JV) A business enterprise formed by a combination of firms under a joint venture agreement. To qualify as a bona fide MBE /WBE, the minority- owned /woman or women owned and controlled firms in the joint venture must: 1. Satisfy all requirements for bona fide MBE/WBE participation in their own right. In cases where a minority woman or women -owned firm participates in a JV, the percentage may be credited towards MBE participation or as WEE participation, or allocated, but may not be credited fully to both. 2. Share a clearly defined percentage of the ownership, management responsibilities, risks, and profits of the JV. Only this percentage will be credited towards the MBE /WBE goal. MINORITY GROUP MEMBERS A minority group member is an individual who is a citizen•of the United States and one of the following: 1. Native Americans consist of American Indian, Eskimo, Aleut, and Native Hawaiian. 2. Black Americans consist of U. S. Citizens, other than Hispanic, having origins in any of the black racial groups of Africa. 3. Asian Pacific Americans consist of U.S. citizens having origins in any of the original npnples of the Far East, Southeast Asia, and the Indian subcontinent. This area includes, for example, China, Japan, Korea, the Philippines, Vietnam, Samoa, Guam, the U.S. Trust Territories of the Pacific, Northern Marianas, Laos, Cambodia, and Taiwan. The Indian subcontinent takes in the countries of India, Pakistan, Bangladesh, Sri Lanka, Sikkim, and Bhutan. 6F -a? �II J I J -3- 4. Hispanic Americans consist of U.S. citizens with origins from Puerto Rico, Mexico, Cuba, or South or Central America. Only those persons from Central and South - American countries who are of Spanish origin, descent, or culture should be included in this category. Persons from Brazil, Guyana, Surinam or Trinidad, for example, would be classified according to their race and would not necessarily be included in the Hispanic category. In addition, this category does not include persons from Portugal, who should be classified according to race. BROKERAGE MEANS Buying and selling for others on commission or other fee basis without maintaining a warehouse or other similar inventory storage facilities (supplier and wholesale arrangements may also fall into this .business enterprise category) . CONSTRUCTION MEANS Erection, building, alteration, remodeling, improvement or extension of buildings, structures, or other property. I SUBAGREEMENT MEANS A written agreement between the grantee and contractor and any lower tier agreement for services, supplies, or construction necessary to complete the project. REQUIREMENTS A. Positive Effort Documentation The bidder must take affirmative steps prior to bid opening to assure that minority and women businesses are used whenever possible as sources of supplies, construction and services. Failure to take such steps prior to bid opening shall cause the bid to be rejec a as non responsive. Irma ive steps snall De as tollUws. 1. Including qualified MBE/WBE businesses on solicitation lists. The bidder must document that it requested assistance from the Small Business Administration and the Office of Minority Business Enterprise MBE /WBE assistance centers and that this request for assistance was received by the MBE /WBE assistance centers at least five (5) working days prior to the need for referrals (see affirmative step no. 5). 2. Assure that MBE /WBE businesses are solicited whenever they are potential sources. The bidder must document that it has provided invitations to MBE /WBE bidders at least seven (7) working days. prior to the need of a bid response. e 7j8 -4- The bidder must document that invitations were sent to at least three (3) (or all if less than three) MBE /WBE contractors /suppliers for each item of work referred by the MBE /WBE assistance center(s). The invitations must adequately specify the item(s) for which sub -bids were requested. The documentation of the bidder's effort to show positive efforts must indicate a real desire for a positive response; i.e., certified letter with return receipt requested or telephone call documentation. A regular letter or an unanswered telephone call is not adequate positive effort. The bidder must submit to the grantee documentation cohsisting of a list of all sub - bidders for each item of work that MBEs or WBEs were soliciteifincluding dollar amounts for both MBE /WBE and non - MBE /WBE - sub- bidders. 3. Divide total requirements, when economically feasible, into small tasks or quantities to permit maximum participation of MBE/WBE businesses. A bidder must document that it gave consideration to dividing the contract into small proprietary portions (paving, electrical, landscaping, etc.). If this was not done, documentation must be submitted explaining why it could not be done. 4. Establish delivery schedules where the requirements of the work permit, which will encourage participation by MBE /WBE businesses. The bidder must document that it gave consideration to•establishing a project schedule which would allow MBE /WBE businesses to bid the work as subcontractors or suppliers. If this is not done., document reasons why the project schedule, or portions thereof, cannot be modified 'so as to accomodate interested MBE /WBE businesses. S. Use of the services and assistance of the Small Business Administration, and the Office of Minority Business Enterprise' of the U.S. Department of Commerce, as appropriate. The bidder must present documentation that contact was made with both of the offices listed below. Their services are provided at no cost to the bidder. If contact was made with neither, documentation must be presented to explain why contact was not made. ev-a ? 1 -5_ Small Business -Administration: Regional Office 45n Golden Gate Avenue _ San Francisco, CA 94102 ATTN: Pete Saugman, P.A. Telephone: (415) 556 -1619 Off i C.o. _of Ni nor!4 Business -Victor Casaus - Enterprise: Regional Office Minority Business Devevlopment U.S. Dept. of Commerce: Agency (MBDA) -- - San Francisco, CA 94102 Telephone: (415) 556 -6734 Please contact the MBDA by telephone. Do not write. You will be given the location and phone number of a nearest inority Business - Development Center, which is under contract to the Regional Office. It will provide you with a listing of MBE /WBE firms. In addition, the bidder is encouraged to procure supplies and-services from labor surplus area firms. B. Other Requirements 1. The apparent "successful low bidder must submit documentation showing that, prior to bid opening, all required positive efforts were made. 1� This documentation must be received by the owner /grantee within ten +•! (10) working days following bid opening (except Attachment 1 -B which is to be submitted with the bid). 2. If the apparent successful low bidder has rejected or considered as nonresponsible and /or nonresponsive any low MBE or WBE sub- bidder, a complete explanation must be provided to the owner /grantee. 3. Each MBE/WBE firm to be utilized must complete the "MBE/WBE Self - Certification" Form.(Attachment 1 -C). I4. If additional MBE /WBE subcontracts become necessary after the award of the prime - contract, Attachment 1- 8'must be provided to the owner /grantee by the Prime Contractor within ten (10) working days following the award of each new subcontract. 5. Any deviation from the information contained in Form 4700 -5 (Attachment 1 -B) shall not result in a reduction of MBE /WBE participation without prior approval of the owner /grantee. 5. When brokerage type arrangements are utilized, only the amount of commission or fee will be eligible for MBE /WBE consideration. I 7. Failure of the apparent low bidder to perform the five affirmative steps prior to bid opening and /or to submit attachment 1 -8 with its bid will lead to its bid being declared non- responsive by the owner/ grantee. The owner /grantee may then award the contract to the next low responsive, responsible bidder meeting the requirements of this bulletin. The owners /grantee also may rebid the contract. OPTIONAL C. Local /Regional Goals In addition to complying with the positive effort requirements, the owner /grantee has established the following goals for this •project: A goal of percent of the total bid dollar amount of this contract Me reinafter described as the contract goal percentage) has been established for the utilization of.Minority Business Enterprises (MBE). A goal of percent of the total bid dollar amount of his contract has been esbM shed for the utilization of Women Business Enterprise (WBE). The MBE and WBE goals are separate goals and shall not be interchangable. They may be achieved when one of the following conditions is met:• 1. The bidder is a joint venture, of which at least one member of the firm is a MBE or WBE and shares responsiblity for.a.t least the contract goal percentage of the contract work to be-performed. A copy of the joint venture agreement must be submitted to the owner /grantee within ten (10) working days following bid opening, or 2. Subagreement totaling at least the contract goal percentages are awarded to both MBE(s) and WBE(s), or 3. Any combination of (1) and (2) that meet the contract goal percentage for MBE(s) and the separate goal percentage for WBE(s). e? 7-3/ r I i 1 ATTACHMENT NO. 1A Monday March 28, IM Part If Environmental Protection Agency Procurement Under Assletance Agreennnts 132 =40 Snra1t, tat am ,, vro wen'R end labor surpkr area busy oswa& (a) It Is EPA policy to award a fair share of subegreements to small. minority, and women's businesses. The recipient must take affirmative steps to aseurc that small, minority, and women's businesses are used when possible as sources of supplies. construction and services. Affirmative steps shell include the following: (1) Including qualified small, minority, and women's businesses on solicitation Lisa (2) Assuring that aatall. minority. and women's businesses are solicited whenever they are potential sources; (a) Dividing total requirements. wben economically feasible, into small taaks or quantities to parmlt maximum participation of small. minority, and women's businesses: (4) Establishing delivery schedules, when the requirenen!f of the work permit, which will eccourace Participation by anal:. m incrity, and women a businesses: Its) Using the services and assistance of the Small Business Administratian and the Office of Minority Busineof Enterprise of the U.S. Department of Commerce, as appropriate. and 'TO] 11 (hi contractor awards subagreements. requiring the contrarfo- to take the affirmative steps in paragraphs (a)(t) through (a)(S) of thrz section. (b)(Reservedl. (e) EPA encourages recipients to procure supplies and services from labor surplus area firms. ew 7 -32 MINORITY BUSINESS ENT RISE /WOMEN BUSINESS ENTERPRISE , AANTEE NAME EPA GRANT NO. PROJECT OESCAIPTSON PROJECT LOCATION 4TTACIAME"'T 1 -E ORMATION PRIME CONTRACTOR INFORMATION - NAME AND ADDRESS (Include ZIPcoce) TYPE OF CONTRACT . C:I ARCHITECT /ENGINEER (A /E) CONSTRUCTION L ' .i s r•( SUPPLIER/SERVICE ISM AMOUNT OF CONTRACT 1 USE I I qBE INIIIIIIIIIIII MBLIWBE INFORMATION NAME AND ADDRESS (IRCluDe ZIP Code) MBE I ( WOE I SUBCONTRACTOR ( I SUPPLIER /SERVICE I :DINT VENTURE I I BROKER CONTRACT AMOUNT rTTPE OF CONTRACT PHONE ACTUAL MBE PARTICIPATION: ACTUAL WBE PARTICIPATION: __ % MBE GOAL: -% WBE GOAL: SIGNATURE OF PERSON COMPLETING FORM: TITLE: PHONE: DATE left *10 e 7 MBE I.� qBE NAME AND ADDRESS (InClude ZIP Code) '-7- ^.._ ... —. ___.� I.1 SUBCONTRACTOR ( I SUPPLIER /SERVICE ( I JOINT VENTURE ( ( BROKER _-- CONTRACT AMOUNT PHONE TTPE OF CONTRACT d NAME AND ADDRESS ZIP I ( MOE ( ( WOE (Include Code) I_ I SUBCONTRACTOR ( I SUPPLIER/SERVICE JOINT Vl NTURE I. 1 BROKER .CONTRACT AMOUNT PHONE TTPE OF CONTRACT NAME AND ACORE53 (IncluCe ZIP COoe) ( ( USE ( ( qBE .�(. L.I SUBCONTRACTOR (, SUPPLIER/SERVICC I.1 JOINT VENTURE (_(,BROKER CONTRACT AMOUNT PHONE TTPE OF CONTRACT — •- -_ - -•_ -- .--.. — - _ C#03 TOTAL MBE TOTAL WBE AMOUNTS: $ AMOUNTS: $ �..� ACTUAL MBE PARTICIPATION: ACTUAL WBE PARTICIPATION: __ % MBE GOAL: -% WBE GOAL: SIGNATURE OF PERSON COMPLETING FORM: TITLE: PHONE: DATE left *10 e 7 MEETING DATE: '14 "�'i'III�IIII �illlli city o[ San lulS OBISp0 August 7 1990 COUNCIL AGENDA REPORT ITEM NUMBER: FROM: WiIliam T. Hetland W ` Prepared By: John E. Mos d'- Utilities Director Wastewater Division ManageA SUBJECT: Wastewater Management Plan Implementation, Approval of Plans and Specifications for Unit 3 Wastewater Treatment Improvements and Phase 1 Collection System Improvements. CAO RECOMMENDATION: By motion, 1) approve plans and specifications for Unit 3 Wastewater Treatment Plant Improvements and Phase 1 Collection System Improvements and authorize solicitation of bids; 2) authorize CAO to award if within engineer's estimate and SRF loan funding approved. DISCUSSION: Background: On October.28, 1986, the City retained Brown and Caldwell Engineers to prepare the Wastewater Management Plan (WWMP). The' purpose of the plan was to identify needed improvements to the City's wastewater treatment and collection facilities to meet all discharge requirements and treat expected future flows to the year 2015. Implementation of the WWMP to date has included activities related to planning, research, design and funding. The City has been working closely with the State Division of Loans and Grants (SDLG) in order to obtain low interest loan funding for the needed projects. On May 17, 1990 the State Water Resources Control Board approved loan funding of the City's projects in the amount of $35 million. Plans and specifications for Unit 3 Wastewater Treatment Plant Improvements . a•nd -Phase 1 Collection System Improvements projects were completed in May 1990 and submitted to the State Division of Loans and Grants for review and approval. The SDLG has subsequently completed their review of the plans and specifications and staff is now ready to advertise these two projects for bids. Unit 3 Wastewater Treatment Plant Improvements project consists of those modifications and additions to the City's treatment facility necessary to meet the effluent requirements identified in the City's National Pollutant Discharge Elimination System. (NPDES) permit. This includes processes for influent screening, aerated grit removal, ammonia removal and BOD and suspended solids removal. eI° *?,P0 h,!1�ilu�lllll��� 11 city o� San tins OBIspo COUNCIL AGENDA REPORT Plans and specs Approv Page 2 Phase 1 Collection System Improvements consist of approximately 3.2 miles of parallel relief and replacement sewers. These sewers are being installed to relieve the problem of surcharging of the collection system and subsequent spills resulting from high Infiltration /Inflow (I /I) during storm events. The new sewers will convey the high flows to the City's wastewater treatment plant for proper treatment and disposal. Consequences of Not Taking the Recommended Action: Staff has negotiated with the State Regional Water Quality Control Board (SRWQCB) , the final terms of a Consent Decree. The Consent Decree is a court documented agreement between the City and the State for achieving compliance with the discharge requirements in the City's NPDES permit. The Consent Decree includes a schedule of key activities or milestones necessary to achieve full compliance. Under the Consent Decree the City is required approve plans and specifications for Unit 3 by August 28, 1990 and to advertise these projects no later than October 10, 1990. Failure to meet the dates specified in the compliance schedule of the Consent Decree will result in fines from the State. It is essential to proceed with each step in the process in a timely manner in order to stay ahead of the compliance dates as much as possible. Conclusion: In order to obtain full compliance with the discharge requirements in the City's NPDES permit and to meet the compliance schedule in the Consent Decree the City must proceed with each step of the improvements projects in a timely manner. Authorizing staff to advertise for bids is the next step in process of achieving full compliance and is therefore recommended at this time.. FISCAL IMPACT:- The City is seeking and has obtained concept approval for State low interest loan funding of the needed improvements. Based on the cost projections and a 4 percent interest rate loan from the State, Council, on June 12, 1990, adopted Resolution No. 6824 approving rate increases of $2.00 per month each year for the next 3 years for a single family residence and a financing plan /revenue program sufficient to cover the debt service expense of the projects. Funding for these.projects has been approved and is identified in the 1989 -91 Financial Plan and Approved 1989 -90 Budget, Page E -17. `�7— S i city of San Luis OBIspo ►II�II COUNCIL AGENDA REPORT Plans and Specs Approval Page 3 - In the review of the plans and specifications the State has identified certain elements of the construction which are not eligible for loan funding. Those items found ineligible relate primarily to reserve capacity. The State will fund up to 12 years capacity from the date of project initiation. An example _ of this is; The State will not fund the difference in cost of a 54 inch versus a 48 inch influent line as the 54 in line is designed for year 2015 flows and only a 48 inch line is needed to handle the flows in the next 12 years. This difference in cost is minor in comparison to the cost of reconstruction of the line at a later date to accommodate the 2015 flows. Those items found ineligible for loan funding and their estimated cost are as follows: Components found ineligible for funding: UNIT 3 IMPROVEMENTS- Additional costs of providing a 54 inch diameter influent sewer in lieu of a 48 inch diameter sewer . ........................$17,000 Additional costs of providing 2 influent pumps at 22 mgd capacity in lieu of 2 pumps at 12 mgd . .... ........................$80,000 Additional costs of providing new pavement around the existing digesters . ..............$12,000 Additional costs of providing landscaping around the existing structures . .............$10,000 TOTAL INELIGIBLE $119,000 PHASE 1 COLLECTION SYSTEM IMPROVEMENTS- Bid..Item No. 25 - Comply with Corps and Fish 4nd Game Permits . ......................$10,000 Bid Item No. 26 - Comply with Caltrans Encroachment Permit . ........................$15,000 Additive Alternate No.l - Televise Existing Service Laterals. ... • ... ...$99,840 TOTAL INELIGIBLE$124,840 The total engineer's estimate for each project are identified below. The number in parentheses is the total estimated amount found ineligible for loan funding which will have to be funded through working capital balances or other debt financing. I 0'14110111illl 11' city of sa►n L"IS OBlspo 1 COUNCIL AGENDA REPORT Plans and Specs Approval -Page 4 Total Engineer's Estimate: Total Cost (Total Ineligible) * UNIT 3 IMPROVEMENTS - $15,245,005 ($119,000) ** PHASE 1 COLLECTION SYSTEM IMPROVEMENTS - $ 71152,577 ($124,840) * Includes 3% contingency ** Includes 20% contingency RECOMMENDATION: By motion, approve plans and specifications for Unit 3 Wastewater Treatment Plant Improvements and Phase 1 Collection System Improvements and authorize solicitation of bids. Attachments: Plans and Specifications are available in the Utilities Office for review. r-° KAWEAH -7 CONSTRUCTION CO. W1 GENERAL ENGINEERING CONTRACTORS =J•�1 v -C--J POST OFFICE BOX 7780. FRESNO. CALIFORNIA 93747 REPLY TO: SACRAMENTO DIVISION PHONE (209) 252.9492 • FAX (209) 252.7377 P.O. BO:: 26057. SACRAMENTO. CALIF. 95628 CALIFORNIA CONTRACTOR'S No. 130865 PHONE :916) 739 -6830 • FAX (916) 739-6319 l \ErCE' Y ED FCLERK/ 14 January 1991 JAN 14199 Q FY! DIX CITY couNCiu � -�� SAN LUIS OBISPO, SSA ❑�� ��EECHIEF City of San Luis Obispo IV' DUL City C o un c i 1 O PO[10ECH 955 Morro Str eet FA 0 0 MGMT.7M O RBCDIR San Luis Obispo, CA 93401 Cam' TD� �I1 A RE: SAN LUIS OBISPO WASTEWATER TREATMENT PLANT The Brown and Caldwell engineering firm's recommendation to the City of San Luis Obispo to rebid the city's planned waste water treatment plant (WWTP) is based on requirements not included in the project specifications and unsound logic. It is inherently unfair and unnecessary to rebid the San Luis Obispo waste water treatment plant as Brown and Caldwell (the city's hired engineering firm) recommends. The decision to rebid could lead to a project delay, decreased quality, litigation and additional costs to the city. We therefore suggest, in fairness to all, that the city, instead, requests authorization to award the project to Kaweah Construction Company from the California State Water Resources Board. Our position is based on the following key points: a. Kaweah's bid not only conforms with the Minority Business and Women Owned Business solicitation requirements, but has exceeded the Grant Agency's requirements. It is our understanding that the most serious objection to our bid is that Kaweah did not meet the documentation requirements of Bulletin 113A, Attachment 1, Step #2: "The bidder must document that invitations were sent to . . . MBE /WBE contractors /suppliers . . referred by the MBE /WBE assistance center(s)." Brown and Caldwell acknowledges Kaweah's efforts to secure the lists of MBE /WBE (Minority Business Enterprise /Women Owned Business Enterprise) contractors from the assistance centers; however, none of the MBE /WBE assistance centers were able to provide Kaweah with any usable lists. Without these lists we were obviously unable to send any documented invitations. Therefore, the requirements of step #2 do not apply. This point was confirmed by Dick Wasser of the State Water Resources Control Board when contractors at the construction prejob meeting complained about their inability to get assistance from the MBE /WBE assistance centers. Mr. Wasser stated that the only requirement would be a documented good faith effort to contact the MBE /WBE assistance centers. Brown and Caldwell has also acknowledged that Kaweah complied with this requirement. Mr. Wasser also suggested that we call Cal Trans, which our firm did, but Cal Trans said they weren't allowed to give us their list of MBE /WBE firms as this was not a highway project. So in response Kaweah took the following steps, beyond the technical requirements of the grant body, to try and meet its intent: (1) Paid for extensive advertisements for.MBE /WBE firms in the Green Sheet, Daily Pacific Builder and Southern California Small Business Exchange. These paid advertisements, at a cost of $2,481.00 were beyond the efforts of other firms. (2) Sent out solicitation letters to 20 MBOE /WBE firms from a list provided by East Bay Municipal Utility District. These are firms familiar with treatment plant work and many are familiar with our firm. (3) Documented phone calls to nine MBE /WBE firms, seven of whom ultimately bid on the project..,0ur phone calls, well in advance of the bid, encouraged several MBE /WBE firms to bid on the project. b. Any failure in the minority business solicitations is attributable to Brown and Caldwell. The State Water Quality Control Board Bulletin 113A requires the grantee to help the MBE /WBE Centers develop these lists of MBE /WBE contractors prior to the bid. Brown and Caldwell did not do this, therefore, they can not objectively review the bid proposals. C. Kaweah is supportive of minorities and women. Forty -five percent of Kaweah field personnel are minorities. Our assigned project manager for this project is a minority. The chairperson of our parent company is a woman. Our second largest subco.n. *ractor on the project (the rebar subcontractor) is a WBE. Our landscape subcontractor is also a WBE. If the project is not awarded to Kaweah, and hence rebid, there is no guarantee that any MBE /WBE subcontractors will land a portion of the work. d. The contract specifications and state law grant the city the right to disregard minor bid irregularities. e. A rebid due to minor irregularities implies that only a perfect bid will be considered. All bids reviewed contained some sort of minor irregularity, therefore the city must recognize that there is a high probability of irregularities if it were rebid. The city will have no choice but to apply the same standards established in the November bid and will be unable to award any bid less than 100% perfect. Doing so could result in protest, litigation, additional costs and time delays. Ultimately, this could threaten the Cty's grant and expose the City to fines for failure to meet the obligations imposed by the cease and desist order. f. A rebid is inherently unfair because all prices have been exposed corrupting the competitive bid process. Not only for the general contractor, but also for the sub - contractors and suppliers. This includes the minority owned businesses that Kaweah would be using if awarded the project. Kaweah has met the solicitation requirements of the Clean Water Grant Program Bulletin 113A. In addition, we have documented a substantial good faith effort to assist MBE /WBE firms. Steps taken by Kaweah have been well in excess of the simple good faith effort to contact the MBE /WBE assistance centers expressed by Mr. Dick Wasser at the prebid meeting. Kaweah is a highly qualified, union, Fresno based firm that would provide San Luis Obispo with the project management skills required for this demanding project. It is very clear that the proper decision for the City Council is to request permission from the State .Water Quality Control Board to award the San Luis Obispo Waste Water Treatment Plant project to Kaweah Construction Company. Any other decision is unfair, unnecessary and potentially damaging to the city of San Luis Obispo. We look forward to Brown and Caldwell project. Respectfully yours, Will Lyles Division Manager the opportunity to work with the City and engineers to make this a successful MEr'NG AGENDA/�� DA1'e� ITEM # s�.,C city Of sAn luis oBispo 955 Morro Street • San Luis Obispo, CA 93401 January 15, 1991 TO: City Council �.'. FROM: William T. Hetland, Utilities Director VIA: John Dunn, City Administrative Officer SUBJECT: Rejection of Wastewater Treatment Plant Unit 3 Bids As you are aware, Kaweah Construction Company has been lobbying the City Council and staff to not reject our Wastewater Treatment Plant (WWTP) bids. They are suggesting that their inability to comply with the Minority Business (MB) and Women Owned Business (WOB) requirements are minor and should be waived by the City Council. The staff report presents in detail the review process the City and our consultant, Brown and Caldwell undertook before reaching the conclusion to reject all bids. Staff has reviewed Kaweah's letter dated January 14, 1991 regarding their bid and a suggestion that the State Department of Water Resources review the award determination. The letter contains incorrect statements and misrepresentations. It also presents a number of issues that do not apply to the MB and WOB requirements. City staff contacted the State Department of Water Resources and their attorney. We asked if the State would participate in a review of our determination regarding the MB and WOB enterprises. They responded that they would not, it was the City's responsibility. They were also of the opinion that the City could not waive these requirements as minor bid irregularities. Based on this response from the State, staff continues to support our recommendation in rejecting the WWTP bids. RECEIVED WTH:bja JAN 1 5 1991 3."go P CITY CLERK SAN LUIS OBISPO, CA �'IFliK FYI /C=aWn ❑ cnnnL F,CA0 ❑ FIN.DIR �C CA O E� A FIRn /ORIC❑ mucEat ❑ mcml -. RECDIR