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RPVCCA_CC_SR_2013_07_02_02_San_Ramon_Project_Response_To_YarberCITY OF MEMORANDUM TO: FROM: DATE: SUBJECT: HONORABLE MAYOR & CITY COUNCIL MEMBERS 0&/'\_ES JONES, INTERIM DIRECTOR OF PUBLIC WORKS~ JULY 2, 2013 UPDATED RESPONSE TO SHARON YARBER'S COMMENTS REGARDING THE CITY'S ADMINISTRATION OF THE SAN RAMON PROJECT REVIEWED:CAROL YN LEHR, CITY MANAGER@ b-CL RECOMMENDATION Staff recommends that the City Council find that Staff has acted appropriately in its administration of the San Ramon Project with no further action required, other than the receipt and filing of this staff report. INTRODUCTION A member of the public, City resident Sharon Yarber, has raised numerous arguments and comments in connection with the City's administration of the San Ramon construction project. Ms. Yarber's contentions focus primarily upon: (1) the selection of the pipe material and lining for this project, which was used previously in the Mccarrell Canyon project; (2) the City's refusal to accept an untimely bid, as required by State law; (3) the recommended approval of a change order that was proposed by the Contractor in accordance Section 7101 of the California Public Contract Code to use another type of steel pipe and lining, which had been determined by an independent consultant and the project engineer to be equivalent to the pipe that was included in the City's original bid specifications, and was authorized by the City Council on May 21st, and (4) Staff's refusal to entertain an offer from the original pipe manufacturer to receive monies directly from that manufacturer at the end of the project. Many of Ms. Yarber's comments lack legal or factual support. Moreover, if some of her suggestions were followed, they would violate provisions of State law and could result in substantial claims for damages against the City due to delay of the project Staff and the City Attorney's Office submit that for these reasons, which are discussed in greater detail below, that the contract has been administered properly by the City in 2-1 accordance with the provisions of State law. BACKGROUND AND DISCUSSION 1. The Pipe Specifications for the Project The San Ramon storm drain project ("the Project") is both large and challenging. Two of the principal challenges are: (1) its location in an area where there are both dormant and active landslides, and (2) the pipe will convey storm water and debris from the streets and canyon above through a storm drain pipe to the beach below. Due to the large rocks and boulders that can bounce down the pipe during a rain storm, any pipe that is installed will incur wear and tear and some damage over time. Accordingly, when the Project was designed by the City's design engineer, Harris and Associates ("Harris"), particular attention was devoted to the type of pipe that would be used. Various types of pipe were evaluated, discussed and eventually rejected in favor of a strong steel pipe that had been used previously in the Mccarrell Canyon project. That pipe has a proprietary design and is manufactured exclusively by and obtained exclusively from Permalok. The Permalok pipe has the additional advantage of having an interlocking joining system that does not require welding to make connections (except at elbow bends or wall thickness transition connections), which is particularly advantageous in steep areas where welding is difficult.1 Despite its advantages, Permalok pipe is not perfect. Prior to the issuance of the bid specifications for the San Ramon Project, Staff brought to Harris' attention that the epoxy lining of the pipe in Mccarrell Canyon had been damaged in some locations due to the rocks that had bounced down the pipe during rainstorms. Harris, in turn, raised the issue to Permalok, which recommended a thicker epoxy lining be required for the San Ramon Project. Accordingly, the design specifications were revised to make that change before the notice inviting sealed bids was issued by the City on 11/29/2012. 2. Specification of Permalok Pipe. When the bids specifications were issued, the Special (technical) provisions required that Permalok pipe "or exact equal" be used by the bidders. As stated in the prior Section, Permalok pipe is a patented product that is available from only one source, Permalok. Questions have been raised about the use of the phrase "or exact equal" in light of the provisions of Public Contract Code Section 3400, which states in relevant part: "(a) The Legislature finds and declares that it is the intent of this section to encourage contractors and manufacturers to develop and implement new and ingenious materials, products, and services that function as well, in all essential respects, as materials, products, and services that are required by a contract, but at a lower cost to taxpayers. 1 The May 21 51 Staff report discussed the Permalok pipe in greater detail and is attached to this report for ease of reference as Exhibit F. 2-2 "(b) No agency of the state, nor any political subdivision, municipal corporation, or district, nor any public officer or person charged with the letting of contracts for the construction, alteration, or repair of public works, shall draft or cause to be drafted specifications for bids, in connection with the construction, alteration, or repair of public works, (1) in a manner that limits the bidding, directly or indirectly, to any one specific concern, or (2) calling for a designated material, product, thing, or service by specific brand or trade name unless the specification is followed by the words "or equal" so that bidders may furnish any equal material, product, thing, or service. In applying this section, the specifying agency shall, if aware of an equal product manufactured in this state, name that product in the specification. Specifications shall provide a period of time prior to or after, or prior to and after, the award of the contract for submission of data substantiating a request for a substitution of "an equal" item. If no time period is specified, data may be submitted any time within 35 days after the award of the contract. "(c) Subdivision (b) is not applicable if the awarding authority, or its designee, makes a finding that is described in the invitation for bids or request for proposals that a particular material, product, thing, or service is designated by specific brand or trade name for any of the following purposes: (3) In order to obtain a necessary item that is only available from one source . " Because Permalok pipe can be obtained only from Permalok, Harris specified it by name in the bid specifications along with the phrase "or exact equal." The intent of this designation was to require all of the bidders to submit bids including Permalok pipe or a product that is virtually identical to Permalok. Since Permalok is a patented product that is available from only one source, it is extremely unlikely that a pipe, which is exactly equal to Permalok, can be obtained. Even though Permalok was specified in the Special provisions of the bid specifications, the General Provisions of the bid package allow bidders to propose equivalent products. For example, Section F-5 of the General Provisions of the City's bid package states: "5 -TRADE NAMES AND ALTERNATIVES "For convenience in designation on the plans or in the specifications, certain equipment or articles or materials to be incorporated in the work may be designated under a trade name of manufacturer and the catalog information. The use of an alternative equipment or an article or equipment which is of equal quality and of the required characteristics for the purpose intended will be permitted, subject to the approval of the Director of Public Works or his authorized representative, in accordance with the following required by Section 3400 of the Public Contract Code of the State of California: "The burden of proof as to the comparative quality and suitability of alternative equipment or articles or materials shall be upon the Contractor, and Contractor shall furnish, at Contractor's own expense, all information necessary or related thereto as required by the Director of Public Works or his authorized representative. The 2-3 Director of Public Works shall be the sole judge as to the comparative quality and suitability of alternative equipment or articles or materials and the Director's decision shall be final. All requests for substitution shall be submitted, together with all documentation necessary for the Director to determine equality, within 20 days following the award of the contract." Accordingly, 13 days after the award of the bid to Woods, Woods followed the procedure set forth above and in Section 3400 and proposed another steel pipe be used instead of the Permalok pipe. City Staff, City consultants and Harris evaluated Woods' proposal and determined that the proposed pipe was equal, or even superior, to the Permalok pipe. (See, discussion in Section 5 below.) Staff recommended the change order be approved by the City Council, which occurred on May 21 51 . To summarize, although the phrase "or exact equal," which was used in the bid specifications, deviated from the language set forth in Section 3400(b), the City followed the process set forth in Section 3400 and considered Woods' request to substitute a different steel pipe in place of the Permalok pipe and ultimately exercised its discretion to approve the request. As such, the City has substantially complied with Section 3400. 3. The Prequalification and Bid Process. Prior to issuing the Notice Inviting Sealed Bids, the City had conducted a prequalification of bidders so that any bidder who bids on the Project would have the requisite experience with constructing this type of project. Eleven bidders responded during the prequalification process and were prequalified by the City. As outlined in the Staff report of 3/5/2013 for the award of the San Ramon construction project, five bids were received by the City and were opened on January 25, 2013. One contractor, Mike Bubalo Construction (MSC), was late in submitting its bid; accordingly that bid was returned unopened in accordance with the requirements of state law. This contractor subsequently submitted a protest on various grounds, all of which were found to be without merit. Staff advised the contractor of the City's decision. The Contractor appealed the ruling, which was submitted to the City Manager on February 22, 2013. The appeal was reviewed by the City Manager, who also determined that the appeal lacked merit. 2 Much has been made about the fact that City did not accept MBC's bid, which is discussed in greater detail in the next Section below. 4. Rejection of the Untimely Bid 2 Copies of the letters from MBC's attorneys and the responses of the Public Works Director and the City Manager are attached as Exhibit G. A question was raised about the appeal process that was used. There is no particular process that is specified under State Law or in the Greenbook for determining bid protest appeals, which typically are filed by bidders who submit timely bids but are not awarded the project. In this case, MBC was afforded the opportunity to appeal the Director's determination to the City Manager. 2-4 The City issued a Notice Inviting Sealed Bids on the Project, which stated that the bids must be received by the City at 11 :00 a.m., on Tuesday, January 25, 2013, at the Office of Public Works, and that the bids would be opened at 11 :00 a.m. on that date. The Public Works Department has a time clock that is used by City staff as the official time clock to stamp in each bid as it is submitted to the City. The Notice Inviting Sealed Bids did not state that the City would use that particular clock, but the City staff, as a matter of practice, informs all potential bidders that the City will use the Public Works time-stamp clock ("Clock") to determine when bids are submitted, and City staff so informed all prospective bidders in this instance, including the representative of the San Ramon bidder who was late, Mike Bubalo Construction, Inc. ("MBC").3 The City's Clock is plugged into an electrical outlet and has a back-up battery in case of power outages. Staff advised us that they have not experienced any difficulty with the operation or accuracy of the Clock. On January 25, 2013, the City Hall opened for acceptance of bids at 7:30 a.m. at the Public Works counter. Bidders could have submitted bids starting at 7:30 a.m., or on any prior day. The City received and accepted five bids on January 25th by the 11 :00 a.m. deadline. The five timely bids were submitted between 10:54 and 11 :00 a.m. After the 11 :00 a.m. deadline passed, City staff took the bidders who were present down to the Community Room to open the bids. After they had entered the Community Room, Staff observed a man running down the sidewalk into the building. At that time, the City's Clock read "11 :01 a.m." The individual was an agent for MBC. The MBC agent attempted to submit his bid, but City staff informed him that because it was after 11 :00, the bid was late and could not be accepted. Staff time-stamped the package by inserting a blank piece of paper into the time-clock, which stamped it as "11 :01 ". Staff was unable to actually stamp in the sealed bid packet itself because it was too thick. The MBC agent commented that according to his cell phone, he walked into City Hall at 10:58 a.m., even though the City's Clock indicated that he arrived at 11 :01 a.m. Because the MBC bid was late, the City did not open the bid or consider it during the bidding process, and returned the unopened bid package to MBC. MBC contended that MBC would have been the low bidder if the City had accepted the bid, and that its bid was timely based on the time shown on the representative's cell phone when he arrived at the City. Because the bid was returned unopened in accordance with the requirements of State law, the amount of MBC's bid was not verified by Staff, and Staff still does not know if the MBC bid is $1 million less than the Woods bid or if the MBC bid is the lowest bid. A. California's Public Bidding Laws Prov ide That Late Bids Shall Be Returned Unopened to the Potential Bidder Under California law, in general law cities, public works contracts for public projects over $5,000 must be awarded pursuant to competitive bidding to the lowest responsible 3 Staff has advised us that on the morning of the bid opening, MBC's representative came to the Public Works counter approximately one hour before the bid opening to inquire about the location where the bids would be accepted and opened. Staff advised him about the City clock that would be used to determine the timeliness of the bids, the location where the bids would be received (the counter), and the location where the bids would be opened (the Community Room). He did not submit the bid at that time and advised Staff that he would return. (See Exhibit B.) 2-5 and responsive bidder. Cal. Pub. Contract Code § 20162. The purpose of the competitive bidding requirements is to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate advantageous market place competition. Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897, 907. In order to accomplish these goals, the statutes are strictly interpreted: Because of the potential for abuse arising from deviations from strict adherence to standards which promote these public benefits, the letting of public contracts universally receives close judicial scrutiny and contracts awarded without strict compliance with bidding requirements will be set aside. This preventative approach is applied even where it is certain there was in fact no corruption or adverse effect upon the bidding process, and the deviations would save the entity money. (Citations omitted.) Ghilotti, 45 Cal.App.41h 897, 907-908. A contract awarded against the dictates of the competitive bidding laws is improper. See City of lnglewood-L.A. County Civic Center Auth. v. Superior Court (1972) 7 Cal.3d 861, 870. The competitive bidding procedures for California general law cities are contained in Government Code § 53068, which provides that "Any local agency, as defined in Section 54951 of the Government Code, which seeks to enter a contract that requires the letting of bids, shall specify in the public notice the place such bids are to be received and the time by which they shall be received. Any bids received by such local agency after the time specified in the notice shall be returned unopened." (Emphasis added.) A city is defined as a "local agency" under Government Code § 54951. A similar requirement is imposed by the Subletting and Subcontracting Fair Practices Act, in Public Contract Code§ 4104.5, which provides that: "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 .... Any bids received after the time specified in the notice or any extension due to material changes shall be returned unopened." (Emphasis added.) Therefore, under California law, a bid that is not submitted to the City by the time deadline specified in the notice inviting bids is untimely and must be returned unopened to the bidder. Adherence to this process complies with State law and eliminates the competitive advantage that a late bidder would receive if a late bid were accepted. (See attached article, Exhibit H.) B. The City Properly Relied Upon Its Pu blic Works Clock to Determine Time of Submittal of Each Bid MBC argued that its bid was timely because the MBC agent arrived at City Hall at 10:58 a.m., according to the agent's cell phone. However, existing cases support the conclusion that MBC's bid was properly rejected as late by the City based on the time reflected in the City's Clock and the City's standard practices. The cases reflect that the notice inviting bids is strictly construed, that there is no statutory requirement for the 2-6 type of clock to be used by cities in determining the time of bid submittal, and that the public agency may rely on its standard practices in the absence of evidence that the official time clock was inaccurate. For example, under federal regulations, there is a presumption that the bid officer's declaration of bid opening time is correct, and unless a protestor shows "clearly" that the time of bid declaration was inaccurate, the bid declaration stands .... If the protestor and the bid officer just disagree about the time, the presumption of a correct declaration prevails." Washington Mechanical Contractors, Inc. v. United States Department of the Navy (N.D. Cal. 1984) 612 F.Supp. 1243, 1247. That presumption exists "to protect the government agency from every disappointed late bidder who might claim his watch is better than the bid clock." Ibid. In Washington, the award of a contract to a late bidder was upheld because the court concluded there was actual evidence that the official time clock was fast. The district court rejected the presumption that the official declaration of the time for bid opening was correct, because under the facts of that case, the Navy agreed that its own equipment was faulty. On the day of the bid opening, the Navy tested the official time clock three times before the bid opening, and each time the clock had to be re-set because it was fast. As a result, the court ruled the Navy did not act arbitrarily or capriciously in awarding the bid to the bidder whose bid was untimely according to the Navy's faulty clock. Washington, 612 F.Supp. 1243, 1247. In conclusion, California courts strictly interpret the competitive bidding statutes. Public Contract Code § 53068 requires that if a bid is late, it must be return unopened to the bidder and cannot be considered by the City in awarding a public works contract. In this situation, the City followed its normal procedures to determine when the deadline arrived for submittal of bids based on the time shown on its Clock in the Public Works Department, which was running properly. Although the MBC agent contended his cell phone indicated there was still time to submit the bid when he arrived at City Hall, City Staff correctly relied on the City's established uniform requirement that the time must be determined by one clock -the Public Works time-stamp Clock --so that all bidders are treated equally. If the City were to rely on various clocks or watches showing different times, the bidding process would become uncertain and unfair, and there would be no way for Staff to determine the timeliness of submittal of bids in a consistent, impartial manner as required by the Public Contract Code. 5. Woods' Request for Substitution of the Pipe The contract was awarded to the low bidder, LH Woods & Sons (Woods), by the City Council on 3/5/2013. At their request, Woods staff met with City Staff, on 3/14/13 to discuss the merits of possible value engineering options, which led to submitting a preliminary pipe substitution proposal on 3/18/2013 to use a different type of steel pipe with a polyurethane lining that is welded together in the field in place of the Permalok steel pipe with the epoxy lining. This substitution process specifically is authorized by Section 3400 of the Public Contract Code. In addition, pursuant to Section 7101 of the State Public Contract Code, if the contractor is the low bidder on the project, and if the contractor's proposal is accepted by the City, the City is required to share 50% of the 2-7 net cost savings, as determined by the City, with the contractor.4 California Public Contract Code Section 7101 states in relevant part: "The state or any other public entity in any public works contract awarded to the lowest bidder, may provide for the payment of extra compensation to the contractor for the cost reduction changes in the plans and specifications for the project made pursuant to a proposal submitted by the contractor. The extra compensation to the contractor shall be 50 percent of the net savings in construction costs as determined by the public entity .... The contractor may not be required to perform the changes contained in an eligible change proposal submitted in compliance with the provisions of the contract unless the proposal was accepted by the public entity." The preliminary proposal for the pipe substitution initially was rejected by Harris on 3/22/2013. When the City staff found that Harris had rejected the substitution based on the opinion of the manufacturer of the originally-specified pipe (Permalok}, the City sought out an independent third party steel pipe specialist to evaluate Woods' proposal. Alan Braatvedt of KOA Corporation, the City's construction manager, suggested the engineering firm of Kennedy Jenks Consultants to provide an independent and objective evaluation of the comparison of the Permalok pipe and the proposed substitute pipe. There was the potential for a considerable saving for the City, so this was undertaken by Staff to provide a relatively inexpensive due diligence report to ascertain whether it would be worthwhile to pursue. The Kennedy Jenks report (attached) was presented to Harris on 4/8/2013, and the pipe substitution subsequently was accepted by Harris. (See the exhibit to the May 21st staff report.) Value engineered change orders appear to be a concept that is not fully understood by the public, which appears to be the reason that Staff's motives were questioned at the City Council meeting of 6/4/2013. While change orders increasing City costs are more common, this type of change order, if approved by the City, seeks to save both the City and the contractor expense without sacrificing quality. It is important to note here that the phrase "if approved" by the City is significant. The contractor must develop the necessary engineering changes and submit them to the City for consideration. In this case, any risk resulting from the change order is borne by the contractor and Harris. The warranty for the work and responsibility for a complete project is not borne by the City. Again, in this case, the total amount saved was $636,266, which will be divided evenly between the City and Woods in accordance with Public Contact Code Section 7101. To assure that the City Council was aware of the proposed pipe substitution and to promote transparency, Staff brought the proposed change order to the City Council for approval at the City Council meeting on May 21, 2013. Staff did so, even though the contract provides that substitutions can be approved by the Director of Public Works. The City Council approved the substitution of the pipe that Woods proposed at the May 21st City Council meeting. 6. Permalok's Offer to the City 4 See the attached May 21st staff report. 2-8 Meanwhile, Permalok made an offer to City Staff to pay $400,000 to the City at the conclusion of the Project, if the City did not approve the pipe substitution that was proposed by Woods. Staff was understandably uncomfortable with this proposal, since it was an inappropriate offer that was made directly to a City representative (Mr. Braadvedt), even though Woods is required by its construction contract with the City to purchase the pipe for the Project. The City Attorney and Staff notified the City Council of the Permalok offer, so the City Council would be aware of it. This offer, however, was not discussed in the May 21 5 staff report, because the Council's decision whether to approve the change order was properly focused on the technical evaluation of the substitute pipe and whether it was equivalent to the Permalok pipe that had been included in the City's bid specifications . If the City were to have accepted the proposal from Permalok, the City would have altered unilaterally its contract with Woods, which it cannot do in the absence of Woods' permission. Moreover, even if Woods were to grant permission to the City to alter the contract so that the City would supply the Permalok pipe for the Project at the reduced price, the City, in effect, would be creating a new project that would have to be rebid, or run the risk of a lawsuit from the unsuccessful bidders. To further explain, the City issued a notice inviting bids for a contractor to supply pipe and construct the storm drain. The bid package included specifications for the pipe. The bids that were submitted included costs for labor and materials. The total cost of the installed pipe, as shown on Woods' bid, is $7,796,759. (This does not include any other materials from the bid specifications that Woods would no longer need, if Woods didn't have to supply the pipe). The total bid was $15, 150,000. Thus, removal of the pipe probably would exceed the 25% cap on allowable change orders. Both the reduction in dollars and the elimination of the primary element needed to do the project (the pipe) would support an argument that elimination of the pipe would create a whole new project. In that case, public bidding would be required to be conducted again. Of course, given that the construction already has commenced; the substitute pipe has been ordered, and the State grant deadline would not afford the City the time to restart the bid process, this option is not realistically available to the City. 7. Potential Damages The Greenbook, which is incorporated by reference into this contract, has a provision for changes initiated by the Agency (Section 3-2). The City may change the plans, specifications, character of the work or quantity of work subject to certain requirements. If any bid item is eliminated in its entirety, "payment will be made to the Contractor for its actual cost incurred in connection with the eliminated item prior to notification in writing from the Engineer so stating its elimination." (Section 3-2.5) This includes payment for the actual cost of material that is ordered prior to notification of cancellation where the order can't be cancelled (including its actual costs for any further handling). If the material is returnable, the material shall be returned and payment will be made to the Contractor for the actual cost of charges made by the supplier for returning the material and handling by the Contractor. This provision also reflects that since the Contractor has already submitted the order for the substitute pipe, there may be costs associated with that order (whether cancelled or not) that the City probably would have to pay to Woods. 2-9 In addition, the City also may be obligated to Woods for any delay that is caused by the City arising from the cancellation or revision of the Project. (See, Howard Contracting, Inc. v. G. A. MacDonald Construction Co., 71 Cal. App. 4th 38 (1998).) In that case, the court of appeal held that the contractor was able to recover damages, pursuant to Section 7102 of the Public Contract Code, for delay of the project that was caused by the City of Los Angeles. 8. Communications from Ms. Yarber Following the City Council's approval of the change order, Staff began receiving several "Public Records Act" requests from City resident Sharon Yarber and a memorandum to the City Council from Ms. Yarber. That memorandum that was presented and read to the City Council by Ms. Yarber on June 4, 2013, and is being included and addressed in Exhibit A to this Staff Report. 9. Additional Information -Updated July 2, 2013 Staff was unable to respond to the comments made by Sharon Yarber on June 18th within the time allowed. The meeting was continued to this evening July 2, 2013, to allow for further discussion and questions. Ms. Yarber raised additional questions on June 18th, which are listed below along with Staff's brief answers, which are in red print. These questions will be answered more fully by Staff this evening: Who wrote the specifications for the pipe and was the City Attorney consulted? Harris wrote the pipe specifications. There was no discussion with the City Attorney's office on this subject. The specifications should have allowed for equivalent materials to be proposed. See discussion in Section 2 above. Contractors don't know which clock is used to time stamp and receive bids. Staff shows all contractors the City's official time-stamp clock, and Staff advised the MBC representative about which clock would be used when he came to the Public Works counter approximately one hour before the bid opening. There was a 2-month delay in the ordering of the pipe. This is not the case, as will be discussed at the meeting . The cost saving to the City is less than $315,000 due to the matching grant. There is a saving of $315,000 to the project. How long has welded pipe been around? Welded pipe has been around for years, but is seldom used in storm drains. The initial pipe substitution referenced a pipeline in El Paso. Woods submitted an example of another project in connection with a request for conceptual approval of their substitution request. 2-10 The savings were just an agreed amount. There was considerable negotiation before agreement was reached regarding the net savings that would be achieved. The Greenbook is written by contractors. It was developed by a committee represented by both public employees in Public Works departments and contractors. A summary from the Greenbook discussing how it was developed is attached (Attachment I). 10.Additional Value Engineered Change Order opportunity. One of the functions of Construction Management of any large project such as San Ramon is to seek project cost reductions wherever possible, which in some cases present Value Engineering ideas, such as the Value Engineered Change order for the steel pipe substitution. This due-diligence is continuing on the project despite the difficulties that Staff has encountered from the public's misperception of the process. Staff is planning to present another Value Engineered Change Order proposal at the next City Council meeting. The contractor has proposed a design change to the outlet structure on the beach below the bluff, which will result in a shared saving in excess of $200,000, which will mean a saving of over $100,000 for the project. The proposed change has been accepted by Ninyo & Moore, the City's Geotechnical consultant for the project, and Harris & Associates, the Design Engineers for the project. The proposed change will require less beach crossing from Royal Palms in San Pedro, a more natural blended appearance and an increase in the stability of the bluff. The Coastal Commission Staff also have expressed support of this concept. CONCLUSION An exhaustive review of the San Ramon Storm Drain Project documents, contract award process and procedures, as well as the Contract Change Order approved by the City Council at the May 21, 2013 meeting has been completed. No irregularities were discovered or uncovered. Staff recommends that the City Council find that Staff has acted appropriately in its administration with no further action required, other than the receipt and filing of this staff report. ALTERNATIVE RECOMMENDATIONS As an alternative to the Staff recommendation: 1. The City Council could find that there are specific apparent deficiencies in the handling of the San Ramon Project and specify what those deficiencies are. 2. The City Council could secure the services of a qualified independent third party firm to review the handling of the San Ramon project and authorize staff to return with a budget modification to cover the additional expense . FISCAL IMPACT 2-11 The cost to respond to the comments as of June 18, 2013 was $45,000 out of pocket cost expenses plus regular staff time (# of hours). If Council wishes to undertake an outside review these costs and staff hours will increase significantly. Attachments: A) B C) D) E) F) G) H) I) J) Exhibit A to Staff Report Statements from Becky Martin and Nadia Carrasco Report from Kennedy Jenks dated April 8, 2013 Letter from Harris and Associates dated June 10, 2013 Memorandum from Sharon Yarber May 21, 2013 Staff Report and attachments Letters from MBC's attorney and responses from Mr. Jones and the City Manager. Article Excerpt from the Greenbook Public correspondence 2-12 Exhibit A to Staff Report Responses to Ms. Yarber's Memorandum to the City Council For purposes of clarity, Ms. Yarber's wording has been taken exactly as it was written In Ms. Yarber's memorandum and is shown in Exhibit A in "italics". Each of her assertions and statements has been separated, and Staff's response to each assertion/allegation is presented immediately following Ms. Yarber's st~tement in "bold" and In red. MEMORANDUM To: Mayor Brooks and the Council Members of the City Council of Rancho Palos Verdes From: Sharon Yarber Date: June 4, 2013 Re: San Ramon Canyon I have many comments, questions and concerns about the May 21, 2013 staff report pertaining to the change order for the San Ramon Project. The report is full of false and misleading statements. The report Is accurate. Please know that I have spoken at considerable length with the CEO of Permalok and have emails to support much of the information set forth herein. The information provided by Perm lok is Ilk ly to bi ed, nd It is not dvl bl to put much weight on th ir commen . P nn lok I th s te .I pipe m nuf cturer th City i not usi ng. Staff h relied in tead upon th opinion of Kennedy Jenks, which I an independent entity with no ke In th outc om of this matt r. I have also spoken with Ehab Gergis at Harris. City St ff I o pok with r . Gergi prior to receiving this m morandum bout hi cOscusslons with Ms . V rber. who r pre ented herself a an attorney representing he elf and 11 others." Please note I am not addressing the issue of whether the new pipe is or is not an exact equal, as I am not qualified to do so. My concerns sre with the process by which this was brought to Council and the public, and the inaccuracies in the staff report. The s taff report is a c curat , and Staff t nds behind IL The proc e by whic h th proposed ehan order w v lu t d wa c o n i st nt with the City' practices all other change orders brought to the City and Is consistent with State law. Mor over, to u r trans p r n cy and City Counc il review, thi chang order was brought to the City Council for approval on May 21 •'. The staff reporl states that Harris & Associates ("Harris'' are "not steel pipe specialists". On what information is that statement based? Harris & ociat ' de i n en lneer r ported on 418/13 in m eting at City H II to Staff th t H rrl Assocl te w r not pe c iall in v lu ting the technical compar blllty between t el pipe . Has Harris acknowledged that they are not steel pipe specialists? 2-13 See statement above. If so, when was that done? See above. The statement was made following the Contractor's request for substitution of the Perm lok pipe with the spiral welded and polyurethane lined and coated steel pipe. Why was Harris engaged to engineer a project that has at Its essential component 4, 100 feet of steel pipe if they are not steel pipe specialists? Harris is an engineering firm that specializes, among other things, in designing storm drain projects . They were r tain d by the City for th Ir expertis e in that field to design thi torm drain project. The list of Top 50 Trench/ass Design Firms of 2011 names Ha"is at# 30. Kennedy/Jenks is not listed. This I not a tr nchles torm drain project -it i s a storm drain project that includes tunneling. Kennedy/Jenks evaluated the adequacy of the substitute te I pipe by comparing the two product . When did staff become aware or determine that Harris is not a steel pipe specialist? See above. Was staff remiss in recommending that the Council retain Haffis if Harris is not qualified to design the pipe specifications? Harri i s qualmed to de ign the torm drain Project, and Harris chose pip with peciflcation th _ t me t the r quirements for the Project. Their er dential include that they re R gl t red Civil Engin ers Uc n ed by the St te of California. Harri was s lect d by the City Coun cil in 2010 following a requ..,st for quallflcations that was lssu d by the City and a rigorous evaluation process. Indeed, why would the City retain Ha"is for two major steel storm drain pipe projects if they are not specialists? H rri was retain d becaus Harris Associates are torm dr in d sign spacla11$ts. While Mr. Gergis was most reticent about speaking with me about this matter, when I asked if Haffis had ever indicated to the City that it was not a steel pipe specialist he said "no". This Is true. Mr. Gargis has never stated Harris & Associates were not steel pipe peciallsts. The tatement was made by Randal Berry, P.E., an employee of Harris. When I asked him if Harris is a steel pipe specialist his answer was that Harris designs steel pipe storm drains -that's what they are in the business of doing. As stated above, Harris is in the bu iness of designing storm drain systems using a variety of pip materials, including steel. The staff report indicates that the lining of the Permalok pipe used in McCaffell Canyon is brittle and has not performed as well as expected "based upon a recent inspection of the pipe." That statement was designed to lead Council to believe that 2-14 It is necessary and appropriate to now re-think using Permalok's pipe because of a recent discovery of problems with the Mccarrell pipe. The statem ent In the ay 2 1s• s t aff report i factu ally acc u ra t and x plained the reason why Staff b elieves that Woods ' proposal should be approved. Staff stated the following In the May 21 , 2013 Staff Report: 11 Staff b elieves the proposed pipe lining material and process to be s uperior to the epoxy lining spec ified by the City In Its original plans and specifications ". Staff failed to inform you that as late as December,_2011 staff was aware that the lining of the Mccarrell Canyon pipe was not wearing as well as expected, which is why Harris and Permalok went to great lengths to develop new specifications for San Ramon that included a DIFFERENT lining, with different material at 150% the thickness of the one used for Mccarrell. Staff works to find solutions to problems that wlll address issues at hand and take steps to minimize those problems in the future, Which happened In this case. Staff Informed Harris & Associates of Staff's findings which resulted In the chang ing of th e s pec ifications fo r the e poxy lin i n g for the Perm al ock p ip that was i n c l u d ed In t h e bid pecificat ions for t h e Sa n Ramon Project . The lining in Mccarrell is 16 mils and the lining specifications for San Ramon are 80 mils. The staff report would lead one to believe that the exact lining of McCaffell was to be used a ff aln in San Ramon which is obviously not correct. The May 21 • staff report discussed t he meri ts of epoxy vers u s polyurethane llnlng. The staff report says "staff'' believes the two types of pipe are equivalent, and "staff'' believes the "proposed pipe lining mater/al and process to be superior to the epoxy lining specified by the City in its original plans and specifications". Who specifically on "staff'' holds this belief and what expertise does that person have to form such an opinion? Staff's opin i on i ba ed u pon the indep n dent third .. party report done by Kennedy J nks, which sP«lfically s tates that in t heir opin ion, t h e poly u rethane li n i ng would b e s u peri o r to epoxy lin i n g for this Proj ct. The St ff M mb r w ho rey i ew d t he fi n dln I Ron D ragoo P .E . Is that person a steel pipe specialist? Ke n nedy Jenk s is a s teel pipe expert, and Ro n Dra g oo P.E. Is a professiona l state llcenced civil engineer who reviewed their findin gs and relled upon them. If so, why was Permalok approved when clearly that staff expert should have been Intimately familiar with all steel pipe alternatives and have determined while the specs were being formulated that Permalok was inferior. Indeed, If we have such an expert about pipes on staff why did we even need to hire Harris or Kennedy/Jenks? See comments ab ou t Ke n nedy Jenks ' opinion above . See above . Permalok was the pipe recommen d d by Harris in t h e bidding specifi cations. Staff did not require a .steel pipe expert untll the contractor recommended the change order. 2-15 Mr. Gergis made it clear in our conversation that all aspects of the various pipe alternatives, including pricing, had been explored during the design process. Obviously, what is now being proposed was considered by Harris and staff but not included in the design specifications. Various types of pipes were considered for the project Including RCP , HOPE , Hobas and steel pipe. After considering e ch , steel pipe was selected and It was de·cided at the time that Perm lok would likely b the most cost effective and pose the lowest risk to the City based on the success of the Mccarrell Canyon Project and because of the relative ease of installation. This decision was only reconsi~ered because the contractor suggested it along with his representation that he could install the welded steel pipe within the tlmeframe set for the Project. With this commitment also came 100% of the risk to be borne by the contractor and 50% of the realized savings to the City. The staff report goes Into great detail about the entire process of shipping the pipe from St. Louis, MO and states as fact that the extensive transportation process damaged the McCa"el/ Canyon pipe. What evidence does staff have to support that statement? . Major shipping issues were encountered on the Mccarrell Canyon Project, which resulted In extensive discussions with Permalok, who explained the ·shipping process as described In the taff r port. Permalok denies this. Has anyone lodged a complaint against Permalok about the loss the City will sustain from having to make the "extensive amounts of repairs" caused by such damage during transport that the staff report says will be incu"ed? The answer is No. The City had no contract with Permalok, but insisted that adequate repairs were made to the damaged pipes by the contractor at no coJt to the City, as typically would be expected. As the contract was b twe n the City and th contractor, staff Is unaware of any claims potential made by the contractor with Permalok. The staff report fails to disclose that Permalok advised staff on April 18, 2013 that they had opened their new facility in Salt Lake City, UT and would be shipping from there. Permalok never stated that they would manufacture the pipes for this project In Salt Lake City. It appeared to Staff that transportation Issues would still arise If the pipe is manufactured and transported by rail to California from another state. The staff report also fails to reflect that on April 18, 2013 Permalok offered to rebate directly to the City $400,000.00 because steel prices had come down and the shipping costs would be reduced since they would ship from Salt Lake instead of St. Louis, which offer was ultimately rejected by the City. The offer was made to the City by Permalok . The City Attorney informed the City Council about this offer; this offer was not disclosed publicly because it was not germane to the issue of whether the steel pipe proposed by Woods was equal to or better than the Permalock pipe, which was the issue at hand with respect to the change order that was presented to the City Council. While in my view it was appropriate to reject such offer, I would like to learn from 2-16 Council or the City Attorney who (staff, senior management, Council, City Attorney) made the determination to reject the refund offer, and if the City Attorney advised against accepting the offer. Staff and the City Attorney recommended against accepting the offer because It was an Improper ln.ducement that was made to t.he City so the City would not approve the pipe substlt-.stlon. I would also like to know whether the making of such offer "colored" or in any way influenced the Council's opinion with respect to using the Permalok product. The decision to substitute the pipe with a pipe requiring a different installation technique was made on sound engineering grounds and as a reasonable savings offi r. Staff k'pt t.he Issues $eparate, since the decision whether to approve the change order should be based on engineering principles, as just stated. The contractor L. H. Woods ('Woods'1 made the suggestion for the alternate pipe on March 18, 2013, less than two weeks after the City approved the contract with Woods at the March 5" Council meeting. The bid documents stressed the need to place an order for the steel pipe as soon as possible after the award of the contract as manufacture and delivery of the pipe is a critical path Item, so it was imperative for the contractor to act quickly to give th City ufficient time to valuate his propos I. It is patently obvious that Woods never had any intention of using Permalok, they just made a low bid and then switched to a less expensive product AFTER the contract was awarded (but prior to the contract being executed on April 2, 2013) which results in approximately $315, 000 in additional profit. There ls no factual basis for this statema·nt. There were no dlseusslons beforehand about this possible change ; the contractor had no assurance that the change order would be approved by the City. I am confident Woods is well aware of the statutory provision for the 50150 split of cost savings. Value Engin ering is a common practice that is frequently used. As a contractor who performs public construction projects, this contractor appears to be well-versed regarding the provisions of the Public Contract Code, Including Section 7101, with which Woods complied , to provide "win-win" outcomes for both the Agency and Contractor. I am fully supportive of the City getting equal or better product at a lower cost through "value engineering" and splitting the cost savings is a win-win situation for the contractor and the City; indeed, the split gives an incentive to the contractor to look for less expensive, yet comparable products and procedures. The problem with the San Ramon situation is we have the design engineer (Harris) saying it is not equal, and then staff engaging in forum shopping to find another expert to conclude that it is. The question of whether or not the new pipe is an exact equal to the Permalok pipe remains unanswered, in my opinion. The proposed alternative pipe was su.bmltted to Harris for their review, who in tum sent It to Permalok for their comments. When staff learned that the review had been done by Permalok, which had a vested Interest In the outcome , Staff decided to obtain an Independent opfnlon from a third party with no stake In 2-17 the outcome. It Is City Staff's duty to perform due diligence on any proposed change, which Is precisely what was done In this case through Staff obtaining a specialist third party opinion. The allegation of "forum shopping" Is totally unfounded. I would like to know who recommended Kennedy/Jenks to render its opinion about the substitute pipe. Did staff select them or were they recommended by Woods? Kennedy Jenks was selected by staff after negotiations with another large consultant revealed that there would b too much delay before the contrac t could be entered into and the w ork could be performed . Since time was of the essence, Staff decided to go to a smaller, but well known consultant to perform the r; v iew . Alan Braatvedt re c ommended Kennedy Jenks. I would also like to know when staff began communicating with Kennedy/Jenks, when the contract was entered into, how much Kennedy/Jenks charged for its services and who is responsible for the payment. The first contact with Kennedy Jenks was made by staff on April 3, 2013, and a purchase order was Issued to them by the City on April 5, 2013 for the amount of $4,260. If the City is responsible, who authorized the expenditure, as I do not believe this expense was ever approved by Council? If the City Manager authorized the expenditure then we know the fee was $25, 000. 00 or less. How many hundreds of thousands of dollars have we paid Han-is to design this project, yet the City will rely on the Kennedy/Jenks findings when they have not been involved heretofore with the project? Thi "peer rev i ew" that was undertaken by Kennedy Jenk at the City' reque t w a authorized by the City Mana r to obtain an imp rtial econd opinion from a third p rty about the pipe s ub tltution requ s t. Thi wa p erformed for the City to complete Its due diligence. Had Kennedy Jenks provided a negative finding, Staff would have recommended that the contrac tor's pro po al for a ub tltute pipe be .rejected. Will Kennedy/Jenks have full liability to the City for any problems with the pipe if it tums out to be inferior to Permalok and cause problems? Th Engin er of Record is Harri & As s o c iate , s o the City took the step to obtain their acceptance of Kennedy Jenks' opinion to ensure that Harris agreed with the change. The llablllty for the construction project remains primarily with the contractor and with Harris & A sociates, as the design engineer. Kennedy Jenks is responsible for its opinion regarding the equlvalency of the strength of the substitute pipe and the acceptability of the proposed lining. Haffis provided Permalok with a copy of the Woods letter of March 18, 2013 outlining the Woods proposal for the switch. On March 21, 2013 Permalok responded by letter to Han-is explaining why the substitute pipe was inferior. I would like to know if that letter was forwarded to staff by Harris. Yes -This was discussed above. It Is obvious that a review of a competitor's product lacks impartiality, which is the reason why staff took the steps to obtain an Impartial third party's review. 2-18 Did anyone from staff ever directly contact Permalok to get their response to the Woods proposal or the findings of Kennedy/Jenks? According to Permalok they were never contacted by the City for their input. No -Permalock Is not Impartial. The staff report says the "vast majority of all large diameter steel piping used throughout the country is installed using the bell lap welded method previously described". When did staff become aware of this wide use of this process? Staff b came aware of thi application when Wood submitted its value engineering proposal. The first time that Staff became aware of the viability of using this method for the storm drain was when it was proposed by Woods. Why was the Permalok process allowed to be included in the design specifications? San Ramon Is a relatively short length of pipe, when compared with water transmi ss ion mains and i s being constructed in difficult conditions . For that reason It was thought that it would be quicker and easier to use the "snap together" Permalock pipe rather than set up n extensive welding oper tion In the field for a total of only 200 welded joints. This decision was cmly reconsidered because the contractor suggested It along with his representation that he could do the work within the tlmeframe set for the proj ct. With this c:ommltment also c me 100% of the rl k to be bo.rn by the contractor and one-half of the realized savings to the City. Is it or is it not also widely used? Staff i s advised that it i not widely u ed for s torm drains but Is used f~ quently In wat r transmission llnes . (See above .) Has any analysis been done about how this project might actually differ dramatically from the "vast majority" of other projects, given that the property is in a landslide area and includes deep canyons and steep drops where the water moves with excessive velocity and then discharges into the ocean? The project was extensively analyzed by Harris, taking all the factors mentioned Into account, and It was for th.ose reas9ns that a thick walled steel p i pe was s elected as the pipe of choice . Interestingly, Permalok asserts that the Permalok joint system has the requisite flexibility to withstand the unstable land conditions that the landslide prone San Ramon Canyon has. There is no discussion in the staff report about this issue. Indeed, the CEO at Permalok told me that Permalok's joint offers more flexibility than a welded joint and is far more capable of withstanding a seismic occu"encel The majority of the 54" pipe will be Installed within an 80" rib and lag tunnel. The gaps between the tunnel and s urrounding dirt will be filled u s ing a pressure grouting method. The annular s pace between the pipe and the rig and lag tunnel will be fully grouted. There Is no ability for this solid construction to easily flex, so it is irrelevant whether the joint has flexibility or not. Has this been considered or evaluated? San Ramon is on an ancient earthquake fault. Exhaustive geotechnlcal investigations were done for the design of this 2-19 project, so staff and Harris are fully aware of the geological conditions that exist. The staff report states, without explanation, that "Staff is also concerned about the Pennalok pipe delivery schedule". This extensively discussed in the May 21•t staff report. Why, because it has to be shipped from Utah instead of California? How much delay would that cause -a day or two? The first time that the City was ever made aware of the brand-new faclllty In Utah was when the $400 ,000 offer was made to the City -which was long after the investigation of the substitute product had begun . In any event, Permalock did not state that the pipe would be manufactured and shipped from Utah. What timeline for delivery has been promised by Northwest, the manufacturer of the proposed substitute pipe? The California manufactured pipes are shipped by road, which reduces the delivery by weeks and keeps the control of dellveries In the hands of the manufacturer. Has that pipe already been ordered and when was it ordered -before or after May 21,2013? A I tt r of Intent was Issued by Woods to the pipe manufacturer on April 15, 2013 , a week after Harris accepted th findings of the report from Kenn dy Jenks. This was done at the Contractor's risk without Staff approval and enabled the pipe supplier to secure the r w material . Attached are emails from the project manager to the contractor advising him of the risk that the change order had not been approved by the City. The final purchase order was made on May 22, 2013. The staff report states that Harris "accepted" the Kennedy/Jenks findings. That is not true. On the contrary: On April 8 , 2013 H rris Associat ent staff an e-mail to say that they accepted the Kennedy Jenks finding in principle, subject to the approval of the submittal. This has been further clarified In a recent letter from Harris, which Is attached. The staff report indicates that Exhibit C thereto is a letter from Harris. In fact, Exhibit C is a letter from Woods bearing a stamp from Harris & Associates. A 11 submittal" is a process for the approval of all materials (and in some cases work-plans) that the contractor Intends to build into the project. The contractor provides these usubmittals'' to the Construction Manager, who either reviews them, or in some cases, passes them onto the appropriate technical specialist for review for general conformance and compliance with the design and specifications. The "letter" from Woods is the submittal for the steel pipe, which was stamped and signed by Harris to signify acceptance of the product. City Attorney Carol Lynch sent an email to me saying that the stamp by Harris on the Woods letter indicated its "approval" of the substitution. That is not true either. The City Attorney's statement is correct. 2-20 Kennedy/Jenks findings are that the substitute pipe is the equivalent of the Permalok pipe. Haffis merely placed a stamp on the Woods letter (Exhibit C) which stamp makes clear that the proposal from Woods was "reviewed as a substitute and not as an approved equal". Council agreed to this "value engineering" change of the most critical component of the largest and most costly public project in the history of this City based on that stamp! This is shocking . This i a conventional practice which I followed for II " ubmittal ". Why wasn't someone from Harris asked to prepare a detailed evaluation of or response to the Kennedy/Jenks report? As there was gr ement from H rri with the Kenn dy Jenk finding , ther w s no need to spend th money on a report that would erve no additional pur pose. Why wasn't someone from Harris asked to come before Council and explain the implications of the change request and the meaning of its "stamp" and the statement "reviewed as a substitute and not an approved equal"? See previous answer abov . Why wasn't a third consultant retained to resolve the conflict between the findings of Harris and Kennedy/Jenks, or is the staffs detennination what resolved the conflict? There wa no confli ct to re olve. H d Harri not ace pted Kennedy J nk ' findings , the substitution would not hav n ace pted. If It Is staff, then It Is vital to know whether the specific staff employee(s) or consultant who did so is/are competent to make these determinations. The Woods letter also refers to submlttals 36 and 43 from Haffls. What are those and why were they not attached to the staff report? Ther a re thre differ nt pipe application on th project, wh i ch all pertain to the ame p ipe. The r qulr m nt I s for th contr ctor to submit ubmi tt I for each of the loc tlons as each has its own set of crlter a . However the product remains the same for all three . The approval of th ubmlttal attach d to th staff report cov rs the acceptanc of the pipe materi I for all thre applications. Carol Lynch has made it clear that once a contract is put out to bidders It cannot be re-negotiated with the bidder who is awarded the contract. Since the contract says Pennalok has to be used, "or pre-approved exact equal", and since Harris has not approved It as an exact equal, and Kennedy/Jenks is not the design engineer for the project, you are arguably not complying with the contract which places all of the bidders at a disadvantage, thus potentially exposing the City to delay If it needs to re-open the bidding (as It is likely legally obligated to do). Further, you actually have potentially exposed the City to risk of litigation from one or more of the contractors who were unsuccessful bidders if you do not re-open the bidding. All bidde r provided their propos I to con tru c t the proj ct based on exactly the same criteria, with no advantage to any one of them, and the bids were evaluated on that ba Is. If ny of the oth r contractors had been the low st r ponslble b i dder and been awarded the bid, th City would have entertain d any Value Engineering Ideas that they had in exactly the same way as with the Woods proposat. All rules for r viewing change orders and value ngln erlng 2-21 proposals were followed here, and there Is no legitimate foundation for a protest by any of the bidders. This is especially true , since the change was less than 4% of the cost of the Project. I understand that on the last day for submitting of bids, the firm of Mike Bubalo Construction submitted a bid that was close to $1 mil lower than Woods, but it was rejected bv staff as not timely. As required by State law, the Mike Bubalo bid was not accepted , and accordingly, It was never opened, so Staff has no idea whether they were $1mil cheaper than Woods, or if they were even the lowest. I understand from speaking with one of the owners of Bubalo that the bid was submitted one minute late. So the City ultimately did NOT select the lowest responsible bidder because the bid got in a minute late? The Bubal.o bid was late and, in accordance with State law, was not considered a "responsive bid". The City opened all bids that were received on time and awarded the bid to the lowest responsive and responsible bidder. He stated to me that the City's clock on its time/date stamp was two minutes fast. What did the bid package say as to what the deadline for submission of bids was based on, a specific time, or the time according to the City's clock? I would like copies of the letters from the attorney for Bubalo complaining about this rejection and the City Attorney's letters in response. Is Council aware of this rejected bid or these letters? This was addressed in the staff report for the 31512013 City Council me tin . The deadline was 11 :00 a.m . The particular clock was not specified in th bid. However, It la Staff's practice to notify bidders when they come to the counter of the exact c l ock that Staff uses to determine the time. Staff advised the Bubalo representative of the location of the clock and wh r the bids would b submitted and opened when the representative first came to the Public Works counter, which was approximately one hour before the 11:00 a.m. deadline tO submit bids. Th document will be provided. Should not staff have brought the issue of the timeliness of receipt of the Buba/a bid before Council to decide if it should be rejected or accepted? All bidders are subject to the same rules, and if a contractor does not follow the rules, as was the case in this Instance, his bid is not responsive and the bid Is not accepted and Is returned to the Contractor unopened. This procedure follows the requirements of State Law. This should not be a staff decision. This should most certainly have been a staff decision, and it was the correct decision . Had the late bid been allowed to be opened, there would undoubtedly been a legitimate protest by the other bidders, which would have delayed the Project. This would have jeopardized the time sensitive funding and the City could have lost the State grant for almost $10mil. Again, these actions were taken In accordance with State Law. While I agree that bidders have to play by the rules, and perhaps it was appropriate to reject the bid because it was late, still this should have been brought before the Council for consideration and consultation with the City Attorney. 2-22 Accepting a late bid would violate the provl ions of th Public Conta ct Code . Th r Is no di er tlon to ccept a late bid. The Council Rules and Procedures (Section 5.1) provide that Consent Calendar Items are to be limited to (I) previously agendized matters that were discussed and acted upon by Council, or (ii) routine matters of a ministerial nature. This major change to the San Ramon pipe, which has been engineered over the last several years, is not a routine, ministerial matter and should never have been on the Consent Calendar. Clearly, the issues involved have not been properly vetted and Council has been manipulated by the staff and Its misleading and false staff report. This item wa chang order to a contract that was pproved previously by the City Council. This is yet another example of why staff reports need to come out far earlier than they do to give Council and the public an opportunity to do adequate due diligence before being acted upon, especially on vitally important Issues. The City's conduct may have actually cost the taxpayers a loss of approximately $1 mill/on dollars. Future "value engineering" proposals will likely be submitted in the future (along with change order suggestions that will Increase the costs). These will need to be reviewed and thoroughly scrutinized, and not be Consent Calendar items. This whole matter does not pass the "smell" test. Staff has followed and will continue to follow all I w and regulations In effect for II projects. I hereby request that the following actions be taken at the June 4, 2013 Council meeting: You vote to place on the agenda for the next Council meeting my request to rescind or reconsider the approval of the change order and re-open the matter for further discussion. I would request that representatives of Harris, Permalok and Kenndy/Jenks be Invited to participate along with the appropriate staff and I would suggest they all be extensively questioned so that a proper decision can be made; Staff bell ves that the proper decision was mad by th City Council. Th pipe has been ordered. If this decision i s reversed, the City could incur substantl I dam g s for the unwari nted delsy of the Project. You engage a third steel pipe expert to see if we can resolve the conflicting opinions of Harris and Kennedy/Jenks, and have that third opinion presented at such Council meeting; Ther Is no conflict betw n H rrls & Associates and K nnedyl J nks that n eds to be re olved. You direct the City Manager to inform Woods that this matter will be reconsidered and that its proceeding with ordering of the substitute pipe is done at its own peril; The decision was mad on 5/21/13 ; the pipe ha been ordered and i curr ntly being manufactured. tf the City Council o ys this demand, it could r ult In a lawsuit that could cost the City mllllons of dollars In delay damages. 2-23 That a Special, Independent investigator be retained to thoroughly investigate this entire matter and that appropriate action be taken following the conclusion of such independent investigation; and Staff believes that this m tter has been fully discussed and aired nd does not believe that an lnvestlg tlon Is warr, nted. Of course, this i$ policy decision for the City Council. You direct the City Manager to cease placing matters on the Consent Calendar that do not comply with the Rules and Procedures. Staff believes because thl contract had been pprov. d previously, and because the change ord r w h ndled In compll nc with Public Contr ct Code Section 7101, It w s pproprlat ly loc I don the Cons nt C lend r If the City Council disagrees, Staff always welcomes direction from th City Council about how items should be handled on the gendas. 2-24 Ron Dragoo From: Sent: To: Subject: Ron- Becky Martin Tuesday, June 11, 2013 6: 15 PM Ron Dragoo San Ramon Bid Opening Attachment B The Bubalo Contractor came into the Public Works Department at least an hour prior to the opening of the bids to ask: Q. Is this where the Bids will be accepted? Answer: "Yes and they will be stamp in as received with this clock" (Anamo NS 5000). "This is the clock which we use for Bid opening purposes so don't go by any other clock you see here." Q. Is this where the Bids will be opened? Answer: "No, they will be opened in the back room." Bubalo: "Ok, I will be back later." The clock registered the Bid opening time, I collected all received bids and headed for the back room. The Bubalo Bid was NOT in the stamped received Bids. Becky 1 2-25 ... /·· Ron Dragoo From: Nadia Carrasco Sent: To: Friday, January 25, 2013 1:50 PM Ron Dragoo Subject: Mike Bubalo Construction Bid Package Ron. This is in regards to the Mike Bubalo Construction bid package. The gentleman that came to deliver the bid package showed up at the counter at 11:O1 In the morning. At that moment I told him that his bid was already late and we could no longer accept It. He mentioned that he has been here since 1 O:OO a.m. I told him that I would stamp the package and ask if we could receive it. I tried stamping the package but was not able due to its size; I proceeded to get a blank paper from the printer to stamp it (the clock was still reading 11 ;Ol a.m.) and handed back to him the bid package with the stamped paper. He mentioned that he was still interested in going to the community room where the bids were being opened; I directed him to the meeting room. Please let me k 0 now if you need any further information. Thank you. Nadia Carrasco Public Works Intern City of Rancho Palos Verdes 30940 Hawthorne Blvd. Rancho Palos Verdes. CA 90275 Phone (310} 544-5333 Fax (310) 544~5292 1 2-26 Attachment C Kennedy/Jenks Consultants 8 April 2013 Memorandum To: From: Subje~t: Mr. Alan Braatvedt ~ City of Rancho Palos Verdes James Bowland P.E. C6640~ ~ Pipe Material Evaluation for £an Ramon Storm Drain Project K/J ProjectNumber The purpose of this memo is to present our opinion on the use of Northwest Pipe supplied spiral welded and polyurethane lined and coated steel pipe with heat shrink sleeves for exterior joint coating versus Permalok epoxy lined welded steel pipe with an epoxy coating for the San Ramon Storm Drain Project. Background The 4, 100 linear foot long pipe will be used as a storm drain and be subject to heavy debris flow and very high water velocities. Approximately 200 linear feet will be installed In a "slant drain" mined tunnel as the pipe approaches the ocean outfall. A second 1,850 linear foot portion of the pipe will be installed In a steel ribbed and timber lagging tunnel. In both trenchless installations the annular space between the carrier pipe and tunnel will be fully grouted. The remainder of the pipe will be installed using open cut trenching and use imported sand as backfill or concrete if cover is less than two feet. Evaluation This section presents our evaluation of the materials and will compare the steel used to fabricate the pipe, the pipe joints, and the linings and coatings. Steel Pipe Materials The Permalok pipe is a rolled and sheet welded steel cylinder constructed of 35,000 pound per square inch (psi) yield strength steel. Permalok's web site states that they use a minimum ASTM A36 structural or ASTM A572 plate steel. The Northwest supplied steel pipe is spiral welded AWW A specified C200 pipe that will have ASTM A 1018 or plate welded ASTM A572 Grade 40 ( 40 ksi) steel. The A572 material Is used when the pipe wall thickness exceeds the capabilities of the spiral weld machine, and the pipe has to be manufactured using rolled steel plate. The Northwest pipe steel is equivalent in strength to the Permalok pipe, and the AWWA manufacturing standards will add extra quality assurance and quality control to the manufacturing process. © Kermedy/Jonks Consuhanls. Inc 2-27 Memorandum Mr. Alan Braatvedt 8 April 2013 Page2 Pipe Joints Kennedy/Jenks Consultants The Permalok pipe uses a proprietary T5 machined joint ring to join 20-foot lengths of pipe during assembly In the field. The joint is designed primarily for tunnel casing installation. The joint is designed to transfer jacking loads between pipe sections and maintain the alignment betwf>en pipe pieces. The T5 joint is not water tight and Is not designed for pressure pipe applications. The Northwest pipe uses a bell and spigot double lap weld joint. The pipe joint is water tight and is the industry standard for steel water and sewer pipes. This joint ls not designed for pipe jacking; however the double welding gives the pipe joint an equivalent strength of the adjacent steel cylinder for buckling (static and live loads) and longitudinal forces from thermal expansion and contrac.tion. Since the Permalok pipe uses a mechanical joint 11 will not perform as well as a continuously welded pipe if cathodic protection is used for protecting the exterior of the pipe. While It is our experience that the Permalok pipe is electrically continuous (Freeport Regional Water Authority Segment 1 Bruceville Tunnel 2008), it is not deslghed to be electrically continuous without joint bonding. For this application the Northwest double welded bell and spigot joint is at least equivalent due to Its water tightness and electrical continuity. Also note that since the pipe will not be used for pipe jacking the Permalok T5 joint is not needed. · Linings and Coatings The Permalok pipe specified has an Interior lining of 80 mils of •Tnemec Series 431 Perms.. Shield PL" and an exterior coating of 30 mils of Sherwin Williams Duraplate. Northwest Pipe is proposing to use a 100% solids polyurethane lining from Lifelast (Llfelast 210). The lining thicknesses proposed by Northwest Pipe are the same as specified for the epoxy products. Table 1: Physical Characteristics presents a summary comparison between the epoxy and polyurethane products physical characteristics from ASTM testing. Examining the physical characteristics reveals that both products are very similar In abrasion resistance, hardness, and adhesion. The polyurethane is slightly better in Impact resistance and is far superior when it is deformed. With the superior deformation characteristics the polyurethane will remain a "plastic" material after it cures while the epoxy becomes a hard and brittle material. Both materials exhibit very similar resistances against corrosive agents normally found in wastewater and are recommended for protection of steel surfaces in severe wastewater conditions. This chemical resistance should extend to the resistance against salt water corrosion from atmospheric exposure of the pipeline near the ocean outfall. 2-28 Kennedy/Jenks Consultants Memorandum Mr. Alan Braatvedt 8 April 2013 Page 3 Table 1: Physical Characteristics Parameter Epoxy-Tnemec Serles 431 Abrasion (ASTM 04060) 76 mg Hardness-Shore D Hardness 78 Adhesion to steel (ASTM 04551) 1,769 psi DeflectioQ No cracking following 5% ring deflection Flexibility (ASTM 0522) NIA Impact resistance (ASTM G14) 160 In-lbs (from NASSCO spec} Polyurethane· Llfelast 210 69.4 mg 74:1:3 >1,500 psi N/A No cracking or delaminatlng on 1" mandrel 180 in-lbs. Field coating the Permalok pipe would only be used when the pipe joints are welded for joint restraint, the field coating would be the same epoxy used for shop coating the exterior of the pipe. The Northwest pipe would use an 80 mil heat shrink sleeve for the exterior of the pipe joints and hand or spray applied Lifelast 210 for the Interior pipe joints. While the field coating of the Northwest pipe would be more laborious it is·betterthan the Permalok pipe since it is thicker on the exterior joints and 100% of the interior joints would be coated. With the Permalok pipe there is a possibility of corrosion at the pipe Joints since the joint seam is not coated. It is our opinion that the polyurethane lining material would be superior to epoxy in an extremely abrasive environment with debris flows since it Is less susceptible to chipping from debris and cracking from pipe deflection. In addition all the pipe joints are coated reducing corrosion at the pipe joints. Summary In summary it is our opinion that the steel pipe cylinder, pipe joint, and coatings being proposed are at least equivalent 'to the Permalok pipe that was specified and add advantages that include: • Manufacturing to AWWA standards, • Water tight and electrically continuous pipe joint, • Lining has an Increased resistance to impact and deformation, and • Interior and exterior of pipe are lined and coated during installation. cc: David Ferguson, Los Angeles 2-29 II June 10, 2013 Mr. Ron Dragoo, PE Deputy Director of Public Works City of Rancho Palos Verdes 30940 Hawthorne Blvd. Rancho Palos Verdes, CA 90275 Attachment D Harris & AssociatesSll Shaping the Future, One Project at a TimeGO Subject: San Ramon Canyon Storm Drain -Steel Pipe Material Performance Dear Ron, The requested steel pipe substitution is expected to perform as well as the specified Permalok steel pipe provided that construction means and methods (handling, welding, lining, coating, etc.) are rigorously inspected for quality by personnel with the required certifications and experience. Further, the acceptance of this substituted pipe material conforms to the Public Contract Code with respect to specifying a brand name with an "or equal' designation. Specifically, Section 3400 of the Public Contract Code is intended to "encourage contractors and manufacturers to develop and implement new and ingenious materials, products, and services that function as well, in all essential respects, as materials, products, and services that are required by a contract, but at a lower cost to taxpayers". Please feel free to call me at (949) 655 -3900 x 2314 with any questions. Sincerely, Harris & Associates Randall Berry, P.E. Design Manager I Associate 34Exoo.JiveP8'1<,&jle150 hvlne, CA 92614-4705 949.655.3900 f.949.655.3995 2-30 MEMORANDUM To: Mayor Brooks and the Council Members of the City Council of Rancho Palos Verdes From: Sharon Yarber Date: June 4, 2013 Re: San Ramon Canyon I have many comments, questions and concerns about the May 21, 2013 staff report pertaining to the change order for the San Ramon Project. The report is full of false and misleading statements. Please know that I have spoken at considerable length with the CEO of Permalok and have emails to support much of the information set forth herein. I have also spoken with Ehab Gergis at Harris. Please note I am not addressing the issue of whether the new pipe is or is not an exact equal, as I am not qualified to do so. My concerns are with the process by which this was brought to Council and the public, and the inaccuracies in the staff report. The staff report states that Harris & Associates ("Harris") are "not steel pipe specialists". On what information is that statement based? Has Harris acknowledged that they are not steel pipe specialists? If so, when was that done? Why was Harris engaged to engineer a project that has at its essential component 4,100 feet of steel pipe if they are not steel pipe specialists? The list of Top 50 Trenchless Design Firms of 2011 names Harris at# 30. Kennedy/Jenks is not listed. When did staff become aware or determine that Harris is not a steel pipe specialist? Was staff remiss in recommending that the Council retain Harris if Harris is not qualified to design the pipe specifications? Indeed, why would the City retain Harris for two major steel storm drain pipe projects if they are not specialists? While Mr. Gergis was most reticent about speaking with me about this matter, when I asked if Harris had ever indicated to the City that it was not a steel pipe specialist he said "no". When I asked him if Harris IS a steel pipe specialist his answer was that Harris designs steel pipe storm drains -that's what they are in the business of doing. The staff report indicates that the lining of the Permalok pipe used in Mccarrell Canyon is brittle and has not performed as well as expected "based upon a recent inspection of the pipe." That statement was designed to lead Council to believe that it is necessary and appropriate to now re-think using Permalok's pipe because of a recent discovery of problems with the Mccarrell pipe. Staff failed to inform you that as late as December, 2011 staff was aware that the lining of the Mccarrell Canyon pipe was not wearing as well as expected, which is why Harris and Permalok went to great lengths to develop new specifications for San Ramon that included a DIFFERENT lining, with different material at 150% the thickness of the one used for Mccarrell. The lining in Mccarrell is 3 mils and the lining specifications for San Ramon are 8 mils. The staff report would lead one to believe that the exact lining of Mccarrell was to be used again in San Ramon which is obviously not correct. The staff report says "staff" believes the two types of pipe are equivalent, and "staff" believes the "proposed pipe lining material and process to be superior to the epoxy lining specified by the City in its 2-31 original plans and specifications". Who specifically on "staff" holds this belief and what expertise does that person have to form such an opinion? Is that person a steel pipe specialist? If so, why was Permalok approved when clearly that staff expert should have been intimately familiar with all steel pipe alternatives and have determined while the specs were being formulated that Permalok was inferior. Indeed, if we have such an expert about pipes on staff why did we even need to hire Harris or Kennedy/Jenks? Mr. Gergis made it clear in our conversation that all aspects of the various pipe alternatives, including pricing, had been explored during the design process. Obviously, what is now being proposed was considered by Harris and staff but not included in the design specifications. The staff report goes into great detail about the entire process of shipping the pipe from St. Louis, MO and states as fact that the extensive transportation process damaged the Mccarrell Canyon pipe. What evidence does staff have to support that statement? Permalok denies this. Has anyone lodged a complaint against Permalok about the loss the City will sustain from having to make the "extensive amounts of repairs" caused by such damage during transport that the staff report says will be incurred? The answer is No. The staff report fails to disclose that Permalok advised staff on April 18, 2013 that they had opened their new facility in Salt Lake City, UT and would be shipping from there. The staff report also fails to reflect that on April 18, 2013 Permalok offered to rebate directly to the City $400,000.00 because steel prices had come down and the shipping costs would be reduced since they would ship from Salt Lake instead of St. Louis, which offer was ultimately rejected by the City. While in my view it was appropriate to reject such offer, I would like to learn from Council or the City Attorney who (staff, senior management, Council, City Attorney) made the determination to reject the refund offer, and if the City Attorney advised against accepting the offer. I would also like to know whether the making of such offer "colored" or in any way influenced the Council's opinion with respect to using the Permalok product. The contractor L.H. Woods ("Woods") made the suggestion for the alternate pipe on March 18, 2013, less than two weeks after the City approved the contract with Woods at the March 5th Council meeting. It is patently obvious that Woods never had any intention of using Permalok, they just made a low bid and then switched to a less expensive product AFTER the contract was awarded (but prior to the contract being executed on April 2, 2013) which results in approximately $315,000 in additional profit. I am confident Woods is well aware of the statutory provision for the 50/50 split of cost savings. I am fully supportive of the City getting equal or better product at a lower cost through "value engineering" and splitting the cost savings is a win-win situation for the contractor and the City; indeed, the split gives an incentive to the contractor to look for less expensive, yet comparable products and procedures. The problem with the San Ramon situation is we have the design engineer (Harris) saying it is not equal, and then staff engaging in forum shopping to find another expert to conclude that it is. The question of whether or not the new pipe is an exact equal to the Permalok pipe remains unanswered, in my opinion. I would like to know who recommended Kennedy/Jenks to render its opinion about the substitute pipe. Did staff select them or were they recommended by Woods? I would also like to know when staff began 2-32 communicating with Kennedy/Jenks, when the contract was entered into, how much Kennedy/Jenks charged for its services and who is responsible for the payment. If the City is responsible, who authorized the expenditure, as I do not believe this expense was ever approved by Council? If the City Manager authorized the expenditure then we know the fee was $25,000.00 or less. How many hundreds of thousands of dollars have we paid Harris to design this project, yet the City will rely on the Kennedy/Jenks findings when they have not been involved heretofore with the project? Will Kennedy/Jenks have full liability to the City for any problems with the pipe if it turns out to be inferior to Permalok and cause problems? Harris provided Permalok with a copy of the Woods letter of March 18, 2013 outlining the Woods proposal for the switch. On March 21, 2013 Permalok responded by letter to Harris explaining why the substitute pipe was inferior. I would like to know if that letter was forwarded to staff by Harris. Did anyone from staff ever directly contact Permalok to get their response to the Woods proposal or the findings of Kennedy/Jenks? According to Permalok they were never contacted by the City for their input. The staff report says the "vast majority of all large diameter steel piping used throughout the country is installed using the bell lap welded method previously described". When did staff become aware of this wide use of this process? Why was the Permalok process allowed to be included in the design specifications? Is it or is it not also widely used? Has any analysis been done about how this project might actually differ dramatically from the "vast majority" of other projects, given that the property is in a landslide area and includes deep canyons and steep drops where the water moves with excessive velocity and then discharges into the ocean? Interestingly, Permalok asserts that the Permalok joint system has the requisite flexibility to withstand the unstable land conditions that the landslide prone San Ramon Canyon has. There is no discussion in the staff report about this issue. Indeed, the CEO at Permalok told me that ONLY Permalok's system can withstand an earthquake! Has this been considered or evaluated? San Ramon is on an ancient earthquake fault. The staff report states, without explanation, that "Staff is also concerned about the Permalok pipe delivery schedule". Why, because it has to be shipped from Utah instead of California? How much delay would that cause - a day or two? What timeline for delivery has been promised by Northwest, the manufacturer of the proposed substitute pipe? Has that pipe already been ordered and when was it ordered -before or after May 21, 2013? Let's obtain a copy of the purchase order. The staff report states that Harris "accepted" the Kennedy/Jenks findings. That is not true. The staff report indicates that Exhibit C thereto is a letter from Harris. In fact, Exhibit C is a letter from Woods bearing a stamp from Harris & Associates. City Attorney Carol lynch sent an email to me saying that the stamp by Harris on the Woods letter indicated its "approval" of the substitution. That is not true either. Kennedy/Jenks findings are that the substitute pipe is the equivalent of the Permalok pipe. Harris merely placed a stamp on the Woods letter (Exhibit C) which stamp makes clear that the proposal from Woods was "reviewed as a substitute and not as an approved equal". Council agreed to this "value engineering" change of the most critical component of the largest and most costly public project in the history of this City based on that stamp! This is shocking. Why wasn't someone from Harris asked to prepare a detailed evaluation of or response to the Kennedy/Jenks report? Why wasn't someone from Harris asked to 2-33 come before Council and explain the implications of the change request and the meaning of its "stamp" and the statement "reviewed as a substitute and not an approved equal"? Why wasn't a third consultant retained to resolve the conflict between the findings of Harris and Kennedy/Jenks, or is the staff's determination what resolved the conflict? If it is staff, then it is vital to know whether the specific staff employee(s) or consultant who did so is/are competent to make these determinations. The Woods letter also refers to submittals 36 and 43 from Harris. What are those and why were they not attached to the staff report? Carol Lynch has made it clear that once a contract is put out to bidders it cannot be re-negotiated with the bidder who is awarded the contract. Since the contract says Permalok has to be used, "or pre- approved exact equal", and since Harris has not approved it as an exact equal, and Kennedy/Jenks is not the design engineer for the project, you are arguably not complying with the contract which places all of the bidders at a disadvantage, thus potentially exposing the City to delay if it needs to re-open the bidding (as·it is likely legally obligated to do). Further, you actually have potentially exposed the City to risk of litigation from one or more of the contractors who were unsuccessful bidders if you do not re- open the bidding. I understand that on the last day for submitting of bids, the firm of Mike Bubalo Construction submitted a bid that was close to $1 mil lower than Woods, but it was rejected by staff as not timely. I understand from speaking with one of the owners of Buba lo that the bid was submitted one minute late. So the City ultimately did NOT select the lowest responsible bidder because the bid got in a minute late? He stated to me that the City's clock on its time/date stamp was two minutes fast. What did the bid package say as to what the deadline for submission of bids was based on, a specific time, or the time according to the City's clock? I would like copies of the letters from the attorney for Bubalo complaining about this rejection and the City Attorney's letters in response. Is Council aware of this rejected bid or these letters? Should not staff have brought the issue of the timeliness of receipt of the Buba lo bid before Council to decide if it should be rejected or accepted? This should not be a staff decision. While I agree that bidders have to play by the rules, and perhaps it was appropriate to reject the bid because it was late, still this should have been brought before the Council for consideration and consultation with the City Attorney. The Council Rules and Procedures (Section 5.7) provide that Consent Calendar items are to be limited to (i) previously agendized matters that were discussed and acted upon by Council, or (ii) routine matters of a ministerial nature. This major change to the San Ramon pipe, which has been engineered over the last several years, is not a routine, ministerial matter and should never have been on the Consent Calendar. Clearly, the issues involved have not been properly vetted and Council has been manipulated by the staff and its misleading and false staff report. This is yet another example of why staff reports need to come out far earlier than they do to give Council and the public an opportunity to do adequate due diligence before being acted upon, especially on vitally important issues. 2-34 The City's conduct may have actually cost the taxpayers a loss of approximately $1 million dollars. Future "value engineering" proposals will likely be submitted in the future (along with change order suggestions that will increase the costs). These will need to be reviewed and thoroughly scrutinized, and not be Consent Calendar items. This whole matter does not pass the "smell" test. I hereby request that the following actions be taken at the June 4, 2013 Council meeting: 1. You vote to place on the agenda for the next Council meeting my request to rescind or reconsider the approval of the change order and re-open the matter for further discussion. I would request that representatives of Harris, Permalok and Kenndy/Jenks be invited to participate along with the appropriate staff and I would suggest they all be extensively questioned so that a proper decision can be made; 2. You ·engage a third steel pipe expert to see if we can resolve the conflicting opinions of Harris and Kennedy/Jenks, and have that third opinion presented at such Council meeting; 3. You direct the City Manager to inform Woods that this matter will be reconsidered and that its proceeding with ordering of the substitute pipe is done at its own peril; 4. That a Special, Independent investigator be retained to thoroughly investigate this entire matter and that appropriate action be taken following the conclusion of such independent investigation; and 5. You direct the City Manager to cease placing matters on the Consent Calendar that do not comply with the Rules and Procedures. 2-35 Attachment F CITY OF MEMORANDUM TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS FROM: DATE: SUBJECT: LES JONES, INTERIM DIRECTOR OF PUBLIC WO~K May 21, 2013 APPROVE VALUE ENGINEERING CONTRACT CHANGE ORDER FOR SAN RAMON PROJECT REVIEWED:CAROL YN LEHR, CITY MANAGER gf_~ <JI.. Project Manager: Ron Dragoo, Senior Engine~ RECOMMENDATION Authorize the Interim Director of Public Works to execute Change Order Number 1 to the San Ramon Canyon Stormwater Flood Reduction Project with L. H. Woods and Sons, Inc. BACKGROUND/DISCUSSION The City Council authorized a construction contract with L. H. Woods and Sons, Inc. at their March 5, 2013 meeting. The contract requires the Contractor to install approximately 4,000 feet of pipe from San Ramon Canyon to the Pacific Ocean. The specifications for the construction of the San Ramon Canyon Stormwater Flood Reduction Project call for the use of a proprietary steel pipe manufactured by Permalok pipe as follows: "Fifty four inch (54") outside diameter steel pipe and fittings used for this project shall be "Permalok" Steel Pipe (Class 3, DSAW, shop rolled and welded from commercial grade steel plating that carries a yield strength of 35ksi in accordance with Permalok specifications) or pre-approved exact equal. Each pipe length is anticipated to be twenty-feet (20') long and comes with a Permalok "Push Ring" and "RTV Silicone Sealant". "Permalok" steel pipe has a prefabricated interlocking pipe joining system that does not require field welding to make the required field connections (except at elbow bends or wall thickness transition connections) ... " The pipe system was recommended by the design engineer Harris & Associates. Staff accepted the design engineer's recommendation to use the Permalok pipe system. 2-36 This system was used during the construction of the Mccarrell Canyon storm drain system, and it nearly eliminates the need for field welding and lining at the pipe joints. Permalok pipe is proprietary and patented. The pipe has a male end with machined teeth on the male end and corresponding teeth on the female end, which allows the pipe to lock into place when forced together. The typical way of joining steel pipes is to weld them together. As previously mentioned, Permalock pipe was successfully used for the Mccarrell Canyon Project in a similar application several years ago. However there were/are a number of shortcomings, which include the need to do extensive amounts of repairs to the pipe lining, which had been damaged during transportation. A second issue is that of the epoxy lining that was used by Permalok, which is strong, also is brittle and has not performed as well as expected, based upon a recent inspection of the pipe in Mccarrell Canyon. Permalok pipes used during the Mccarrell Canyon construction were manufactured in St Louis and delivery and handling of the pipes was a major concern. The pipes manufactured at the Permalok facility in Missouri are shipped by road to another facility about 20-miles away in Illinois for coating and lining. The completed products are loaded onto rail cars and shipped to a marshaling yard for shipment to a rail head in Kansas City. They continue on their journey and once again go through marshaling before being shipped to another rail-head. This process is repeated 2 or 3 more times before they arrive at Barstow, where they wait for the appropriate window (which is sometimes several days) to negotiate the Cajon Pass before arriving at Rancho Cucamonga, where the pipes are off loaded and delivered to a staging yard. The pipes then are loaded and shipped to the field by road when required. With all the handling, the pipes sustain a fair amount of damage to the epoxy coating and the lead-time between manufacture and delivery is extensive and unpredictable. Staff is proposing waving the requirement for the contractor to use the proprietary "Permalok" product and accept the Contractor's proposal for an approved alternative steel pipe. The General Contractor L.H. Woods & Sons has proposed substituting the Permalok steel pipe with a conventional welded steel pipe using similar specifications for the steel used in the fabrication of the pipe. The alternative steel pipe is manufactured by North West Pipe in California. The pipes will be lined using a polyurethane lining, which has excellent wear properties, is more flexible than epoxy and is less prone to chipping. It also can be repaired more easily if it becomes damaged over time by rocks and debris that enter the pipe. Staff believes the proposed flexible pipe lining material and process to install the lining is superior to the epoxy lining in the Permalock pipe that was specified in the City's bid documents. The pipe will be joined with a 3" bell lap and welded together conforming to specific welding standards. The joints will be lined with the polyurethane liner in the field under controlled conditions. The vast majority of all large diameter steel piping used through the country is installed using the bell lap welded method previously described. The substitute pipe is manufactured and lined in the same facility located in Southern California and is shipped directly to the job site by road, minimizing the amount of handling and minimizing the chances to damage the pipe lining. 2-37 Harris and Associates are the design engineers for the San Ramon Project; they are not steel pipe specialists, so to evaluate the adequacy of the proposed steel pipe, the City contracted with Kennedy Jenks, an independent steel pipe specialist consulting firm to perform a technical comparison between the two products. Kennedy Jenks found the proposed substitute pipe to be an equivalent product to the Permalock pipe. Staff believes the proposed pipe lining material and process to be superior to the epoxy lining specified by the City in its original plans and specifications. Harris & Associates, the Engineer of Record has accepted Kennedy Jenks findings. The contractor has provided the City with all of the costs associated with using both products, which shows a total saving of $630,688.80. City staff has reviewed the numbers and verified that they are an accurate representation of the savings. The California Public Contract Code Section 7101 states: "The state or any other public entity in any public works contract awarded to the lowest bidder, may provide for ·the payment of extra compensation to the contractor for the cost reduction changes in the plans and specifications for the project made pursuant to a proposal submitted by the contractor. The extra compensation to the contractor shall be 50 percent of the net savings in construction costs as determined by the public entity. For projects under the supervision of the Department of Transportation or local or regional transportation entities, the extra compensation to the contractor shall be 60 percent of the net savings, If the cost reduction changes significantly reduce or avoid traffic congestion during construction of the project, in the opinion of the public entity. The contractor may not be required to perform the changes contained in an eligible change proposal submitted in compliance with the provisions of the contract unless the proposal was accepted by the public entity." Proposals of this type submitted by contractors are typically referred to as value engineering proposals. If the proposal is accepted by the City, the Public Contract Code requires that the savings initiated by the contractor must be shared on a 50:50 basis between the City and the contractor. Therefore the savings offered to the City for this material change is $315,334.40. Staff believes, based on technical review of the proposed materials that the two types of pipe are equivalent, and the steel pipe proposed by the Contractor is preferable because the polyurethane lining offered with the substitute pipe is less brittle than the lining of the Permalock pipe. Staff is also concerned about the Permalok pipe delivery schedule. For all of these reasons, Staff recommends the acceptance of the Contractor's Value Engineering offer, which represents a saving of $315,334.40 to the project and requests the City Council to authorize Change Order Number 1 to the San Ramon Stormwater Floodwater Reduction Project to formalize the change. CONCLUSIONS Adopting staff's recommendation will authorize the Interim Director of Public Works to execute the attached Contract Change Order, changing the contract requirements to allow use of the steel pipe and lining proposed by the Contractor. 2-38 FISCAL IMPACT Adopting staffs recommendation will reduce to overall cost of construction by $315,334.40. Attachment: A) B) C) Contract Change Order Number 1 Report from Kennedy Jenks Letter from Harris and Associates 2-39 <t 1- l ~ ~ <C. Project: OTYa= tJRANcHo FALOS VERa:.s 30940 Hawthorne Blvd. Palos Verdes, CA 90275 Rancho San Ramon Canyon Storm Drain System Project Change Order# Attention: Mike Ireland LH. Woods & Sons, Inc. 2115 La Mirada Drive CA92801 1 Vista, Description I Quantity Unit Price Amount Value Engineering to supply and install an approved alternative 54" steel pipe for the project. The cost saving is shared at a 50:50 ratio with the contractor. All expenses, including the hiring of a certified independent I -50% I 630,668.80 I LS -315,334.40 welding inspector are included in the net saving. Note: This CO is subject to final approval of the submittals by Harris & Associates and acceptance by the City Council. Original Contract Value Total Value of all Previous Change Orders Total Revised Contract Sum Prior to this Change Order Value of this Change Order New Contract Sum Change in Contract Days Revised Contract Completion Date Accepted: LH Woods & Sons By Date: ___________ _ Authorized: Rancho Palos Verdes By Date: ___________ _ Total By -315,334.40 15,140,000.00 0.00 15,140,000.00 -315,334.40 14,824,665.60 0 4/6/2014 Construction Manager Date: __________ _ 2- 4 0 Attachment B) Kennedy/Jenks Consultants 8 April 2013 Memorandum To: From: Subj~ct: Mr. Alan Braatvedt ~ City of Rancho Palos Verdes · James Bowland P.E. C66400 ~ Pipe Material Evaluation for £an Ramon Storm Drain Project K/J ProjectNumber The purpose of this memo is to present our opinion on the use of Northwest Pipe supplied spiral welded and polyurethane lined and coated steel pipe with heat shrink sleeves for exterior joint coating versus Permalok epoxy lined welded steel pipe with an epoxy coating for the San Ramon Storm Drain Project. Background The 4, 100 linear foot long pipe will be used as a storm drain and be subject to heavy debris flow and very high water velocities. Approximately 200 linear feet will be installed in a "slant drain" mined tunnel as the pipe approaches the ocean outfall. A second 1,850 linear foot portion of the pipe will be installed in a steel ribbed and timber lagging tunnel. In both trenchless installations the annular space between the carrier pipe and tunnel will be fully grouted. The remainder of the pipe will be installed using open cut trenching and use imported sand as backfill or concrete if cover is less than two feet. Evaluation This section presents our evaluation of the materials and will compare the steel used to fabricate the pipe, the pipe joints, and the linings and coatings. Steel Pipe Materials The Permalok pipe is a rolled and sheet welded steel cylinder constructed of 35,000 pound per square inch (psi) yield strength steel. Permalok's web site states that they use a minimum ASTM A36 structural.or ASTM A572 plate steel. The Northwest supplied steel pipe is spiral welded AWWA specified C200 pipe that will have ASTM A1018 or plate welded ASTM A572 Grade 40 ( 40 ksl} steel. The A572 material is used when the pipe wall thickness exceeds the capabilities of the spiral weld machine, and the pipe has to be manufactured using rolled steel plate. The Northwest pipe steel is equivalent in strength to the Permalok pipe, and the AWWA manufacturing standards will add extra quality assurance and quality control to the manufacturing process. 0 Kennedy/Jenks CoMUlt.ahl!I, Inc 2-41 Memorandum Mr. Alan Braatvedt 8 April 2013 Page2 Pipe Joints Kennedy/Jenks Consultants The Permalok pipe uses a proprietary TS machined joint ring to join 20-foot lengths of pipe during assembly In the field. The joint Is designed primarily for tunnel casing Installation. The joint is designed to transfer jacking loads between pipe sections and maintain the alignment between pipe pieces. The T5 joint is not water tight and is not designed for pressure pipe applieations. The Northwest pipe uses a bell and spigot double lap weld joint. The pipe joint is water tight and Is the industry standard for steel water and sewer pipes. This joint Is not designed for pipe jacking; however the double welding gives the pipe joint an equivalent strength of the adjacent steel cylinder for buckling {static and live loads) and longitudinal forces from thermal expansion and contraction. Since the Permalok pipe uses a mechanical joint it wtll not perform as wen as a continuously welded pipe if cathodic protection is used for protecting the exterior of the pipe. While It is our experience that the Permalok pipe is electrically continuous (Freeport Regional Water Authority Segment 1 Bruceville Tunnel 2008), it is not designed to be electrically continuous without joint bonding. For this application the Northwest double welded bell and spigot joint is at least equivalent due to Its water tightness and electrical continuity. Also note that since the pipe will not be used for pipe jacking the Permalok T5 joint Is not needed. Linings and Coatings The Permalok pipe specified has an interior lining of 80 mils of "Tnemec Series 431 Perma- Shield PL n and an exterior coating of 30 mils of Sherwin Williams Duraplate. Northwest Pipe is proposing to use a 100% solids polyurethane lining from Llfelast (Lifelast 210). The lining thicknesses proposed by Northwest Pipe are the same as specified for the epoxy products. Table 1: Physical Characteristics presents a summary comparison between the epoxy and polyurethane products physical characteristics from ASTM testing. Examining the phygical characteristics reveals that both products are very similar in abrasion resistance, hardness, and adhesion. The polyurethane is slightly better in impact resistance and is far superior when It is deformed. With the superior deformation characteristics the polyurethane will remain a ~plastic" material after it cures while the epoxy becomes a hard and brittle material. Both materials exhibit very similar resistances against corrosive agents normally found in wastewater and are recommended for protection of steel surfaces in severe wastewater conditions. This chemical resistance should extend to the resistance against salt water corrosion from atmospheric exposure of the pipeline near the ocean outfall. 2-42 Kennedy/Jenks Consultants Memorandum Mr. Alan Braatvedt 8 April 2013 Page3 Table 1: Physical Characteristics Parameter Epoxr· Tnemec Serles 431 Abrasion {ASTM 04060) 76 mg Hardness-Shore 0 Hardness 78 Adhesion to steel {ASTM 04551) 1,769 psi Deflectio~ No cracking following 5% ring deflection Flexibility (ASTM 0522) NIA Impact resistance (ASTM G14} 160 in-lbs (from NASSCO spec) Polyurethane· Llfelast 210 69.4 mg 74:1:3 >1 1500 psi N/A No cracking or delaminating on 1" mandrel 180 in-lbs. Field coating the Pennalok pipe would only be used when the pipe joints are welded for joint restraint, the field coating would be the same epoxy used for shop coating the exterior of the pipe. The Northwest pipe would use an 80 mil heafshrink sleeve for the exterior of the pipe joints and hand or spray applied Lifelast 210 for the interior pipe joints. While the field coating of the Northwest pipe would be more laborious It is better than the Permalok pipe since it Is thicker on the exterior joints and 100% of the Interior Joints would be coated. With the Permalok pipe there is a possibility of corrosion at the pipe joints since the joint seam Is not coated. It is our opinion that the polyurethane lining material would be superior to epoxy in an extremely abrasive environment with debris flows since It Is less susceptible to chipping from debris and cracking from pipe deflection. In addition all the pipe joints are coated reducing corrosion at the pipe joints. Summary In summary it is our opinion that the steel pipe cylinder, pipe joint, and coatings being proposed are at least equivalent to the Permalok pipe that was specified and add advantages that Include: • Manufacturing to AWWA standards, • Water tight and electrically continuous pipe joint, • Lining has an increased resistance to Impact and deformation, and • Interior and exterior of pipe are lined and coated during installation. cc: David Ferguson, Los Angeles 2-43 DATE: TO: ATTN: RE: May 14, 2013 City of Rancho Palos Ve 30940 Hawthorne Blvd. Rancho Palos Verdes, C Mr. Alan Braatvedt San Ramon Canyon Sto 05/09/2013 submittal #36 Attachment C) L.H. WOODS & SONS, INC. general P,nof,neering Contractors • r1J REVIEWED X-a:i RESUBMITTAL NOT AEQUIREO C NOTE CORRECTIONS CJ RESUBMfr REJECTED * R~VllSNED l>-6~ S U~STIT\JTr=:_ (NcT ,...$ ArJ 1'Pf'fL-011~D !S-<:i? u~L-) Dear, Alan. 2. rstandlilg th pe . can see each one of the pipes end specials ls numbered wfth Jt's position In the aijgnment Also, the Slant drain Is 20' segments vAth no exterior coating and ~ Rib Lag Is 25' segments with no exterior ooatlng (It would be dlffioultfor oross•use here). Lay drawings for each segment w!D be suppUed accordingly. Northwest Pipe Company will also reapond to the request. 3. LHWS has proposed to use e SlngJe Double Paes weld on the Interior of the piping system. This is a watertight welded system, meeting all the rsqulremetits of the AWW A and AWS, that would withstand test pres$ures of 200 PSI, far greater than any.(perma- lok)jolilt would, as they are not oonsldered water tight. currently, t do not believe that the AWWA allows a perma-lok joint for water conveyance. 4. All of the splral welded pipe Is suitable for jacking Into place. This is a common practice regularly undertaken ln all 50 states with spiral welded pipe. LHWS has completed more than 150 locations in the past 50 years, where spiral welded earner pipe is j~cklng Into a host tunnel or pipe. NW Pipe wlll also supply a list of the hundreds of projects end agencies that have also successfully done so. The pipe will be placed onto skids In the Pit, tined up with the pipe previous pushed Into place, ln$erled to the stop Jlne and then finally tack welded on the OD In four locations so that the pipe oan be pushed Into the tunnel segment. Once the entire alignment is pushed into place all of the Interior double pass welding wlll be completed. Northwest Pipe Company will also respond to the request. Corporate Office: 2115 l.a Mirada Drive • Vista, CA 92081 • (760) 599·5500 • Fax: (760) 599-5510 2-44 . :~· i -... :'F">l:fTi 1.ii-• , L.H. WOODS & SONS, INC . <Jeneral'Engi.neering Contractors • 5. The details for the 1 • pipe and velocity reducer rings will be supplied with the detailed lay drawings. Northwest Pipe Company wlll also respond to the request. 6. Full lining repair of the hold backs will be completed. 7. The credit for the approved alternate end/or equal Is ongoing. Respectfully yours, Mjchael Ireland GENERAl ENGINEERING CONTRACTORS Corporate Office: 2115 La Mirada Drive • V1Sta, CA 92081 • (760} 599-5500 • Fax: (760) 699-5510 2-45 Jan. 28. 2013 3:51PM Peter Klika Paige R. Parrish Franklin T. Bigelow, Jr. TO: TELECOPlER NO: FROM: DATE: SUBJECT: TOTALPAGBS: MESSAGE'. Klika Parrish & Bigelow LAW OFFICES OF KLIKA, PARRISH & BIGELOW kpbfaw. com FACSIMILE TRANSMISSION SHEET City of Rancho Palos Verdes Public Works Department (310) 544-5292 Paige R. Parrish January 28, 2013 Mike Bubalo Construction Co., Inc I San Ramon Canyon Storm Drain System 2 · (including cover sheet) Attachment G No. 7957 P. 1 133 N. Altadena Drive Suite 133 Pastdw, California 91107 Telephone (6'26) 196-9998 Pacslmlle (626) 796-9992 Please find a letter for your review. The oliginal was sent via FedEx. The infonnation co11tained in this fecslmlle message iB attomey privileged and confidential infomiation intended only fot the use oftbt individual or entity named above. lftbe reader oI chis message is l\Ot the intended recipient, you me hcrtby notified that lUlY dissemination, dislribution or copying of this commu11ication is stticrly prohibited. It you have received this conununioalion m eiror, please immediMely notify us by 1elephone, and return !he original message to us at Ille above address via the U.S. postal service. Thlmk you. 2-46 Jan. 28. 2013 3:51PM Klika Parrish & Bigelow LAW OFFICES OF' KLIKA, PARRISH & BIGELOW PETER KLIKA PAIGE Ill. PAl\lRl5H P-A ... NKl.IN T. l!llc:IELOW, .IR. January 28, 2013 VIA FACSIMILE (310) 544-5292 and OVERNIGHT MAIL City of Rancho Palos Verdes Pttblic Works Department 30940 Hawthrone Blvd. llaucbo Palos Verdes, CA 90275 · Re: Mike Bubalo Construction Co., Inc I San Ramon Canyon Storm Drain System (the Project") Dea1· Sir or Madam: No. 7957 P. 2 13.3 NORTH ALTAOl!:NA oFUVE SUIT& 403 PASACllCNA, CALIFORNIA 9110? TELEPHONE(62S)796-~999 FAC51Mll.E: (6261 796-9992 Please be advised that this office represents Mtlce Bubalo Constmction Co .• Inc. (''.MBC 11 ) with regard to the referenced Project and its associated Notice Inviting Sealed Bids. Notice is hereby given that MBC hereby submits a protest regarding the bid closing 011 January 25, 2013 and award of the contl'act fol' the Project. Specifically, MBC objects to the rejection of its bid due to its allegedly being submitted after the deadline. In addition, MBC objects to the awarding of the bid in that the city of Palos Verdes was required to extend the date and time ofbid closing to allow 72 hours prior to closing, due to the fact that it issued no less than two addendum, which constituted a material change to the bidsubniission documents in the 72 hourpeiiod prior to bid closing (Public Contract Code §4104.5). Since the Notice inviting Sealed Bids did not specify a bid protest p1·ocedure, please advise which procedure the City wishes MBC to use in objecting to the award of the contract. cc: Dave Sorem 2-47 CITY OF January 25, 2013 Mike Bubalo Construction 5102 Gayhurst Ave. Baldwin Park, CA 91706 RANCHO PALOS VERDES PUBLIC WORKS DEPARTMENT Subject: Return of Proposal for San Ramon Canyon Storm Drain System Dear Mike Bubalo Construction, Proposals for the San Ramon Canyon Storm Drain System project were due to the City of Rancho Palos Verdes by 11 :OOam January 25, 2013. A proposal from Mike Bubalo Construction was received after the scheduled closing time. As required in the specifications, the unopened proposal that was submitted is being returned unopened. Best regards, 30840 HAWl HORNE BOULEVARD I RANCHO l~LOS VERDES, CA 90275·5391 / (310) 544·5252 IF AX (310) 544·5292 / WWWPALOSVERDESCOM/RPV PRINTED ON RECYCLED f-'APl:R 2-48 Ftb. 1. i013 2:44PM llet~rKHka Paige R. Parrish Frai\ldin T. ai&eldw, Jr. TO: T:BLECOPI:BR NO! FROM: DATE: SUBJECT: TOTA:L :PAGES: Ml?SSAGE:. Kl ih ·PHrish & Bigelow LAW OFFICES OF KLii<A, PARRISH & BIGELOW kppf(l.._,,C()nl FACSIMtLE TRANSMISSION SHEET Mr. Les Jones Il City ofRancho Palos Verdes Ptiblic Works Department (310)544~529:2 Paige R. Panish February 1. 2013 MikeBubalo Constructi.on Co., Inc I San Ramon Canyon. Storm Drain System (including cover.sheet) No. 7973 P. 1 1'33 N, Alt&d!m.a:Drlve St1ir¢ ~33 llasad\'!Ul, Galifornia 91107 TclepliOM (626) 796•9998 Facsi1n!lc (626) 196~99~ Please find a letterfotyour i"view; · ".rhe orighlal'was sent via<rJS Ma:il. Tli~ it1fonnllti0t1 C011fftin~1tintbls f\t~s.i.111il~.1t111ssftge Is 111torneypriVlleged ~nd co11fiden1M infQruiatlQn 1n1en~e.d 91jly foi' tlle~1\$11 ofthe individual orentitynamedabove. Ifthe reader ofthiS mesS4,2~ is not the. intentle~ ,w~ptom,you aie l\ere'.by.notlfiedthata~y dis5emi11atlq~. distrib11!io)1 orcppying ofihis llomml\nio~lion is strictly probibifod. If you l!nv¢teceiVecl 1his commm1Jci!tio11 hi ert;or, plMse fuinied~telynot!fy llll by telephone, and return theorlgirui:l mes~ge ~11~ at the nb.ovead4rcss vi11 tl1e 0.$. posto! seNice, Thank you. 2-49 Feb. 1. 2013 2:·44PM Klika Parrish & Bigelow 1'AW OFFICES OF KLIK.A.. PARRISH & BIGELOW PAIGE: R. PARftl·5H Februm:y 1, 2013 VIA FACSIMILE (310) 544*5.W2 and US MAIL Mi'. Les Jones Il Interim Director Depa~:tment pf:PnQHc Wodt~ 'City ofRa11cho P~los Verdes 30940 Hawth()tne Blvd. Rincho Palos Ve,i:des, CA fJ0275 R~: Mike Bubalo CQnst_i.·uctioP-Co., Inc/ San RatnQn Canyon Storm Prai~ Systexn(~he P,roj~ct'') Dear Ml'.. Jones: No. 7973 P. 2 13.!9 NORTH Al..1'ADENA DR)\/!!: PASACll!:NA> C~l..!l"OAl"llA !.iiil07 TEt.l::PHOl\IS: (l5ll:51 795•9991:1 F:AC.SJMILE Csl?SJ 71iili;i-999<! Please be a(]:v:ised that this office represents Mike Bubalo ·Construction Co .• Inc. ('1MBCu) with regard to the referenced Project aJid ·its associated Nqt,iceJn,viting Seated Bids. · Enclosed please find our bid protest letter of Januru•y 2'8 1 2013. Yow DepartJI1ent has .confirmed itsreceiptand din:~ete<i. us to contattMt:~ RonPragoo regardingthe bid protest refere.np~d herein. We were informed today'theMr. Dragoo Will b~()µ,tofthe office un~ilF~bntary H,:2013. We wot\ld appreciate y<Ju S\lpplyil1$any additional contaotso we.m~Y·niove f(>rwarcl wit4 this mauer. iim:e is especially clt!Qfal in that '.\Ve have be:ert informed that this contl'act is schedl\led fobe awarded atthe City Co\mcil meeting on Febni.~iy 19, 2013 .. Thank you fot you!: attention and reply. Shcl\:ild Y©'l.l have, a,ny ques~ions •. please do not hesitate to contact us. Tri the iiltel'im, thisletter is wi'itten with,a ftitl 1·eserva:tion ofa:U tights pn behalf ofMBC whetl1er at law, in equity, or othei•Wise. · Enclosure as noted c'C: ba,ve Sor.em 2-50 · Feb. l. 2013 2:45PM Klika Parrish & Big~low LAW 0,FFICE.S OF KLIKA, PARRISH & BIGELOW Ptl:'l'E:R KLlKA PAIGE Fl' PARRtSH January 28, 2013 VIA :VACSIMILB (310) 544-5292 and OVERNIGHT M,AJT,, City of Rancho Palos Verdes :Pul:>lic WorksDeparttnent 3o940 Ha.wthto~e:Blvd. Rancho Palos Verdes, CA 90275 Re: Mike BJibalo CQnsiru.etion Co-> Iµc/ SanRamori Can:yonSto1m Drain System (the Project'' DearSir·or·Matlam: No. 7973 P. 3 SUIYB: 403 PAf'IAOtNA; C.Al.IFORNIA.$iil107 T~LEPJ.joNe! ti326i 7~e.·9Q9Q FA()SIMILE ;16261 '79El-jil99,!!! :Please be a:dVised thatthi~ office represents :Mike Bubalo C9;nstruotion Co~, foe. ("MBC'') With regard to tho.referenced Project and its associated Notice lnviting Sealed.\Bids. ' Notice is hereby given that MBC hereby submits a protestregarditJ.g the bid closmg on Januaxy 25 1 20 l 3 aud award of :the 9Ql1.ti:;:ict;tbr the l'roject. · · ~peci:ficallJ, MBG objeots·to the rejeetipn.of its bid due to its allegedly,,beirig submitted. after the deadline. In addition~ .MBC 1obj,ects to the awai:ding.of the bid.in that the. city o!l'afos Verdes was .reqUired to ·extend the date and tilne of'.bid closing to allo:w 7'!t hour~ piior to closing, due to the fuct ·mat.it issu~d 110 Jess th~:!1. two addendu~ whi:cl;tti,Qnstituted t\.:mated1iJ~hange to the b"xdsubm:ission docu.mentsinthe 72 hourperiodpdQtto bid closing(PublicConti:act Code §4104.S); Since the Notice inviting Sealed Bids did not specify.a bid protestpi:ocedute~ please advise which pi:ocedure the City Wishes MBC to use in objecting to the award of the contract. We look forward to yourprompt i:esponse. In the ititeiimi this letter is written with a full reservation of allrights on behaU: of MBC whetherast la.w, in equify1 o~· ot'herwise. Very y' ~ R: ARIUSH cc: ))av~ Sore:tn 2-51 CITY OF February 11, 2013 RANCHO PALOS VERDES PLBLIC WORKS DEPARTMENT ~coPV VIA CERTIFIED MAIL-RETURN RECEIPT REQUESTED VIAU. S. MAIL Paige R. Parrish Klika, Parrish & Bigelow 133 N. Altadena Drive, Suite 403 Pasadena, CA 91107 Re: Mike Bubalo Construction Letters regarding San Ramon Canyon Project Dear Ms. Parrish: The City of Rancho Palos Verdes ( .. City") has received your letters dated January 28, 2013 and February 1, 2013. This letter is in response to that correspondence. As was clearly written in the Notice Inviting Sealed Bids, all bids for the San Ramon Canyon Storm Drain System project ("Project") were due by 11 :00 a.m. on January 24, 2013. The agent for Mike Bubalo Construction Company, Inc. C'MBC") delivered MBC's bid late, even though he advised City Staff that he has arrived at the City approximately one hour earlier. MBC's agent also did not contest at that time the fact that he was tardy in delivering the bid, and indeed the bid was time-stamped 11 :0 l a.m. Therefore, in accordance with the provisions of state law, the bid was returned unopened. For the purposes of fairness to other bidders, compliance with the bidding statutes, and the integrity of the bidding process, no extensions to that deadline could be made. Additionally, no 72-hour bid closing extension was requested or made, nor was such an extension required. Public Contract Code section 4104.S(a) states, in relevant part: "The date and time [of bid closing] 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." Section 4014.S(b) explains, "[a]s 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." While two addenda were issued within 72 hours of bid closing, those addenda did not include any material changes, additions or deletions to the total bid, and thus no such extension was required. The addenda removed two catch basins and an epoxy coating from the bid. The City estimates that the catch basins cost approximately $2,500 each, and the epoxy coating costs $17 ,400, resulting in a total cost impact of $22,400 of the total bid. Additionally, an item was inadvertently removed from the bid packet in one addendum, and 30!)4 0 I lAWTHORNE BOULE VAf~D / l{A.NCHO 11\Los VERDES CA 90275·5391 f (310 J 544-5252 I FAX (310) 54 4 ·5292 I WWW PALOSVEROES COM/RPV : ·. PRINlfO ON RE:L'YCLED 11\PER Error! Unknown document property name. 2-52 subsequently was added back in the next addendum, having no cost impact on the total bid. Since the lowest bid crone in at $15, 140,000, the cost impact on the total bid is approximately one-tenth of one percent. That is not a substantial cost impact on the total bid, and thus, the addenda did not create a material change that required a bid closing extension. Technically, your letters do not raise a valid bid protest because MBC has not submitted a timely bid for this Project. However, the City wou]d like to afford you an opportunity to appeal this decision. To avail yourself of that opportunity, please submit your appeal in writing to the City Manager, stating all of the reasons for appeal, including relevant law and facts, no later than February 22, 2013. Failure to timely appeal to the City Manager shall constitute a waiver of your arguments and an acceptance of this decision. The Project contract will not be awarded prior to your appeal deadline. Sioot2--,,..~~""t Les M. Jones, I , Interim Director of Public Works cc: Shiri Klima, Assistant City Attorney Error! Unknown document proper!}· name. -2~ 2-53 Feb. 22. 2013 12: 14PM Kl ika Parrish & Bigelow PetcrKlika Paige R.. Parrish Franklin T. Bigelow, Jr. TO; . TELECOPIBR. NO: FROM: DATE: SUBJECT: TOTAL PAGES: MESSAGE: LAW OFFICES OF · KLIKA, PARRISH & BIGELOW ~.com Cly of RenchO Pa'°8 Venlel FEB II Z013 City Manager's Office FACSIMILE TRANSMISSION SHEET Ms. Carolyn Lehr City Manager City of Rancho Palos Verdes (310) 544-5291 Paige R. Parrish Februaiy 22.1 2013 Mike Bubalo Constnlotion Co .• Inc I San Ramon Canyon Stonn Drain System 4 (including cover sheet) Please find a letter for your review. No. 8037 P. 1 133 N. Altac'kmA Drive &lite 133 huelcnt. C.Ufornla 91107 Tclcpbonc (626) 796-9998 Fatsimflc (626) 79fi.9992 'The infbnnalion contained in dlis ~lo messago 1$ auomey privileged and c:onftdential infoimation iDlelldcd ODty for Ibo ua<: of tho individual or ClllilY l1flmtd above. If tho mdor otlhla mossago iG nol lbO imended recipient, you are hereby llOtified lhatany dissemination. distnl>ution or c~ or this cOlmn'lllliCatloa. is strictly prohibited. lfy(lllbave received this communication in mor, please iminedittel.y notify \IS by tolephono, and rotwn tllc orl&mel mmagotCI ut 11t the above address via lhc U.S. poslll 111:.!\'kc. Thank you. 2-54 Feb.22. 2013 12:14PM Klika Parrish & Bigelow LAW 0,..FICES OF KLIXA, PARRISH & BIGEWW PETER Kl.ll<A PAfGE R. PAA'l'tlSH Fru>.NKl.IN T. Dl~IE:LQW, JR. VIA FACSIMILE (310) 544-5291 Ms. Carolyn Lehr City Manager City of Rancho Palos Verdes 30940 Hawthome Blvd Rancho Palos Verdes, CA 90275 Februaey 22, 2013 Re: Mike Bubalo Construction Co., Inc I San Ramon Canyon Stonn Drain System (the "Project") Dear Ms. Lehr: No. 8037 P. 2 l.:it!ll "IORTH AL'TACJE"'A DRIVll: St.ll'tE 403 f'ASAOti:NA. CAl.lf"ORNIA llilllQ7 YEL~PHONE(020)79e-9998 f'ACSIMll.1: ltllie61 789-lllSHl:i= Pursuant to the letter from Mr. Les M. Jonetil of February 11, 2013, please accept this letter · I as an appeal and/or bid protest by Mike Bubalo Construction Co., Inc. ("MBC") regarding the bid process for the referenced Project. L.FACTS. MBS is an underground contractor with more than 38 yeaTS of eXperience in water, sewer, and storm drain projects. They were prequalificd to bid the Project. MBC had prepared its bid for submission at 11:00 AM on Friday January 24, 2013 at the Office of the Director of Public Works for the City. On January 22, 2013, at approximately 3:00 PM. MBC received addendum No. 4 to the bid package via facsimile from the City Department of Public Works. This addendum Jlllde a deletion for item 8A (crushed roak) and an additional deletion that reduced the size of two catch basins in item 20. It also deleted the requirement that all steel had to be epoxy coated and requested that only steel in the outlet .stl'Ucture at the beach and the CIOH piles be coated. It also ch~ged the bid deadline to 11:00 AM on January 25, 2013. MBS was now required 10 communicate this information with its subconttac:tors to account for this change, have them rebid their work, and then include it in its cal<iillation. The elimination of the crushed rock resulted in a reduction of$105,000.00. The catch basin deleti0nreduced the cost by $10,000.00. The epoxy deletion affected approxiniately 75% of the steel in the Project and resulted in a reduction of $237, 000.00. 2-55 F e b. 22. 2 0 13 12 : 15 PM K l i k a Pa r r i s h & B i g e l ow No. 8037 P. 3 Ms. C8rolyn Lebr Re: Mike Bubalo Construction Co., Ine I San Ramon Canyon $toon Drain System (the 'tProject'j City Manager of City of Rancho Palos Verdes February 22, 2013 Page2 Therefore, Addendum No. 41'CSul.ted in a total bid reduction of $352,000.00. On January 23, 2013, at approximately 2:00 PM. MBC received Addendum No. 5 by facsimile.from the Department of Public Works. This Addendum added the item SA ( crushingroc:Ic) back into the bid package, resulting in an addition of$105,000.00. · On January 25, 2013, the MBC representative arrived at the Office of the Director of Public Works to submit the bid. His satellite clock indicated the time was 10:58 AM, however, the office clock indicated the time was 11 :00 AM. The person at the counter 1irst refused it, then consulted with someone else who directed her to accept it. Ho submitted the bid at that time. but the employee could not stamp the bid because it would not fit in the machine. After approximately 40 seconds, a separate sheet of paper was sratnped in lieu of the package at 11:01 AM. Without the delay, it would have received pn 11:00 AM stamp. The MBC representative was later informed that the City considered the bid late. MBC would have been the low bidder on the Project if its bid had been accepted. II. ARGUMENT MBC objects to the awarding of the bid on the two grounds: (I) an extension of the bid opening was not given as required by California Public Contract Code §4104..S; and (2) but for the employee's delay in the time stamping the bid. MBC would have timely submitted its bid. · A. Bid Extension. California Public Contract Code §4104.5 states: (a) The officer, department. boardJ 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 nrocivcd and the time by which the shall be received. The date and time shall be'~tended by no less than 72 hours if the officer, department. board, or commission issne8 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. (b) As used in this section, the term .. material change" means a ehange with a substantial cost impact on the total bid as determined by the awarding agency. (c) As used m this section, die term "bid invitation" shall include any documents issued to prime contractors that contain descriptions ()fthework to be bid 2-56 Feb. 22. 2013 12: 15 PM K 1 i k a Parr i sh & Bi g e 1 ow No. 8037 P. 4 . ~ ~-,···· Ms. Carolyn Lehr Re: Mike Bubalo Constl.'uction Co., Inc I San Ramon Canyon Storm Drain System (the "Project .. ) City Manager of City of Rancho Palos Verdes · Februa1y 22, 2013 Pagc3 or the content. form, or manner of submission of bids by bidders. In theinstantmatter, two addenda were issued by the Citywbichatfcc~ the bidding process for the project witWn 12 hours of bid closing. (72 hours prior to bid closing would have been Januaiy21,2013 at ll:OOAM). The addonda clearly fit the definition included in the statute of a material change, addition or deletion to the bid in that Addendum No. 4 resulted in a deletion of $352,000.00. ~ §4104.~(a)(b). Moreover, these addenda also changed the "bid invitation'' as de.scribed by §4104.S( c} in that they directly altered the content of the bid in'Vitation. · The object of §4104.S is to allow a contractor adequate time within which to prepare its bid, in light oflast minute changes to the bid documents. A change which rcmtltod in a 3% reduction in a bid is significant in that it was a material change, which included a substantial cost impact to the job, and was a deletion to the bid invitation as descri'bed in Section §4104.S(a). In addition, to add to the confusion, the change to the epoxy contains a direct contradiction regarding the steel which is required to be coated or not coated. Section 206-1 states only tho steel reenforcement at the outlet structure at the beach shall be coated and "no other rebar on the p1-oject will requite epoxy coating". Then in Section 205-3.3.2A. it requires that the steel reinforcement in CIOH piles shall also be epoxy coated. Subsectjons B and D also contradict Scction206-l. This is a direct change of the fonn and content of the work required by the bid. h evidenced by the foregoing, the bid deadline sboqldhave been extended by72 hours from the time of the issue of Addendum No. 4 because of the changes and deletions. B. Bid Submission. The bid documents require that "It is the bidder's sole responsibility to see that his proposal is received in proper time." MBC did just that, aniYing before the prescribed hour to submit its bid. only to be met with a clock in the office which was two minutes fast. The bid package was submitted at I l :00 AM. office time, but it was not stamped as such due to the actions, not ofMBC. but by a City employee. A delay because the employee could not stamp the bid is not the n:sponsibility of MBC, whose bid would have been timely stamped but for her delay. 2-57 F e b. 22. 2 0 13 12 : 15 PM K I i ka Pa r r i s h & B i g e 1 ow No. 8037 P. 5 Ms. Carolyn Lehr . Re: Mike Bubalo Construction Co., Inc I San Ramon Canyon Storm Drain System (the "Project'') City Manager of City of Rancho Palos Verdes February 22, 2013 Page4 m, CONCLUSION MBC submits that, based on the foregoing. that ample evidence ~that the City did not foJlow Section4104.S in this bid process. In addition, any delayattn'buted to a City employee which resulted in an untimely bid should not be attn'buted to MBC. MBC respectfully requests that this Project not be awarded and be rebid in accordance with proiJer bidding procedures. . Should you have any :f\nther questions, please do not hesitate to contact us. Our previously asserted reservation of all rights is hereby reinstated. cc: Dave $orcm 2-58 CITY OF RANCHO PALOS VERDES OFFICE OF THE CITY MANAGER February 26, 2013 VIA CERTIFIED MAIL -RETURN RECEIPT REQUESTED VIA FACSIMILE (626) 796-9992 Paige R. Parrish, Esq. Klika, Parrish & Bigelow 133 N. Altadena Drive, Suite 403 Pasadena, CA 91107 Re: Mike Bubalo Construction Appeal regarding San Ramon Canyon Project Dear Ms. Parrish: ·The City of Rancho Palos Verdes ("City") received your letters dated January 28, 2013 and February I, 2013. On February 11, 2013, Les Jones, Interim Public Works Director, responded to your letters. Although he correctly indicated that your letters do not technically raise a valid bid protest because Mike Bubalo Construction Company, Inc. ("MBC") did not submit a timely bid for the San Ramon Canyon Storm Drain System project ("Project"), he offered you an opportunity to submit an appeal in writing to me. I have received your appeal letter dated February 22, 2013, in which you state all of the reasons for your appeal. I have reviewed your letters, the Project's bid packet, all of the Project's addenda, and the Interim Public Works Director's determination. I also have reviewed a memorandum from the City employee who was at the counter and determined that the MBC bid was late. I concur with the Interim Public Works Director's determination that MBC's bid was received too late for consideration and that a 72-hour bid closing extension was not required. I. FACTS The Notice Inviting Sealed Bids for the Project clearly stated that bids must be received by 11 :00 a.m. on January 24, 2013. City staff sent Addendum 4 to all bidders on January 22, 2013. Addendum 4 clearly stated that bids must be received by 11:00 a.m. on January 25, 2013. Addendum 4 reduced the size of two catch basins, and removed from the bid requirements crushed rock fill in the canyon below the sub-drain and the requirement for an epoxy coating on some of the steel. City staff sent Addendum 5 to all bidders on January 23, 2013. Addendum 5 added the crushed rock fill that had been inadvertently removed from Addendum 4 back into the bid requirements with no change to the quantity of that item. Addendum 5 made no other change to the bid requirements and did not change the bid receipt time, which was still two days later on 11 :00 a.m. on January 25, 2013. No bidder, including your client, claimed that these revisions to the bid documents were material changes or requested additional time to prepare their bids in response to the two addenda. 30940 HAWTHORNE BLVD./ RANCHO PALOS VERDES, CA 90275-5391 / (310) 544-5205 /FAX (310) 544-5291 . E-MAIL: CLEHR@RPV.COM / WWW.PALOSVERDES.COM/RPV PRINTED ON RE~YCLED R\PER 2-59 On the morning of January 25, 2013, City Hall opened at 7:30 a.m., as it does every other City workday, and there was no impediment to entry to City Hall. The City employee who was at the counter stated that MBC's agent walked into the Public Works Department at 11 :01 a.m., which was after deadline for submitting a timely bid. She told the agent that the bid was already late and that the City could no longer accept it. He mentioned to her that he had been at City Hall since 10:00 a.m. She said she would time stamp the package and would confirm with her supervisor if the City was able to receive it. Due to the bid's size, she time stamped a blank paper and handed both the bid and time-stamped paper to MBC's agent. The time stamp still read 11:01 a.m. Her supervisor confirmed that the bid could not be submitted, because the agent did not come into the Public Works Department until 11 :01 a.m. Five bids were submitted timely, the lowest of which came in at $15,140,000. II. DETERMINATION A. MBC's Bid Was Received Late MBC's agent appeared at the counter at 11 :01 a.m., which is when MBC's bid was time- stamped. It is irrelevant when MBC's agent arrived at City Hall or what he did prior to turning in the bid. Every bidder is responsible for submitting its bid on time, and the City certainly has no control over the bidders' whereabouts prior to bid submission. The bid packet did not state when bidders must arrive at or near City Hall; the bid packet clearly indicated that bids must be received by 11 :00 a.m. There is no harm in turning a bid in early, since they are all opened at once after the established deadline, and indeed~ MBC's agent could have submitted the bid as early as 7:30 a.m. on that morning, or on any prior day. However, at the time MBC's agent chose to appear at the counter, he was already late. Since the bid was late, any events that occurred thereafter are irrelevant to the bid receipt time. California Public Contract Code Section 4104.5(a) states that that any bids received after the time specified in the notice or any extension must be "returned unopened." Because the bid was received after 11 :00 a.m., the bid was returned unopened, as required by State law. In your letter, you mention MBC's agent's clock indicated that he walked into City Hall at 10:58 a.m. As you know, clocks may vary by a few minutes, but the City must rely on one clock for the purposes of closing the receipt of bids and determining their timeliness. The City relies on the clock on its time-stamp machine for that purpose. If the City were to rely on various timekeeping devices showing slightly different times, the City would subject the process to uncertain and unfair results, and there would be no way for City staff to determine the timeliness of the receipt of bids in compliance with the Public Contract Code. The City is a cost-conscious entity, especially in these tough economic times. It is to the City's benefit to receive as many bids as possible, especially low bids from qualified bidders. Thus, the City has no incentive to prevent any bidder from turning in its bid. However, staff is bound by State law, which clearly requires the City to return unopened any bid that is received after the deadline that is specified in the bid packet. City staff has no authority to waive such a provision, and I likewise cannot ignore it. 2-60 B. No 72-hour Bid Closing Extension Was Required Public Contract Code Section 4104.5(a) requires an extension of the bid closing date and time by no less than 72 hours only ifthe officer or department "issues any material changes, additions, or deletions to the invitation later than 72 hours prior to the bid closing." The word "material" must be read in this statute to have meaning, so the phrase "any material changes, additions, or deletions" cannot simply mean "any changes, additions, or deletions." Section 4104.5 was passed in 1998 by Assembly Bill 1092. As originally introduced in February 27, 1997, AB 1092 proposed adding Section 4104.5 with language stating, in relevant part: "The date and time shall be extended by no less than 72 hours in the event the officer, department, board, or commission issues any changes, additions, or deletions to the invitation later than 72 hours prior to the bid closing." The Assembly added the word "material" to this sentence in the May 5, 1997 version of the bill, and that language was included in the final version that was adopted by the Legislature. Furthermore, Section 4014.S(b) defines the term "material change" as "a change with a substantial cost impact on the total bid as determined by the awarding agency." Again, the definition does not simply require the seventy-two hour extension for any cost impact, but rather for a "substantial" cost impact. This definition also was not in the original version of AB 1092. It was added by the Senate on July 8, 1997, and was included in the final legislation. · As the Interim Public Works Director indicated in his letter, staff calculated the impact of the two addenda on the total bid amount to be substantially lower than what you have listed in your letter. I do not have any way to confirm the accuracy of your numbers. Because staff returned MBC's bid unopened, and since you did not list the total amount of MBC's bid in your letter, I do not know that amount. However, even assuming that the inadvertent elimination of the crushed rock should be included in the calculation of the change to the amount of the bid, and assuming the other costs that you have listed in the appeal are correct (the reduction of the size of the two catch basins costs $10,000; the deletion of the crushed rock costs $105,000, and the deletion of the epoxy coating from some of the steel costs $237,000), the worst case scenario is still an impact of only 3% on MBC's alleged total bid amount. Thus, even if all of the amounts that you have set forth in the appeal are correct, none of which the City concedes, this is not a "material" change that has a "substantial" cost impact on the total bid amount that would have required the City to extend the deadline for submitting bids by seventy-two hours. Also, please note that the definition of material change set forth in Public Contract Code Section 4014.S(b) refers not only to a substantial cost impact, but to an impact that is determined to be substantial by the awarding agency. Thus, the Legislature clearly gave deference to the City's judgment in making a determination of what is, or is not, a substantial cost impact. Staff determined at the time when the last two addenda were issued that these changes did not create a substantial cost impact on the total amount of the bids that would have required the extension of the bid deadline by seventy-two hours, and I concur with that determination. 2-61 11 2 The Chaos of Bid Day It is amazing how many people involved in public works construction, especially public agency employees, have no idea what kind of chaos bid day is. Nor do they realize how that chaos causes bid mistakes that lead to bid disputes. It is time to enlighten them. On bid day, information that must be recorded in the complex bid forms keeps arriving until seconds before the bid deadline. As a result, mistakes routinely appear. The process needs to be simplified. But, legal constraints and economic realities limit what can be done. First, to be successful, the bid must offer the lowest price (City of Inglewood-LA. Civic Center Auth. v. Superior Court (1972) 7 Cal.3d 861, 867, 103 Cal. Rptr. 689, 500 P2d 601). Second, to be considered at all, the bid must be submitted by the bid deadline (California Government Code section 53068). Finally, the bid must be responsive; it cannot contain any consequential defect (Menefee v. County of Fresno (1985) 163 Cal.App.3d 1175, 1180-81, 210 Cal. Rptr. 99). That means the now routine pages of attachments and required information, some of which is obtained only minutes before the bid deadline, must be complete and accurate. In order to submit the lowest priced bid, the prime contractor must get the lowest possible prices from the Attachment H 2-62 12 interested subcontractors and suppliers. Bid shopping is one way to do this: When ABC Electric offers to do the electrical work for X dollars, some prime contractors will call up DEF Electric, relay the ABC price and ask DEF if it can beat it. The same happens with suppliers' bids. Subcontractors and suppliers are well aware of this practice. In fact, subcontractors have gotten legislation to prevent it after bid time (Subletting and Subcontracting Fair Practices Act, California Government Code section 4100 et seq.), but it is perfectly legal before bid time. So, subcontractors and suppliers routinely delay submission of their lowest prices to the prime contractors until they think the prime contractors will no longer have sufficient time before the bid deadline to shop those prices. Most subcontractors and suppliers phone or fax their proposals to the prime contractors during the last few hours before the bid deadline. Some deliver quotation forms a few days before bid day that contain all of the terms and conditions of the proposed sale or subcontract -except the price. Then, within the last hour before the bid deadline, the price is phoned in. See the description of this activity in Saliba-Kring/en Corp. v. Allen Engineering Co. (1971) 15 Cal.App.3d 95, 100, 92 Cal. Rptr. 799. Because word about bid prices gets around., a subcontractor's or supplier's first price is often not the lowest. The subcontractor or supplier waits to see what the competition is offering, then, to get the contract it may lower its price. Such price cutting occurs throughout the last hour before the bid deadline, sometimes right up to the time when the bids must be submitted. 2-63 13 Here are a couple of real Iifo examples: In a Los Angeles lawsuit, the local manager of a major pipe supplier who was bidding 20 or more projects a month testified: "At times while at the bid location, in order to improve my chances of getting the project, I will make adjustments in our bid price to the contractors. . . . I have reduced my bid by as much as $200,000 within the last minute or so before the bids are due." In the days before cellular phones, and before many agencies made banks of phones available to prime contractors at the bid location, the prime contractor's representative had to find a pay phone near the bid location in order to receive last minute instructions. One contractor describes a bid where the only phone he could find was three floors above the office in which the bids were to be received. He had to get off the phone and close out his bid early enough to run downstairs to submit the bid on time. While he was making that trip, one of the subcontractors phoned in a price cut of more than $50,000. Contractors at phones on the same floor as the bid location were able to use that cut; he wasn't. He missed submitting the lowest bid by less than $50,000. To accommodate the last minute flood of information from subcontractors and suppliers, prime contractors typically do two things. First, employees staff a bank of phones during the last few hours before bid time to receive information from suppliers and subcontrattors. Second, a representative of the contractor is posted at the bid location with the bid form, ready to accept last minute changes in the bid, prior to closing it up and submitting it. 2-64 14 Since the bid day phone call is the only contact with most subcontractors, much more than prices are received and recorded. A description of the scope of work also must be obtained -particularly inclusions and exclusions, because they can significantly increase or decrease the real price of the offer as compared with offers from others in the same trade. Also, various legal requirements compel obtaining additional information. For example, California Government Code section 4104 requires the prime contractor to list in its bid all of the subcontractors and certain suppliers who will provide more than Yi of 1 % of the dollar value of the contract. The listing must identify the subcontractor and describe the portion of the work it is to do. The prime contractor must use that subcontractor, unless the conditions in California Government Code section 4107 or section 4107.5 are met. To assure that it does not list a subcontractor that is unacceptable, the prime contractor must obtain additional information, for example: can the subcontractor provide a performance bond; is the subcontractor a signatory to union agreements or is it willing to sign one; will the subcontractor execute a subcontract with nonstandard clauses? Another example, many contracts today have goals for minority business enterprises or women business enterprises or disabled veteran business enterprises or disadvantaged business enterprises (see example, California Public Contract Code section 2001). To satisfy those requirements, all such subcontractors and suppliers, regardless of the amount of their quote, need to be listed. So, a prime contractor must ask every firm that calls whether it has been certified in one of those categories, and if so, by what agency, since some 2-65 15 agencies will not accept other agency's certifications, or only certifications of specific other agencies. During the last hour or two before bid time, all this incoming information must be continually evaluated and reevaluated to determine which subcontractors and suppliers are acceptable and are offering the lowest prices ~ and on what portions of the work Then, the conclusions must be formulated to fit the requirements of the bid form. This is no mean task. Besides the subcontractor and supplier listings, the bids usually require a variety of prices to be listed. It is very rare, today, for a public works project bid to involve just a single lump sum pnce. At minimum, the agency will usually have several deductive or additive alternatives. They allow the agency to tailor the ultimate contract to fit budgetary limits, without having to rebid the project. They must be separately priced, and often involve work or materials of several subcontractors and suppliers. In addition, the agency may want "unit prices" for individual units of work, such as each foot of installed pipeline, or each square foot of paving, or each cubic yard of excavation. The agency does so because it is uncertain about the exact quantities needed or because it wants these prices to determine whether to issue potential change orders. Each unit price is multiplied by an estimate of the quantity needed to produce an estimated price for that item; it is added to the estimated prices for all other items to obtain the overall bid price used to determine which bid is the lowest Some bids include dozens of unit price items; more than l 00 appear on some Caltrans and large local agency infrastructure projects. 2-66 16 Rarely do any of the unit price items correspond exactly to a quotation from a subcontractor or supplier. Thus, when a new lowest price from a subcontractor or supplier is received, the prime contractor has to determine how it affects the various alternative bid items or unit price items to which it might pertain. Finally, all of these last minute modifications in the bid must be placed on the bid form, and that form must be delivered to the agency before the bid deadline. Most contractors station a representative at the bid location with the bid form. With a cellular phone in one hand and a pen in the other, that representative makes adjustments to the bid until it must be closed out to be submitted by bid time. Most bids are submitted within the last minute or two before the deadline. Since the lowest price requirement, the bid deadline and bid shopping before bid time are not likely to change, the only way to simplify this process -and reduce the number of mistakes that lead to bid disputes -is to simplify the bid forms. Public entities, take note. 2-67 - Attachment I Greenbook 2012 Ill . . . .. By Way Of Explanation The Standard Specifications for Public Works Construction, popularly known as the "Greenbook'', was originally published in 1967. The 2012 Edition is the 161h edition of this book, which is updated and republished every three years. The original edition of the Green book was the product of almost four years of intensive work by a 400-person task force which then comprised the Joint Cooperative Committee. The City and County of Los Angeles were major contributors to this effort and these two agencies were the first to adopt the Greenbook. To date, more than 200 other cities, counties, and agencies in the area have also adopted it as their standard for public works construction specifications. Interest in the Greenbook has been worldwide, with copies being acquired and studied by public works officials throughout the United States, Canada, and many countries overseas. Immediately after publication of the Greenbook, a permanent Joint Committee, comprised of representatives from cities, counties, utility companies, and contractors throughout Southern California, was established to carry on the work. The function of this committee is to study and update the provisions of these specifications to reflect the constantly changing technology and advanced thinking of the construction industry. The first 10 editions of the Green book were the product of the Joint Cooperative Committee of the Southern California Chapter of the American Public Works Association, and the Southern California Districts of the Associated General Contractors of California. In December 1995, the Joint Committee formally ceased operations. In January 1996, Public Works Standards, Inc., a mutual benefit corporation, began producing the Greenbook. The Corporation's Board of Directors is comprised of nine members -five representing the American Public Works Association, and the other four from the Associated General Contractors of California, the Engineering Contractors Association, the Southern California Contractors Association, and BNi Publications, Inc. The Board appoints a 25-member Greenbook Committee which carries on the tradition and function of the original Joint Committee. This committee convenes regularly each month to consider new changes. In each of the two years between publication of a new Green book edition, the changes which have been researched and approved by the committee during the preceding year are published in pamphlet form as amendments to the current edition. This program maintains a "living" document in public works specifications. Stripes in the margin of each new edition point out significant changes in the text adopted since the preceding edition. The original edition of the Greenbook consisted of three parts: General Provisions, Construction Materials, and Constrnction Methods. In 1970, 1991, and 1994, Pmts 4, 5 and 6 were added to provide specifications for alternate aggregate materials, pipeline system rehabilitation, and modified asphalt products, respectively. In 2012, Part 6 was incorporated into Parts 2 and 3. 2-68 Ron Dragoo From: Sent: To: Cc: Subject: Carolynn Petru Wednesday, June 26, 2013 12:01 PM Ron Dragoo Les Jones FW: San Ramon Canyon Project -----Original Message----- From: r.klatt@cox.net [mailto:r.klatt@cox.net] Sent: Wednesday, June 26, 2013 11 :57 AM To: CC Subject: San Ramon Canyon Project Attachment J I am in favor of an independent review of the City Staff's handling of The San Ramon Canyon Project. Robert W. Klatt, Resident of Rancho Palos Verdes 1 2-69 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:10 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: Charles Agnew [mailto:cvagnew@cox.net] Sent: Wednesday, June 26, 2013 12:09 PM To: CC Subject: San Ramon Canyon City Council Members, I am concerned about the San Ramon Canyon project. It appears to have been ramrodded through with little regards to public input. The chosen approach costs a lot of money. I think that it has a high probability of cost overrun. And now, just as it is getting started, change order #1 comes along. There appears to be lots of confusion as to why this occurred. Please review what's going on. Maybe an independent review would be prudent. Charles Agnew RPV Resident 1 2-70 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:14 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: Bill Schurmer [mailto:sbschurm@yahoo.com] Sent: Wednesday, June 26, 2013 10:51 AM To: CC Subject: San Ramon Canyon City Council Members, After reading all the information on the San Ramon Canyon pipe issue that I can find, I still have many questions with few answers. A number of these questions involve actions and/or decisions of staff. You must be seeking these answers yourselves. When complex situations like this arise where uncertainty and doubt exist, issues should be cleared up. Therefore I feel it to be essential that an unbiased independent investigation take place. I realize that there are details such as cost, time involved, who to perform the investigation and the like, but you simply can't afford not to proceed. It's for the protection of all and the people have a right to know. Troubling, negative information is out there. I would think that your city manager would also want such an investigation so that she could clear up the uncertainty that is hanging over this project. Additional she would know better the activities of those under her control. Regards, Bill Schurmer RPV 1 2-71 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:32 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon Project From: Walt Strauch [mailto:wstrauch@mac.com] Sent: Tuesday, June 25, 2013 4:33 PM To: CC Subject: San Ramon Canyon Project To: Rancho Palos Verdes City Council From the information I have received from those attending the City Council meeting concerning the San Ramon Canyon Project, it seems to be in the residents best interest to have an independent investigation of the City Staffs handling of the San Ramon Canyon Project. Walt Strauch Resident of Rancho Palos Verdes 1 2-72 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:33 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon Project From: Ellen November [mailto:ellen.november@gmail.com] Sent: Tuesday, June 25, 2013 2:22 PM To: CC Subject: San Ramon Canyon Project I am in favor of an independent investigation of the City Staff's handling of The San Ramon Canyon Project. Ellen November Resident, Rancho Palos Verdes Ellen November www.ellennovember.com mobile: 310-384-6912 1 2-73 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:33 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon Project From: Ronald Williams [mailto:ronleol@cox.net] Sent: Tuesday, June 25, 2013 1:34 PM To: CC Subject: San Ramon Canyon Project I am in favor of an independent investigation of the City Staff's handling of the San Ramon Canyon Project. Ronald L. Williams Resident of Rancho Palos Verdes 1 2-74 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:34 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon Project From: G_ZITPA [mailto:gzitpa@gmail.com] Sent: Monday, June 24, 2013 9:25 PM To: Carol Lynch <clynch@rwglaw.com>; CC; Joel Rojas; John Alvarez Cc: mickeyrodich@gmail.com; momofyago@gmail.com Subject: San Ramon Canyon Project After having watch the deliberations on the San Ramon Project and having followed this project from the beginning I am URGING this City Council to have an independent investigation of the City Staffs handling of The San Ramon Canyon Project. (Being personally in constant dismay at the lack of overview of Compliance with the Resolution of Permit 203). I am a Resident of Rancho Palos Verdes Ginette Aelony June 24th ,2013 1 2-75 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 12:34 PM Ron Dragoo Cc: Les Jones Subject: FW: RE San Ramon Canyon From: ezstevens@cox.net [mailto:ezstevens@cox.net] Sent: Saturday, June 22, 2013 7:17 PM To: CC Subject: RE San Ramon Canyon Dear City Council, . I am requesting that you begin a private investigation into the City Staff and their handling of the San Ramon Canyon Project at the July 2nd meeting. Sincerely Edward Stevens 45 year resident 3 2418 Conqueror Dr. 1 2-76 Ron Dragoo From: Sent: To: Cc: Carolynn Petru Wednesday, June 26, 2013 12:34 PM Ron Dragoo Les Jones Subject: FW: Outstanding City Council Review of Sharon Yarber's accusations From: James [mailto:bubba32@cox.net] Sent: Saturday, June 22, 2013 2:02 PM To: CC Subject: Fwd: Outstanding City Council Review of Sharon Yarber's accusations To the City Council Thank you for your conscientious and diligent consideration of the assertions tendered by certain individuals regarding the propriety of City decisions in processing the San Ramon Canyon Project. My laudatory sentiments are being forwarded per request of Mayor Brooks. Jim Gordon Sent from my iPad Begin forwarded message: From: Susan <subrooks08(fV,gmail.com> Date: June 22, 2013 11:14:50 AM PDT To: James <bubba32@cox.net> Subject: Re: Outstanding City Council Review of Sharon Yarber's accusations Jim. Thank you for your objective analysis. Would you be willing to send this to cc@rpv.com so staff and Council can see it, too? Susan Brooks Mayor, Rancho Palos Verdes Sent from my iPhone On Jun 22, 2013, at 9:14 AM, James <bubba32@cox.net> wrote: 1 2-77 Susan (aka Mayor Brooks) As I watched last night's re-runs of your City Council meeting, I couldn't help but recognize the notable quality of all the City's participants -in stark and embarrassing contrast with Sharon Yarber and her associates. This is no idle compliment. Your mastery of the circumstances was appropriately nuanced, at times stern and commanding, and as required, softly leading by example. Simply brilliant. I have full confidence that your leadership under these difficult circumstances was and is innate and will continue. You brought great credit to our City that night. I look forward to supporting the follow -up meeting July 2nd. The key concerns expressed by Yarber and Crew were more than adequately answered and addressed brilliantly and honestly by the City. The summary description of these key concerns by Les was simply awesome in it's clear, concise content. Very easily understood. By contrast, Sharon Yarber's expressed problems, though seemingly brilliant on the surface (as Les had acknowledged) lacked important background information which totally undercut those points. She failed to do her research and homework. It showed. The specification of Pemalock Pipe was based upon critical engineering necessity, well thought out. All bidders were appropriately constrained and grounded to that standard. That another option was possible, is not justification -as Yarber contended -that the specification should have been more open. Use of an alternative involved substantial schedule risks as was proven by the later change order. In short, Yarber's contention, in my opinion, would have improperly reopened the entire design process rather than ending it. Her next frivolous contention involved the late bid. Because of the circumstances in this situation -i.e. that the contractor had already been informed beforehand about which clock governed the submittal time, which was thereafter ignored -is key. Yarber's attempt at bring up a flawed 1984 legal case was off target and simply stupid under these circumstances. In fact, that lapse undercuts all of the other assertions as well, not being founded on the realities of this particular situation. I found it definitive that even the contractor had not further pursued this issue after the appeal was denied. I have had personal experience with bid submittals and find, as a result, Yarber's criticism of this point to be naive at best and cynically self-serving at worst. The contention (Ken Delong) that nothing of substance was discussed or heeded at the Miraleste hearing is similarly spurious, especially given his parting shot that something (undefined) "smells". As you know, I had a personal (bystander) experience with the San Ramon Project (Gene Dewey) that involved a more basic engineering concept, presumably to save substantial costs. Thanks to your intervention and assistance, those concerns were properly and rapidly addressed (Ron Dragoo) to both my satisfaction and Gene Dewey's as well. I have his email thanking me for such participation. It appears that Sharon and company had formed a preconceived position and had 2 2-78 utterly failed to first check out the facts and background. In other words, they jumped to false conclusions based upon their own agenda. Simply irresponsible, shameful and unprofessional, in my opinion. Thus, the Council meeting on this subject and participation by all City Staff earned kudos for a Bravura performance, far exceeding expectations. Great performances by all. Great job by the Mayor, Councilmembers, Legal Counsel, City Manager, Public Works Director and engineers, etc. Thanks to all involved, I believe you have restored a great deal of Trust and Faith in our City's governance. Jim Gordon Sent from my iPad 3 2-79 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 2:07 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon Project From: kuehl@usc.edu [mailto:kuehl@usc.edu] Sent: Wednesday, June 26, 2013 2:03 PM To: CC Subject: San Ramon Canyon Project I am in favor of an independent investigation of the City Staffs handling of The San Ramon Canyon Project. Hans Kuehl Resident of Rancho Palos Verdes 1 2-80 Ron Dragoo From: Sent: To: Cc: Subject: Carolynn Petru Wednesday, June 26, 2013 2:07 PM Ron Dragoo Les Jones FW: San Ramon Canyon Project From: henrikson [mailto:paul.henrikson@cox.net] Sent: Wednesday, June 26, 2013 1:56 PM To: CC Subject: San Ramon Canyon Project I am in favor of an independent investigation of the City Staff's handling of the San Ramon Canyon Project. Paul Henrikson Resident of Rancho Palos Verdes 1 2-81 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 2:57 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: Florence Fenton [mailto:flofentonl@cox.net] Sent: Wednesday, June 26, 2013 2:53 PM To: CC; 'Mickey Radich' Subject: San Ramon Canyon June 25, 2013 Attention: City Council and City Staff Subject: San Ramon Canyon Project I am concerned as with regard to the "San Ramon Project". It is an area that I frequently travel. I am in favor of an independent investigation of the City Staff's handling of the "San Ramon Canyon Project". I want to see this project done right considering the gravity and expense of this cascading problem. Sincerely, Florence Fenton Resident of Rancho Palos Verdes 1 2-82 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 3:09 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: R. Gene Dewey [mailto:rgdewey@cox.net] Sent: Wednesday, June 26, 2013 3:09 PM To: Jim Gordon Cc: Susan Brooks <Subrooks08@gmail.com>; CC Subject: San Ramon Canyon Hi Jim, I just returned from a trip out of the country and upon returning, I read your e-mail to Mayor Susan Brooks dated June 22, 2013, entitled "Outstanding City Council Review of Sharon Yarber's accusations". In that e-mail you have a paragraph that states the following: The contention (Ken Delong) that nothing of substance was discussed or heeded at the Miraleste hearing is similarly spurious, especially given his parting shot that something (undefined) "smells". As you know, I had a personal (bystander) experience with the San Ramon Project (Gene Dewey) that involved a more basic engineering concept, presumably to save substantial costs. Thanks to your intervention and assistance, those concerns were properly and rapidly addressed (Ron Dragoo) to both my satisfaction and Gene Dewey's as well. I have his email thanking me for such participation I do not remember an e-mail to you saying my concerns were satisfied. I have been interested in San Ramon Canyon since I moved to RPV in 1980. I drive by it on a regular basis. Years ago I walked the canyon with a friend who worked with me in the mining industry and who now works for the city of Los Angeles. We discussed a relatively simple solution to the problem. At that time we felt a pipe in the canyon with back fill to stabilize the slide and improving the storm drain inlet at 25th street would resolve the problem. We attended the meeting at Miraleste Intermediate School together several years ago. It seemed to us that the decision to choose the tunnel alternative had been made and any input from the public was summarily dismissed. I think the estimates for the various alternatives were done in such a way as to favor the tunnel alternative. After I discussed this with acting Director of Public Works, Tom Odem, he arranged a meeting with city staff and a few of my neighbors, Mickey Rodich and Barry Hildebrand, to hear our concerns on January 17, 2012. At that meeting we were told it was impossible to get any cooperation from the city of LA or the County and the solution was the tunnel alternative. We ask if we could help by contacting some of the state and federal officials and were told to hold back as the city council was working on this issue. After Mayor Susan Brooks was elected to the council, she attended our annual Homeowners association meeting. Barry Hildebrand relayed to her our concerns on the San Ramon Canyon project. She met with us and then arrange another meeting with Ron Dragoo and Councilman Jim Knight on August 23, 2012. Again we were told that only the tunnel alternative satisfied the legal concerns of city council. This problem has been around for at least 25 years and could have been resolved for much less expense. I was the only citizen to comment during the NEPA study. The staff reported that my suggestion relied on connecting to the existing 1 2-83 storm drain system in the City of Los Angeles. They went on to say that the condition of the existing storm drain system in the City of Los Angeles is unknown as no technical information has been submitted to the city of Ranch Palos Verdes and the city of Rancho Palos Verdes would have to spend more time and money to assess the system. My notes from our January 17, 2012 meeting record Ron Dragoo stating that their hydrology study showed the storm drain would handle the clean flow of a 100 year storm. I found out later from my friend in the city of Los Angeles that the city of Ranch Palos Verdes also had access to a camera study of the system. I came to the conclusion that the decision had been made and that any further effort to change it was a waste of time. But let me assure you, Staff never did satisfy my concerns. Of course I support Mickey Rodich's suggestion for an independent investigation of this matter. Gene Dewey 2 2-84 Ron Dragoo From: Carolynn Petru Sent: To: Wednesday, June 26, 2013 3: 19 PM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon -----Original Message----- From: Rachel Diffendal [mailto:diffend@cox.net] Sent: Wednesday, June 26, 2013 3:18 PM To: CC Subject: San Ramon Canyon An independent investigation of the City Staff regarding the San Ramon Project is important and should be done as quickly as possible. Rachel Diffendal Resident of Rancho Palos Verdes 1 2-85 Ron Dragoo From: Sent: To: Cc: Subject: RPV City Council, Tom Smith <thomash.smith@gmail.com> Monday, June 24, 2013 10:07 PM www.cc@rpv.com Karen Romo Smith San Ramon Canyon Project We have been following the San Ramon Canyon Project and have concerns about change orders occurring without the City Council's knowledge or approval. Letters have been written to the City Council wanting clarification about these change orders. These letters have been stonewalled by the City staff. These actions by the staff seem untoward to the City Council and to the citizens of Rancho Palos Verdes. We are in favor of an independent investigation of the City staffs handling of the San Ramon Canyon Project. We intend to voice our opinions at the July 2, 2013 Council meeting. Thomas H. Smith Karen S. Smith Voters in the the City of Rancho Palos Verdes 31 0-544-7281 1 2-86 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 7:31 AM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: Ralph Gilbert [mailto:pvgdlife@yahoo.com] Sent: Thursday, June 27, 2013 6:31 AM To: CC Subject: San Ramon Canyon I am in favor of an independent investigation of the San Ramon Canyon Project. Ralph Gilbert pvgdlife@yahoo.com 1 2-87 Ron Dragoo From: Sent: To: Cc: Subject: Carolynn Petru Thursday, June 27, 2013 7:31 AM Ron Dragoo Les Jones FW: San Ramon Project -----Orig in al Message----- From: Steven Carlsen [mailto:surfsupsteve@gmail.com] Sent: Thursday, June 27, 2013 5:33 AM To: CC Subject: Fwd: San Ramon Project > > > I am in favor of an independent investigation of the City Staff's handling of The San Ramon Canyon Project. > > > Steven Carlsen > > Resident of Rancho Palos Verdes 1 2-88 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 7:49 AM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: Mayor Susan Brooks [mailto:subrooksOS@gmail.com] Sent: Wednesday, June 26, 2013 10:57 PM · To: bill foster Cc: CC; Mickey Rodich; Carolyn Lehr Subject: Re: San Ramon Canyon Thank you for your input, Mr.Foster (with cc to Mickey Rodich). It appears what is taking place here is an online version of a petition; similar wording and residents of similar geographic regions. Perhaps we should attach all those who signed as 'concerned residents/ citizens' together. Not one of these letters lists any specific problem. I'm curious about exactly what facts are in your possession to garner these assertions, but rest assured that the issue will have a full airing next Tuesday. I strongly urge you to either attend or tune in for yourself to channel 35 so you have all the information for yourself. In the meantime, I'm more than happy to talk with you or Mickey about your concerns. Best Regards, Susan Brooks Mayor, Rancho Palos Verdes (310) 541-2971 (Sent from my iPad) On Jun 26, 2013, at 5:36 PM, bill foster <bfos(W,cox.net> wrote: > As a Rancho Palos Verdes tax paying resident, I am requesting that the City Council of Rancho Palos Verdes begin a private investigation into the City Staff and to their handling of the San Ramon Project. The transparency that was professed by staff doesn't seem very transparent and there are many questions that need to be answered in regard to the contracts that were awarded for the Project. Please attach this email to the other concerned citizens request to be on the agenda of the July 2nd meeting. Bill Foster 1 2-89 32451 Searaven Drive Rancho Palos Verdes, Ca 90275 2 2-90 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 8:02 AM Ron Dragoo Cc: Les Jones Subject: FW: "San Ramon Canyon Project" -----Original Message----- From: rsjfle@cox.net [mailto:rsjfle@cox.net] Sent: Wednesday, June 26, 2013 7:17 PM To: CC Subject: Re: "San Ramon Canyon Project" >Hello > > I am in favor of an Independent Investigation of the City Staff's handling of The San Ramon Canyon Project. > > Stephanie Fleck > Resident of Rancho Palos Verdes 1 2-91 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 10:20 AM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon From: James [mailto:bubba32@cox.net] Sent: Wednesday, June 26, 2013 6:36 PM To: R. Gene Dewey Cc: Susan Brooks <Subrooks08@gmail.com>; CC Subject: Re: San Ramon Canyon Gene Thank you for correcting my faulty recollection of your position and attributing your consent to the resulting decision that was reached to proceed with the current project as specified and awarded. Given the disagreement with that design, I do not understand the current list of complaints by those now accusing the City of different improprieties, specifically suggesting not only malfeasance but intentional deception. Further, I cannot understand nor condone the assertions made by Attorney Yarber that the late submittal of a bid was an error by the City to not accept a late bid, when the contractor's representative had been in the room beforehand and was informed of the clock that would govern proper acceptance, well before the deadline which the contractor's representative simply ignored. I think the issues in this case now are much different and involve completely unconnected assertions of City malice which appear to be groundless and unsupported by the facts. As you may also know, the City has taken these charges very seriously and has scheduled additional review time for July 2nd. Hopefully, at that time there will be ample opportunity to discover any background information, if any, that supports Yarber's very serious contentions. Again I apologize to you for mischaracterizing the design issues that were previously discussed. Jim Gordon Sent from my iPad On Jun 26, 2013, at 3:08 PM, "R. Gene Dewey" <rgdewey(lV,cox.net> wrote: Hi Jim, I just returned from a trip out of the country and upon returning, I read your e-mail to Mayor Susan Brooks dated June 22, 2013, entitled "Outstanding City Council Review of Sharon Yarber's accusations". In that e-mail you have a paragraph that states the following: 1 2-92 The contention (Ken Delong) that nothing of substance was discussed or heeded at the Miraleste hearing is similarly spurious, especially given his parting shot that something (undefined) "smells". As you know, I had a personal (bystander) experience with the San Ramon Project (Gene Dewey) that involved a more basic engineering concept, presumably to save substantial costs. Thanks to your intervention and assistance, those concerns were properly and rapidly addressed (Ron Dragoo) to both my satisfaction and Gene Dewey's as well. I have his email thanking me for such participation I do not remember an e-mail to you saying my concerns were satisfied. I have been interested in San Ramon Canyon since I moved to RPV in 1980. I drive by it on a regular basis. Years ago I walked the canyon with a friend who worked with me in the mining industry and who now works for the city of Los Angeles. We discussed a relatively simple solution to the problem. At that time we felt a pipe in the canyon with back fill to stabilize the slide and improving the storm drain inlet at 25th street would resolve the problem. We attended the meeting at Miraleste Intermediate School together several years ago. It seemed to us that the decision to choose the tunnel alternative had been made and any input from the public was summarily dismissed. I think the estimates for the various alternatives were done in such a way as to favor the tunnel alternative. After I discussed this with acting Director of Public Works, Tom Odem, he arranged a meeting with city staff and a few of my neighbors, Mickey Rodich and Barry Hildebrand, to hear our concerns on January 17, 2012. At that meeting we were told it was impossible to get any cooperation from the city of LA or the County and the solution was the tunnel alternative. We ask if we could help by contacting some of the state and federal officials and were told to hold back as the city council was working on this issue. After Mayor Susan Brooks was elected to the council, she attended our annual Homeowners association meeting. Barry Hildebrand relayed to her our concerns on the San Ramon Canyon project. She met with us and then arrange another meeting with Ron Dragoo and Councilman Jim Knight on August 23, 2012. Again we were told that only the tunnel alternative satisfied the legal concerns of city council. This problem has been around for at least 25 years and could have been resolved for much less expense. I was the only citizen to comment during the NEPA study. The staff reported that my suggestion relied on connecting to the existing storm drain system in the City of Los Angeles. They went on to say that the condition of the existing storm drain system in the City of Los Angeles is unknown as no technical information has been submitted to the city of Ranch Palos Verdes and the city of Rancho Palos Verdes would have to spend more time and money to assess the system. My notes from our January 17, 2012 meeting record Ron Dragoo stating that their hydrology study showed the storm drain would handle the clean flow of a 100 year storm. I found out later from my friend in the city of Los Angeles that the city of Ranch Palos Verdes also had access to a camera study of the system. I came to the conclusion that the decision had been made and that any further effort to change it was a waste of time. But let me assure you , Staff never did satisfy my concerns. Of course I support Mickey Rodich's suggestion for an independent investigation of this matter. Gene Dewey 2 2-93 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 10:22 AM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon -----Original Message----- From: bill foster [mailto:bfos@cox.net] Sent: Wednesday, June 26, 2013 5:36 PM To: CC Cc: Mickey Radich Subject: San Ramon Canyon As a Rancho Palos Verdes tax paying resident, I am requesting that the City Council of Rancho Palos Verdes begin a private investigation into the City Staff and to their handling of the San Ramon Project. The transparency that was professed by staff doesn't seem very transparent and there are many questions that need to be answered in regard to the contracts that were awarded for the Project. Please attach this email to the other concerned citizens request to be on the agenda of the July 2nd meeting. Bill Foster 32451 Searaven Drive Rancho Palos Verdes, Ca 90275 1 2-94 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 10:22 AM Ron Dragoo Cc: Les Jones Subject: FW: San Ramon Canyon Project From: Steve Katz [mailto:stevekatz74@yahoo.com] Sent: Wednesday, June 26, 2013 5:14 PM To: CC Subject: San Ramon Canyon Project I've been a resident of RPV since before it became a city. In most instances, I have been very satisfied with the way my areas of concern have been resolved by city staff. Suddenly, several residents have surfaced allegations of impropriety on the part of some members of the staff, the nature of which are of sufficient import that I feel an independent inquiry is warranted. I am confident that those whose integrity have been impugned would welcome the opportunity to see these allegations resolved by an impartial commission. I am, therefore, calling for such a independent inquiry. Stephen E. Katz Col., USAF ret. 3553 Seaglen Drive 1 2-95 June 27,20!3 J\llayor Susan Brooks Gale N. Lovrich 2275 JVest 2511t Street #11 .San Pedro, CA 90275 City of Rancho Palos Verdes 30940 Hawthorne Blvd Rancho Palos Verdes, CA 90275 Dear Mayor Brooks and Council Members: After having been a resident of the Peninsula and Rancho Palos Verdes for over 57 years and a recent resident of Palos Verdes Shores I am concerned that the very important San Ramon project could be delayed due to unwarranted complaints. I an1 also concerned about the finances for the San Ramon Project and the state of infrastructure in Rancho Palos Verdes. I would like to point out to you that continuing the questioning of city employees, consultants, contractors and others who are politically motivated within the City will waste away the savings that was obtained through the change order to the San Ramon Project. After reviewing the staff reports and attachments I am satisfied that the engineers and managers acted appropriately, which resulted in a substantial savings to the City. A required pipe was deleted from the project and was substituted \Vith another pipe, which is a great idea if it saves money. I understand a bidder that was late was turned away, the bidder was required to be turned avvay to be in compliance with State Law. I am thanktlll that the City did not accept a bribe from a pipe supplier. I am hopeful that this project will be completed in a timely and cost effective manner. Very truly yours, idJ;tyJ~~w~ Gale N. Lovrich 2-96 Ron Dragoo From: Sent: To: Cc: Subject: Carolynn Petru Thursday, June 27, 2013 3:40 PM Ron Dragoo Les Jones FW: San Ramon project -----Original Message----- From: diane torrentera [mailto:dmtorrentera@msn.com] Sent: Thursday, June 27, 2013 2:57 PM To: CC Subject: San Ramon project I am in favor of an independent investigation of the city staffs handling of the San Ramon project. I do not wish to see what happened in Bell,Ca happen here. Sincerely, Diane Torrentera Rancho Palos Verdes resident Sent from my iPhone 1 2-97 Ron Dragoo From: Carolynn Petru Sent: To: Thursday, June 27, 2013 3:40 PM Ron Dragoo Cc: Les Jones Subject: FW: Accusations against city heard, inquiry continued to July 2 From: david bentley [mailto:davidbentleybmg@yahoo.com] Sent: Thursday, June 27, 2013 3:24 PM To: letters@pvnews.com Cc: CC Subject: Accusations against city heard, inquiry continued to July 2 LETTERS TO THE EDITOR As a construction management professional, I read this article in the PV News dated 6/20/13 and was astounded on several fronts as follows: 1. Negative change orders such as using a less expensive but "equivalent" piping design is a project management best practice that quite frankly is not used enough. Design documents are created by human beings who simply cannot know every alternative and cost, so they develop a "workable" design. It is up to the project team to encourage value engineering ideas and implement them. Interestingly, if the design was flawed and a positive change order occurred, the city would have to pay or go after the designers errors and omissions insurance, which rarely happens. 2. Mary Scott, who wrote the article spent a lot of effort discussing the late bid. This is a non starter, one second late, and the bid is late. No issue here. Lot of good reasons for that law. 3. The project team has a difficult road ahead building this complicated $20 million project. It doesn't need nor deserve continued scrutiny on the bid process, it needs to focus on achieving the scope, cost, schedule and quality goals of the project. If not managed properly with all parties involved (City, designers, contractors, inspectors, etc), a lot more serious issues than this bid issue could result. 4. I also read the 6/18/13 letter from Les Jones to the City Council on this matter and concur with his recommendations. David Bentley, PMP, CCM, CCE, LEED AP Professional Project Manager and Construction Consultant 9 Latigo Lane, Rolling Hills Estates, CA. 90274 (310) 871-9530 1 2-98