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RPVCCA_CC_SR_2013_06_18_09_San_Ramon_Project_Response_To_Yarber
CITY OF RANCHO PALOS VERDES MEMORANDUM TO: FROM: DATE: SUBJECT: REVIEWED: HONORABLE MAYOR & CITY COUNCIL MEMBERS LES JONES, INTERIM DIRECTOR OF PUBLIC W~---- JUNE 18, 2013 u--- RESPONSE TO SHARON YARBER'S ALLEGATIONS REGARDING THE CITY'S ADMINISTRA TON OF THE SAN RAMON PROJECT CAROLYN LEHR, CITY MANAGER 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 allegations 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 21 5 \ 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 the allegations that are being made by Ms. Yarber are without 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 9-1 in greater detail below, that the contract has been administered properly by the City in 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 Permalock. The Permalock 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, Permalock 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 Permalock, 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. 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 (MBC), 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. 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. 1 The May 21st Staff report discussed the Permalock pipe in greater detail and is attached to this report for ease of reference. 9-2 2. Rejection of the Untimely Bid 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").2 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 Provide 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 2 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 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. 9-3 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.4th 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. $uperior 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 also 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. B. The City Properly Relied Upon Its Public 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 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 9-4 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 conclu.sion, 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. 3. 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 Permalock steel pipe with the epoxy lining. This substitution process specifically is authorized by Section 7101 of the State Public Contract Code. Pursuant to that Section, if the contractor's proposal is accepted by the City, the City is required to share 50% of the cost savings with the contractor.3 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 3 See the attached May 21st staff report. 9-5 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 (Permalock), 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 Permalock 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. First, the contractor must develop the necessary engineering changes and submit them to the City for consideration. If approved, the contractor is entitled, under state law, to 50% of the proceeds from the savings. In this case, any risk resulting from the change order is borne by the contractor, Harris, and Woods. 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. 4. Permalock's Offer to the City Meanwhile, Permalock 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 Permalock offer, so the City Council would be aware of it. This offer, however, was not discussed in the May 21st 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 Permalock pipe that had been included in the City's bid specifications. 9-6 If the City were to have accepted the proposal from Permalock, 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 Permalock 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. 5. 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. 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. 6. 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 9-7 Exhibit A to this Staff Report. 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. FISCAL IMPACT The cost to respond to the allegations with regards to this investigation of Staff's conduct is being calculated and will be included under Late Correspondence. Attachments: A) B) C) D) E) Exhibit A to Staff Report 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 9-8 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 statement 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 Permalok is likely to be biased, and it is not advisable to put much weight on their comments. Permalok is the ste~I pipe manufacturer the City is not using. Staff has relied instead upon the opinion of Kennedy Jenks, which is an independent entity with no stake in the outcome of this matter. I have also spoken with Ehab Gergis at Harris. City Staff also spoke with Mr. Gergis prior to receiving this memorandum about his discussions with Ms. Yarber, who represented herself as an attorney representing herself and "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 are with the process by which this was brought to Council and the public, and the inaccuracies in the staff report. The staff report is accurate, and Staff stands behind it. The process by which the proposed change order was evaluated was consistent with the City's practices all other change orders brought to the City and is consistent with State law. Moreover, to assure transparency and City Council review, this change order was brought to the City Council for approval on May 21st. The staff report states that Harris & Associates ("Harris'J are "not steel pipe specialists". On what information is that statement based? Harris & Associates' design engineer reported on 4/8113 in a meeting at City Hall to Staff that Harris & Associates were not specialists in evaluating the technical comparability between steel pipes. Has Harris acknowledged that they are not steel pipe specialists? 9-9 See statement above. If so, when was that done? See above. The statement was made following the Contractor's request for substitution of the Permalok 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 retained by the City for their expertise in that field to design this storm drain project. The list of Top 50 Trenchless Design Firms of 2011 names Harris at# 30. Kennedy/Jenks is not listed. This is not a trenchless storm drain project -it is a storm drain project that includes tunneling. Kennedy/Jenks evaluated the adequacy of the substitute steel pipe by comparing the two products. 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 Harris if Harris is not qualified to design the pipe specifications? Harris is qualified to design the storm drain Project, and Harris chose pipe with specifications that meet the requirements for the Project. Their credentials include that they are Registered Civil Engineers licensed by the State of California. Harris was selected by the City Council in 2010 following a request for qualifications that was issued by the City and a rigorous evaluation process. Indeed, why would the City retain Harris for two major steel storm drain pipe projects if they are not specialists? Harris was retained because Harris & Associates are storm drain design 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". This is true. Mr. Gergis has never stated Harris & Associates were not steel pipe specialists. The statement 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 business of designing storm drain systems using a variety of pipe materials, including steel. 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 9-10 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 statement in the May 21st staff report is factually accurate and explained the reason why Staff believes that Woods' proposal should be approved. Staff stated the following in the May 21, 2013 Staff Report: "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". 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 will 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 changing of the specifications for the epoxy lining for the Permalock pipe that was included in the bid specifications for the San 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 Mccarrell was to be used again in San Ramon which is obviously not correct. The May 21st staff report discussed the merits of epoxy versus polyurethane lining. 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 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 opinion is based upon the independent third-party report done by Kennedy Jenks, which specifically states that in their opinion, the polyurethane lining would be superior to epoxy lining for this Project. The Staff Member who reviewed the findings is Ron Dragoo P.E. Is that person a steel pipe specialist? Kennedy Jenks is a steel pipe expert, and Ron Dragoo P .E. is a professional state licenced civil engineer who reviewed their findings and relied 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 about Kennedy Jenks' opinion above. See above. Permalok was the pipe recommended by Harris in the bidding specifications. Staff did not require a steel pipe expert until the contractor recommended the change order. 9-11 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 each, steel pipe was selected and it was decided at the time that Permalok would likely be 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 reconsidered because the contractor suggested it along with his representation that he could install the welded steel pipe within the timeframe 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 Mccarrell 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 staff report. 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 City had no contract with Permalok, but insisted that adequate repairs were made to the damaged pipes by the contractor at no cost to the City, as typically would be expected. As the contract was between the City and the 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 9-12 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 inducement that was made to the City so the City would not approve the pipe substitution. 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 offer. Staff kept the issues separate, since the decision whether to approve the change order should be based on engineering principles, as just stated. 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. 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 the City sufficient time to evaluate his proposal . 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 is no factual basis for this statement. There were no discussions 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 Engineering 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 submitted to Harris for their review, who in turn 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 opinion from a third party with no stake in 9-13 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 be too much delay before the contract could be entered into and the work could be performed. Since time was of the essence, Staff decided to go to a smaller, but well known consultant to perform the review. Alan Braatvedt recommended 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 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? This "peer review" that was undertaken by Kennedy Jenks at the City's request was authorized by the City Manager to obtain an impartial second opinion from a third party about the pipe substitution request. This was performed for the City to complete its due diligence. Had Kennedy Jenks provided a negative finding, Staff would have recommended that the contractor's proposal for a substitute pipe be rejected. 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? The Engineer of Record is Harris & Associates, so the City took the step to obtain their acceptance of Kennedy Jenks' opinion to ensure that Harris agreed with the change. The liability for the construction project remains primarily with the contractor and with Harris & Associates, as the design engineer. Kennedy Jenks is responsible for its opinion regarding the equivalency of the strength of the substitute pipe and the acceptability of the proposed lining. 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. 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. 9-14 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 became aware of this application when Woods 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 transmission mains and is 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 an extensive welding operation in the field for a total of only 200 welded joints. This decision was only reconsidered because the contractor suggested it along with his representation that he could do the work within the timeframe set for the project. With this commitment also came 100% of the risk to be borne by the contractor and one-half of the realized savings to the City. Is it or is it not also widely used? Staff is advised that it is not widely used for storm drains but is used frequently in water transmission lines. (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 those reasons that a thick walled steel pipe was selected 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 occurrence! The majority of the 54" pipe will be installed within an 80" rib and lag tunnel. The gaps between the tunnel and surrounding dirt will be filled using a pressure grouting method. The annular space 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 geotechnical investigations were done for the design of this 9-15 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 Permalok pipe delivery schedule". This extensively discussed in the May 21st 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 facility 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 deliveries in the hands of the manufacturer. Has that pipe already been ordered and when was it ordered -before or after May 21,2013? A letter of intent was issued by Woods to the pipe manufacturer on April 15, 2013, a week after Harris accepted the findings of the report from Kennedy Jenks. This was done at the Contractor's risk without Staff approval and enabled the pipe supplier to secure the raw materials. 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 Harris & Associates sent 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 "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 "submittals" 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. 9-16 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 . This is a conventional practice which is followed for all "submittals". Why wasn't someone from Harris asked to prepare a detailed evaluation of or response to the Kennedy/Jenks report? As there was agreement from Harris with the Kennedy Jenks findings, there was no need to spend the money on a report that would serve no additional purpose. 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 above. 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? There was no conflict to resolve. Had Harris not accepted Kennedy Jenks' findings, the substitution would not have been accepted. 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? There are three different pipe applications on the project, which all pertain to the same pipe. The requirement is for the contractor to submit a submittal for each of the locations as each has its own set of criteria. However the product remains the same for all three. The approval of the submittal attached to the staff report covers the acceptance of the pipe material for all three 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 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. All bidders provided their proposals to construct the project based on exactly the same criteria, with no advantage to any one of them, and the bids were evaluated on that basis. If any of the other contractors had been the lowest responsible bidder and been awarded the bid, the City would have entertained any Value Engineering ideas that they had in exactly the same way as with the Woods proposal. All rules for reviewing change orders and value engineering 9-17 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 by 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 Bubalo 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 315/2013 City Council meeting. The deadline was 11 :00 a.m. The particular clock was not specified in the bid. However, it is Staff's practice to notify bidders when they come to the counter of the exact clock that Staff uses to determine the time. Staff advised the Bubalo representative of the location of the clock and where the bids would be 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. The documents will be provided. Should not staff have brought the issue of the timeliness of receipt of the Bubalo 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 $1 Omil. 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. 9-18 Accepting a late bid would violate the provisions of the Public Contact Code. There is no discretion to accept a late bid. The Council Rules and Procedures (Section 5. 7J 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 was a change order to a contract that was approved 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 Joss 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. Staff has followed and will continue to follow all laws and regulations in effect for all 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 believes that the proper decision was made by the City Council. The pipe has been ordered. If this decision is reversed, the City could incur substantial damages for the unwarranted delay 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; There is no conflict between Harris & Associates and Kennedy/Jenks that needs to be resolved. 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 made on 5/21/13; the pipe has been ordered and is currently being manufactured. If the City Council obeys this demand, it could result in a lawsuit that could cost the City millions of dollars in delay damages. 9-19 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 matter has been fully discussed and aired and does not believe that an investigation is warranted. Of course, this is a 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 this contract had been approved previously, and because the change order was handled in compliance with Public Contract Code Section 7101, it was appropriately located on the Consent Calendar. If the City Council disagrees, Staff always welcomes direction from the City Council about how items should be handled on the agendas. 9-20 Kennedy/Jenks Consultants 8 April 2013 Memorandum To: From: Subjeqt: 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 AWWA specified C200 pipe that will have ASTM A1018 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. u:~ameebowland\san ramon\pipe_memo_san ramon 8apr2013.dccx © Kennedy/Jonks Consul!ants, Inc 9-21 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 betw~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 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 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 electricafly·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 BTnemec Series 431 Perma- 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 (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 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. u:'jamesbov.londlsan mmonlplpe_memo_..., mmon 8apr2013.docx @)Kennedy/Jenks COMUllan1s, Inc. 9-22 Kennedy/Jenks Consultants Memorandum Mr. Alan Braatvedt 8 April 2013 Page3 Table 1: Physical Characteristics Parameter Epoxy-Tnemec Series 431 Abrasion (ASTM 04060) 76 mg Hardness-Shore D Hardness 78 Adhesion to steel (ASTM 04551) 1,769 psi Deflectio~ No cracking following 5% ring deflection Flexibility (ASTM 0522) N/A Impact resistance (ASTM G14) 160 in-lbs {from NASSCO spec) Polyurethane· Lifelast 210 69.4 mg 74±3 >1,500 psi N/A No cracking or delaminating 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 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 u:'jamosbowlondlsan ramon'j>fpe_,..mo_aan ll!mon Bapr'.!013.d(ICJ( ll Kennedy/Jenks Consullanto, In~ 9-23 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 Harris & Associatess .. 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 34 Exerutive Par1<, Stite 150 Irvine, CA 92614-4705 949.655.3900 f.949.655.3995 lrvine@halfis..assoc.com 9-24 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 Trench less 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 9-25 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 9-26 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 ofthe 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 9-27 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 Buba lo 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 Buba lo 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. 9-28 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. 9-29 CITY OF 'RANCHO PALOS VERDES MEMORANDUM TO: FROM: DATE: SUBJECT: HONORABLE MAYOR & CITY COUNCIL MEMBERS 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 S?I-~ ~ 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. 9-30 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. Permalck 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. 9-31 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 staffs 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. 9-32 FISCAL IMPACT Adopting staff's 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 9-33 ct 1- 1 <;.) ~ <. Project: San Ramon Canyon Storm Drain System Project CITYOF 30940 Hawthorne Blvd. Rancho Palos Verdes, CA 90275 Change Order # Attention: Mike Ireland L.H. 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:------------ 9- 3 4 Attachment B) Kennedy/Jenks Consultants 8 April 2013 Memorandum To: From: Subject: 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 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. u:~ameabowland\san ramon\pipe_memo_san ramon 8apr2013.docx © Kennedy/Jenks Consultants, Inc 9-35 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 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 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 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" and an exterior coating of 30 mils of Sherwin Williams Duraplate. Northwest Pipe is proposing to use a 100% solids polyurethane lining from Lifelast (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 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. u:'jamesbowlandl&an Rlmon\plpa_memo_..., ramon Bapr2013.docx ti Kennedy/Jenks COMUltanls, Inc. 9-36 Kennedy/Jenks Consultants Memorandum Mr. Alan Braatvedt 8 April 2013 Page3 Table 1: Physical Characteristics Parameter Epoxy· Tnemec Series 431 Abrasion {ASTM 04060) 76 mg Hardness-Shore D Hardness 78 Adhesion to steel (ASTM 04551) 1,769 psi Deflectlo~ No cracking following 5% ring deflection Flexibility (ASTM 0522) N/A Impact resistance (ASTM G14) 160 in-lbs (from NASSCO spec) Polyurethane· Llfelast 210 69.4mg 74±3 >1,500 psi NIA No cracking or delaminating 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 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 u:\jamesbo"'8ndlsen ramon~o_memo_aan ramon 8apr2013.doox Ill Kennedy/Jenks Consultants, Inc. 9-37 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. qeneral P,ngineering Contractors • r/J REVIEWED~ M RESUBMITTAL NOT REQUIRED Cl NOTE CORRECTIONS CJ RESUBMrr f:J REJECTED * R~\11 l:iwED f.6/:-. 5 UBSTIT\ITc (NOT "'$ AN -t-.Pf'f'A!Jft,D !SCi?u~l-) Dear, Alan. following 2. erstandihg -~ ~~ each one of the pipes and specials ls numbered with it's position In the alignment Also, the Slant drain Is 20' segments With no exterior coating and th~ Rib Lag Is 25' segments with no exterior coating (It would be difficult for cross-use here). Lay drawings for each segment wlD be supplied accordingly. Northwest Pipe Company Will also respond to the request. 3. LHWS has proposed to use a Single Double Pass weld on the Interior of the piping system. This Is a watertight welded system, meeting all the requiremerrts of the AWWA and AWS, that would withstand test pressures of200 PSI, far greater than any.(perma- lok) joint would, as they are not considered water tight. Currently, I do not believe that the AWWA allows a perma-lok joint for water conveyance. 4. All of the spiral welded pipe is suitable for jacking Into place. This is a common practice regularly undertaken in all 50 states with spiral welded pipe. LHWS has completed more than 150 locations In the past 50 years, where spiral welded carrier pipe iS jacking Into a host tunnel or pipe. NW Pipe will also supply a list of the hundreds of projects and agencies that have also successfully done so. The pipe will be placed onto skids in the Pit, lined up with the pipe previous pushed Into place, Inserted to the stop line and then finally tack welded on the OD In four locations so that the pipe can be pushed Into the tunnel segment. Once the entire alignment is pushed into place all of the Interior double pass welding will be completed. Northwest Pipe Company will also respond to the request. Corporate Office: 2115 La Mirada Drive • Vista, CA 92081 • (760) 599·5500 • Fax: (760) 599-5510 9-38 ,~; ' , ":I I' ::t l•l • L.H. WOODS & SONS, INC. fienera{'Engineering Contractors • 5. The details for the 1D pipe and velocity reducer rings will be supplied with the detailed lay drawings. Northwest Pipe Company will also respond to the request. 6. Full lining repair of the hold backs will be completed. 7. The credit for the approved alternate and/or equal Is ongoing. Respectfully yours, Mjchael Ireland GENERAL ENOBNEERBNG CONTRACTORS Corporate Office: 2115 La Mirada Drive • Vista, CA 92081 • (760) 599-5500 • Fax: (760) 599-5510 9-39