HomeMy WebLinkAboutStaff Report 145-06TO:
FROM:
DATE:
SUBJECT:
Manager’s Rep r
ItONORABLE CITY COI~CIL ~
CITY MANAGER
FEBRUARY 13, 2006
7
DEPARTMENT: PUBLIC WORKS
CMR:145:06
MUNICIPAL SERVICE CENTER FUEL STORAGE TAN~:S ANq) FUEL
STORAGE ISLAND REPLACEMENT (CAPITAL IMPROVEMENT
PROGRAM PROJECT VR-01001): REJECTION OF CONSTRUCTION
BIDS
RECOMMENDATION
Staff recommends that Council:
Reject all bids received for construction of the Municipal Service Center Fuel Storage
Tanks and Fuel Storage Island Replacement (Capital Improvement Program Project VR-
01001).
Redirect use of the consukant’s construction administration fee to instead reduce the
scope of the project and break the project into two separate projects: a conventional
fueling portion and a compressed natural gas (CNG) fueling portion.
3. Direct staffto rebid the work.
DISCUSSION
Project Description
Construction bids were advertised for the installation of new underground fuel tanks, a natural
gas compressor, dispensing equipment and all associated piping, electrical systems and leak
detection systems at the Municipal Service Center (MSC). This project was included in the FY
1999-2000 Adopted Capital Budget, Project VR01001.
This new fueling station, which will be located at the east side of the MSC, includes provisions
for the storage and dispensing of unleaded gasoline, diesel, compressed natural gas (CNG),
propane and an alternative "clean" liquid fuel, such as synthetic diesel ("biodiesel") or ethanol.
This new facility will replace the existing, thirty-seven year old fueling facility that is well
beyond the end of its useful life and needs to be replaced.
Staff is currently studying the feasibility of locating auto dealerships on the MSC site. Should an
auto dealer ever occupy the site, the fuel station could be modified for use by the dealer or it
could be relocated for use at a new MSC location.
CMR:145:06 Page 1 of 3
Design of the project was completed and bids advertised in November 21, 2005, and bids were
opened on January 3, 2006. Two bids were received with a low bid of $2,165,232 which is
$965,232 over the engineer’s estimate of $1,115,000.
Summary of Bid Process
Bid Name/Number
Proposed Length of Project
Number of Bids Mailed to Contractors
Number of Bids Mailed to Builder’s
Exchanges
Total Days to Respond to Bid
Pre-Bid Meeting?
Number of Company Attendees at Pre-
Bid Meeting
Number of Bids Received:
Bid Price Range *
MSC Fuel Station Relocation Project [FB #114505
9 months (including equipment deliver~)
18
8
43
Yes
6
2
From a low of $2,165,232 to a high of $2,269,646
*Bid summary provided in Attachment A.
Based on conversations with contractors and the engineering design consultant, it was found that
bids were higher than expected due in part to the consolidation of the conventional and CNG
fueling equipment into one construction bid package. Contractors specialize in either
conventional or CNG fueling systems and most companies were not comfortable working with
unfamiliar systems. The bonding requirements for this project were beyond the reach of most of
the contractors, and the current market demand for this type of work is very high. In 2005, the
State also began mandating stricter vapor-recovery system installation and testing requirements
for gasoline dispensing facilities, and the availability of certified installers is very limited.
Due to the limited number of bids and the excessive difference in the low bid and the engineer’s
estimate, staff recommends rejecting all bids. Prior to re-bidding staff recommends revising the
design of the fueling station so that it is broken into two separate components: one bid package
will cover the conventional fueling portion and the other bid package will contain CNG fueling.
The consultant will also look for ways in which material or other costs can be reduced.
Contractors felt that up to $500,000 could be saved by breaking the project into two separate bid
packages since bonding and liability issues would be reduced by having a smaller, more
specialized scope of work.
RESOURCE IMPACT
Funding is available in Vehicle Replacement Fund CIP VR-01001 and Gas Fund CIP GS-00011.
The City applied for and was awarded a grant from the Santa Clara Valley Transportation
Authority (VTA) in the amount of $300,000 which will help offset the construction cost of the
new fueling station (CMR:145 :01). The grant expires on June 30, 2006. Prior to that time staff
will ask for reimbursement of consultant design fees and will also pre-order enough fueling
equipment so that the entire grant amount would be expended.
CMR: 145:06 Page 2 of 3
POLICY IMPLICATIONS
This project furthers Policy N-2! and N-25 of the Comprehensive Plan.
ENVIRONMENTAL REVIEW
This project is exempt under the California Environmental Quality Act Section 15302 because it
is a relocation of an existing use. The project has been appropriately conditioned to address the
soil contamination.
ATTACHMENTS
Attachment A: Bid Summary
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
KAREN BENGARD
Senio} Engineer
GLENN S. ROBERTS
Director of Public Works
Assistant City Manager
CMR: 145:06 Page 3 of 3
ATTACHMENT A