HomeMy WebLinkAboutStaff Report 6289
City of Palo Alto (ID # 6289)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 1/25/2016
City of Palo Alto Page 1
Summary Title: Extend Term of Canus Corporation's Contract Until July 31,
2016
Title: Approval and Authorization of the City Manager to Extend the Term of
the Construction Inspection Services Contract with Canus Corporation
(C13145442) to July 31, 2016 with no Change to the Total Amount
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council approve and authorize the City Manager or his designee to
extend the term of the construction inspection services contract with Canus Corporation
(C13145442) until July 31, 2016, with no change to the contract dollar amount.
Background
The City’s Utilities and Public Works Departments inspect the construction of their Capital
Improvement Projects (“CIP”) to ensure safety, reliability, contractor performance and
compliance with contract specifications. Construction Inspection of CIP projects has
traditionally been performed by Utilities Operations and Public Works Operations staff. Because
of an increase in construction activity and limited number of qualified staff, on July 16, 2012
Council approved a contract with Canus Corporation (“Canus”) in a total not to exceed amount
of $7,673,000 (contract amount of $6,975,000 + 10% contingency amount of $698,000) for
electric, water, gas, wastewater, storm drain and Public Works construction inspection services
(Staff Report 2973). The original contract was set to expire in July 2015. Because of ongoing
projects, the City Manager extended the term of the contract to January 2016, the current
expiration date, based on the authority provided by Section 2.30.290(b) of the municipal code.
A second term extension, even without the expenditure of additional funds, requires Council
approval.
Discussion
The City awarded, via a competitive bid process, a contract to Canus in July 2012 for a period of
three years. After executing a six (6) month extension, this contract is now valid until January
31, 2016. At the time of the extension it was thought that there was adequate internal staff to
handle upcoming CIP projects and that there was sufficient time to go out to bid for outside
City of Palo Alto Page 2
inspection services. But the current construction requirements to meet customer and system
improvement schedules indicate internal staff resources are better allocated to construction
activities rather than inspection.
Canus has provided a qualified person for inspecting various Utilities and Public Works projects
over the past three years. This has included projects dealing with electric underground system
rebuild; overhead electric system rebuild; water, gas, and wastewater pipeline replacement;
and storm drain replacement. Utilities has a current need for Canus to provide inspection
services for upcoming pole replacement and water main replacement projects that will
continue beyond the Canus contract expiration date in January 2016.
Canus has met the needs of the City and has satisfactorily carried out its work, provided
accurate billing for work, and have addressed issues identified by staff over the past three
years. Staff has checked with Canus and they stated that they would accept the extension until
July 31, 2016 and perform inspection work without any escalation in their existing labor rates.
Resource Impact
The value of the contract is $6,975,000 and to date $1,870,000 has been expended, leaving
$5,105,000 remaining on the contract. When the contract was originally awarded it was
anticipated that Canus would be used to inspect several CIP projects for Utilities and Public
Works. But the actual number of projects that the Canus inspectors worked on was less than
expected. Staff intends to utilize Canus for inspection of the construction of pole and pipeline
replacement projects, and other associated work, which is estimated to be $600,000 through
June 2016, thus no additional funds need to be added to the contract. Funds for this contract
are available in the approved CIP budgets for each project.
Staff is also preparing to go out to bid for a new inspection services contract. The extension of
the Canus contract is to bridge the gap between the January 2016 expiration and anticipated
award of a new contract by July 2016.
Policy Implications
The approval of this contract is consistent with existing city policies, including the Council
approved Utilities Strategic Plan to operate the distribution system in a cost effective manner
and to invest in utility infrastructure to deliver reliable service.
Timeline
In the event that Council approves the extension of the Contract, wood pole and pipeline
replacement projects can continue as scheduled, avoiding a delay until the new contract is
awarded.
Environmental Review
City of Palo Alto Page 3
The Council’s approval of an extension of this construction inspection services contract is
exempt from California Environmental Quality Act (CEQA) review, as it does not meet the
definition of a “project” under Public Resources Code 21065.
Attachments:
Canus Corporation - Second Amendment (PDF)
ATTACHMENT A