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Report regarding a resolution awarding a construction contract to “Wickman Development and Construction” for the Orange Memorial Park Aquatic Center and authorizing a total construction budget of $38,269,000. (Philip Vitale, Deputy Director of Capital Projects)
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RECOMMENDATION
Recommendation
It is recommended that the City Council adopt a resolution awarding a construction contract to WICKMAN DEVELOPMENT AND CONSTRUCTION of Oakland, California for the Orange Memorial Park Aquatic Center (Project No. pk2310; Bid No. 2687) in an amount not to exceed $34,790,000 and authorizing a total construction budget of $38,269,000.
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BACKGROUND/DISCUSSION
On January 30, 2024, a key milestone was reached on the Orange Memorial Park Aquatic Center Project with the completion of design and bidding. Following the submittal of the project for a building permit on August 24, 2023, the bid package was completed and advertised on December 19, 2023, and January 3, 2024. The following summarizes the procurement process.
Procurement Process
A Request for Prequalification for General Contractors for the SSF Orange Memorial Park Aquatic Center (OMPAC) was released September 5, 2023, with prequalification advertisements on September 20, 2023, and September 25, 2023, and posted to the City’s OpenGov platform. The project team sent emails and made phone calls to sixteen local and capable general contractors noticing its availability. Two general contractors responded to the Request for Prequalification that was due on October 11, 2023. To attract a wider range of General Contractors, the prequalification requirements were revised such that the overall revenue limit and value per project was reduced. A second Request for Prequalification of General Contractors was issued attracting interest from sixteen general contractors.
Advertisements for the second prequalification were placed November 6, 2023, and November 13, 2023, with prequalification packages due November 28, 2023. Eleven submittals for prequalification were received from eleven general contractors. Swinerton, acting as the City’s project manager, with City staff scored and evaluated each prequalification packet, as submitted, against minimum shortlisting criteria and weighted criteria to arrive at a final list of seven (7) qualified general contractors that may submit a bid for South San Francisco’s Orange Memorial Park Aquatic Center Project (OMPAC). Swinerton concluded that seven general contractors from the list of ten should be allowed to bid.
The seven general contractors were:
1) Alten Construction Inc. of Richmond, CA
2) Hensel Phelps of Pleasanton, CA
3) Lathrop Construction Associates, Inc. of Benicia, CA
4) Rodan Builders, Inc. of Hayward, CA
5) S.J. Amoroso Construction Co. LLC of Redwood Shores, CA
6) Vance Brown, Inc. of Palo Alto, CA
7) Wickman Development and Construction of Oakland, CA
The following four contractors were issued rejection notices on December 13, 2023:
1) BHM Construction, LLC - Napa, CA
2) Gonsalves & Stronck Construction Company Inc. - San Carlos, CA
3) Thompson Builders Corporation - Novato, CA
4) Zovich & Sons Inc - Brentwood, CA
Staff advertised a notice inviting bids for the project on December 21, 2023, to the seven pre-qualified General Contractors directly and via City’s OpenGov platform. On January 9, 2024, a mandatory public Pre-Bid meeting was held at Orange Memorial Pool to review the project scope and answer questions about the project and bid process timeline. A total of three addenda were issued between January 16 and January 24, 2024. During the bid period, staff worked closely with the seven pre-qualified contractors.
In early January 2024, staff learned that one of the seven pre-qualified general contractors, Hensel Phelps, would not be attending the job walk, citing heavy workload with a number of recently won projects. During the bidding period, staff was advised two of the six remaining general contractors, Alten Construction and Lathrop Construction, would decline the invitation to bid, one citing workload of newly won projects; the other citing insufficient staff close to the project to properly staff and manage the project.
Although two bidders out of the six declined to bid, having four interested bidders maintained a competitive environment. The goal of any public bid is to obtain at least three bids for optimum pricing. Having more bidders makes it more likely that one bid will come in at or below the engineer’s estimate. The four active bidders remained engaged with the project throughout the bid period. The bid results illustrate that having four responsive bidders positioned the City in the best conditions for getting a bid in line with the engineer’s estimate.
On January 30, 2024, staff received and publicly opened in-person, with a teleconference option, the four responsive bids from Rodan Buildings, Inc., SJ Amoroso Construction Company, LLC, Vance Brown, Inc. and Wickman Construction and Development. After further review of all the bids, the staff determined the lowest responsive bidder was WICKMAN DEVELOPMENT AND CONSTRUCTION of Oakland, California. A post bid-interview was held on January 31, 2024, and February 1, 2024, between WICKMAN DEVELOPMENT AND CONSTRUCTION and Swinerton Management and Consulting and with VANCE BROWN, INC. (second lowest responsive bidder) to review their bid and help ensure contractor understood scope of work and project requirements. Staff has verified the low bidder’s current contractor’s license with the California State Licensing Board and found it to be in good standing.
Public Works contracts are ordinarily awarded to the lowest responsible bidder whose bid is responsive to the solicitation. (Public Contract Code §20166.) Because these projects are locally funded, there are no Disadvantaged Business Enterprise (DBE) requirements. The Project is a prevailing wage project.
The following is a summary of all bids received:
Contractor Name Grand Total Base Bid Amount
1. Wickman Development and Construction $34,790,000
2. Vance Brown, Inc. $35,676,784
3. S.J. Amoroso Construction Co. $35,747,000
4. Rodan Builders, Inc. $35,974,000
Metrics
Based on bid numbers received, there is a 2.49% delta between #1 and #2, with bidders #3, and #4 coming in at 2.67% and 3.29% respectively from lowest responsible bidder.
The final Engineer’s estimate for the Base Bid was $39,824,000. The lowest responsible bidder proposal came in under engineer’s estimate by 12.6%. A competitive bid environment from the four bidders and market conditions likely impacted by the previous Covid-19 pandemic years proved favorable for the City. Analysis and review of recent bids in the Bay Area show similar competitive bid numbers, with low bids significantly below engineer’s cost estimates.
The contractors were asked to bid on a base bid project. The project consultants, inclusive of ELS Design and Swinerton Management, discussed with the City the addition of alternates on the bid form to provide an exit strategy for the City in the event bids came in over the Engineer’s Estimate. Upon further review, staff decided pulling out bid alternates would make for straightforward package and reduce opportunities for confusion during bidding. Both Swinerton and ELS advised City staff that market conditions remained highly favorable to the Owners and no Alternates were included on the bid proposal form.
Staff recommends accepting the base bid of $34,790,000, which is below the engineer’s estimate for the base bid.
Soft Costs:
1. Design Fees $3,347,562
2. Permits and Fees (PG&E, Water, Telecommunications) $1,447,195
3. Dedicated Soft Costs (Special Inspections/Geotech/Other) $2,598,331
4. FF&E Including Pool Equipment $1,195,769
5. Soft Cost Project Contingency $793,706
6. Project Reserve $1,928,437
Subtotal Total Soft Costs $11,311,000
Hard Costs:
1. WICKMAN CONSTRUCTION Contract $34,790,000
2. Construction Contingency $3,479,000
Subtotal Total Construction Budget $38,269,000
Total Project Budget $49,580,000
Construction Contingency
The construction contingency is for additional costs related to unforeseen conditions requiring design changes during the construction operations. The contingency will not be used to add additional scope beyond what is necessary to accomplish the intent of the base bid contract. Any unused contingency will be allocated to the budget of one of the other two remaining projects (Orange Memorial Park All-Abilities Playground or Colma Creek Bridge Replacement) named in the 2022A Bond sale or as directed by City Council. Contingency usage will be closely monitored throughout construction to help ensure costs are tracking appropriately.
Soft Costs Items
Soft cost budget includes funding for the following items:
1. Permits and Fees: The Permits and Fees budget will be used to pay for permits and other fees from various utility companies, including PG&E for new electric service, CalWater for new domestic and fire water service to the facility and new fire hydrants, and for telecommunication companies such as AT&T, Comcast, and Wave, and others who have a service fee associated with new service installation.
2. Dedicated Soft Costs (Special Inspection/Geotechnical/Other): The dedicated soft cost budget will be used to pay for inspection services needed for the project ranging from special inspection and materials testing to geotechnical testing. Per the requirements of the City’s Building Division, these inspection services are outside the general contractor’s scope of work and are there to ensure that the building is constructed to meet project and California Building Code requirements. This budget will also be used for construction project management services needed during construction.
3. Furniture, Fixtures and Equipment (FF&E): This includes Furniture, Fixtures, and Equipment (FF&E) scope and cost for program spaces at the Orange Memorial Park Aquatic Center. The budget will be used for procurement of items, including all the necessary information technology (IT), pool equipment, office furniture, and activity room furniture needed to have a functioning aquatic center open to the public and for aquatic events and meets.
Allowances
A $20,000 Allowance was added to the bid form to provide services to protect and remove the Eternal Flame sculpture weighing 2,000 pounds from its current location, and store the sculpture onsite until the project is completed and the Eternal Flame is ready for installation at its new location at the Veterans Memorial, leading visitors from the memorial location into the park.
A $20,000 Allowance was added for testing and remediation of the existing pool’s tile and plaster as staff was informed testing of the existing pool’s tile and plaster could not be performed until the pool was empty.
Project Reserve
Line items within the project budget are fairly tight, and while a variety of investigations and assessment of site conditions were conducted during the design process, risk remains that unforeseen soil conditions may be uncovered during construction. A project reserve of roughly $1.9M, approximately equal to 5% of the construction budget, is included in the project budget as an additional contingency to address unforeseen conditions. As is the case with the Orange Memorial Park Sports Field project in which the surplus balance at the end of construction is being applied towards the Orange Memorial Park Aquatic Center project budget, any remaining balance from the Aquatic Center Project Reserve could be applied towards the Orange Memorial Park All-Abilities Playground, which was also identified in the 2022A Bond Sale.
FISCAL IMPACT
This project is included in the City of South San Francisco’s Fiscal Year 2023-24 Capital Improvement Program. The project was included as a named project in the Measure W 2022A Bond Sale with an anticipated budget of $49,000,000. Additional funding sources to the project include $450,000 unspent 2022A Bond Sale from the Orange Memorial Park Sports Field project and $130,000 from the Energy Efficiency and Conservation Block Grant (ECBG) program for electric vehicle charging equipment.
The following table shows the financing plan for the Orange Memorial Park Aquatic Center project.
Total Project Budget $49,580,000
Sources of Funds
Bond Proceeds $49,000,000
Sports Field Unspent Funds $450,000
ECBG Grant $130,000
Total Sources $49,580,000
RELATIONSHIP TO STRATEGIC PLAN
Approval of this plan will contribute to the City’s Strategic Plan. It aligns with Priority #2, which is focused on enhancing quality of life by building and maintaining a sustainable city, making the city a great place to live, learn, and play.
CONCLUSION
Awarding the construction contract to WICKMAN DEVELOPMENT AND CONSTRUCTION of Oakland, California, for the ORANGE MEMORIAL PARK AQUATIC CENTER PROJECT is a necessary step to replace the existing Orange Pool and create a state-of-the-art aquatic center for South San Francisco residents.