HomeMy WebLinkAboutStaff Report 5.B 01/24/2011DATE:
TO
January 24, 2011
Honorable Mayor and Members of the City Council through City Manager
FROM: Larry Zimmer, Public Works Engineering Manager
SUBJECT: Resolution Terminating a Construction Contract with North Bay Construction,
Inc. for the Hopper, Street Pavement Rehabilitation Project
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution terminating a construction
contract with North Bay Construction, Inc. for the Hopper Street Pavement Rehabilitation
Project.
BACKGROUND
The storm event of January 2006 resulted in damage to Hopper Street. This project, along with
many others, was approved for FEMA funding. On September 15; 2008, the City Council
awarded a construction contract for the Hopper Street Pavement Rehabilitation Project to North
Bay Construction, Inc. in the amount of $496,651.05. Subsequent to the award, the City applied
for an encroachment permit with SMART, since a portion of Hopper Street is in SMART right-
of-way. As a condition of the permit, SMART required certain drainage improvements along the
railroad tracks. However, FEMA has not, to date, agreed to reimburse the estimated $129,119.45
for the additional work.
Since the drainage improvements were not part of the originally -approved scope of flood damage
repair by FEMA, staff submitted a request for additional funding to FEMA on November 20,
2008; that request was, denied in June 2009. Staff filed an appeal with the FEMA regional office
on July 3, 2009; and again it was denied on March 25, 2010. Staff filed a second and final
appeal with FEMA headquarters on May 11, 2010, and is still awaiting response.
The construction contract with North Bay Construction (NBC) was fully executed, and as
required, the contractor provided the required bonds and obtained a separate SMART
encroachment permit. Additionally, the contractor purchased materials in anticipation of starting
construction. Since this project was originally awarded, North Bay Construction has been
acquired by Ghilotti Construction Company. NBC is completing most of its current projects, but
is no longer bidding on any new projects, and will not be adequately staffed to complete this one.
Agenda Review:
City Attorne UA Finance Director City Manager
DISCUSSION
This contract has been idled for more than two years, and cannot start until spring of this year at
the earliest. Since, in all probability, NBC will no longer have adequate staff to, complete the
project, the City needs to terminate the contract due to the contractor's inability to complete the
work. It is expected that re -advertising this project in late winter or spring, after the City has
received final notice from FEMA, will result in lower project costs, since construction costs have
fallen since this project was originally bid. Another advantage to rebidding the project is,that
FEMA will most likely make some modifications to the plans, and making these changes prior to
bidding will assure lower costs than negotiating a change order, and make future FEMA audits
simpler.
Staff has verbal confirmation from SMART that, in the event that FEMA again denies the City's
request to add the drainage component to the project, SMART will allow the City to complete
the roadwork.
FINANCIAL, IMPACTS
As a result of the proposed contract termination, the City will compensate North Bay up to
$4,956 for their costs incurred .to date, as follows:
1. bond costs - $2,583
2. contractor's SMART permit - $1,000 (SMART requires both the owner and the
contractor to obtain encroachment permits prior to working in their right of way. The
contractor's permit is specific to them and not transferrable to another contractor.)
3. restocking fee for materials - $1,373.
These costs, which are not reimbursable through FEMA, must be funded by the City. It is
recommended that street maintenance funds (account # 2411--24110-54150) be used for this
purpose.
ATTACHMENTS
1. Resolution
2. Location Map
2
ATTACHMENT 2
RESOLUTION TERMINATING A CONSTRUCTION CONTRACT WITH
NORTH BAY CONSTRUCTION, INC. FOR THE HOPPER STREET PAVEMENT
REHABILITATION PROJECT
WHEREAS, on September 15, 2008, the City Council awarded a construction contract
for the Hopper Street Pavement Rehabilitation Project to North Bay Construction, Inc. in the
amount of $496,651.05; and
WHEREAS, construction of the above project is currently on hold pending appeal of
FEMA funding for additional construction: and
WHAREAS, a decision on the FEMA appeal will not be received in time for the project
to begin this construction season; and
WHEREAS, North Bay Construction has merged with Ghilotti Construction Company
and will no longer be operating as North Bay Construction, Inc. in the near future; and
WHEREAS, the City and North Bay Construction have negotiated North Bay
Construction's agreement to termination and release by North` Bay Construction of all
claims relating to the contract in exchange for payment of North Bay's out-of-pocket contract -
related expenses in the amount of $4,956 by the City; and
WHEREAS, staff recommends the construction contract with North Bay Construction be
terminated and the project be re -bid, once FEMA has reached a decision on the appeal.
NOW, THEREFORE, BE IT RESOLVER that the City Council of the City hereby:
Authorizes termination of the construction contract with North Bay Construction, Inc. for
the Hopper Street Pavement Rehabilitation Project.
2. Directs staff to issue a notice of termination of the construction contract to North Bay
Construction.
3. Authorizes and directs the City Manager to execute all documents required for
termination of the construction contract with North Bay Construction, and authorizes the
payment to North Bay Construction of not more than $4,956.00.
.19
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