REPORT TO THE CITY COUNCIL
FROM: SCOTT L. MOZIER, PE, Director
Public Works Department
THROUGH: WILLIAM C. HERR, Assistant Director
Public Works Department, Construction Management Division
BY: KARL LENHOF, Chief Engineering Inspector
Public Works Department, Construction Management Division
SUBJECT
Title
Approve a substitution of a listed Subcontractor DeAnda Company, for Prefabricated Restroom at Hinton Park. (Council District 3)
Body
RECOMMENDATION
It is recommended that the City Council approve the request from Ardent General, Inc. (Ardent), to substitute DeAnda Company (DeAnda) and utilize JT2 for the demolition, grading, and paving portions of this project.
EXECUTIVE SUMMARY
Ardent, the General Contractor who was awarded the referenced project, has requested to substitute DeAnda, who is listed in the bid documents as performing the demolition, grading, and paving portions of the project. In accordance with the bid documents, Ardent listed DeAnda for the demolition, grading, and paving portions of the project because the work exceeds one-half of one percent of the total contract amount.
Ardent notified the City by letter dated October 17, 2022, that their Subcontractor, DeAnda, after having a reasonable opportunity to do so, has failed or refused to execute a written subcontract. Ardent is asking that they be allowed to use JT2, to perform the demo, grading, and paving portions. This action requires Council approval because Public Contract Code section 4107 requires consent of the awarding authority to a request by a prime contractor for a substitution of a subcontractor.
BACKGROUND
On September 30, 2021, a contract was awarded in the amount of $402,725.90 to Ardent, for the Prefabricated Restroom at Hinton Park project; the Notice to Proceed was issued with a start date of October 24, 2022.
In the original proposal, DeAnda was listed as the subcontractor for the demolition, grading, and paving portions of the contract. On October 17, 2022, Ardent provided the City a written request to substitute the listed Subcontractor, since the listed Subcontractor has refused to perform his or her subcontract under Public Contract Code section 4107(a)(1).
In accordance with section 4107 of the Public Contract Code, a Prime Contractor may substitute a listed Subcontractor, with the consent of the awarding authority, when the listed subcontractor has refused to perform his or her subcontract as set forth in section 4107.
The Subletting and Subcontracting Fair Practice Act requires the Prime Contractor to secure the permission of the awarding agency before substituting a non-listed subcontractor for a listed subcontractor in order to protect the public and subcontractors from bid shopping and bid peddling. (Southern California Acoustics Co., Inc. v. C.V. Holder, Inc. (1969), 71 Cal.2d 719,726)
Ardent has requested that they be allowed to substitute JT2 to perform demolition, grading, and paving portions of the contract in place of DeAnda by letter dated October 17, 2022. Section 4107 of the Public Contract Code allows the Prime Contractor to substitute listed Subcontractors with prior consent from the awarding authority.
In accordance with provisions of the Public Contract Code, the City notified DeAnda, at its last known address, of the proposed substitution by FedEx shipment on October 27, 2022, which was delivered to and signed for by an agent for DeAnda on October 28, 2022.
The City Attorney’s Office has found that the proposed substitution of subcontractor to be legal and proper if Council consents to the substitution. In accordance with section 4107 the failure to file these written objections within five working days of receipt of that notification ending at 5 p.m. on November 4, 2022, constitutes the listed Subcontractor’s consent to the substitution. The City has not received an objection in accordance with Public Contract Code 4107.
The replacement of the Subcontractor for the demolition, grading, and paving portions of the contract will not increase the cost of the project.
DeAnda was listed as Small Minority Business Enterprise (SMBE) contractor for this project. As a result of DeAnda’s refusal to execute a written subcontract, Ardent made a good faith effort to replace DeAnda with another SMBE to perform the demo, grading, and paving portions of this project, but was unsuccessful in doing so.
ENVIRONMENTAL FINDINGS
This project was previously found to be categorically exempt based on Class 32 Section 15332 of the CEQA Guidelines. No substantial changes to the project are being made as this is a substitution of a contractor to perform work already included in the project’s scope and contemplated in the categorical exemption.
LOCAL PREFERENCE
Local preference was not implemented because the lowest responsive and responsible bidder is a local business.
FISCAL IMPACT
This substitution does not change the amount of the cost of the project. There will be no impact to the General Fund or the project budget by this substitution.
Attachment:
Contractor’s Request for Substitution Letter