REPORT TO THE CITY COUNCIL
FROM: SCOTT L. MOZIER, P.E., Director
Public Works Department
BY: BRIAN E. RUSSELL, Assistant Director
Public Works Department, Streets, Landscape, and Graffiti Divisions
MARK A. RIVAS, Senior Management Analyst
Public Works Department, Streets, Landscape, and Graffiti Divisions
SUBJECT
Title
Actions pertaining to the award of a requirements contract to Vulcan Materials Co. in the amount up to $5,826,127.50 for the purchase of Asphalt Concrete Material. (Bid File 12300991) (City-wide)
Body
RECOMMENDATION
Staff recommends that the City Council award a requirements contract in the amount up to $5,826,127.50 plus 20% contingency, per year, for one (1) year with the option for four (4) one-year extensions to Vulcan Materials Co., as the lowest responsive and responsible bidder for the purchase of Asphalt Concrete Material and to authorize the Public Works Director or designee to sign the contract on the City’s behalf.
EXECUTIVE SUMMARY
The Street Maintenance Division of Public Works uses a requirements contract to purchase asphalt concrete materials to be used by City crews for pavement maintenance in various locations in the City of Fresno. Staff is currently purchasing materials utilizing a 6-month extension of the prior contract. A re-bid was initiated to establish a new requirements contract on January 25, 2023. Funding for this contract is included in the FY2023 budget. After evaluation, staff recommends award of a one (1) year contract with the provisions for four (4) one-year extensions to Vulcan Materials Co. in the amount up to $5,826,127.50 plus a 20% contingency per year.
BACKGROUND
The Department of Public Works Street Maintenance Division uses asphalt concrete materials for various paving operations, such as pavement reconstruction, overlay, pothole repairs, and localized asphalt patching. These materials are used by City crews throughout the year and are transported to various jobsites around the city. The execution of a requirements contract establishes a firm price, secured through competitive bidding, for a specified time and allows the City to make material purchases as needed.
In accordance with the City Procurement Handbook, Administrative Order 6-19, and CDBG requirements, the Department of Public Works solicited bid proposals for the necessary materials based on the average annual quantities of twelve separate pavement related products. The Bid Specifications for the Asphalt Concrete Materials Requirements Contract was distributed to four (4) Building Exchanges, sent directly to five (5) prospective bidders, and published on the City’s PlanetBids Online site on January 25, 2023. A public bid opening was held on February 21, 2023 and two (2) bids were received. The two proposals received were in the amount of $5,826,127.50, and $6,697,636.60. Ultimately, the second bid was deemed non-responsive since the bidder did not turn in all of the required documents. Vulcan Materials Co. was the lowest responsive and responsible bidder with a bid amount of $5,826,127.50.
Staff is in agreement that Vulcan Materials Co. is capable of providing the City of Fresno with the necessary materials. The current bid reflects a 54% increase from the previous contract award. This is due to both an increase in quantities in the bid specifications, and the increase in the price of oil. The bid specifications were increased by 22% to accurately reflect the increase in product use projections, as well as evaluation of prior purchases made by the Street Maintenance Division. Additionally, industry wide cost increases related to the price of oil have contributed to the increase cost. Staff is confident the City received competitively priced bids.
Funding for this contract is included in the FY2023 budget. It will be partially funded by Measure C and SB1 Gas Tax, as well as projects funded by the HUD Community Development Block Grant (CDBG) program and the American Rescue Plan Act (ARPA). These additional funding sources also account for additional projects, which are reflected in the bid proposal estimated quantities and are another reason for the increased overall bid amount. Since this is a requirements contract, there is no obligation to purchase a minimum amount of material if budgets or scopes of work are adjusted.
Council may reject all bids. If this were to happen, the City would be without an alternate option to purchase the necessary asphalt concrete materials for approximately sixty (60) days while the contract is rebid. Such a delay would have a significant impact on the planned paving, pothole repairs, and other pavement improvements currently planned across the city.
Staff recommends that the City Council award a requirements contract in the amount up to $5,826,127.50 plus a 20% contingency per year for one (1) year with the option for four (4) one-year extensions to Vulcan Materials Co., as the lowest responsive and responsible bidder for the purchase of asphalt concrete materials and to authorize the Public Works Director or designee to sign the contract on the City’s behalf.
ENVIRONMENTAL FINDINGS
This contract is not subject to environmental findings due to the fact that this contract is for the purchase of materials and is not a project.
LOCAL PREFERENCE
Local preference was not implemented due to the fact that this contract utilizes state funding. Also, the bidder is a local business.
FISCAL IMPACT
No General Funds are budgeted for purchases on this contract. Appropriations in the FY2023 budget are funded through Measure C and SB1 State Gas Tax funding.
Attachments:
Bid Evaluation
Fiscal Impact Statement