REPORT TO THE CITY COUNCIL
FROM: NICHOLAS D. MASCIA, PE, Assistant City Manager
Interim Director - Capital Projects Department
SCOTT L. MOZIER, PE, Director
Public Works Department
BY: Joshua S. Rhodes, PE, Assistant Director
Capital Projects Department, Construction Management Division
KELLY YOST, PE, Construction Manager
Capital Projects Department, Construction Management Division
SUBJECT
Title
Approve the substitution of listed Subcontractor, Arguello Concrete Construction of Fresno, California for concrete work with Madera Concrete Company of Madera, California for the City of Fresno Paving Bid Package, Various Locations - Project ID SM00050. (Bid File 12402606) (Council Districts 1, 3, 4, 5, 6, 7)
Body
RECOMMENDATION
Staff recommends that the City Council approve the request from Cal Valley Construction, Inc. of Fresno, California, to substitute Arguello Concrete Construction of Fresno, California and utilize Madera Concrete Company of Madera, California for the remaining concrete portions of this project.
EXECUTIVE SUMMARY
On June 27, 2024, a contract was awarded in the amount of $7,358,665.00 to Cal Valley Construction (CVC), Inc. of Fresno, California, for the construction of roadway paving and concrete work in eight (8) locations. CVC has requested to substitute Arguello Concrete Construction (ACC) of Fresno, California, who is listed in the bid documents as performing the concrete portions of the project, with Madera Concrete Company (MCC) of Madera, California. This action requires City Council approval per Public Contract Code Section 4107, whereas the consent of the awarding authority is required to approve a request by a prime contractor for a substitution of a subcontractor.
The replacement of the Subcontractor for concrete portions of the contract will not increase the cost of the project.
BACKGROUND
On June 27, 2024, a contract was awarded in the amount of $7,358,665.00 to CVC, for the construction of roadway paving and concrete work in 8 locations. The Notice to Proceed has been issued for October 14, 2024, with a completion date of July 31, 2025.
In CVC’s original proposal, ACC was listed as the Subcontractor for the concrete portions of the contract. On March 26, 2025, CVC provided the City of Fresno with a written request to substitute the listed Subcontractor, as the listed Subcontractor was unable to provide the required resources to complete the job in a timely manner. CVC has requested that they be allowed to substitute MCC to perform the remaining concrete portions of the contract in place of ACC. CVC provided the City of Fresno with a signed copy of the Termination for Convenience letter in which ACC acknowledged that they would not protest the termination of the subcontract.
On April 3, 2025, in accordance with provisions of Section 4107 of the Public Contract Code, the City of Fresno sent notification to ACC, at the company’s last known address, of the proposed substitution via certified mail shipment through United States Parcel Service (USPS), which a delivery attempt to ACC was made on April 5, 2025. Notice was left at the address instructing ACC to arrange for delivery or pick up of the letter, with notice made that if the letter is unclaimed by April 20, 2025, that it would be returned to the sender, The City of Fresno. The City of Fresno has not received a returned letter from USPS nor any correspondence from the contractor opposing the substitution.
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). Section 4107 of the Public Contract Code allows the Prime Contractor to substitute listed Subcontractors with prior consent from the awarding authority. The City Attorney’s Office finds the proposed substitution of subcontractor to be legal and proper if the City Council consents to the substitution.
This contract is covered by the Community Workforce Agreement (PLA), adopted by Council in September 2021. The Contractor for this project has become signatory to the PLA by executing the Agreement To Be Bound.
Staff recommends the City Council approve the request from CVC to substitute ACC and utilize MCC for the remaining concrete portions of this project.
ENVIRONMENTAL FINDINGS
On June 27, 2024, the Council approved a finding of Categorical Exemption pursuant to Sections 15301/Class 1, 15302/Class 2, and 15303/Class 4 of the California Environmental Quality Act (CEQA) Guidelines. Based on staff analysis, it was determined that no adverse environmental impacts would occur because of the proposed project and none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines Section 15300.2 apply to this project.
LOCAL PREFERENCE
Local preference is not applicable for this project due to it being funded by State SB1 Gas Tax and ARPA which precludes local preference.
FISCAL IMPACT
The City of Fresno Paving Bid Package Various Locations project areas are within Council Districts 1, 3, 4, 5, 6, and 7. The project is funded through a combination of SB1 Gas Tax, Measure C, and ARPA funding, which are included in the FY2024 budget adopted by Council. The replacement of the Subcontractor for the remaining concrete portions will have no impact on the General Fund.
Attachments:
Cal Valley Construction, Inc. Termination of Subcontractor Letter
City of Fresno, Substitution of Subcontractor - Arguello Concrete Construction Letter
USPS Delivery Notification
Vicinity Map