REPORT TO THE CITY COUNCIL
January 15, 2015
FROM: THOMAS C. ESQUEDA, Director
Department of Public Utilities
THROUGH: MARTIN A. QUERIN, PE, Assistant Director
Department of Public Utilities - Water Division
MICHAEL CARBAJAL, Chief Engineering Technician
Department of Public Utilities - Water Division
BY: PAUL MARAGONI, PE, Professional Engineer
Department of Public Utilities - Water Division
SUBJECT
Title
Approve the substitution of a listed subcontractor for the construction of the three million gallon water storage tank and booster pump station at 401 "H" Street in Fresno (Council District 3) Bid File 3186
Body
RECOMMENDATION
Staff recommends the approval of the request from Mountain Cascade Incorporation to substitute Murphy Industrial Coatings Inc., for Mason Painting, to provide materials and subcontractor services to apply coatings for the prime contractor of the T-4/Three Million Gallon Water Storage Tank Project.
EXECUTIVE SUMMARY
The prime contractor, Mountain Cascade Inc., has requested the substitution of Murphy Industrial Coatings Inc., for Mason Painting. Mason Painting is listed in the bid documents as a subcontractor slated to perform coating services work for the prime contractor on the project. In accordance with the bid documents, Mountain Cascade Inc., listed Mason Painting for this work on the project. Subsequent to the contract award, Mountain Cascade Inc., notified the City that the listed subcontractor, after having a reasonable opportunity to do so, refused to execute a written contract. 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 June 12, 2014, the Council awarded a contract in the amount of $10,089,000 to Mountain Cascade Inc., for the construction of the T-4/Three Million Gallon Water Storage Tank Project. The Notice to Proceed was issued on July15, 2014 to begin construction on August 4, 2014.
In the original proposal Mason Painting of Rancho Cordova, CA, was listed as a subcontractor for the project. On August 12, 2014, Mountain Cascade Inc., provided the City an email requesting the substitution of the listed subcontractor, since Mason Painting failed or refused to execute a written contract as provided under Public Contract Code Section 4107(a)(1).
In accordance with Section 4107 of the Public Contracts Code, a prime contractor may substitute a listed subcontractor, with the consent of the awarding authority, when the listed subcontractor fails or refuses to execute a contract. The Subletting and Subcontracting Fair Practices Act requires the prime contractor to seek 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.
In accordance with provisions of the Public Contract Code, the City has notified Mason Painting of the proposed substitution by certified mail dated December 12, 2014. As of December 19, 2014 Mason Painting has not provided written objections to the substitution. The listed subcontractor is required to file a written objection(s) within five working days of receipt. Failure to respond within this period is construed as the subcontractor accepting the proposed substitution. The City has not received a timely objection in accordance with Public Contract Code 4107 and the City Attorney's Office finds the proposed substitution to be legal and proper.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act ("CEQA") Guidelines Section 15378, this item does not qualify as a "project" for the purposes of CEQA.
LOCAL PREFERENCE
Local preference was not implemented because the substitution of a subcontractor does not include a competitive bid.
FISCAL IMPACT
The General Fund is not impacted as the funding source for this construction contract has been appropriated and encumbered from 2010 Bonds issuance. The subcontractor substitution is a no cost/increase to the construction contract and results in no changes to the Contractor's existing authorized Purchase Order. The construction has already commenced and delays, schedule impact and/or construct costs increases could occur if Council approval is protracted from normal processing.
Attachments:
- Letter notifying Mason Painting of Substitution Request
- Certified Mail Receipt Confirming Delivery of Letter