REPORT TO THE CITY COUNCIL
September 25, 2014
FROM: SCOTT L. MOZIER, PE, Director
Public Works Department
THROUGH: ROBERT N. ANDERSEN, PE, Assistant Director
Public Works Department, Construction Management Division
BY: PHILLIP TARVIN, Construction Manager
Public Works Department, Construction Management Division
SUBJECT
Title
Approve a substitution of Playground Unlimited for the Universally Accessible Park (Council District 1)
Body
RECOMMENDATION
It is recommended that the City Council approve the request from Lewis C. Nelson and Sons, Inc. (LCN), to substitute Playgrounds Unlimited and utilize King Khan Drilling and Construction Inc., for the Installation of Playground Equipment work located at Universally Accessible Park located in Council District 1.
EXECUTIVE SUMMARY
LCN, the General Contractor for the referenced project, has requested to substitute Playgrounds Unlimited, who is listed in the bid documents as the Installation of Playground Equipment subcontractor. In accordance with the bid documents, LCN listed Playgrounds Unlimited, for the Installation of Playground Equipment portion of the project because the work exceeds one-half of one percent of the total contract amount. LCN notified the City by letter dated July 1, 2014, that their playground equipment subcontractor, Playgrounds Unlimited, cannot meet the bond requirements of the Prime Contractor contract. LCN is requesting King Khan Drilling and Construction Inc., be allowed to perform the Installation of Playground Equipment portion of the project. This action requires Council approval because Public Contract Code Section 4107 requires consent of the awarding authority to be requested by a prime contractor for a substitution of a subcontractor.
BACKGROUND
On April 10, 2014, a contract was issued in the amount of $7,819,000 to LCN for the construction of the Universally Accessible Park. In the original proposal, Playgrounds Unlimited of Santa Clara, California was listed as the subcontractor for the Installation of Playground Equipment contract. On July 1, 2014, LCN provided the City a written request to substitute the listed subcontractor due to the listed subcontractor cannot meet the bond requirements of the Prime Contractor per Public Contract Code 4107 (a)(4).
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 cannot meet the bond requirements of the Prime Contractor.
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)
LNC has requested that they be allowed to utilize King Khan Drilling and Construction Inc., to perform the Installation of Playground Equipment work in place of Playgrounds Unlimited, by letter dated July 1, 2014. Section 4107 of the Public Contract Code allows the prime contractor to substitute listed subcontractor with prior consent from the awarding authority.
In accordance with provisions of the Public Contract Code, the City has notified Playgrounds Unlimited of the proposed substitution by certified mail delivered July 16, 2014. Playgrounds Unlimited did not provide written objections within five working days of receipt of the notification ending at 5:00 P.M. on July 23, 2014, which constitutes the listed subcontractor's consent to the substitution. The City has not received a timely objection in accordance with Public Contract Code 4107. The City Attorney's Office finds the proposed substitution of subcontractor to be legal and proper if Council consents to the substitution.
The replacement of the subcontractor for the playground installation portion of the contract will not increase the cost of the project.
This project does not contain a Disadvantaged Business Enterprise (DBE) requirement and therefore will not affect the DBE status of the contract.
ENVIRONMENTAL FINDINGS
This is not a "Project" for the purposes of CEQA pursuant to CEQA Guidelines section 15378(b)(5), as it is an administrative action that will not result in direct or indirect physical changes to the environment.
LOCAL PREFERENCE
Local Preference was not considered because this action does not include a bid or an award of a City construction contract.
FISCAL IMPACT
There will be no impact to the General Fund or the project budget by this substitution.