REPORT TO THE CITY COUNCIL
FROM: RANDALL W. MORRISON, PE, Director
Capital Projects Department
JENNIFER K. CLARK, AICP, HDFP, Director
Planning and Development Department
BY: FRANCISCO V. MAGOS II, PE, Assistant Director
Capital Projects Department, Utilities and On-Site Project Management Division
HARLAVPREET S. BRAR, Licensed Professional Engineer
Capital Projects Department, Utilities and On-Site Project Management Division
SUBJECT
Title
Reject the bid received for Garage 9 Renovation Project. (Bid File 12402153) (Council District 3)
Body
RECOMMENDATION
Staff recommends the City Council reject the bid received for the Garage 9 Renovation Project (Project) and direct staff to re-bid the project.
EXECUTIVE SUMMARY
Staff recommends the City Council reject the one (1) bid received for the Garage 9 Renovation Project. The single bid received is one-hundred thirty-nine percent (139%) above the engineer’s estimate and exceeds the funding allocation for the project provided by the Planning and Development Department’s Housing and Community Development Division. Upon rejection of the bid, staff will re-evaluate and identify areas to reduce the scope of improvements, look at pre-procuring the necessary bid items for the contractor to complete the installation and re advertise. Staff believe that the bids received are significantly higher than industry standards and does not recommend awarding the construction contract.
BACKGROUND
Garage 9, also known as the Merced Garage, has a vacant bank lobby and offices which will be converted to the public facing offices for the Housing, Community Development and Homeless Services work units of Planning & Development. Per the Council action on February 23, 2023 the City entered into a temporary lease agreement for office space during the remodel. This lease was extended through August 31, 2025 with approval by Council on February 22, 2024. Once completed, the former bank lobby and offices will house 48 employees across five divisions along with a public facing counter for customers applying for senior rehab and homebuyer assistance, as well as for developers utilizing Federal and State funds to construct affordable housing in Fresno. The project design was initiated through a Consultant Services Agreement with Temple-Andersen-Moore Architects, LLP on June 23, 2023.
The Notice Inviting Bids was advertised and published in the Business Journal and PlanetBids on May 23, 2024, and posted on the City’s website. Eight (8) building exchanges received the Notice Inviting Bids. The specifications were distributed to 42 prospective bidders. One (1) sealed bid proposal was received and opened in a public bid opening on July 9, 2024, with a bid amount of $5,979,000. AMG and Associates Inc. of Santa Clara, California submitted the single bid in the amount of $5,979,000 and was determined to be the lowest responsive and responsible bidder for the project.
Upon evaluation of the bids, staff determined that the bid received surpassed the engineer’s estimate by one-hundred thirty-nine percent (139%) and exceeded the funding allocation for the project. The bid received was significantly higher than the industry standards and staff does not recommend awarding the construction contract. Comparing unit prices on several of the bid items with current market costs, it is determined that the bids on those specific items are four to five times higher than the industry standards. Additionally, upon investigation by the Purchasing Division with prospective bidders, local contractors did not bid on the project due to a busy schedule. To reduce construction costs, City Staff will work on the list of items that can be pre-procured and present additive-alternate options during the re-advertisement of the project.
The City Attorney’s Office has reviewed and approved all documents as to form.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines, Section 15378, the rejection of the bid and contract amendment does not qualify as a “project” as defined by the CEQA requirements.
LOCAL PREFERENCE
The local preference was not considered as this is an action recommending rejection of the bid.
FISCAL IMPACT
The Garage 9 Renovation Project is in Council District 3 and has no impact to the general fund. The adopted project budget does not have sufficient funding to cover the construction cost. Rejection of the bid, redesign of the project with a reduced scope, and pre-procurement of items will potentially reduce construction costs. The project is funded through revenue generated from the City’s Homekey developments and ARPA dollars.
Attachments:
Bid Evaluation
Vicinity Map
Location Map