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HomeMy WebLinkAboutMINUTES - 12072010 - C.26RECOMMENDATION(S): 1. RATIFY the termination of the Consulting Services Agreement dated May 11, 2010 with Rudolph and Sletten, Inc., Redwood City, for Construction Manager At-Risk services (Pre-Construction Phase) for the West County Health Center project, in an amount not to exceed $382,000. 2. APPROVE a Consulting Services Agreement with Turner Construction Company, Oakland, for Construction Manager At-Risk services (remaining Pre-Construction Phase and Construction Phase) for the West County Health Center project, in an amount not to exceed $3,400,000. 3. AUTHORIZE the General Services Director, or designee, to execute the agreement with Turner Construction Company. 4. DECLARE that, should the award to Turner Construction Company be invalidated for any reason, the Board would not have awarded a contract to any other firm for Construction Manager At-Risk services (remaining Pre-Construction Phase and Construction Phase) for the West County Health Center project. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 12/07/2010 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Federal D. Glover, District V Supervisor ABSENT:John Gioia, District I Supervisor Contact: Patrick Godley, 957-5405 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: December 7, 2010 David J. Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: GSD Administration, GSD Accounting, GSD CPM Division Manager, GSD CPM Clerical, Auditor's Office, County Counsel's Office, County Administrator's Office, County Administrator's Office C.26 To:Board of Supervisors From:Michael J. Lango, General Services Director Date:December 7, 2010 Contra Costa County Subject:RATIFY TERMINATION OF CONTRACT WITH RUDOLPH & SLETTEN AND APPROVE AWARD OF CONTRACT TO TURNER CONSTRUCTION CO. FOR CONSTRUCTION MANAGEMENT AT-RISK SER FISCAL IMPACT: The estimated total project cost is $45 million. Funding in the amount of $12 million is from a federal Health Resources and Services Administration (“HRSA”) grant, provided under the American Recovery and Reinvestment Act of 2009. The remaining balance of $33 million is financed with Lease Revenue bonds with dedicated revenue in the Hospital Enterprise fund (EF1). BACKGROUND: Project Description The project involves constructing a 2-story, 53,000-square-foot health center as well as an adjacent 320-stall, 3-level parking structure. The new West County Health Center (“WCHC”) will enhance and serve the community by providing outpatient and ancillary services in a modern and efficient facility. The WCHC will be located in the City of San Pablo, on San Pablo Avenue just north of Vale Road. Project Delivery Method The “Construction Manager At-Risk” (“CM At-Risk”) project-delivery method is being used to accelerate the project schedule. Under that method, the CM At-Risk provides estimating, scheduling, constructibility reviews, value engineering, construction market analysis, and preparation of multiple bid packages during the Pre-Construction Phase. During the Construction Phase, the CM At-Risk provides full contract administration services, including management of the work performed by the various Trade Contractors. The CM At-Risk is responsible for completing the project on time and within budget (i.e., is “at-risk” for time and cost). The budget is fixed once the trade contracts have been awarded and the prices determined. This responsibility helps to ensure that the CM At-Risk has a stake in the project’s success. The County has previously used the CM At-Risk project-delivery method on the recent New Public Works Department Building project, which was completed ahead of schedule and under budget. For the WCHC, the CM At-Risk method will provide improved cost control, better allocate risk, and improve project collaboration. In addition, the County’s Outreach Program and the Project Labor Agreement (PLA) policy will be incorporated into the WCHC trade contracts. CM At-Risk Services On March 23, 2010, the Board awarded the architectural services contract for the design of the WCHC to Hawley Peterson Snyder Architects (“HPS”), Mountain View. HPS has completed the Programming and the Preliminary and Schematic Design Phases and is progressing with the Design Development Phase. For the CM At-Risk method to be effective, the CM At-Risk must be on-board at about the same time as the architect. The CM At-Risk, the architect, and the County (General Services and Health Services staff) work as a team to address the issues of schedule, budget, materials, and quality. In particular, the CM At-Risk will coordinate with the architect to determine how best to divide the project into different, phased bid packages to fast-track the project. From January to March, 2010, the General Services Department conducted a competitive-selection process to hire a CM At-Risk firm. As a result of that process, Rudolph and Sletten, Inc. (“R&S”), Redwood City, was ranked first and Turner Construction Company (“Turner”), Oakland, was ranked second. Following successful negotiations, a $382,000 contract was awarded to R&S on May 11, 2010. That contract covered CM At-Risk services for the Pre-Construction Phase only, including cost estimating, schedule development, and prequalification of trade contractors. The contract specifically stated that services for subsequent phases were at the County’s option (i.e., there was no guarantee that R&S would be hired for the entire project). The contract also contained a provision allowing the County to terminate R&S’s services at any time, whether or not R&S was then in default. Over the past several months, while the Pre-Construction services were underway, the County approached R&S regarding the Construction Phase services and requested that R&S submit a fee proposal. Despite that request, R&S failed to submit a fee proposal for the Construction Phase services. They also objected to the County’s proposed contract for the Construction Phase services, insisting that R&S be hired as a traditional Construction Manager (Agency CM) with no responsibility for time and cost rather than as a CM At-Risk with time and cost responsibility. During the same time period, the County experienced problems with R&S’s performance under the Pre-Construction Phase contract. Those problems included delays in investigating a foundation issue and preparation of substandard prequalification documentation. After trying unsuccessfully for several months to negotiate a contract with R&S for the Construction Phase services, and considering R&S’s failure to submit a fee proposal and performance problems, County staff made a decision to stop further negotiations with R&S and to proceed instead with Turner, the second-ranked CM At-Risk firm. An email and a letter notifying R&S of that decision were sent on October 27, 2010. R&S responded by letter on November 3, 2010, claiming that the County could not use any firm but R&S for the Construction Phase services. A letter was sent on November 10, 2010 replying to R&S’s letter. The letter informed R&S of the following: The existing contract was for Pre-Construction Phase services only, with no guarantee that R&S would be hired for the Construction Phase. The contract states that services for subsequent phases are at the County’s option. Under the contract, the County has the right to terminate the contract at any time, whether or not R&S is then in default. Although the contract does not require a reason for termination, the County actually has ample reason and justification for termination. The County gave R&S several months to submit an appropriate fee proposal for the Construction Phase services and to sign a contract that was consistent with the CM At-Risk arrangement under which R&S was hired. Despite that, R&S failed to submit a fee proposal and refused to sign the County’s proposed contract, instead insisting on a traditional Agency CM arrangement. Under the circumstances, it became apparent that R&S was unable or unwilling to successfully complete the necessary CM at-Risk services in a timely, efficient manner on this extremely-time-sensitive project. Therefore, the County had no realistic choice but to terminate R&S. The County has followed the procedure for hiring construction managers (Government Code Section 4525 and following) but was unable to successfully negotiate a contract for Construction Phase services with R&S. Therefore, as allowed in the Government Code and the contract, the County has decided to negotiate with the second-most-qualified firm (Turner Construction Company). Public Contract Code Section 20161, which was cited in R&S’s letter, relates to city construction projects and has no applicability to the County. Public bidding under the Public Contract Code is not required for the CM at-Risk services, which involve no construction work. The Trade Contracts, which involve the actual construction work, will be publicly bid pursuant to the Public Contract Code. When R&S was hired for the CM At-Risk services, it never made a claim that those services had to be publicly bid as construction work. Accordingly, the letter notified R&S of the County’s decision to terminate R&S’s Pre-Construction Phase contract and instructed R&S to perform no further work. On November 12, 2010, a response was received from R&S’s General Counsel. Although the response disputed the County’s position, it provided no details. To date, no further details have been received. At this point, R&S has performed a portion of the Pre-Construction Phase services, including prequalification of some Trade Contractors. As allowed in Government Code Section 4525 and following, negotiations have recently taken place with Turner—the second-ranked CM At-Risk firm. As negotiated with Turner, Turner will perform full CM At-Risk services for the Construction Phase, together with the remaining Pre-Construction Phase services, for a not-to-exceed price of $3,400,000. Under the arrangement with Turner, Turner will be responsible for delivering the WCHC project on time and within budget. In view of the unsuccessful contract negotiations with R&S, as well as R&S’s failure to submit a fee proposal and their performance problems during the Pre-Construction Phase, County staff recommends that the Board ratify the termination of R&S’s contract for Pre-Construction CM At-Risk services. In addition, staff recommends that the Board approve the award to Turner of a contract for CM At-Risk services (Construction Phase and remaining Pre-Construction Phase) in an amount not to exceed $3,400,000. CONSEQUENCE OF NEGATIVE ACTION: A negative action could potentially result in the WCHC not being built and the loss of $12 million in federal stimulus money. CHILDREN'S IMPACT STATEMENT: Not applicable.