HomeMy WebLinkAboutAgenda Report - June 1, 1994 (48)00
OF
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Contract Award for Standby Generators for Water Well and Storm Drain Pumping
Stations for Sites 1 R. 7, 9. 11 R. and 16 ($650,000 - project estimate)
MEETING DATE: June 1. 1994
PREPARED BY: Public Works Director
RECOMMENDED ACTION: That the City Council adopt a resolution awarding the contract for the
above project.
BACKGROUND INFORMATION: The City's Water Master Plan recommends that backup power be
available at a minimum of one-third of the well sites. We currently
have twenty-four wells (see Exhibit A for the well locations) and only
three have standby generators that are operational. The three
locations with auxiliary power are Wells 5, 8 and 9 and Well 9 is currently out of service. The existing
generators, mostly 1940's and 50's government surplus units, are obsolete and repair and replacement
parts are no longer available.
Geib Engineering was hired to provide plans and specifications for standby generators at seven well
sites. Two of those sites have been removed from this project because they are wells with DBCP and
have no treatment facility, thus their use would be restricted. The five remaining sites included in this
project are Wells 1 R, 7, 9, 11 R, and 16.
Pians and specifications for this project were approved on January 19, 1994. Bids were received on
March 2, 1994 and on March 19, Council rejected all the bids and authorized the Public Works
Department to readvertise the project. The City received the following three bids for this project on April
27,1994:
Bidder
Engineers Estimate
Royal Electric
Interstate Construction
Collins Electric Co.
Location
Sacramento, Ca
Sacramento, Ca
Stockton, Ca.
Lump Sum Bid
$613,956
$456,027
$495,600
$510,000
Financing Bid
(Present Worth)
$456,000
$535,000
APPROVED
THOMAS A. PETERSON
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City Manager
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Contract Award for Standby Generators for Water Well and Storm Draih umping Stations
for Sites 1 R, 7. 9, 11 R, and 16 ($650,000 - project estimate)
June 1. 1994
Page 2
Interstate Construction's bid for the equipment to be supplied under the financing package is the only
equipment that complies with the specifications. Royal Electric listed Katolight as the supplier of the
engine generator sets and Interstate Construction named Caterpillar under its financing plan as the
manufacturer of the engines and generators. Section 6-201.04 of the Special Provisions states that:
"All engine generator sets, housings, and accessories shall be assembled by one firm. This firm
shall be authorized by Caterpillar, Kohler, or Onan to supply and service the Lodi Area."
In addition, Section 6-153 "Commonality of Equipment" states that:
"To facilitate operation, maintenance, and parts procurement, and to define the quality required,
only equipment from the following suppliers will be accepted:
A. All Automatic Transfer Switches shall be manufactured by one firm, either Russell or
Zenith. Note there are physical size limitations on several of the ATS.
B. All engine generator sets, housings, and accessories shall be assembled by one
Firm. This firm shall be authorized by Caterpillar, Kohler, or Onan to supply and
service the Lodi Area."
Interstate Construction has sent a letter to the City indicating their intent to protest the award
of the contract to Royal Electric because Royal Electric listed Katolight as its manufacturer. A
copy of Interstate's letter of protest is attached.
Katolight was not listed in the specifications as they are a smaller company, and Geib Engineering was
not as familiar with them. There is a company in Stockton, Energy Systems, that is authorized by
Katolight to service Katolight equipment.
There are two additional areas where Royal Electric does not meet the specifications. First, the bid
proposal required that the engines and generators be furnished by the same manufacturer. It was Geib
Engineering's and the City's opinion that using the same manufacturer would make the maintenance of
the generators easier. The generator sets being listed by Royal Electric have some John Deere and
some Detroit Diesel engines.
The second area of non-conformance concerns Section 6-204 of the Special Provisions which requires
that:
"The standby engine generator sets shall be supplied by a firm that has at least 5
years experience providing equipment as required in the specifications and
drawings while operating under its current name and management."
Katolight's supplier is Energy Systems. Energy Systems used to be a part of E. E. Richter & Sons, Inc.
which has been a supplier of standby, portable, industrial, mobile and RV generators since 1974. In
1992, Energy Systems separated from E. E. Richter & Sons and is independently owned by Don W.
Contract Award for Standby "tors for Water Well and Storm Drat ' ping Stations
for Sites 1 R. 7, 9,11 R. and 16 ($650,000 - project estimate)
June 1, 1994
Page 3
Richter. Energy Systems has more than fire years of experience but not under its current name as
required by the specifications.
The Public Works Department and the consultant, Geib Engineering, feel that the Royal Electric bid
would provide acceptable equipment for the City. interstate Construction's bid meets the requirements
of the specifications but they are also approximately $78,000 higher than Royal Electric when looking at
the present worth of the 60 month financing plans submitted by each company. Whether the Council
awards the contract to Royal Electric or to Interstate Construction, the Public Works Department is
recommending that the 60 month lease purchase arrangement (Bid Alternate B) be chosen. City
Attorney McNatt is researching the legal implications of awarding to the low bidder, and will have
additional comments regarding this contract award at the Council meeting.
FUNDING: Originally Budgeted: 1993194
Budgeted Fund: Water Capital Outlay
Current Appropriation: $236,000 (first year of lease payment)
Total Project Estimate: $650.000
Bid Opening Date: April 27, 1994
L. Ronsko
Works Director
Prepared by Wesley K. Fujitani, Senior Civil Engineer
JLR/WKF/rs
Attachment
cc: City Attorney
Purchasing Officer
Water/Wastewater Superintendent
Geib Engineering
Royal Electric
Interstate Construction
CAWAR02.DOC 0525194
- CITY OF LODI
PUBLIC WORKS DEPARTMENT
EXHIBIT A
WELL LOCA`. 1ONS
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April 27. 1994
City of Lodi
Public Wotiu Depatrnent
Attn: Wes Fujitani
Re: Standby Generators for Vkater Well and Storm Drain Pumping Stations
for Sites 1R, 7,9, 1 IR. and 16
Dear Mr. Fujitani:
Upon review of the bid results for the above referenced project, Interstate
Construction, Inc. would like to make clear their intention to protest any award to
Royal Electric based on Royal's noncompliance with the speciftcatioas for this
project. Specifically, the noncompliance relates to Specification paragraph 6-
201.04 on page 6.30. This paragraph reads "All engine generator sets, housings,
and acc cssorics shall be assembled by one firm. Thir firm shall be authorized by
Caterpillar, Kohler, or Omarr to sawply mrd service the iodiArea." (emphasis
added). Please acre that Royal Electric listed Katolight Corporation as their
Standby Engine Generator Set suppikobamufacturer. Based on this
noncompliance, we feel that award should be male to Interstate Construction, Inc.
as we have offered either Caterin1lar or Kohler as part of our bid package.
Please contact me with your response after consideration of this matter.
S'
o�
Joel D. Lcineke
3909 SOMrnty Park Dwe
R:uicho CGr bvJ, CA 9.142
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GENERA 2.XLS
Public Works Department
Tabulation of Bids Recelved.4127194
Project: Standby Generators for Water Well & Storrs Drain Pumps
Sites I R, 7, 9, 11 R, & 16.
Contractors
Engk*Ws
hAffstate
Couplets Electrical
Estimate
EbOk
RoyalConsbuction
Co.
Item Desedpdon
I B d Alternate A
Lump Sum Price for the Equipment and
Services
$813,958.00
$458.027.00
"".600.00
$510.000.00
(Katoight)
(Kohler)
(Kohler)
Il Bid Alternate B
The 60 Payments Shall Each Be
$9,215.00
$10,486.69
no bid
Interest Rate
7.850%
6.575%
Present Worth
$456,000
$535,000
(Katofight)
(Cate"N)
III Bfd Alternate C
The 84 Payments Shap Each Be
$7,080.00
$8,094.21
no bid
Interest Rate
7.870%
7.075%
Present Worth
(
$456,000
$535,000
(Katolight)
(Caterpillar)
IV Bid Alternate D
The 120 Payments Shap Each Be
$5,530.00
$6,512.25
no bid
kuterest Rate
7.990%
8.075%
Present Worth
$456,000
$535,000 '
(KatoW*)
(Caterpillar)
--
Bid Breakdown - -
Cost of each site:
1R
$90.339.00
$96,790.68
$102,000.00
- — 7--
- --- $89,879.00
$88,068.12
$96,900.00
9 _ _
$97,995.00
_5110,518.80
_ 5117,300.00
11R
$88,037.00
$101,101.40
$96,900.00
16
$89,777.00
$_9.9,120.00
$96,900.00
Suppler!
Manufacturer - LumpSum Bid
_
_
Energy
Sierra Power
Sierra Power
Engine / Generator Supplier
SystemlKatofipht
Products: Kohler
Products: Kohler
John Deere Corp./
John Deere Corp./
John Deere Corp.!
Engine Manufacturer
Detroit Diesel
Detroit Diesel
Detroit Diesel
Corr --
COte. ---
COQ' -
-- --------
Generator Manufacturer
C�
Kohler
Kohler
—Marathon
—
Suppler/
Manufacturer - Financing_ ---
--
Energy
Engine / Generator Supplier
System/Kato"
Holt Bros.
no bid
�.�.-..----------------------------._..._-
COQ-
---------
---- i
i
John Deere Corp./
Engine Manufacturer
Detroit Diesel
i Caterpillar
no bid
'
_
Corn_- -'
1--- -----
--------------
Generator Manufacturer
Marathon Corp.
I Caterpillar
i no bid
I
. � ►1r
os
c� CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Supplemental Information - Contract Award for Standby Generators for Water
Well and Storm Drain Pumping Stations for Sites 1 R, 7, 9, 11 R. and 16
MEETING DATE: June 1, 1994
PREPARED BY: Public Works Director
RECOMMENDED ACTION: That the City Council adopt a resolution rejecting the low bid as being
non-responsive and awarding the contract for the above project to
Interstate Construction, Bid Alternate B (60 month lease/purchase at
$10,486.69 per month).
BACKGROUND INFORMATION: This memo supplements information provided in the City Council
packet for the June 1 meeting and recommends award of the
generator contract to Interstate Construction, the second bidder.
This recommendation is made after additional consultation with the
City Attorney and the receipt of his written opinion (copy attached). This was received after the original
Council Communication was written and could not be included in the memo due to processing and
review deadlines. This additional information is being provided to both Royal Electric, the low bidder
and Interstate Construction.
Although this recommendation will result In a higher first cost to the City, staff feels there are
advantages to the Interstate bid in that they are proposing Holt/Caterpillar equipment and Caterpillar
Financial Services Corporation leasing. They are:
• We already have one Caterpillar unit (at the Public Safety Building) and it has performed up
to our expectations. Having similar units will make routine inspection and troubleshooting
more efficient.
• Holt Brothers has a solid reputation and sates base in this area. Their ability to provide
service and parts exceeds that of Energy Systems.
• The Public Safety Building unit was purchased under a Caterpillar Financial Services lease
and we had no problems with them. (That lease has been paid off.)
• The Interstate/Caterpillar lease interest rate is good through Dec. 31, 1994. The interest rate
on the lease proposed by Royal Electric, through Saddleback Financial Corporation, was
only good through May 31, 1994. Because of the other bid considerations, we have not
contacted them to see if the interest rate would be held past the deadline. If it were to
increase, the total cost would increase by $13,000 for each percentage point.
APPROVED _-- — _ — ---- —
THOMAS A. PETERSON 'ecyclea Dave,
City Manager
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Contract Award for Standby Ge `nerators for Water Well and Storm Drain" Pumping Stations
for Sites 1 R. 7, 9, 11 R, and 16 ($650,000 - project estimate)
June 1, 1994
Page 2
We do not feel that rejecting the bids and rebidding the project is to the City's advantage.
After doing that once, the number of bidders has dropped from eight to three. With another
rebid, no matter how we do or don't modify the specificatirns, we could easily receive only
one bid.
With regard to the financing, the lower interest rate on the Caterpillar lease is advantageous
to the City. Their rate is 6.575% and the City is presently earning 4.85% on investments.
Thus, the net rate the City would be paying is only 1.725%. This results in a cost difference
between Interstate and Royal Electric of approximately $67,000: The lease allows us to
purchase all the units at the same time, saving the costs of bidding and administering one
contract each year and allows the City to benefit from all the installations now. It also insures
similar units for ease of maintenance rather than coping with model changes in later years.
In terms of overall water system reliability and in spite of recent discussions regarding
replacement of old pipes and welts, staff feels these generators are the highest priority in
system rehabilitation and we urge the City Council to award the contract as recommended
and move ahead with this project.
FUNDING: Originally Budgeted:
Budgeted Fund:
Current Appropriation:
First year cost:
Total Project Estimate:
Bid Opening Date:
1993/94
Water Capital Outlay
$236,000 (first year of lease payment)
$125,840.28 (12 payments)
$629,201.40 (total of 60 payments)
April 27, 1994
I/
d.
Jack . Ronsko
Public Works Director
Prepared by Richard C. Prima, Jr., City Engineer
JLR/RCP/rs
Attachment
cc: City Attorney
Purchasing Officer
Water/Wastewater Superintendent
Geib Engineering
Royal Electric
Interstate Construction
CITY OF NODI
MMORANDUM FRal THE OFFICE OF THE CITY ATTORNEY
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To: Rich Prima, City Engineer
From: Bob McNatt, City Attorney
Date: May 26, 1994
Subject: Bids for Standby Generators
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I have now had the opportunity to look over the material you provided to ate
yesterday concerning the bids for standby generators for water well and
storm drain pumping stations. For reasons discussed below, it appears that
the low bid submitted by Royal Electric is irregular and cannot be accapted.
I have reached this conclusion because the plans and specifications, in
Section 6-153 clearly state "all engine generator sets, housings and
accessories shall be assembled by one firm. This firm shall be authorized
by Caterpillar, Kohler, or Onan to supply and service the Lodi area." It
is my understanding that Royal Electric bid the project based on using
Katolight in lieu of the three firms specified by the City. This is also
the basis of the protest letter received from Interstate Construction,
dated April 27, 1994.
in analyzing these situations, the starting point is Public Contracts Code
520161(c) and 520162 which require competitive bids on public projects. In
order to provide a level playing field for bidders, the City retained Geib
Electric to help us draft plans and specifications. The plans and
specifications call for very specific information to be provided by bidders
and in 52.500 states that proposals may be rejected for irregularities of
any kind. it has been held that a contract made in violation of statutes
on competitive bidding is illegal (Reams v. Cooley, 171 Cal. 150).
It is also been held by the California Attorney General that if an error or
omission in the bid is "inconsequential" a bid award is still proper.
However, if an error or Mission is a "substantial deviation" the bid is
invalid (47 Ops Ag 129). The basis to distinguish between an error which
is inconsequential and one which is substantial is whether or not the
deviation "...gives a bidder an advantage or benefit not allowed to
others...." (ID, at 131). Unsuccessful bidders can obviously argue that by
bidding Katolight instead of the three manufacturers called for, Royal
Electric has a financial advantage not allowed to the other bidders.
I have also found a case entitled Konica Business Machines v. The Regents
of the University of California 253 Cal. Rptr. 591 which says that a
deviation in responding to bid specifications is "substantial" unless it is
so inconsequential that it could not effect the bid amount. (Konica, supra
at 594). It was also stated in the Konica case that strict adherence to
standards in bidding must be observed by public agencies and that contracts
awarded without strict compliance with bidding requirements will be set
aside. The court even went on to state "this preventive approach is
i
Contract Award for 5C5ndby Generators
May 26, 1994
Page 2
applied even where it is certain there was in fact no corruption or adverse
effect upon the bidding process, and the deviations would save the entity
money." (Konica at 595).
I am also aware that under 56-150 of the specifications, it states
"whenever any material is specified by name and/or number thereof, such
reference shall be deemed to be used for the purpose of facilitating a
description of the materials and establish quality, and shall be deemed or
construed to be followed by the words "or approved equal". No substitution
will be permitted which is not been submitted per the submittal schedule of
this specification...." while this implies that the City has some
discretion in determining whether a suggested alternative is acceptable, I
think that the general nature of the language is overcome by the very
specific language of 56-153. The language in §6-150 is "boiler plate"
which we put into our specifications as a matter of routine. while it is
intended to provide flexibility for the City in making decisions on certain
types of products, when we further narrow it down to specify not a single
brand name but to three acceptable alternatives, I feel that the general
substitution language is overcome.
While I will always try to save the City money wherever possible, in this
situation I believe if we tried to accept the low bid, any dissatisfied
person could bring a legal challenge.
Please let me know if there are further questions.
BOB MCNATT
City Attorney
BM:pn
CC: City Council
Jack Ronsko
BID.GEN/TXTA.OIV
BID.GSN/TXTA.01V
RESOLUTION NO. 94-61
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A RESOLUTION OF THE U)DI CITY COUNCIL
REJECTING ALL BIDS FOR THE CONTRACT FOR STANDBY GENERATORS
FOR WATER WELL AND STORM DRAIN PUMPING STATIONS
FOR SITES 1R, 7, 9, 11R, AND 16
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WHEREAS, in answer to notice duly published in accordance with
law and the order of this City Council, sealed bids were received and
publicly opened on March 2, 1994 at 11:00 a.m. for the bid for Standby
Generators for Water well and Storm Drain Pumping Stations for sites
IR, 7, 9, 11R, and 16, described in the specifications therefor
approved by the City Council on January 19, 1994; and
WHEREAS, said bids have been compared, checked, and tabulated and
a report thereof filed with the City Manager as follows:
BIDDER
Engineer's Estimate
Royal Electric
Interstate Construction
Collins Electric Co.
LOCATION LUMP SUM BID
$613,956
Sacramento $456,027
Sacramento $495,600
Stockton $510,000
FINANCING BID
(Present worth)
$456,027
$535,000
WHEREAS, there were disputes between the low and 2nd lowest
bidder, and staff wishes to reevaluate the project in its entirety.
NOW, THEREFORE, BE IT RESOLVED by the Lodi City Council that all
bids received are hereby rejected for the award of contract for the
Standby Generators for Water Well and Storm Drain Pumping Stations for
Sites IR, 7, 9, 11R, and 16.
Dated: June 1, 1994
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I hereby certify that Resolution No. 94-61 was passed and adopted
by the City Council of the City of Lodi in a regular meeting held June
1, 1994 by the following vote:
Ayes: Council Members - Davenport, Mann, Pennino and
Sieglock (Mayor)
Noes: Council Members - Snider
Absent: Council Members - None
fer in
y Cler
94-61