TO: Members of the Governing Board
FROM: Christopher Silke, District Engineer
REPORT BY: Annamaria Martinez, Assistant Engineer
SUBJECT: Reject Bids for the Lift Station A - Sewer Collection Tank Replacement Project, LB 22-03, and Authorize Readvertisement of the Project for Sealed Bids
RECOMMENDATION
title
Reject all bids received for the Lift Station A - Sewer Collection Tank Replacement Project, LB 22-03r, pursuant to Section 20150.9 of the Public Contract Code, and authorize re-advertisement for sealed bids and opening of the bids at a time, date, and location to be published by the District Engineer pursuant to Section 20150.8 of the Public Contract Code. (No Fiscal Impact, Discretionary)
body
BACKGROUND
The President authorized the American Rescue Plan Act (ARPA) in March 2021 to allocate $1.9 trillion in stimulus monies across a variety of programs. Of the total, $350 billion is allocated to state, local, territorial and Tribal governments to enable them to continue to support the public health response and to lay the foundation for a strong and equitable economic recovery. The U.S. Department of the Treasury released Final Interim Rule regulations on May 10, 2021 defining eligible use of ARPA monies that includes investments into water and sewer utility infrastructure. Local Fiscal Recovery (LFR) funds must be obligated by December 31, 2024 with projects completed no later than December 31, 2026. Napa County received $26,755,157 for ARPA appropriations.
Based on the Final Rule guidelines, water and sewer utility projects that would qualify for funding under the Safe Drinking Water and Clean Water Act Programs are deemed as eligible under ARPA. The District has four (4) high priority projects that satisfy ARPA and the Drinking and Clean Water Act funding criteria - one of the projects being the subject of this agenda report - the replacement of the 91,000 gallons raw sewage collection tank located at Sewer Lift Station A.
History of the Collection Tank at Lift Station A:
The original sewer collection tank at Lift Station A, which collects all raw sewage from Unit 2 of the Berryessa Estates subdivision, was installed in 1967. The tank was constructed of welded steel with a maximum capacity of approximately 50,000 gallons. In the late 1980s/early 1990s, deterioration of the upper tank wall due to corrosion from hydrogen sulfide vapors caused seepage of raw sewage from the upper tank panels requiring the operational level to be lowered to half the height of the tank. Due to lack of funding for full replacement of the tank, a reduced scope project was approved that required removal of the corroded panels above the reduced operational level - leaving the District with limited sewer collection capacity for growth and or storm events.
The tank was operated at this reduced capacity for over a decade; increased flow as a result of community growth, and also from increased inflow and infiltration (I/I) in the collection system, resulted in multiple overflows from the tank and violations from the Central Valley Regional Water Quality Control Board (CVRWQCB). An Administrative Civil Liability Complaint (ACL) that required payment of a fine, was issued and ultimately rescinded, but the District was required to replace the tank with a capacity sufficient to prevent overflows in the future.
In 2002, District engineering staff solicited bids for replacement of the modified original welded steel tank with a 91,000 gallon bolted steel tank. The solicitation required setting the new tank within the footprint of the original tank, and the reuse of the original pad. The vendor, International Tank, Dry & Liquid Storage, Inc. from Kentucky was retained to complete the project design and installation.
The 91,000 gallon tank is now 20 years old, and as with the original tank installation, corrosion and pitting, due to the accumulation of hydrogen sulfide gases, has accelerated along the top tank panels that sit above the operational liquid level of the tank. In an effort to prevent a repeat of prior violations and potential ACLs from the CVRB due to illicit discharges from the tank, staff proposed immediate replacement of the tank pending award of funding availability through the ARPA program.
On February 8, 2022, the District and Napa County executed a Memorandum of Understanding (MOU) outlining the terms of the transfer of the $800,000 ARPA earmark for the project, and on June 21, 2022, staff publicly advertised an RFQ / RFP engineering services package detailing the scope of work, submittal instructions and deadline for the Sewer Lift Station A Tank Replacement Project. After evaluation of the two proposals received, staff recommended and the Board awarded a contract to GHD, Inc. in the amount of $190,674 on September 13, 2022.
Design plans and specifications to demolish the corroded steel tank and construct a new cast-in-place reinforced concrete were approved and authorized to solicit competitive public bids by the Governing Board at its May 16, 2023 meeting. Contractor bids were subsequently opened on July 13, 2023. The lowest qualified bid exceeded ARPA appropriations to award a Contract. All Contractor bids were rejected by the Governing Board in the August 8, 2023 meeting. Supplemental project appropriations in the amount of $1,400,000 from Napa County for water and wastewater improvements were then secured as part of am additional funding award from the Department of Water Resources through the California Budget Act of 2022 (AB 179, Stats. 2022, ch. 249, § 207). Including the remaining ARPA funding available, project appropriations with the DWR award totaled $2,009,326.
District staff and GHD, Inc. design team deliberated the feasibility of downsizing concrete tank capacity and geometry simultaneous with replacing the remaining segment of undersized sewer force main as an alternative approach to upgrade sewer collection infrastructure. Preliminary engineer estimates to construct a smaller concrete tank and increase the sewer force main diameter that will enhance Lift Station A pumping capacity totaled less than the ARPA / DWR project appropriations budgeted for construction. On December 19, 2023 Amendment No 1 to the GHD, Inc. Agreement was approved by the Governing Board, authorizing the change to the scope of the project design and directing GHD, Inc. to produce revised plans and specifications. Engineering design budget was increased by $49,114 for an adjusted total of $239,788, leaving total appropriations of ARPA/DWR funding of $1,960,212 to fund construction related services.
The revised construction plans and specifications were approved by the Governing Board for readvertisement of the Project on March 12, 2024. The revised plans included replacement of the existing steel tank with a new cast-in-place reinforced concrete tank of 50,000 gallons capacity in the same footprint as the existing tank paired with replacement of the original 1960’s asbestos cement pipe sewer force main that will improve pumping efficiency. Additional project components included a new tank foundation, piping reconfiguration to allow better control of waste volumes entering the tank, and other miscellaneous site improvements necessary to install the tank in the same footprint as the existing tank.
The District Secretary opened two (2) bids on May 30, 2024. The base bid results of the two bidders are as follows:
Cushman Contracting Inc. Goleta, CA $1,202,500
Piazza Construction Penngrove, CA $1,614,000
While both of the bids submitted for the base bid items are less than the total appropriations for this project as defined above, an error in the bid documents was discovered after bids were opened creating uncertainty on how the various bid alternates would be awarded. One section of the bid documents indicated the bid alternates “may” be awarded (what the District intended), while another section erroneously indicated the bid alternates “will” be awarded up to the amount of available funds. The lowest bidder on the base bid, Cushman Contracting, believed the additive bid alternates would be awarded based on the erroneous language, and submitted quotes for the ten bid alternates totaling $1,196,250. District staff believes these bid alternates are substantially overpriced, as evidenced by the second lowest bidders quotes for the same bid alternates totaling $225,870, which is also close to the engineer’s estimates for the bid alternate work. Due to the conflicting language in the bid documents and the likely confusion among the bidders as to whether award of the bid alternates was discretionary or mandatory, District staff recommends that the Board reject all bids for the “Lift Station A - Sewer Collection Tank Replacement Project”, LB 22-03 pursuant to Section 20150.9 of the Public Contract Code.
District staff has corrected the erroneous language in the bid documents and reorganized the Bid Items to clarify the basis of award of the project, and that award of any alternate bid items is discretionary. District staff now requests approval of and authorization from the Board to re-advertise the project for sealed bids and opening of the bids at a time, date, and location to be published by the District Engineer pursuant to Section 20150.8 of the Public Contract Code.
Requested Actions:
1. Reject all bids for the “Lift Station A - Sewer Collection Tank Replacement Project,” LB 22-03r pursuant to Section 20150.9 of the Public Contract Code; and
2. Authorize District Engineer to re-advertise the project for sealed bids and opening of the bids at a time, date, and location to be published by the District Engineer pursuant to Section 20150.8 of the Public Contract Code.
FISCAL & STRATEGIC PLAN IMPACT
|
Is there a Fiscal Impact? |
Yes |
|
Is it currently budgeted? |
No |
|
Where is it budgeted? |
Lake Berryessa Resort Improvement District Capital Budget - Subdivision 5220500, Project 22014 |
|
Is it Mandatory or Discretionary? |
Discretionary |
|
Discretionary Justification: |
An error discovered in the bid documents created uncertainty on how the bid alternates would be awarded and compromised the competitive bidding process. |
|
Is the general fund affected? |
No |
|
Future fiscal impact: |
Minor cost increases expected under project administration for staff time spent rebidding the project. |
|
Consequences if not approved: |
The District would attempt award of the Base Bid scope plus substantially inflated Bid Additives for sewer pipe replacement by the Apparent Low Bidder; however, due to ambiguities in the stated Basis of Award within the Bid Documents, only one of the Bid Additives that include sewer force main replacement would be awarded leaving the District to secure a future $500,000 funding obligation for the remaining 2,100 feet of pipe. The District could also be subject to Federal and/or State Program Audit(s) after project construction is completed and be at risk of having to return funds for overpaying Bid Additive work to the Apparent Low Bidder. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: Consideration and possible adoption of a Categorical Exemption Class 1: It has been determined that this type of project does not have a significant effect on the environment and is exempt from the California Environmental Quality Act. [See Class 1 (“Existing Facilities”) which may be found in the guidelines for the implementation of the California Environmental Quality Act of 14 CCR § 15301; see also Napa County’s Local Procedures for Implementing the California Environmental Quality Act, Appendix B].