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3. Award Bid - Second Alley E Sewer Improvement Projectof Kalispell Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758 REPORT TO: Mayor and City Council FROM: Dick Amerman, Assistant City Engineer SUBJECT: Award Bid, Second Alley East Sewer Improvement Project DATE: July 10, 2000 for Council Meeting July 17, 2000 BACKGROUND: The FY 2000/2001 budget provides for funding for this project. The sewer main and manhole replacements are covered in the Sewer Fund under a $145,000 item for main replacement. The alley re -construction portion of the project is funded in the Downtown Urban Renewal District (TIF) under an $80,000 item for alley re -construction. The attached memo from Fred Zavodny explains the bid results. The attached memo from the City Attorney is the result of our concern over the unbalanced bid submitted by Sandon Construction. RECOMMENDATION: We recommend the bid for the Second Alley East Sewer Improvement Project be awarded to Sandon Construction in the amount of $189,391.00. FISCAL EFFECTS: Expenditure of budgeted funds as indicated. ALTERNATIVES: As suggested by the City Council. Respectfully, chard Amerman, E. d"A' � Chris A. Kukulski Assistant City Engineer City Manager Date: July 10, 2000 To: Richard Amerman, Assistant City E i er 'I From: Fred Zavodny, Project Managefl Re: Second Alley East Sewer Improvemen Pr Jec - Bid Analysis and Recommendation Bids for the Second Alley East Sewer Improvement Project were received from Sandon Construction, LHC Incorporated and Timberland Construction. All bids are in order and contained the required Bid Bond. A $200.00 mathematical error in LHC's bid does not affect the ranking of the bidders. I Sandon Construction $ 189, 391.00 LHC Incorporated $ 199, 867.00 Timberland Construction $ 203, 593.00 I have attached the following information: 1. Bid tabulations including a description of each bid item and the associated costs for each bidder. The bid totals and the Engineer's estimate are also included. 2. A copy of an opinion from the City Attorney concerning the procedure to be followed in considering the bids on this project. Based on the above information I am recommending the bid for the Second Alley East Sewer Improvement Project be awarded to Sandon Construction in the amount of $ 189, 391.00. SECO0,113 ALLETFEAST BID TABULATION F.M.71 RM Description Engineer IIIIIIIII10-f TO Z 10 A remove asphalt install 678 If sewer install type 2 pipe beddingk k1,800.00 s_ _ # ail 1# i11 ## 111.uu mv�s 4 -��---4diti+nal sewer services W�14111011 service stubouts 130:66 1 670.00 1,700.00 =sewer manhole #1 $ 2,800.00 $ 13,425.04 $ 8,500.00 ©'FR M-1 1741M 1# 11 > ## $ 6,000.00 LMN�101 I �Mmjg FT7,15 M41 0 MMS 141 sewer cleanout jj $ 366.00 �,��MMEM IMs 1 =;fill install and remove asphalt ramp $ 1,400.00 $ 477.00 $ 140.00 crushed gravel access 600.00 $ 119.00 $ 220.00 ri remove concrete footing $ 18,500.00 remove concrete parking bumpers 4i zuu.uu a telaphtne vault 00.00 $ 5j!,just �Mremove catch basin 150.00 60 s.y. concrete sidewalk 2,700.00 $ 2,100.001 install 41 If curb and gutter # R - I $ 820.00 �install 650 s.y. asphalt •. • ## # $§F�, Zol $ 1,�, R-CM no w�1f install 2511,, s.y. asphalt Him= M(gravel 6'strip �CAMIMA iinstall 41 I.f. landscaping ; 2s# $ 200.00 rr tie retianing-wall 500.00 reinforce fence supports ��'install topsoil and sod ploratory excavation # Woo ��iContractors Total Bid $ 203,593.00 Corrected Total Bid 11111411SPIr! liss City of Kalispell Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758 June 21, 2000 TO: Jim Hansz, Dick Ammerman, and Fred Zavodny Department of Publi or s FROM: Glen Neier City Attorn Re: 2°d Alley East Sewer Improvement Project Your office has requested the opinion of the City Attorney's office concerning the procedure to be followed in considering bids on the above -referenced project. Apparently, DPW received three bids for work to be accomplished in 2"d Alley West: Sandon Construction $189,391.00 LHC $199,867.00 Timberland Construction $203,593.00 The bid tabulation contained an element designated "remove concrete footing". Sandon bid $18,000 for the item. LHC bid $500.00. Timberland bid $137.00. Obviously, Sandon weighted almost 100 of the bid on concrete removal, a relatively minor element of the project. Your office has proposed that the City, prior to awarding the bid, delete the "remove concrete footing" from the project and allow Sandon to accomplish the remaining work at a price reduced by $18,000. For the following reasons this office considers such a proposal improper. Section 7-5-4302, MCA provides, in part: Competitive, advertised bidding required for certain purchase and construction contract. (1) Except as wp\2ndA11ey.wpd provided in 7-5-4303 or 7-5-4310, all contracts for the purchase of any automobile, truck, other vehicle, road machinery, other machinery, apparatus, appliances, equipment, or materials or supplies of any kind in excess of $20,000 or for construction, repair or maintenance in excess of $25,000 must be let to the lowest responsible bidder after advertisement for bids. (Emphasis Supplied) In Baker vs. State, 707 P2d 20 (1985) a disgruntled bidder on a construction contract sued the State of Montana because he was not awarded the contract on an armory building in Harlowtown, Montana. He challenged the State's award to the lowest bidder, by a mere $440, because the lowest bidder was allegedly working beyond contract time on another public works project. Montana at the time had a statute which prohibited a contractor working beyond contract time from submitting a bid or entering into a contract with another agency of the State. The Supreme Court dismissed Baker's claim stating: . . .The department was under a statutory obligation to accept the lowest responsible bidder. Competitive bidding statutes are primarily intended for the benefit of the public rather than for the benefit or enrichment of bidders, and consideration of advantages or disadvantages to bidders must be secondary to the general welfare of the public. . . I have searched the construction cases since Baker and cannot find where it has been overruled. The City under the statute and Baker is obligated to take the lowest responsible bid. The question then becomes whether Sandon's weighting of the bid to "remove concrete footing" made the bid non -responsible. Under the Montana Public Works Standard Specifications, Instructions to Bidders, Article 19: Owner reserves the right to reject any and all Bids, including without limitations, nonconforming, non- responsive, unbalanced or conditional Bids. Owner further reserves the right to reject the Bid of any Bidder whom it finds, after reasonable inquiry and evaluation, to be non -responsible. owner also reserves wp\2ndA11ey.wpd the right to waive all informalities not involving price, time or changes in the Work and to negotiate contract terms with the Successful Bidder. owner reserves the right to reject the Bid of any Bidder if the owner believes it would not be in the best interest of the Project to make an award to that Bidder whether because the Bid is not responsive or the Bidder is unqualified or of doubtful financial ability or fails to meet any other pertinent standard or criteria established by Owner. The MPWSS gives the City authority to reject a bid which is unbalanced. The MPWSS gives the City authority to reject a bid from a bidder who has been determined to be non -responsible. The MPWSS does not say that a unbalanced bid is a non -responsible bid. A non -responsible bid or bidder would seem to require some evidence of previously poor workmanship, lack of manpower or equipment to perform, or some other disqualifying factor. Merely because a contractor weights the bid does not seem, to this office, to rise to the level of non -responsible. The MPWSS states that the City may waive informalities not involving prices, time, or changes in the Work and negotiate contract terms. . . The elimination of a bid item from the schedule after bidding would seem to be more than an informality, and, in this case, would definitely involve a change in price and work. Further, the MPWSS gives the City the option of rejecting an unbalanced bid, not negotiating for the elimination of elements from the bid. The City appears to have three options in this matter. First, accept the bid of Sandon as being the lowest responsible bid. Unless Sandon Construction can be determined to be incompetent or lacking in resources it must be determined as being responsible. Secondly, the City has the option of rejecting the bid of Sandon, in total, as being unbalanced. Subsequently, the City could award the bid to the next lowest bidder. In this regard the City does have a contractual argument that the Sandon bid was unbalanced and properly rejected by the City. However, it should be noted that Sandon's unbalanced bid was $10,476 lower than LHC's bid. Finally, the City could reject all bids and start the process over, at some point in time. This office does not express an opinion on advisability of this option. wp\2ndA11ey.wpd In closing, Sandon Construction appears to have constructed the bid in order to accelerate income from the project. Under the Sandon bid the City will pay $18,000 of project costs relatively early in the construction process, whereas the other bids may have a slower pay schedule. If you calculated the time value of money lost to the City as a result of paying the $18,000 at the first pay estimate as opposed to paying the $18, 000 at some latter point, say 30 days after the first pay estimate, the actual loss to the City is in the neighborhood of $90.00. Sandon's bid, although perhaps beneficial to Sandon, does not, as you can see, operate to the detriment to the City. wp\2ndA11ey.wpd