That the City Council:
A. Terminate the Public Works Agreement with AID Builders, Inc., for the City of La Habra East Bishop Drive Storm Drain Improvement Project, Project No. 1-D-16; and,

B. Approve Emergency Work being performed by Mike Bubalo Construction Co. Inc., to secure the East Bishop Drive Storm Drain Improvement Project site, Project No. 1-D-16; and,

C. Authorize the City Manager to execute an Agreement with Mike Bubalo Construction Co. Inc. to perform emergency work.

On November 21, 2022, the City of La Habra (“City”) awarded a construction contract for $1,778,657 to AID Builders, Inc. (“AID”) for the construction of the East Bishop Drive Storm Drain Project, Project, No. 1-D-16 (Project). On May 17, 2023, the City issued a Notice to Proceed to AID to commence work on Monday, May 22, 2023. The Project was scheduled to be completed within eighty (80) working days, with construction estimated to end in September 2023. 
 

Since the beginning of this Project, City staff have encountered many issues with the contractor, including poor performance and poor work quality performed by AID. Despite the City’s best efforts over several months to assist AID to properly complete the Project, AID proved unable to perform the work. As a result, on September 27, 2023, the City Attorney's office notified AID in writing that they were in default of the terms of the construction contract with the City of La Habra.  Pursuant to Section 8.3 of the Public Works Agreement, AID was given ten (10) days to cure the default. The following serious deficiencies occurred in AID’s performance of this Agreement, along with other items not listed:

AID was given until October 7, 2023, to cure its defaults and to correct all outstanding performance failures that have caused serious concerns for the health and safety of the public. AID failed to cure any of the Project defaults that staff identified; therefore, on October 10, 2023, at the request of City staff, the City Attorney’s Office issued a letter to AID and Gray Casualty & Surety Company (“Surety”), AID’s bonding company, requesting that the Surety step in and ensure completion of the project, per City specifications. On October 11, 2023, the Surety notified the City that they were in receipt of the default letter and requested project documents. On October 18, 2023, City staff submitted the requested documents to the City Attorney’s office for review and those documents were provided to the Surety.

Since City staff did not observe necessary progress from AID to address the safety issues that were identified on the Project job site, with advice from the City Attorney’s office, staff retained the services of an emergency contractor to properly secure the job site. This emergency work has included the installation of trench shoring and plating along the channel and the open trench at Bishop Drive, the installation of proper perimeter fencing to secure the project site, implementation of proper best management practices for storm water runoff, and assistance with dewatering/bypassing of storm water, as needed.
 

On October 23, 2023, staff met on the job site with the Surety’s expert engineer, Mr. Edward Bennett, with Guardian Group, Inc. Mr. Bennett assessed the condition of the site and asked several questions regarding the project's evolution.  On October 26, 2023, the City Attorney’s office sent a letter of Termination of Public Works Agreement to AID.  Staff is requesting that the City Council ratify the termination of the agreement and authorize the City Manager and City Attorney to negotiate with the Surety to bring the project to competition as quickly as possible.
 

The City Attorney’s office has been in regular communication with the Surety's representatives and a supplemental document request was made to the City on November 2, 2023. Staff is in the process of compiling those documents. As a result, the City is still waiting for a formal response and next steps from the Surety.  In an effort to mobilize as quickly as possible and with assistance from Mr. Bennett, staff has prepared a Request for Proposal (RFP) for contractors to bid. The RFP listed the appropriate scope of the remaining work to complete the project and to properly restore the site. The RFP will be provided to four licensed and qualified contractors to review. The bids received will then be reviewed by staff and will be provided to the Surety for their review and determination. Once a contractor is selected for the job, staff will bring an Agreement for City Council consideration and approval at a future City Council meeting.

In the interim, staff is requesting authorization from the City Council to continue with emergency work necessary to secure the job site and render it safe until a new contract can be issued to finish the Project. As indicated above, emergency work is currently being performed by Mike Bubalo Construction Co. Inc. (“Bubalo”). The previous contractor had left an unsafe trench with no outlet and no direct connection for the storm water to reach the downstream channel opening at Cypress Street. Thus, the emergency scope of work that staff has issued required the removal of a non-compliant manhole, re-adjusting previously installed storm pipe, and the installation of an additional 72 inch reinforced concrete pipe (RCP) which was needed to straighten the alignment so that water flow would not directly impact the steel plates that were installed to protect the unsecured walls of the channel and the adjacent properties.  Additionally, the emergency contractor has installed a “cutoff wall” downstream of the last joint (pipe) to slow down the flow and prevent scouring at this last joint, as there is concern due to the potential high velocity of water flow in this storm channel. This “cutoff” wall will also retain water to make it easier for the emergency contractor to dewater it and bypass the water into the channel. The emergency work also included the installation of a 4-inch thick slurry concrete section on the base of the exposed channel to allow proper runoff and prevent any scouring and/or erosion of the soil that was left exposed by the previous contractor.
 

The emergency contractor (Bubalo) has performed competently thus far and is an experienced contractor qualified to undertake this type of emergency work. They are also one of the firms that will be requested to submit a bid to complete the project. Bubalo has recently worked with the City on other emergency storm drain projects such as the Coyote Creek Channel and Ridgehaven Street, and have demonstrated satisfactory work quality and professionalism; therefore, staff is recommending that the City Council approve the emergency work and authorize the City Manager to execute an Agreement with Bubalo to continue with the emergency work for the Project. 

Due to the emergency work that is necessary to secure the project site, staff is requesting that the City Council authorize the use of $750,000 from the available budgeted funds for this project to fund the emergency work that has been completed and that remains to be completed. A significant portion of this emergency work (i.e., installation of storm pipe segments) is also part of the original work that needs to be done as part of this project.