That the City Council:
A. Reject all bids received for the Remodel/Tenant Improvements at 205 South Euclid Street and 106 East First Avenue;

B. Authorize staff to redesign and de-scope the Remodel/Tenant Improvements at 205 South Euclid Street and 106 East First Avenue with the goal of lowering the cost of the project;

C. Authorize staff to increase the Purchase Order for Crane Architectural Group to an amount not to exceed $70,000 to revise the plans, specifications, and estimates as deemed necessary to effectively de-scope the project; and,

D. Authorize staff to re-advertise the revised contract plans and specifications for the Remodel/Tenant Improvements at 205 South Euclid Street and 106 East First Avenue.

In June 2022, the City executed a contract with Crane Architectural Group (Crane) to provide professional services for preliminary designs and layouts (Phase 1) for the two buildings purchased at 205 S. Euclid Street (the location of the former chiropractic business adjacent to Portola Park) and 106 East First Avenue (the location of a former electronics repair business across from City Hall).  The purpose of Phase 1 was to develop conceptual design layouts to create offices for staff and the La Habra Historical Society Museum within the building at 205 S. Euclid Street, and offices for the La Habra Art Association and La Habra Woman's Club within the building located at 106 E. First Avenue.  By October 2022, Phase 1 was complete, and staff was ready to move forward with the development of final renovation designs and construction plans for the project. On October 17, 2022, the City Council approved an additional contract with Crane, and approved a purchase order in the amount of $175,626, for the preparation of construction bid plans and documents, bid support services, and construction management for the project.  Both agreements for Crane, dated 6/2/2022 and 10/17/2022, are included as Attachments 1 and 2 to this report.

The original plan for remodel/tenant improvements at 205 S. Euclid Street and 106 E. First Avenue project included: site demolition, removal of interior walls, new roofing systems, the renovation of the building's exteriors, new interior improvements, new electrical, mechanical, plumbing, fire/security alarms, doors, windows, and all other related improvements.  The scope also included patching, repairing, replacing, and refinishing of all damaged areas within the buildings.

Furthermore, the Project included a base bid and an additive bid for both buildings. The base bid called for improvements that staff determined were necessary for the Project, whereas the additive bid items were determined to not be necessary, but would complement the improvements to the building, such as: parking lot improvements, new facade and entry improvements, automated securing fence, new concrete masonry unit (CMU) wall, new roll-up door at the storage room, and new doors and windows. The Award of Contract was to be based on the lowest base bid amount, or the combined total of the base bid plus the additive bid, should the combined bid amount fall within the Project's budget of $1,500,000.

On November 6, 2023, the City advertised the Remodel/Tenant Improvements at 205 S. Euclid Street and 106 E. First Ave. A job walk was held on November 14, 2023 with five contractors attending and given the opportunity to inspect the buildings.

On December 7, 2023, the City of La Habra received two bids for the Project with the following results:
 

After reviewing the two bid proposals submitted, staff determined that the apparent low base bid submitted by Far Builders of Anaheim, California for a total amount of $2,456,515, was non-responsive since they failed to submit the required Addendum No. 1 with their bid package. In addition, Far Builders' base bid was $2,456,515, or $956,515 higher than the project budget of $1,500,000.

The second bid proposal, submitted by Caltec Corporation of Westminster, California, was deemed to be responsive; however, their base bid was in the amount of $3,310,000, which was $1,810,000 higher than the project budget of $1,500,000.

In an attempt to secure construction bids within or closer to the project budget of $1,500,000, staff recommends that the City Council reject all bids received, and re-evaluate the original scope of work to potentially reduce some of the costs associated with the project. In order to do so, staff recommends that the City Council authorize the City Manager to increase the purchase order for Crane Architectural Group, in an amount not to exceed $70,000, in order to make substantive changes to the plans and specifications for the project, and provide updated estimates, where necessary. Once this process is complete, and with the approval of the City Council, staff will re-advertise the revised project to solicit bids to proceed with the project at a lower cost.

This project is included in the City's adopted Fiscal Year 2023-2024 Building Renovations CIP at 106 E First Ave and 205-211 S Euclid Street budget in the amount of $1,500,000 from the General Capital Project Fund. Staff's objective is to re-evaluate and re-design the original scope of work with the goal of reducing costs for some of the project elements so anticipated construction bids can stay within or close to the original $1,500,000 project budget. There is sufficient funding in the approved budget to cover the proposed costs for the additional architectural design services by Crane Architectural Group, in an amount not to exceed $70,000.