Discussion and possible action on any and all matters regarding the award of Construction Contract for Fleet Services Building Expansion Project (New Fleet Services Shop) to Merrill Development, LLC.   (Eulogio Vera, Director of Public Works)

Staff seeks approval to award a construction contract to the low bidder for the Fleet Services Building Expansion Project.

For FY 2022, the city adopted a $796,900.00 CIP project for execution of the new Fleet Services Shop, to replace the existing inadequate facility (this is described in the invitation for bids as a "building expansion project," as one of the modules for the new building was partially completed several years ago).  The approach has been that the construction of the new facility would span over two (2) fiscal years. The adopted FY 2022 project is planned for funding from the following GL accounts:

• 100-999-90015 (Fleet Services): $518,000.00
• 300-302-90015 (Water):                $99,600.00
• 310-311-90015 (Wastewater):       $99,600.00
• 320-321-90015 (Solid Waste):      $79,700.00

The project design was completed by Thompson Design Architects in December 2021, encompassing all work required for the new facility, including shop, storage, and administrative areas, as well as exterior improvements such as paving, perimeter wall, and security gates (noting that the required perimeter chain link fence will be separately placed “in-house” by the Public Works Department’s Highway Users Division).  A $117,082.00 pre-engineered metal building, that will comprise a significant portion of the new facility, has already been purchased, following Council approval in calendar year 2021, and will be provided to the selected construction contractor for erection.

The city published an invitation for bids for the construction of the Fleet Services Building Expansion Project on January 9, 2022, with a due date for prospective bids of 3:00 PM on February 17, 2022.  On February 17, staff confirmed receipt of bids from 3 interested bidders, Merrill Development LLC, Pilkington Contracting Company, Inc., and Yuma Valley Contractor, Inc. While all three (3) bids were responsive to the city’s requirements, staff’s evaluation of bids confirmed that Merrill Development, LLC submitted the lowest responsive bid in the total amount of $2,638,718.00 (base bid of $2,243,000.00 plus three alternate bid items).  All bids were considerably higher than our original estimates for the project, noting that keen competition for labor and substantial cost growth for labor, materials and equipment, fuel, and transportation have increased dramatically since planning and design for the project began and are likely to continue to increase, making it advantageous for us to award a construction contract now.  Even though the low bid of $2,638,718.00 (combined with the $49,996.00 final payment in current year funds that was paid to Bunger Steel in February 2022 for purchase of the required pre-engineered metal building, along with architect fees remaining to be paid this fiscal year) is higher than the $796,900.00 available in the city’s adopted FY 2022 budget, the Public Works Department recommends council approval to award the contract to Merrill Development LLC at full project scope, noting that construction will commence on/about March 21, 2022, and will take between 12 and 15 months to complete.  If the contract award is approved by the council, we anticipate that $996,900 of the $2,638,718.00 could be expended during fiscal year 2022, causing a shortfall in the allocated budget amount for this year of $200,000. We have budget available from projects that are not completed to cover this shortfall. Appropriately we also need to include in FY 2023 budget the portion of the project that will not be completed this year.