Earlier this year, the Department of Public Works requested and received authorization from the City Administration to substitute the High School Lift Station Generator Project with the East Wastewater Treatment Plant CMU Wall Construction Project. This change was necessary because, although the generator project had been fully designed, electrical equipment suppliers advised the City that the generator had an extended lead time and could not be delivered before the end of Fiscal Year 2026. Since both projects had comparable budget estimates, Public Works requested authorization to proceed with the CMU wall project, with the understanding that the project would require a formal budget transfer and subsequent City Council approval.

The original construction budget for the CMU wall project was estimated at $80,000. Public Works advertised the project for competitive bids with the goal of completing the work within the available budget. During the first solicitation, three bids were received, with the lowest responsive bid totaling $118,800.00, significantly exceeding the available funding. As a result, all bids were rejected, and the project was rebid. The second solicitation resulted in a single bid of $118,800.00 from the same contractor that had submitted the lowest bid during the initial solicitation.

Given the lack of competitive pricing and the bids exceeding the project budget, Public Works evaluated alternative procurement options and determined that substantial savings could be achieved by separately procuring construction materials and labor. The Department subsequently obtained competitive quotations from multiple suppliers for the materials, including concrete masonry units (CMU), reinforcing steel, grout, and cement, as well as separate quotations from qualified contractors to perform the labor. This procurement approach complied with the City's purchasing requirements while significantly reducing the overall project cost.

To avoid further delays and maintain the project schedule, Public Works processed an initial budget transfer of $49,000.00 under the Department's administrative authority to procure the required construction materials. Once labor quotations were received, the total project cost exceeded the Department's budget transfer authority, requiring City Council approval to ratify the full budget transfer.

Although the Department expedited both bidding processes, a typical procurement cycle can take between two and ten weeks. Conducting two separate bid solicitations, followed by the decision to separately procure materials and labor, significantly impacted the project schedule and left insufficient time to obtain City Council approval before the close of Fiscal Year 2026. To avoid delaying the project, Public Works coordinated with the Finance Department to process the necessary requisitions and obtained authorization from the City Administration to proceed with the purchases, subject to subsequent City Council ratification.

By utilizing separate procurements for materials and labor, the Department reduced the total project cost to approximately $65,000, representing a savings of more than $53,000.00 when compared to the lowest bid received through the formal bidding process.

For these reasons, the Department of Public Works respectfully requests that the City Council ratify the budget transfer in the amount of $65,000.00, as outlined in the Fiscal Impact section of this agenda item.