7.3.
CC Regular Session
- Meeting Date:
- 10/11/2016
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title:
Demolition of Former Municipal Center Campus
Purpose/Background:
PURPOSE
Consider awarding contract to lowest qualified bidder.
-OR-
Consider rejecting all bids and direct staff to re-bid.
BACKGROUND (Former Municipal Center Campus)
The City’s Economic Development Authority (EDA) and Council went through an in-depth public engagement process in 2013 and 2014 to consider the future development of the “Old Municipal Center Site.” The City considered two general development scenarios for the 20.5 acre site: (A) data center development and (B) residential development.
Until 2015, the Old Municipal Center (OMC) Site was zoned Public/Quasi Public. In June 2014, the City Council decided to move forward with an amendment to allow for single-family residential only land use on the OMC site (and not allow a data center). In June 2015, the City Council closed on a purchase agreement to sell the former municipal center site to a residential developer.
BACKGROUND (Demolition)
Upon rezoning and selling the former municipal center site in 2015, the City Council provided general direction to staff (and direction via a purchase agreement) to demolish and clean up the site. Said demolition and site clean up includes two phases/ contracts (1) removal of hazardous materials/ regulated waste, and (2) demolition, site clean up, and site restoration.
The purpose of this case is to consider a contract for phase 2. The City awarded a contract to J&J Contracting for phase 1 in June ($10,400). That work was completed in August.
BACKGROUND/ PROCESS (Case)
This case is a continuation of a case the Council reviewed on:
Consider awarding contract to lowest qualified bidder.
-OR-
Consider rejecting all bids and direct staff to re-bid.
BACKGROUND (Former Municipal Center Campus)
The City’s Economic Development Authority (EDA) and Council went through an in-depth public engagement process in 2013 and 2014 to consider the future development of the “Old Municipal Center Site.” The City considered two general development scenarios for the 20.5 acre site: (A) data center development and (B) residential development.
Until 2015, the Old Municipal Center (OMC) Site was zoned Public/Quasi Public. In June 2014, the City Council decided to move forward with an amendment to allow for single-family residential only land use on the OMC site (and not allow a data center). In June 2015, the City Council closed on a purchase agreement to sell the former municipal center site to a residential developer.
BACKGROUND (Demolition)
Upon rezoning and selling the former municipal center site in 2015, the City Council provided general direction to staff (and direction via a purchase agreement) to demolish and clean up the site. Said demolition and site clean up includes two phases/ contracts (1) removal of hazardous materials/ regulated waste, and (2) demolition, site clean up, and site restoration.
The purpose of this case is to consider a contract for phase 2. The City awarded a contract to J&J Contracting for phase 1 in June ($10,400). That work was completed in August.
BACKGROUND/ PROCESS (Case)
This case is a continuation of a case the Council reviewed on:
02/23/2016: Council approved the attached work order from Hakanson Anderson Engineering to manage/ lead the process of putting together plans/ specs/ and administering the bidding process.
06/14/2016: Council approve a contract with J&J Contracting to complete phase 1 of the demolition process.
08/15/2016: J&J Contracting completes phase 1 of demolition process.
08/23/2016: Council adopt plans & specifications and authorizes advertisement for bids for phase 2 of the demolition project.
10/11/2016:**(this case) Council was to consider approving contract for demolition.
11/30/2016: Phase 2 demolition SUBSTANTIAL completion.
06/30/2017: Phase 2 demolition FINAL completion.
07/30/2017: Developer with purchase agreement on the remaining portion of the former municipal center site must close.
06/14/2016: Council approve a contract with J&J Contracting to complete phase 1 of the demolition process.
08/15/2016: J&J Contracting completes phase 1 of demolition process.
08/23/2016: Council adopt plans & specifications and authorizes advertisement for bids for phase 2 of the demolition project.
10/11/2016:**(this case) Council was to consider approving contract for demolition.
11/30/2016: Phase 2 demolition SUBSTANTIAL completion.
06/30/2017: Phase 2 demolition FINAL completion.
07/30/2017: Developer with purchase agreement on the remaining portion of the former municipal center site must close.
Observations/Alternatives:
UPDATE
Per the original project schedule, bids were opened on 09/21/2016. Eleven companies bid. Bids ranged from $92,900 to $391,263--with a cluster of bids ranging from $150K-$220K. The Engineer's estimate for this project was $175,000. DRC had the low bid of $92,900. The Project Manager (Hakanson Anderson) followed up with DRC, and confirmed they understood the scope of work for this project, and completed a reference check. In summary, Hakanson Anderson believes DRC has a good bid, and believes they are a qualified bidder in regard to performance.
During the bidding process an issue occurred. Four of the eleven bidders were provided information by City satff related to "crushing" construction debris. The information received by said four bidders was not shared with all bidders. As a result, some bidders were bidding on different information. In summary, the information provided regarding "crushing" by the City can have an effect on project costs--thus effecting bid results. With this in mind, staff believes it would be reasonable to consider re-bidding this project for the sake of transparency, equity, and future credibility in regard to the City's bid process. Below are details.
Crushing (what is it?): crushing is a technique used by contractors during construction/ demolition projects to reclaim/ reuse construction materials. Typically, items like bricks, concrete, and asphalt can be crushed and reused as an ingredient for a new product. A good example is Commercial Asphalt in Ramsey--they use recycled materials from construction sites to create various products that go into road materials.
Crushing (why does it matter?): crushing allows a demolition contractor to reduce their project costs by increasing revenues they can pull from a particular project (by reselling the materials they demo and crush). One important component of crushing is whether it is done ON-site or OFF-site of a particular demolition project. Crushing ON-site further reduces costs for a demolition contractor--as they can eliminate transporting materials one more time (i.e. they don't need to transport materials to another site for crushing--they can transport directly to the end-user).
Crushing (what the issue with this project?): the City's bid documents never explicitly indicated whether crushing is allowed, or not allowed, ON-site. Without a specific prohibition in the bid document, crushing was allowed ON-site per the bid documents--technically speaking. However, during the bid process, City staff verbally communicated to only four of the eleven bidders that crushing was not allowed ON-site. As a result, a conflict within the information provided to bidders exists.
Crushing (important notes): (1) the lowest bidder DRC did include crushing ON-site. (2) staff can support crushing materials ON-site. The original staff concern regarding crushing was noise. After some research, it has been found crushing (with proper equipment) can be quieter than most other activities that will occur on site during the demolition process. As a result, crushing is no longer seen as a concern by staff.
ALTERNATIVES
Please see attached alternatives sheet for details.
OTHER PROJECT NOTES
(1) Contingency Budget: staff is requesting a $15,000 contingency budget be approved as part of this project. Like any construction project, change orders can/ do occur. In the case of a demolition project, especially of this size, the risk of change orders should be a known risk for the property owner (City of Ramsey). Why is there a risk?-- it's challenging to know exactly how the asbestos treatment required for this project will unfold, if any unknown materials/ issues will arise when moving soils, if anything was missed in our specifications book, if there are discrepancies in what our as-built plans are versus what is in the ground, etc. etc. Staff does not anticipate any change orders--and will do our best to eliminate all, and challenge any that come forward. However, if change order request comes up during demolition--that is reasonable/ justifiable--we don't want to delay this project to go back to Council for a separate approval.
(2) Neighborhood Notification: staff will sending out the attached notification letter to the surrounding neighborhood RE this demolition project. Please note--this letter is in draft format. If the Council would like to see any changes, please advise.
(3) Bid Tabulation: attached are the bid results from 09/21/2016.
(4) Plans & Specs: attached are plans and specs for this project.
Per the original project schedule, bids were opened on 09/21/2016. Eleven companies bid. Bids ranged from $92,900 to $391,263--with a cluster of bids ranging from $150K-$220K. The Engineer's estimate for this project was $175,000. DRC had the low bid of $92,900. The Project Manager (Hakanson Anderson) followed up with DRC, and confirmed they understood the scope of work for this project, and completed a reference check. In summary, Hakanson Anderson believes DRC has a good bid, and believes they are a qualified bidder in regard to performance.
During the bidding process an issue occurred. Four of the eleven bidders were provided information by City satff related to "crushing" construction debris. The information received by said four bidders was not shared with all bidders. As a result, some bidders were bidding on different information. In summary, the information provided regarding "crushing" by the City can have an effect on project costs--thus effecting bid results. With this in mind, staff believes it would be reasonable to consider re-bidding this project for the sake of transparency, equity, and future credibility in regard to the City's bid process. Below are details.
Crushing (what is it?): crushing is a technique used by contractors during construction/ demolition projects to reclaim/ reuse construction materials. Typically, items like bricks, concrete, and asphalt can be crushed and reused as an ingredient for a new product. A good example is Commercial Asphalt in Ramsey--they use recycled materials from construction sites to create various products that go into road materials.
Crushing (why does it matter?): crushing allows a demolition contractor to reduce their project costs by increasing revenues they can pull from a particular project (by reselling the materials they demo and crush). One important component of crushing is whether it is done ON-site or OFF-site of a particular demolition project. Crushing ON-site further reduces costs for a demolition contractor--as they can eliminate transporting materials one more time (i.e. they don't need to transport materials to another site for crushing--they can transport directly to the end-user).
Crushing (what the issue with this project?): the City's bid documents never explicitly indicated whether crushing is allowed, or not allowed, ON-site. Without a specific prohibition in the bid document, crushing was allowed ON-site per the bid documents--technically speaking. However, during the bid process, City staff verbally communicated to only four of the eleven bidders that crushing was not allowed ON-site. As a result, a conflict within the information provided to bidders exists.
Crushing (important notes): (1) the lowest bidder DRC did include crushing ON-site. (2) staff can support crushing materials ON-site. The original staff concern regarding crushing was noise. After some research, it has been found crushing (with proper equipment) can be quieter than most other activities that will occur on site during the demolition process. As a result, crushing is no longer seen as a concern by staff.
ALTERNATIVES
Please see attached alternatives sheet for details.
Consider awarding contract to lowest qualified bidder.
-OR-
Consider rejecting all bids and direct staff to re-bid.
-OR-
Consider rejecting all bids and direct staff to re-bid.
OTHER PROJECT NOTES
(1) Contingency Budget: staff is requesting a $15,000 contingency budget be approved as part of this project. Like any construction project, change orders can/ do occur. In the case of a demolition project, especially of this size, the risk of change orders should be a known risk for the property owner (City of Ramsey). Why is there a risk?-- it's challenging to know exactly how the asbestos treatment required for this project will unfold, if any unknown materials/ issues will arise when moving soils, if anything was missed in our specifications book, if there are discrepancies in what our as-built plans are versus what is in the ground, etc. etc. Staff does not anticipate any change orders--and will do our best to eliminate all, and challenge any that come forward. However, if change order request comes up during demolition--that is reasonable/ justifiable--we don't want to delay this project to go back to Council for a separate approval.
(2) Neighborhood Notification: staff will sending out the attached notification letter to the surrounding neighborhood RE this demolition project. Please note--this letter is in draft format. If the Council would like to see any changes, please advise.
(3) Bid Tabulation: attached are the bid results from 09/21/2016.
(4) Plans & Specs: attached are plans and specs for this project.
Funding Source:
Land proceeds from the sale of the former municipal center campus (Facilities Fund).
Recommendation:
Please see attached recommendation from project manager (Hakanson Anderson).
Action:
Motion to:
Adopt resolution #16-10-195 accepting bids and awarding contract for the former Ramsey Municipal Center site demolition, in the amount of $92,900, to DRC INC -and- authorize an additional $15,000 project contingency budget to be administered by the Project Manager, Hakanson Anderson.
**OR**
Adopt resolution #16-10-196 rejecting all bids and not award a contract for the former Ramsey Municipal Center site demolition -and- order the the project to be re-bid by the Project Manager, Hakanson Anderson.
Adopt resolution #16-10-195 accepting bids and awarding contract for the former Ramsey Municipal Center site demolition, in the amount of $92,900, to DRC INC -and- authorize an additional $15,000 project contingency budget to be administered by the Project Manager, Hakanson Anderson.
**OR**
Adopt resolution #16-10-196 rejecting all bids and not award a contract for the former Ramsey Municipal Center site demolition -and- order the the project to be re-bid by the Project Manager, Hakanson Anderson.
Attachments
- Alternatives Detail
- RESOLUTION 16 10 195 ACCEPTING BIDS AND AWARDING CONTACT FOR RAMSEY MUNICIPAL COMPLEX SITE DEMOLITION
- RESOLUTION 16 10 196 REJECTING ALL BIDS FOR THE RAMSEY MUNICIPAL COMPLEX SITE DEMOLITION
- Bid Tabulation
- Plans
- Specs
- Example Letter to Residents
- Detailed Background
- Hakanson Anderson Recommendation
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Bruce Westby | Kathy Schmitz | 10/05/2016 03:51 PM |
| Kurt Ulrich | Kurt Ulrich | 10/06/2016 03:15 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 09/28/2016 03:56 PM
- Final Approval Date:
- 10/06/2016